As filed with the Securities and Exchange Commission on March 3, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC.
(Exact name of Registrant as specified in its charter)
Delaware 98-0213257
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9060 Ryan Avenue
Dorval, (QC), Canada H9P 2M8
(Address, including zip code, of Registrant's principal executive offices)
Lumenon Innovative Lightwave Technology, Inc.
Stock Option Incentive Plan
(Full title of the Plan)
Vincent Belanger, Chief Financial Officer
Lumenon Innovative Lightwave Technology, Inc.
9060 Ryan Avenue
Dorval, (QC), Canada H9P 2M8
(514) 631-0023
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
David J. Adler, Esq.
Olshan Grundman Frome Rosenzweig & Wolosky LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Amount Proposed maximum Proposed maximum Amount of
Title of each class of to be offering price aggregate offering registration
Securities to be registered registered per share price fee
- --------------------------- ---------- --------- ----- ---
<S> <C> <C> <C> <C>
Common Stock, par 2,500,000(1) $ 35.50(2) $12,600,775 $3,326.61
value $.001 per share
</TABLE>
(1) Pursuant to Rule 416, the registration statement also covers such
indeterminate additional shares of common stock as may become issuable
as a result of any future anti-dilution adjustment in accordance with
the terms of the Stock Option Incentive Plan (the "Plan").
(2) Includes an aggregate of 2,407,500 shares with respect to which options
were granted under the Plan at an average exercise price of $3.87 per
share. Pursuant to Rule 457(g) and (h), the offering price for the
additional shares that may be issued under the Plan of 92,500 is
estimated solely for the purposes of determining the registration fee
and is based on the closing price of the Company's common stock in the
over-the-counter market as reported by the National Quotation Bureau
Pink Sheets on March 2, 2000 of $35.50.
<PAGE>
EXPLANATORY NOTES
Lumenon Innovative Lightwave Technology, Inc. (the "Company")
has prepared this Registration Statement in accordance with the requirements of
Form S-8 under the Securities Act of 1933, to register shares of our common
stock that may be issued under the Plan.
This Form S-8 includes a Reoffer Prospectus prepared in
accordance with Part I of Form S-3 under the Securities Act of 1933. The Reoffer
Prospectus may be used for reofferings and resales of shares of common stock
acquired under the Plan by selling stockholders who may be deemed "affiliates"
(as such term is defined in Rule 405 under the Securities Act) of the Company.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The Company will provide documents containing the information
specified in Part 1 of Form S-8 to employees as specified by Rule 428(b)(1)
under the Securities Act. Under the instructions to Form S-8, the Company is not
required to file these documents either as part of this Registration Statement
or as prospectuses or prospectus supplements pursuant to Rule 424 under the
Securities Act.
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<PAGE>
SUBJECT TO COMPLETION, DATED March 3, 2000
PROSPECTUS
750,000 SHARES
LUMENON INNOVATIVE LIGHTWAVE TECHNOLOGY, INC.
This prospectus relates to the reoffer and resale by certain
selling stockholders of shares of our common stock that we may issue to the
selling stockholders upon the exercise of stock options we granted to them under
our Stock Option Incentive Plan. We previously registered the offer and sale of
these shares to the selling stockholders. This prospectus also relates to
certain shares of our common stock subject to options that we have not yet
granted. If we grant these options to persons who must use the prospectus to
reoffer and resell the shares subject to such options, we will distribute a
prospectus supplement. The selling stockholders are reselling these shares and
we will not receive any of the proceeds from those resales.
The selling stockholders have advised the Company that they
may resell the shares from time to time in one or more transactions in the
over-the-counter market or on any stock exchange or other automated quotation
system on which the common stock may become listed, in negotiated transactions
or otherwise, at market prices prevailing at the time of the sale or at prices
otherwise negotiated. See "Plan of Distribution." The Company will bear all
expenses in connection with the preparation of this prospectus.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING AT PAGE 6.
The Company's common stock is traded in the National Quotation
Bureau Pink Sheets under the symbol "LUMM." On March 2, 2000, the last sale
price for the common stock, as reported by the National Quotation Bureau, was
$35.50.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE 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 March 3, 2000.
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WHERE CAN YOU FIND MORE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and Seven World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material can be obtained from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
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<PAGE>
TABLE OF CONTENTS
Page
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WHERE YOU CAN FIND MORE INFORMATION..........................................4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..............................6
ABOUT THIS PROSPECTUS........................................................6
THE COMPANY ...........................................................7
RISK FACTORS ...........................................................7
USE OF PROCEEDS ..........................................................13
SELLING STOCKHOLDERS........................................................13
PLAN OF DISTRIBUTION........................................................15
LEGAL MATTERS ..........................................................16
EXPERTS ..........................................................16
ADDITIONAL INFORMATION......................................................16
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the
information we file with them, which means that we can disclose important
information to you by referring you to those documents. The information we
incorporate by reference is considered to be a part of this prospectus and
information that we file later with the SEC will automatically update and
replace this information. We incorporate by reference our Registration Statement
on Form 10, as amended, and any future filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended.
