We will amend and complete the information in this prospectus. Although we are
permitted by US federal securities laws to offer these securities using this
prospectus, these securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any jurisdiction where the offer or sale is not
permitted.
SUBJECT TO COMPLETION - March 26, 1999
================================================================================
Prospectus
April 12 , 1999
Conolog Corporation
3,057,143 Shares of Common Stock
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The Company:
o Conolog Corporation is an engineering company with two lines of business.
We provide short- and long-term engineering and technical staff, through
our Atlas Design subsidiary. We also design and manufacture small
electronic components for military and commercial applications.
o Conolog Corporation
5 Columbia Road Somerville,
NJ 08876
(800) 526-3984
o Conolog common stock is listed on the Nasdaq SmallCap symbol CNLG.
The Offering:
o This is an offering of shares of common stock of Conolog Corporation.
o Holders of convertible debentures of Conolog are offering these shares,
which they will own upon conversion of their notes. Shares issued to a
consultant pursuant to a Consulting Agreement are also being offered.
Conolog will not receive any proceeds from the shares sold by the selling
stockholders.
o On April 9, 1999, the last reported sale price for the Common Stock on
the Nasdaq SmallCap Market was $2.25 per share.
- --------------------------------------------------------------------------------
Investing in the common stock involves certain risks. See "Risk Factors"
beginning on page 8.
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<PAGE>
Neither the SEC nor any state securities commission has determined whether this
prospectus is truthful or complete. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
- --------------------------------------------------------------------------------
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<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST
NOT RELY ON ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS IS
AN OFFER TO SELL ONLY THE SHARES OFFERED HEREBY, BUT ONLY UNDER CIRCUMSTANCES
AND IN JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN
THIS PROSPECTUS IS CURRENT ONLY AS OF ITS DATE.
TABLE OF CONTENTS
PAGE
----
Prospectus Summary.............................................................4
Risk Factors...................................................................8
Recent Developments...........................................................14
Disclosure of SEC Position on
Indemnification for Securities Act Liabilities..............................14
Selling Stockholders and Plan of Distribution.................................15
Validity of Capital Stock.....................................................17
Experts.......................................................................17
Available Information.........................................................17
Incorporation of Certain Documents by Reference...............................18
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<PAGE>
PROSPECTUS SUMMARY
This prospectus contains forward-looking statements based on our current
expectations, assumptions, estimates and projections about Conolog and our
industry. Our actual results could differ materially from those anticipated in
these forward-looking statements as a result of various factors, including all
the risks discussed in "Risk Factors" and elsewhere in this prospectus. Conolog
undertakes no obligation to update publicly any forward-looking statements for
any reason, even if new information becomes available or other events occur in
the future.
THIS SUMMARY HIGHLIGHTS SOME INFORMATION FROM THIS PROSPECTUS. YOU SHOULD
ALSO READ THE MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS
AND THE NOTES TO THOSE STATEMENTS APPEARING IN OTHER PARTS OF THIS PROSPECTUS OR
INCORPORATED BY REFERENCE.
CONOLOG CORPORATION
We are an engineering company with two lines of business. Our
non-manufacturing business recruits and places professionals, primarily in the
engineering fields, for a variety of businesses. Our manufacturing business
designs and manufactures small electronic and electromagnetic components. Our
products are used in radio and other transmissions, telephones and telephone
exchanges, air and traffic control, automatic transmission of data for by
electric utilities in monitoring power transmission lines for faults and/or
failures.
OUR HISTORY
We were originally incorporated in Delaware in 1968 as DSI Systems, Inc.
We changed our name to Conolog Corporation in 1971. Our principal executive
offices are located at 5 Columbia Road, Somerville, New Jersey 08876. Our
telephone number is (908) 722-8081.