You may request a copy of these filings, excluding the
exhibits to such filings that we have not specifically incorporated by reference
in such filings, at no cost, by writing or telephoning us at the following
address:
Lumenon Innovative Lightwave Technology, Inc.
4975 Levy Street
St. Laurent, (QC), Canada H4R 2N9
Attention: Chief Financial Officer
(514) 331-2261
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we filed
with the SEC. You should rely only on the information provided or incorporated
by reference in this prospectus or any related supplement. We have not
authorized anyone else to provide you with different information. No dealer,
salesman or other person has been authorized to give any information or to make
any representations other than those contained in this Prospectus in connection
with the offer made hereby, and, if given or made, such information or
representations must not be relied upon as having been authorized by us or any
selling stockholder. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the securities offered hereby to any person in
any state or other jurisdiction in which such offer or solicitation is unlawful.
The selling stockholders will not make an offer of these shares in any state
where the offer is not permitted. The delivery of this Prospectus at any time
does not imply that information contained herein is correct as of any time
subsequent to its date. You should not assume that the information in this
prospectus or any supplement is accurate as of any other date than the date on
the front of those documents.
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<PAGE>
THE COMPANY
The Company is a development stage company that designs,
develops, and has begun the manufacture in limited quantities of components
related to the Dense Wavelength Division Multiplexing ("DWDM") market and other
optical (photonic) segments of the global telecommunications and data
communications optical networking markets. DWDM is a technology that permits the
transmission of multiple sources of information and data simultaneously over a
single optical fiber. Companies like AT&T and MCI WorldCom are creating fiber
optic networks to transmit large quantities of data and information at high
speeds to accommodate the demand for applications such as the Internet, e-mail,
and electronic commerce. These companies desire to increase the capacity of
their networks to carry and deliver more information at high speeds without the
additional costs of having to install new fiber optic cable. The Company's DWDM
components, integrated optics devices in the form of compact hybrid glass
circuits on silicon chips, allow providers such as AT&T to greatly increase
their information carrying capacity on existing fiber at significantly lower
cost than conventional DWDM components.
The Company's principal executive offices are located at 9060
Ryan Avenue, Dorval, (QC), Canada H9P 2M8. The Company's telephone number at
such location is (514) 631-0023.
The shares offered hereby will be purchased by the selling
stockholders upon exercise of options granted to them under the Plans and will
be sold for the accounts of the selling stockholders.
RISK FACTORS
The purchase of our common stock involves a high degree of risk; you should
regard it as speculative and you should consider it only if you can reasonably
afford a loss of your entire investment. You should carefully consider, in
addition to the other information contained in this prospectus, the following
risk factors relating to the Company and its business before deciding to invest
in our common stock.
We are a development stage company.
The Company was founded in 1998. We are a development stage company and, to
date, do not have revenues from sales of our products. Our operating history
provides no basis for evaluating the Company and our prospects. We must, among
other things, successfully develop and commercialize our products, meet
competition, attract, retain and motivate qualified employees, expand our
operations and market and sell products using our technology in volume to have
significant revenues and to be profitable.
Our future will depend on our ability to develop and commercialize products
based upon our licensed proprietary technologies. Our first product, the DWDM
optical chip, has only recently entered production in limited quantities and we
expect to make only limited shipments of the chips in 2000. Even if our products
appear promising when introduced, potential customers may not accept them, they
may be difficult to produce in large volumes at an acceptable cost, fail to
perform as expected, cost too much or be barred from production by the
proprietary rights of others.
We project future losses.
We expect to spend considerable sums to develop and market new products. We
expect our operating expenses to increase as we develop our technology and
products, increase our sales and marketing activities, and expand our assembly
operations. We will not have revenues from product sales before the second
quarter of 2000. We expect to have losses for the balance of 2000. How much we
will lose and when, if ever, we will have profits is highly uncertain. If we
become profitable, we do not know how much we will earn and our profits may vary
significantly from quarter to quarter.
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The market for our products requires us to adapt to rapid technological change
and to continue new product development.
We must become a key supplier of components to the photonics industry to be
successful. Our target markets are highly competitive and are marked by rapidly
changing technology and industry standards and declining average selling prices.
We must:
o anticipate what our clients and their end-users will need and
demand in the manufacture of products - both for general
industry use and specific custom-made usage,
o incorporate those anticipated features and functions into our
products,
o meet specific and exacting design requirements,
o price our products competitively, and
o introduce our products at the right time to meet market
demand.
The success of new products depends on these factors:
o proper product definition;
o timely completion and introduction of designs,
o the ability of our customers to incorporate our product into
theirs,
o the quality and performance of our products,
o the differentiation of our products from those of our
competitors, and
o acceptance of our products and those of our customers.
Our products are generally incorporated into our customers' products at the
design stage. Even if our products are accepted by our customers, their products
may not be commercially successful.