THE OFFERING
Common Stock offered by the selling stockholders ......................3,057,143
Common Stock to be outstanding after the offering ..............7,314,916 shares
Use of proceeds .................................. We will not receive any of
the proceeds of the sale
from the shares sold by the
selling stockholders
Nasdaq SmallCap Market Symbol ..............................................CNLG
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<PAGE>
The 7,314,916 shares of common stock to be outstanding after this offering
assumes the conversion in full of the $2 million principal amount of the
convertible debentures that may be issued to a selling stockholder. Also
includes the issuance of 1,057,143 shares under a consulting agreement with
another selling stockholder.
In addition, the shares to be outstanding after this offering includes
8,776 shares held in the Company's treasury and excludes:
o 105,000 shares of common stock issuable upon exercise of options
outstanding under the Company's 1995 and 1996 Stock Option Plans at
a weighted average exercise price of $0.6875 per share;
o 5,135,750 shares of common stock issuable upon exercise of
outstanding warrants at a weighted average exercise price of $6.00
per share.
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<PAGE>
SUMMARY FINANCIAL DATA
Set forth below is our summary financial data for the years ended July 31, 1998,
1997, 1996, 1995 and 1994, which are derived from our audited consolidated
financial statements. Also set forth below is the summary financial data for the
six months ended January 31, 1999 and 1998, which are derived from our unaudited
financial statements. The unaudited financial statements include all adjustments
consisting of normal recurring accruals, which Conolog considers necessary for a
fair presentation of the financial position and results of operations for these
periods.
<TABLE>
<CAPTION>
(in thousands, except per share amounts)
Year Ended July 31,
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operations Summary:
Net sales and other income $ 746 $ 1,123 $ 1,924 $ 2,091 $ 2,045
Net income (loss)
from continuing operations (1,765) (3,810) 292 (537) (1,183)
Income (loss) from continuing
operations per primary share (.54) (2.41) 0.28 (0.12) (0.27)
Income (loss) from continuing
operations after giving retroactive
effect to a 1-for-100 reverse stock -- -- -- (12.36) (27.22)
split on August 16, 1995
Balance Sheet Summary:
Total assets 4,819 4,340 3,928 3,882 3,739
Long-term debt and capitalized
lease obligations -- -- 5 34 3,830
</TABLE>
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<PAGE>
(in thousands, except per share amounts)
FOR THE SIX MONTHS ENDED
JANUARY 31
(unaudited)
1999 1998
---- ----
Operations Summary:
Net sales and other income $ 354 $909
Net (loss) (641) (194)
from continuing operations
before extraordinary item
Extraordinary item-- Gain 411 0
on sale of building
net of taxes
Net (loss) (230) (194)
Income (loss) per (.05) (.06)
primary share
Balance Sheet Summary:
January 31, 1999
(unaudited)
Cash $969
Total Current Assets 4,683
Total Assets 4,934
Total Current Liabilities 185
Total Stockholders' Equity 4,749
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<PAGE>
RISK FACTORS
We have a history of operating losses and we may not become profitable.
Our continued existence is dependent upon us successfully expanding our
business and attaining profitable operations. We reported losses of $508,698 for
the quarter ended January 31, 1999, and losses of $1,765,390 and $3,810,736 for
the years ended July 31, 1998 and 1997, respectively. The loss for the quarter
ended January 31, 1999 was attributable to the issuance of bonus shares to
officers, key employees of the Company and consultants and an increase in
selling, general and administrative expenses. We may not become profitable.
We only began our placement services business in September 1998, so your basis
for evaluating us is limited.
We only entered the placement services business in September 1998 when we
acquired the operating assets of Atlas Design. None of our officers have any
prior experience in that business. We cannot assure you that we will be
successful in operating that business.
Our placement services business is a substantial burden on our limited cash.
On January 31, 1999, we had approximately $969,000 in cash. We pay the
personnel we place through our Atlas Design subsidiary on a weekly basis.
However, our customers are invoiced when we pay the employees and typically take
30 days or more to pay their bills. As our placement services business expands,
this has created a cash flow problem for us. We may not have sufficient
financing capital to allow us to support the placement services business.