The market for our products is characterized by short product lifecycles,
declining average selling prices and fluctuating industry conditions.
Our target markets are subject to continuous, rapid technological change,
including changing industry standards, frequent introduction of new products,
anticipated and unanticipated decreases in average selling prices and fierce
price competition. This means that the life cycle of a product we make may be
short, we must introduce new products on a timely basis and we must spend a
great deal to develop new products. Other competing technologies may force us to
sell our products at lower prices than we expect. Thus, we will need to
introduce new products to compete effectively and to maintain our selling
prices. This may require greater development time and expense than we presently
anticipate. We could experience delays in introducing new products because they
are complex.
Our products have certain risks in their manufacture and assembly.
The assembly of our chips is a sophisticated process, requiring a clean room and
precision assembly equipment. Very small amounts of contaminants in assembly,
defects in components, difficulties in the assembly process or other factors can
cause a significant number of chips to be nonfunctional or to have unacceptable
defects. Many of these problems are difficult to find and require much time or
expense to fix.
We have never assembled large amounts of products. We may find it difficult to
do this.
Using our own plant could involve significant risks, including lack of adequate
capacity, technical difficulties and events limiting production, such as fires
or other damage. Furthermore, if demand for our products increases, we will have
to build another facility and rely on contractors to manufacture for us.
Building another facility will cost a great deal and will involve the risks
found in all manufacturing, including poor production yields, technical
difficulties and events limiting production.
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We are dependent on equipment suppliers and contract manufacturers.
We rely on outside suppliers for certain equipment to be used in our
manufacturing process. We do not maintain long-term agreements with any of them.
If important manufacturing equipment were to malfunction, we would at a minimum
experience delays in the shipment of our products and could be required to find
another manufacturer. Delays in shipment could result in the loss of customers
and reductions in our revenues.
We may rely on third party manufacturers for certain components of our products.
Risks associated with our potential dependence upon third party manufacturing
relationships include:
o reduced control over delivery schedules,
o lack of quality assurance,
o poor manufacturing yields and high costs,
o potential lack of adequate capacity during periods of excess
demand, and
o potential misappropriation of our intellectual property.
We don't know if we will be able to enter into third party manufacturing
contracts on favorable terms, if at all, or that our current or future third
party manufacturers will meet our requirements for quality, quantity or
timeliness.
We are dependent on our relationship with Molex to increase sales; there are a
small number of customers for our products.
Our initial marketing strategy is dependent upon the efforts of Molex
Incorporated ("Molex"), our strategic partner in the joint development of
certain products. Our contractual relationship with Molex gives us access to
Molex's global distribution network and requires us to reserve our first year of
jointly developed products, up to a maximum of 400 units per month, to Molex.
After the first year, Molex will have the option to purchase all of our
production of the jointly developed products at fair market value for the
succeeding three year period.
For the foreseeable future, we intend to market our products to only a limited
number of leading original equipment manufacturer ("OEM") customers. We will
rely on our OEM customers to develop their own systems, creating demand for our
products. OEM customers, including Molex, may be expected to exert considerable
leverage in negotiating purchases from us. We expect sales to OEM customers to
be made at a smaller profit and on other less favorable terms, such as marketing
exclusivity, milestone requirements and burdensome cancellation provisions. The
telecommunications equipment industry, a principal industry customer, is
dominated by a small number of large companies. If any of them were to combine
their operations, there would be even fewer telecommunications industry
customers.
The market for our products is very competitive; our competition may more
effectively develop and market their products.
The photonics industry is highly competitive and is marked by lower selling
prices and profits, rapid technological change and product obsolescence. We
expect such conditions to continue.
Our competitors include large companies that have substantially greater
financial, technical, marketing, distribution and other resources, broader
product lines, greater name recognition and longer standing relationships with
customers than we do. Our competitors include both companies already
manufacturing large volumes of products based on established technologies, as
well as companies selling emerging technological solutions. Potential
competitors also include our own customers, which may decide to manufacture
products competitive with ours, rather than purchasing our products. Potential
competitors may develop technology and products comparable or superior to ours.
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We don't know if we can effectively manage the growth of our business.
Our success will depend on the expansion of our operations and the effective
management of growth, which will place a significant strain on our management,
operations and financial resources. In particular, once we begin volume assembly
of our products, our operations are anticipated to expand substantially. To
achieve our plan, we must hire and train additional engineering, manufacturing,
marketing, sales, administrative and management personnel, and buy additional
equipment, facilities, information technology and other infrastructure. We must
also continue to develop our management, operational and financial systems,
procedures and controls. Because we have had little experience with the
assembly, marketing or sale of our products in large quantities, we don't know
if we will be able to expand our business rapidly enough or adequately manage
this growth. If we don't accurately predict demand for our products, we may have
too much or too little production capacity. If we overestimate demand, we may
incur fixed production expenses that are excessive.
We are dependent on key personnel; we need to attract and retain additional
qualified personnel.
Our success will depend to a significant degree upon the continued services of
key management, technical, and scientific personnel, including Dr. S. Iraj
Najafi, our Company's President and Chief Executive Officer, Dr. Mark Andrews,
our Chief Technical Officer, and Dr. Chia-Yen Li, our Chief Operating Officer.
We do not currently maintain key-man life insurance on any of our personnel.
Our success will also depend on our ability to attract and retain additional
management and other highly skilled personnel. Currently, we are seeking to hire
skilled engineers for our assembly process. Our competitors for qualified
personnel are often long-established, highly profitable companies and the
process of hiring qualified personnel is often lengthy. Our management and other
employees may voluntarily leave the Company at any time.
We have limited working capital; we may be unable to obtain funding to meet our
future capital needs.
We will require substantial additional funding over the next several years to
develop our technology, commercialize our products and to expand assembly
capacity. In particular, we will require approximately US$20 million to
construct and equip a high volume assembly facility and to upgrade our current
facility. Our capital needs will depend on a number of factors, including:
o how many new products we develop,
o how fast we develop and commercialize our technologies and
products and expand our assembly operations,
o the response of competitors,
o the level of acceptance of our products,
o competing technological developments, and
o changes in market demand.
In addition, if we develop or commercialize our technology and products more
slowly than we expect, we may need substantially more funding, and we may be
required to spend our cash faster than we currently plan.
We expect to raise additional working capital primarily from the following
sources:
o sales of equity or debt securities,
o equipment leasing and other secured debt financing, and
o manufacturing and other strategic partners.
If we borrow funds, we may become subject to restrictive financial covenants and
our interest obligations will increase. If we issue more stock, our present
stockholders may experience substantial dilution.
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<PAGE>
We do not know whether additional funding will be available on favorable terms,
or at all. If it is not, we may have to delay or abandon some or all of our
anticipated expenditures, to curtail our operations significantly, to sell
assets, or to license to third parties potentially valuable technologies that we
currently plan to commercialize ourselves.
We lack sales and marketing experience and may not be able to retain qualified
salespeople.
We have no experience in marketing, selling and distributing our products. Our
future profitability will depend on our ability to develop an effective sales
force. Competition for employees with sales and marketing experience is intense.
We do not know if we will be able to attract and retain qualified salespeople or
if we can build an effective sales and marketing organization.
We are subject to additional risks related to international sales and operations
We expect that international sales will account for a significant portion of our
total revenues. International sales and operations are subject to a number of
risks, including:
o the imposition of government controls,
o export license requirements,
o restrictions on the export of critical technology,
o political and economic instability or conflicts,
o trade restrictions, changes in tariffs and taxes,
o challenges to patents and other intellectual property rights,
o difficulties in staffing and managing international
operations,
o problems in establishing or managing distributor
relationships, and
o general economic conditions.
In addition, as we expand our international operations, we may be required to
invoice our sales in local currencies, the value of which may fluctuate in
relation to the Canadian and U.S. dollars.
We lack patent protection of our products.
The patent positions of technology companies, including ours, are uncertain and
involve complex legal and factual questions. In addition, the coverage claimed
in a patent application can be significantly reduced before the patent is
issued. We do not know if our patent applications will result in patents being
issued or that any patents issued to us will provide protection against
competing technologies or will be held valid if challenged. Others may
independently develop products similar to ours or design around or otherwise
avoid patents issued to us.
Others may assert claims against us that will result in litigation. Litigation,
regardless of its outcome, would result in significant cost to the Company, as
well as diversion of management time. If we were to infringe upon a valid
patent, we might have to change our products or obtain licenses from the patent
owners. We don't know if such licenses would be available on terms favorable to
us or that we would be successful in any attempt to change our products or
processes to avoid infringement. In addition, we could be liable for significant
monetary damages.
We also rely on trade secret and copyright law, and employee and third-party
nondisclosure agreements to protect our intellectual property rights. We can't
be sure whether agreements and measures will provide meaningful protection of
our trade secrets, copyrights, know-how, or other proprietary information in the
event of infringement by others or that others will not independently develop
similar technologies.
The laws of certain foreign countries do not protect our intellectual property
rights to the same extent as do the laws of the United States. Our intellectual
property may be at additional risk in such markets.
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We must comply with environmental regulations, which could be costly.
Our operations and assembly processes are subject to certain federal, provincial
and local environmental protection laws and regulations. These relate to our
use, handling, storage, discharge and disposal of certain hazardous materials
and wastes, the pre-treatment and discharge of process waste waters and the
control of process air pollutants. We have put into place procedures to comply
with these laws and regulations. We also have safety programs, including
training of personnel on safe storage and handling of hazardous materials and
wastes. We believe that we are in compliance in all material respects with
applicable environmental regulations. Environmental laws and regulations,
however, may become more stringent over time. If we fail to comply with either
present or future regulations, we may have significant expenses, and may be
subject to fines and production halts.
Insiders control the Company, which may prevent a change of control or other
corporate transactions.