We have many competitors and we may not be able to compete effectively against
them.
The placement services industry is intensely competitive and highly
fragmented, with few barriers to entry by potential competitors at the local
level. We compete for both clients and qualified personnel with other firms
offering such placement services. The majority of our competitors are
significantly larger than we are and have greater marketing and financial
resources than we do. Many clients use more than one placement services company
and it is common for a client to use several placement services companies at the
same time. We also face the risk that our clients may decide to provide similar
services internally or use independent contractors.
The market for our manufactured products is also very competitive. We are
an insignificant factor in the industry. There are several companies which
manufacture products of the type we produce, most of which are substantially
larger and have substantially greater name recognition, financial resources and
personnel. Competition is expected to continue and intensify.
-8-
<PAGE>
Our success depends on keeping up with rapid technological changes.
The market for our manufactured products is characterized by rapid
technological changes and advances. Our failure to introduce new products in a
timely or cost effective manner or our failure to improve our existing products
or remain price competitive, would materially adversely affect our operating
results.
We are dependent on a few large customers.
Our new placement services business currently has fewer than 20 customers.
Most of the sales of our manufactured products are also to a few major
customers. Our dependence on major customers subjects us to significant
financial risks in the operation of our business if a major customer were to
terminate, for any reason, its business relationship with us.
An economic downturn in the New York City area would adversely affect us.
A majority of our revenues derived from placement services are generated
within the New York City metropolitan area. An economic downturn in that area
could have a material adverse effect on our results of operations or financial
condition. During such downturns, the use of temporary and contract employees
usually is curtailed, the recruitment of permanent employees is reduced and we
may face increased competitive pricing pressures. As economic activity
increases, temporary and contract employees often are added to the workforce
before permanent employees are hired. During periods of increased economic
activity and generally higher levels of employment, the competition among
placement services firms for qualified personnel becomes even greater. During
these periods we may not be able to recruit the personnel necessary to fill our
clients' needs.
We may not be able to attract the qualified personnel we need to succeed.
Because of the technical nature of our business, we are dependent upon our
ability to attract and retain technologically qualified personnel. Competition
for individuals with proven professional or technical skills is intense, and
demand for such individuals is expected to remain very strong for the
foreseeable future. We may not be successful in attracting qualified personnel.
We may make acquisitions that are not successful.
We are seeking to expand into new markets and may do so by acquiring
businesses, which may or may not be related to our existing businesses. Our
strategy of making acquisitions is subject to the following risks:
o We may not be able to identify suitable acquisition candidates.
o If the purchase price includes cash, we may need to use all or a
portion of our available cash.
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<PAGE>
o Even if we do identify such suitable candidates, we may not be able
to make such acquisitions on commercially reasonable terms.
o We may not be able to consummate any acquisition or successfully
integrate the acquired services, products and personnel of any
acquisition into our operations.
o Acquisitions may cause a disruption in our ongoing business,
distract our management and drain our other resources.
o We may not be able to retain key employees of the acquired companies
or maintain good relations with its customers or suppliers.
o We may be required to incur additional debt.
o We may be required to issue equity securities, which may be dilutive
to existing shareholders, to pay for acquisitions.
o We may have to incur significant accounting charges, such as for
goodwill, which may adversely affect our results of operations.
Our minimal staff may have difficulty managing our operations.
We only employ about 20 people on a full time basis. Approximately half of
our full time employees are involved in production. Our success is dependent
upon the services of our current management, particularly Robert S. Benou, our
President. Mr. Benou has entered into an employment agreement with us pursuant
to which he will be employed through May 31, 2002. However, if the employment of
Mr. Benou terminates, or he is unable to perform his duties, we may be
materially and adversely affected.
We are dependent on component manufacturers to provide us with the parts we
need.
We are dependent on outside suppliers for all of the subcomponent parts
and raw materials we need to manufacture our products. A shortage, delay in
delivery, or lack of availability of a part could lead to manufacturing delays,
which could reduce sales. We also purchase some custom parts, primarily printed
circuit boards. The failure of a supplier of one of these customized components
could cause a lengthy delay in production, resulting in a loss of revenues.
Year 2000 problems may disrupt our business.
The Year 2000 issue is a result of computer programs being written using
two digits rather than four to define the applicable year. In other words, date
sensitive software may recognize the date using "00" as the year 1900 rather
than the year 2000. This could result in systems failures or miscalculations
causing disruptions of normal business activities.
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<PAGE>
We have contracted with a Year 2000 solution provider to review our
mainframe computer system for Year 2000 compliance and to upgrade the computer
system to be Year 2000 compliant. We anticipate that the upgrade will be
completed by fiscal year end July 31, 1999 and estimate the cost of our Year
2000 compliance program will be $5,000. However, we cannot assure you that such
review and upgrade can be completed on schedule or within estimated costs or
will successfully address our Year 2000 compliance issues.
We are also in the process of contacting all of our major suppliers to
request representations that their systems are or will be Year 2000 compliant.
We are in the process of determining the impact, if any, that third parties who
are not Year 2000 compliant may have on our operations.
If our present efforts to address Year 2000 compliance issues are not
successful, or if suppliers and other third parties do not successfully address
such issues, our business, financial condition and results of operations could
be materially and adversely affected.
Investigations involving one of our market makers, Fairchild Capital, Inc.,
could adversely affect our stock price.
Fairchild Capital, Inc., formerly named VTR Capital, Inc., has
underwritten offerings for us in the past and currently makes a market in our
securities. We have been advised by Fairchild that the Securities and Exchange
Commission (SEC) has issued an order directing a private investigation by the
staff of the SEC. An unfavorable resolution of the SEC investigation concerning
the sales and trading activities and practices of Fairchild could have the
effect of limiting Fairchild's ability to make a market in our securities in
which case the market for and liquidity of our securities may be adversely
affected. The SEC order empowers the SEC staff to investigate whether, from June
1995 to the present, Fairchild and certain other persons and/or entities may
have engaged in fraudulent acts or practices in connection with the purchase or
sale of securities of certain companies in violation of securities law. These
acts or practices include whether Fairchild and certain other brokers or dealers
effected transactions or induced transactions by making untrue statements of
material fact and whether Fairchild and certain others have engaged in
manipulative, deceptive or other fraudulent devices. As of March 1, 1999, we
understand that the SEC investigation is ongoing. We cannot predict whether this
investigation will result in any type of enforcement action against Fairchild.
We may not be able to remain on Nasdaq, which may make it more difficult to
dispose of our stock.
Our common stock and class A warrants are currently listed on the Nasdaq
SmallCap Market. For continued listing on Nasdaq, a company, among other things,
must have $2,000,000 in net tangible assets, 500,000 shares in the public float,
$1,000,000 in market value of public float and a minimum bid price of $1.00 per
share. If we are unable to satisfy the requirements for continued quotation on
Nasdaq, trading, if any, in our common stock would be conducted in the
over-the-counter market in what are commonly referred to as the "pink sheets" or
on the NASD OTC Electronic Bulletin Board. As a result, you may find it
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<PAGE>
more difficult to dispose of, or to obtain accurate quotations as to the price
of, our common stock. These rules may materially adversely affect the liquidity
of the market for our common stock.
If we are delisted from the Nasdaq SmallCap market, you may find it more
difficult to trade our common stock due to "penny stock" rules.
In the event that our shares are delisted, we anticipate that they will
continue to be traded on the Electronic Bulletin Board. In that event, trading
in our shares would be covered by "penny stock" rules promulgated for non-Nasdaq
and non-exchange listed securities. Under these rules, any broker/dealer who
recommends our shares to persons other than prior customers and investors
meeting certain financial requirements, must, prior to sale, make a special
written suitability determination for the purchaser and receive the purchaser's
written agreement to a transaction. Securities are exempt from these rules if
the market price is at least $5.00 per share.