As of the date hereof, our management, Molex, Polyvalor and McGill University
collectively own approximately 60.35% of our outstanding common stock. They
determine the composition of the Board of Directors and will be able to
determine the outcome of corporate actions requiring stockholder approval. This
ability may have the effect of delaying or preventing a change in control that
may be favorable to other stockholders or causing a change of control that may
not be favored by other stockholders.
Under agreements with it, Molex will acquire the non-exclusive right to
manufacture and sell certain jointly developed optical chip products in the
event of a change in the control of the Company. Molex also has rights of first
refusal with respect to any sale of stock by certain stockholders of the
Company. Such rights of Molex may have the effect of delaying or preventing a
change in control of the Company that may be favorable to stockholders other
than Molex.
Certain provisions of our corporate documents and state law may prevent or
hinder a change of control.
Certain provisions of our Certificate of Incorporation and By-Laws and of
Delaware law could make it more difficult for another party to acquire us or
discourage another party from attempting to acquire us. For example, our
Certificate of Incorporation and By-Laws permit us to issue preferred stock with
rights senior to the common stock in respect of voting and dividend rights and
rights upon liquidation without any further vote or action by stockholders, and
provide for a classified Board of Directors. Although we have no present plans
to issue preferred stock, the issuance of preferred stock could have the effect
of delaying, deterring or preventing a change of control and could make it more
difficult for holders of our common stock to take certain corporate actions,
including the replacement of incumbent directors. Additionally, any such
preferred stock may have preference over and harm the rights of the holders of
common stock.
We have a significant number of outstanding warrants and options, which could
adversely affect the price of our common stock and our ability to sell
additional common stock.
As of March 2, 2000, we have outstanding options to purchase a total of
2,407,500 shares of common stock at a weighted average exercise price of US$3.87
per share and outstanding warrants to purchase an aggregate of 3,467,211 shares
of our common stock at a weighted average exercise price of US$1.98 per share.
The exercise of outstanding options and warrants will dilute the then current
stockholders' ownership of common stock. Sales in the public market of common
stock acquired upon such exercise of options and warrants could depress the
price of our common stock. The holders of options and warrants can be expected
to exercise them at a time when we would be able to sell common stock on terms
more favorable than those provided by such options and warrants. This may
adversely affect our ability to sell common stock.
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We will not pay dividends.
We have never paid any dividends on our common stock. We do not anticipate
paying such dividends in the foreseeable future. We will use any future earnings
to finance our growth.
The market price of our common stock may increase or decrease significantly.
The market price of our common stock has both increased and decreased
significantly in the past several months. Such market price could be subject to
significant future changes in response to various factors and events including:
o the depth and liquidity of the trading market for the common
stock,
o quarter-to-quarter variations in our operating results,
o the correlation of operating results with the expectations of
stockholders and the investment community,
o the introduction of our products, and
o conditions in our industry.
In addition, from time to time, the public markets, and in particular the shares
of high technology companies, have experienced broad price and volume
fluctuations that often have been unrelated to the operating performance of
issuers.
We can give no assurances that our forward looking statements will be correct
Certain forward-looking statements, including statements regarding our expected
financial position, business and financing plans are contained in this
prospectus or are incorporated in documents annexed as exhibits to this
prospectus. These forward-looking statements reflect our views with respect to
future events and financial performance. The words, "believe," "expect," "plans"
and "anticipate" and similar expressions identify forward-looking statements.
Although we believe that the expectations reflected in such forward-looking
statements are reasonable, we can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from such expectations are disclosed in this prospectus. All
subsequent written and oral forward-looking statements attributable to us are
expressly qualified in their entirety by the cautionary statements. We caution
readers not to place undue reliance on these forward-looking statements, which
speak only as of their dates. We undertake no obligations to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
USE OF PROCEEDS
This prospectus relates to the reoffer and resale by certain
selling stockholders identified in this prospectus of common stock that may be
issued by us to them upon the exercise of options granted under our Stock Option
Incentive Plan. All net proceeds from the sale of the common stock will go to
the stockholders who offer and sell their shares. We will not received any part
of the proceeds from such sales. We will, however, receive the exercise price of
options when exercised by their holders. Any such proceeds will be contributed
to working capital and will be used for general corporate purposes.
SELLING STOCKHOLDERS
This prospectus relates to the reoffer and resale of shares
issued or that may be issued to the selling stockholders under the Stock Option
Incentive Plan.
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The following table sets forth (i) the number of shares of
common stock beneficially owned by each selling stockholder at March 2, 2000,
(ii) the number of shares of common stock to be offered for resale by each
selling stockholder (i.e., the total number of shares underlying options held by
each selling stockholder irrespective of whether such options are presently
exercisable or exercisable within sixty days of March 2, 2000) and (iii) the
number and percentage of outstanding shares of common stock to be held by each
selling stockholder after completion of the offering.