The SEC has adopted regulations that generally define a penny stock to
be an equity security that has a market price of less than $5.00 per share,
subject to certain exceptions. Unless an exception is available, the regulations
require the delivery, prior to any transaction involving a penny stock, of a
disclosure schedule explaining the penny stock market and the risks associated
with trading in the penny stock market.
If our shares become subject to the regulations on penny stocks, the price
and ability to sell our shares would be severely affected because the shares
could only be sold in compliance with the penny stock rules. We cannot be sure
that our securities will not be subject to the penny stock regulations or other
regulations that would negatively affect the market for our securities.
The issuance and sale of a significant number of authorized and unissued shares
in the public market may adversely affect prevailing market prices of our common
stock.
We are authorized to issue 20,000,000 shares of our common stock, of
which:
5,314,916 shares of common stock are issued and outstanding (including
treasury stock).
5,240,750 shares of common stock are reserved for issuance upon the
exercise of warrants and options to purchase common stock.
155,239 has been reserved for conversion of all of our outstanding
preferred stock.
2,000,000 shares of common stock are reserved for issuance upon the
conversion of the convertible debentures.
In addition, we are authorized to issue 2,000,000 shares of Preferred
Stock, of which 156,197 are outstanding.
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<PAGE>
The market price of our common stock could decline as a result of sales by
our existing stockholders of a large number of shares of common stock in the
market after this offering, or the perception that these sales may occur. These
sales also might make it more difficult for us to sell equity securities in the
future at a time and at a price that we deem appropriate.
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<PAGE>
RECENT DEVELOPMENTS
In November 1998, we issued 468,000 shares as a bonus to our officers and
key employees. We also issued options to purchase 105,000 shares to officers and
key employees at an exercise price of $.6875 per share, the fair market value on
the date of grant.
See "Selling Stockholders and Plan of Distribution" for description of the
Option Agreement between Clog LLC and Conolog, dated as of December 22, 1998 and
the Consulting Agreement between Nybor Group Inc. and Conolog dated as of
December 22, 1998.
In December 1998, Conolog was named in two related litigations pending,
one in the United States District Court for the Southern District of New York
and the other in Superior Court of New Jersey. The first of the pending
litigations was commenced in 1993. The litigations relate to a dispute
concerning real property acquired in 1984. While the property is near real
property formerly owned by Conolog, Conolog was not a party to that transaction.
The claim made against Conolog alleges that Conolog contributed to environmental
contamination of the property acquired in 1984. The litigation is in its early
stages, insofar as Conolog is concerned. However, Conolog believes that it has
no liability and intends to vigorously defend itself.
In December 1998, Conolog issued 235,000 shares in the aggregate to three
consultants for the performance of various services. Conolog will register the
resale of such shares with the SEC.
In February 1999, Conolog reported completing tests of its first
production units for non GE frequencies. The successful completion of Conolog's
new advanced PTR1500 tone protection testing, for the standard frequencies,
permitted Conolog to introduce the first production units to U.S. and Canadian
west coast utilities, ahead of schedule. The Company intends to later introduce
the PTR1500 to other utilities across the U.S. and Canada.
In February 1999, Conolog agreed, in principle, to acquire another
placement services business for a total purchase price of $1,625,000, of which
$700,000 is payable at the closing and the balance is payable over 2 1/2 years.
The transaction is subject to a number of conditions, including completion of
due diligence review and the execution of a definitive agreement, which have not
yet been satisfied.
DISCLOSURE OF SEC POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Article Eighth of Conolog's Certificate of Incorporation provides that the
Company shall, to the full extent permitted by Section 145 of the Delaware
General Corporation Law, as amended from time to time, indemnify all persons
whom it may indemnify pursuant thereto.
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<PAGE>
Section 145 of the General Corporation Law of the State of Delaware
authorizes a corporation to provide indemnification to a director, officer,
employee or agent of the corporation, including attorneys' fees, judgments,
fines and amounts paid in settlement, actually and reasonably incurred by him in
connection with such action, suit or proceeding, if such party acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful as
determined in accordance with the statute, and except that with respect to any
action which results in a judgment against the person and in favor of the
corporation the corporation may not indemnify unless a court determines that the
person is fairly and reasonably entitled to the indemnification.
Section 145 further provides that indemnification shall be provided if the
party in question is successful on the merits.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the Securities Act) may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, Conolog has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. If a claim for indemnification against such
liabilities (other than the payment by Conolog of expenses incurred or paid by a
director, officer or controlling person in connection with the securities being
registered) Conolog 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.
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION
The Registration Statement of which this prospectus is a part relates to
the offer and sale of (i) 2,000,000 shares of common stock by Clog LLC and (ii)
1,057,143 shares of common stock by Nybor Group Inc. Nybor and Clog together are
referred to as the selling stockholders.
Conolog and Clog entered into an Option Agreement, dated as of December
22, 1998. Under the Option Agreement, Conolog granted an option to Clog to
purchase convertible debentures having an aggregate principal amount of up to
$2,000,000. Clog has exercised its option to purchase a convertible note in the
principal amount of $200,000. Clog's option may be exercised at any time prior
to October 31, 1999.
Each convertible debenture is convertible into common stock of Conolog at
a conversion rate of $1.00 per share. If Clog were to exercise its option for
all $2,000,000 of convertible debentures, it would have the right to convert
those notes into 2,000,000 shares of common stock, which would represent
approximately 27.3% of the outstanding common stock of Conolog. The Option
Agreement provides that the voting power of any common stock owned by Clog may
be exercised by Conolog's President.
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<PAGE>
Each convertible debenture bears interest at the rate of 8% per annum and
is due 12 months from the date such note is issued, subject to acceleration
under certain circumstances. At maturity, except with respect to the initial
$200,000 loaned, Conolog will have the option to pay each debenture, together
with all accrued interest thereon, by issuing shares of a new Series C preferred
stock having a value of $5.00 per share for purposes of such repayment.
The Series C preferred will be non-voting and carry a cumulative dividend
of 8% per annum, which may be payable by the issuance of shares of common stock
valued at $5.00 per share. The Series C preferred will be convertible into
common stock at the rate of one share of common stock for each share of Series C
preferred and have a liquidating preference of $5.00 per share. The Series C
preferred may be redeemed by Conolog at any time by paying $5.00 in cash
therefor.
The Agreement also provides that, for the one-year period commencing on
the issuance of any shares of Series C preferred (the "Registration Period")
Clog may elect to include its Series C preferred in any post-effective amendment
to the Registration Statement or any new registration statement under the
Securities Act of 1933, as amended. In addition, the Agreement also provides
that, during the Registration Period, Clog may give notice to the Company to the
effect that it desires to register its shares under the Act for public
distribution, in which case the Company will file a post-effective amendment to
a then current registration statement or a new registration statement.
Conolog and Nybor have entered into a Consulting Agreement, dated as of
December 22, 1998. Under the Consulting Agreement, Nybor agrees to provide the
services of its President to Conolog for management and financial consulting
services through October 31, 1999. As compensation, Nybor received 1,057,143
shares of common stock. The Consulting Agreement provides that the voting power
of any common stock owned by Nybor may be exercised by Conolog's President.
The securities offered hereby may be sold from time to time directly by
the selling stockholders. Alternatively, the selling stockholders may from time
to time offer such securities through underwriters, brokers, dealers or agents.
The distribution of securities by the selling stockholders may be effected in
one or more transactions that may take place on the over-the-counter market,
including ordinary broker's transactions, privately-negotiated transactions or
through sales to one or more broker-dealer for resale of such securities as
principals, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the selling
stockholders in connection with such sales of securities. The selling
stockholders and intermediaries through whom such securities are sold may be
deemed "underwriters" within the meaning of the Act with respect to the
securities offered, and any profits realized or commissions received may be
deemed underwriting compensation.