<TABLE>
<CAPTION>
Number of shares of
Common Stock/
Number of shares of Number of Percentage of Class to
Common Stock Owned Shares to be be Owned After
at March 2, Offered for Completion of the
Name 2000(1) Resale(2) Offering(1)
- -------------------------------------- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
S. Iraj Najafi(3)..................... 5,237,500 200,000 5,237,500/ 21.3%
Mark P. Andrews(4).................... 4,887,500 200,000 4,887,500/19.9 %
Vincent Belanger(5)................... 1,000 300,000 1,000/ *
Tony Moretti(6)....................... 50,000 50,000 50,000/*
</TABLE>
- --------------------
* Less than one percent
(1) A person is deemed to be the beneficial owner of voting securities that
can be acquired by such person within 60 days after the date hereof
upon the exercise of options, warrants or convertible securities. Each
beneficial owner's percentage ownership is determined by assuming that
options, warrants or convertible securities that are held by such
person (but not those held by any other person) and that are currently
exercisable (i.e., that are exercisable within 60 days from the date
hereof) have been exercised. Unless otherwise noted, the Company
believes that all persons named in the table have sole voting and
investment power with respect to all shares beneficially owned by them.
(2) Consists of shares of common stock issuable upon the exercise of
options both currently and not currently exercisable.
(3) Dr. Najafi has been Director, President and Chief Executive Officer
since he joined the Company in July 1998.
(4) Dr. Andrews has been Director, Vice President, Chief Technical Officer
and Secretary since he joined the Company in July 1998.
(5) Mr. Belanger has been Chief Financial Officer and Treasurer since he
joined the Company in June 1999.
(6) Anthony L. Moretti is the representative of Molex Incorporated on the
Company's Board of Directors and has been since December 1999. Mr.
Moretti has been employed in various executive capacities with Molex
Fiber Optics Inc., a subsidiary of Molex Incorporated since 1997. The
shares reflected do not include 4,666,667 shares of common stock
beneficially owned by Molex Incorporated. Mr. Moretti disclaims
beneficial ownership of the 4,666,667 shares held by Molex
Incorporated.
We cannot assure you that the selling stockholders will exercise their
options to purchase our common stock.
The shares covered by this prospectus may be sold from time to time so
long as this prospectus remains in effect; provided, however, that the selling
stockholders are first required to contact our Corporate Secretary to confirm
-14-
<PAGE>
that this prospectus is in effect. We intend to distribute to each selling
stockholder a letter describing the procedures that the selling stockholder may
follow in order to use this prospectus to sell the shares and under what
conditions the prospectus may not be used. The selling stockholders expect to
sell the shares at prices then attainable, less ordinary brokers' commissions
and dealers' discounts as applicable.
PLAN OF DISTRIBUTION
This offering is self-underwritten; neither we nor the selling
stockholders have employed an underwriter for the sale of the shares by the
selling stockholders. We will bear all expenses in connection with the
preparation of this prospectus. The selling stockholders will bear all expenses
associated with the sale of the shares.
The selling stockholders may offer their shares directly or through
pledgees, donees, transferees or other successors in interest in one or more of
the following transactions:
o On any stock exchange on automated quotation system on which the
shares of common stock may be listed at the time of sale
o In negotiated transactions
o In the over-the-counter market
o In a combination of any of the above transactions
The selling stockholders may offer their shares of common stock at any
of the following prices:
o Fixed prices, which may be changed
o Market prices prevailing at the time of sale
o Prices related to such prevailing market prices
o At negotiated prices
The selling stockholders may effect such transactions by selling shares
to or through broker-dealers, and all such broker-dealers may receive
compensation in the form of discounts, concessions, or commissions from the
selling stockholders and/or the purchasers of shares for whom such
broker-dealers may act as agents or to whom they sell as principals, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions).
Any broker-dealer acquiring common stock from the selling stockholders
may sell the shares either directly, in its normal market-making activities,
through or to other brokers on a principal or agency basis or to its customers.
Any such sales may be at prevailing market prices, price related to such
prevailing market prices or at negotiated prices to its customers or a
combination of such methods. The selling stockholders and any broker-dealers
that act in connection with the sale of the shares hereunder might be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities Act; any
commissions received by them and any profit on the resale of shares as principal
might be deemed to be underwriting discounts and commissions under the
Securities Act. Any such commissions, as well as other expenses incurred by the
selling stockholders and applicable transfer taxes, are payable by the selling
stockholders. The selling stockholders reserve the right to accept, and together
with any agent of the selling stockholder, to reject in whole or in part any
proposed purchase of the shares. The selling stockholders will pay any sales
commissions or other seller's compensation applicable to such transactions.
We have not registered or qualified offers and sales of shares under
the laws of any country, other than the United States. To comply with certain
states' securities laws, if applicable, the selling stockholders will offer and
sell their shares in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the selling stockholders may
not offer or sell shares unless we have registered or qualified such shares for
sale in such states or we have complied with an available exemption from
registration or qualification.
-15-
<PAGE>
The selling stockholders have represented to us that any purchase or
sale of shares by them will comply with Regulation M promulgated under the
Securities Exchange Act of 1934, as amended. In general, Rule 102 under
Regulation M prohibits any person connected with a distribution of our common
stock (a "Distribution") from directly or indirectly bidding for, or purchasing
for any account in which he or she has a beneficial interest, any of our common
stock or any right to purchase our common stock, for a period of one business
day before and after completion of his or her participation in the distribution
(we refer to that time period as the "Distribution Period").
During the Distribution Period, Rule 104 under Regulation M prohibits
the selling stockholders and any other persons engaged in the Distribution from
engaging in any stabilizing bid or purchasing our common stock except for the
purpose of preventing or retarding a decline in the open market price of our
common stock. No such person may effect any stabilizing transaction to
facilitate any offering at the market. Inasmuch as the selling stockholders will
be reoffering and reselling our common stock at the market, Rule 104 prohibits
them from effecting any stabilizing transaction in contravention of Rule 104
with respect to our common stock.
There can be no assurance that the selling stockholders will sell any
or all of the shares offered by them hereunder or otherwise.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the shares
offered hereby have been passed upon for the Company by Olshan Grundman Frome
Rosenzweig & Wolosky LLP, New York, New York.
EXPERTS
The consolidated financial statements of Lumenon Innovative Lightwave
Technology, Inc. (a Development Stage Enterprise) six-month period ended June
30, 1999 and periods from inception (March 2, 1998) to December 31, 1998 and to
June 30, 1999, have been incorporated in reliance upon the report of KPMG, LLP,
independent chartered public accountants, and upon the authority of said firm as
experts in accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-8 under the Securities Act with respect to the
shares offered hereby. For further information with respect to the Company and
the securities offered hereby, reference is made to the Registration Statement.
Statements contained in this Prospectus as to the contents of any contract or
other document are not necessarily complete, and in each instance, reference is
made to the copy of such contract or document filed as an exhibit to the
Registration Statement, such statement being qualified in all respects by such
reference.
-16-
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following document filed with the Securities and Exchange
Commission (the "Commission") is incorporated herein by reference and made a
part hereof:
The description of the Company's securities contained in the Company's
Registration Statement on Form 10, as amended.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13, 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of the filing of such reports and documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interest of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Officers and Directors
As permitted by the Delaware General Corporation Law (the "DGCL"), the
Company's Certificate of Incorporation, as amended, limits the personal
liability of a director to the Company for monetary damages for breach of
fiduciary duty of care as a director. Liability is not eliminated for (i) any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, (iii) unlawful payment of dividends or stock
purchases or redemptions pursuant to Section 174 of the DGCL, or (iv) any
transaction from which the director derived an improper personal benefit.
The Company's Certificate of Incorporation and By-Laws provide that the
Company shall 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
by reason of the fact that he is or was a director, officer, employee or an
agent of the Company or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with the defense or settlement of such action,
suit or proceeding, to the fullest extent and in the manner set forth in and
permitted by the DGCL, as from time to time in effect, and any other applicable
law, as from time to time in effect. Such right of indemnification is not be
deemed exclusive of any other rights to which such director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of each such person.
The Company proposes to enter into indemnity agreements with its
directors and executive officers. The indemnity agreements will provide that the
Company shall indemnify such directors and executive officers from and against
any and all liabilities, costs and expenses, amounts of judgments, fines,
penalties and amounts paid in settlement of or incurred in defense of any
settlement in connection with any threatened, pending or completed claim,
action, suit or proceeding in which such persons are a party (other than a
proceeding or action by or in the right of the Company to procure a judgment in
its favor), or which may be asserted against them by reason of their being or
having
II-1
<PAGE>
been an officer or director of the Company (the "Losses"), unless it is
determined that such directors and executive officers did not act in good faith
and for a purpose which they reasonably believed to be in, or in the case of
service to an entity related to the Company, not opposed to, the best interests
of the Company and, in the case of a criminal proceeding or action, that they
had reasonable cause to believe that their conduct was unlawful. The indemnity
agreements will also provide that the Company shall indemnify such directors and
executive officers from and against any and all Losses that they may incur if
they are a party to or threatened to be made a party to any proceeding or action
by or in the right of the Company to procure a judgment in its favor, unless it
is determined that they did not act in good faith and for a purpose that they
reasonably believed to be in, or, in the case of service to an entity related to
the Company, not opposed to, the best interests of the Company, except that no
indemnification for Losses shall be made in respect of (i) any claim, issue or
matter as to which they shall have been adjudged to be liable to the Company or
(ii) any threatened or pending action to which they are a party or are
threatened to be made a party that is settled or otherwise disposed of, unless
and only to the extent that any court in which such action or proceeding was
brought determines upon application that, in view of all the circumstances of
the matter, they are fairly and reasonably entitled to indemnity for such
expenses as such court shall deem proper. Such indemnification will be in
addition to any other rights to which such officers or directors may be entitled
under any law, charter provision, by-law, agreement, vote of stockholders or
otherwise.
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
Securities Act of 1933 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 an 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 of 1933 and will be governed by the final adjudication of such
issue.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Exhibit Index
4(a) - The Company's Stock Option Incentive Plan (Incorporated by
reference to Exhibit 4.2 to the Company's Registration
Statement on Form 10).
*5 - Opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP.
*23(a) - Consent of KPMG, LLP, independent auditors.
*23(b) - Consent of Olshan Grundman Frome Rosenzweig & Wolosky LLP
(included in its opinion filed as Exhibit 5).
*24 - Powers of Attorney (included on signature page to this
Registration Statement).
- --------------------
* Filed herewith.
II-2
<PAGE>
Item 9. Undertakings
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement 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 purposes 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; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that
remain unsold at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities 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 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.
C. 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 Securities Act of 1933 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 a 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 of 1933 and will be
governed by the final adjudication of such issue.
D. The undersigned registrant hereby undertakes to deliver or cause
to be delivered with the prospectus, to each person to whom the
prospectus is sent or given, a copy of the registrant's latest
annual report to stockholders that is incorporated by reference
in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X is not
set forth in the prospectus, to deliver, or cause to be delivered
to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial
information.
II-3
<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-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Dorval, Province of Quebec, Canada on February 29, 2000.
LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC.
By:/s/ S. Iraj Najaf
------------------------------------------
S. Iraj Najafi, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints S. Iraj Najafi and Vincent Belanger, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for and in his name, place and stead, in any
and all capacities, to sign any or all amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, full power and authority to do and
perform each and every act and thing requisite necessary to be done in and about
the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or his substitute, may lawfully 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.
Signature Title Date
/s/ S. Iraj Najafi
- ----------------------- Director, Principal Executive February 29, 2000
S. Iraj Najafi Officer, President and Administrator
of the Stock Option Incentive Plan
/s/ Mark P. Andrews
- ----------------------- Director, Vice President, Chief February 29, 2000
Mark P. Andrews Technical Officer and Secretary
- ---------------------- Director and Administrator of the
Anthony Moretti Stock Option Incentive Plan
/s/ Denis M. Beaudry Director and Administrator of the February 29, 2000
- ---------------------- Stock Option Incentive Plan
Denis M. Beaudry
/s/ Pierre-Paul Allard Director and Administrator of the February 29, 2000
- ---------------------- Stock Option Incentive Plan
Pierre-Paul Allard
/s/ Vincent Belanger Principal Financial and Accounting February 29, 2000
- ---------------------- Officer and Treasurer
Vincent Belanger
II-4
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
505 PARK AVENUE
NEW YORK, NEW YORK 10022
March 3, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Lumenon Innovative Lightwave Technology, Inc.
Registration Statement on Form S-8
---------------------------------------------
Gentlemen:
Reference is made to the Registration Statement on Form S-8 dated the
date hereof (the "Registration Statement"), filed with the Securities and
Exchange Commission by Lumenon Innovative Lightwave Technology, Inc., a Delaware
corporation (the "Company"). The Registration Statement relates to an aggregate
of 2,500,000 shares (the "Shares") of common stock, par value $.001 per share
(the "Common Stock"). The Shares will be issued and sold by the Company in
accordance with the Company's 1999 Stock Option Incentive Plan (the "Plan").
We advise you that we have examined originals or copies certified or
otherwise identified to our satisfaction of the Certificate of Incorporation and
By-laws of the Company, minutes of meetings of the Board of Directors and
stockholders of the
<PAGE>
Securities and Exchange Commission
March 2, 2000
Page -2-
Company, the Plan, the documents to be sent or given to participants in the Plan
(the "Prospectus") and such other documents, instruments and certificates of
officers and representatives of the Company and public officials, and we have
made such examination of the law, as we have deemed appropriate as the basis for
the opinion hereinafter expressed. In making such examination, we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, and the conformity to original documents of documents
submitted to us as certified or photostatic copies.
Based upon the foregoing, we are of the opinion that the Shares, when
issued and paid for in accordance with the terms and conditions set forth in the
Prospectus, will be duly and validly issued, fully paid and non-assessable.
We are members of the Bar of the State of New York. This opinion is
limited to the Federal laws of the United States, the laws of the State of New
York and the General Corporation Law of the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus constituting a part of the Registration
Statement.
Very truly yours,
/S/ OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
--------------------------------------------------
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
Lumenon Innovative Lightwave Technology, Inc.
We consent to incorporation by reference in the registration statement of
Lumenon Innovative Lightwave Technology, Inc. (the "Corporation") on Form S-8 of
our report on our audits of the consolidated financial statements of the
Corporation as at June 30, 1999 and for the periods from inception (March 2,
1998) to December 31, 1998 and to June 30, 1999 which report is incorporated by
reference in this Form S-8.
We also consent to the reference to us under the caption "Experts" in the
Registration Statement.
/s/ KPMG LLP
Chartered Accountants
Montreal, Canada
March 2, 2000