At the time a particular offer of securities is made by or on behalf of
the selling stockholders, to the extent required, a prospectus will be
distributed which will set forth the number of securities being offered and the
terms of the offering, including the name or
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<PAGE>
names of any underwriters, dealers or agents, if any, the purchase price paid by
any underwriter for securities purchased from the selling stockholders and any
discounts, commissions or concessions allowed or reallowed or paid to dealers,
and the proposed selling price to the public.
Under the Exchange Act, and regulations thereto, any person engaged in a
distribution of the securities of the Company offered by the selling
stockholders may not simultaneously engage in market-making activities with
respect to such securities of the Company during the applicable "cooling off"
period (nine days) prior to the commencement of such distribution. In addition,
and without limiting the foregoing, the selling stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Regulation M, in connection with
transactions in such securities, which provisions may limit the timing of
purchase and sales of such securities by the selling stockholders.
VALIDITY OF COMMON STOCK
The validity of the shares of common stock offered hereby will be passed
upon for the Company by Milberg Weiss Bershad Hynes & Lerach LLP.
EXPERTS
The financial statements of Conolog for each of the three years in the
period ended July 31, 1998, incorporated by reference in this prospectus, have
been audited and reported upon by Rosenberg Rich Baker Berman & Company,
independent accountants. Such financial statements have been incorporated by
reference in this prospectus in reliance upon the report of Rosenberg Rich Baker
Berman & Company, incorporated by reference herein, and upon the authority of
such firm as experts in accounting and auditing. To the extent that Rosenberg
Rich Baker Berman & Company audits and reports on the financial statements of
Conolog issued at future dates and consents to the use of their report thereon,
such financial statements also will be incorporated by reference in this
prospectus in reliance upon their report and said authority.
AVAILABLE INFORMATION
Conolog is subject to the informational requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, files reports, proxy
statements and other information with the SEC. The public may read and copy any
materials we file with the SEC at the SEC's Public Reference Room at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy
and information statements, and other information regarding issuers, such as
Conolog, that file electronically with the SEC. The address of the site is
http://www.sec.gov
Conolog has filed with the SEC a Registration Statement on Form S-3 under
the Securities Act. This prospectus does not contain all of the information,
exhibits and
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<PAGE>
undertakings set forth in the Registration Statement, certain portions of which
are omitted as permitted by the Rules and Regulations of the SEC. Copies of the
Registration Statement and the exhibits are on file with the SEC and may be
obtained, upon payment of the fee prescribed by the SEC, or may be examined,
without charge, at the offices of the SEC set forth above. For further
information, reference is made to the Registration Statement and its exhibits.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Conolog with the SEC (File No. 0-8174)
are incorporated by reference in this prospectus:
(1) Annual Report on Form 10-K for the year ended July 31, 1998.
(2) Quarterly Report on Form 10-Q for the quarter ended October 31,
1998.
(3) Quarterly Report on Form 10-Q for the quarter ended January 31,
1999.
(4) Proxy Statement for the Annual Meeting of Stockholders, held on
August 11, 1998.
(5) Report on Form 8-K, filed October 8, 1998.
(6) All other reports filed by Conolog pursuant to Sections 13 or 15(d)
of the Exchange Act since July 31, 1998.
(7) The description of Conolog's common stock contained in its
Registration Statement on Form S-1 (No. 333-35489), including any
amendments or reports filed for the purpose of updating such
description.
All documents filed by Conolog pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus and prior to the
termination of the offering hereunder shall be deemed to be incorporated by
reference in this prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained herein or in a document all or any
portion of which is incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded
to constitute a part of this prospectus.
Conolog will provide, without charge, to each person (including any
beneficial owner) to whom this prospectus is delivered, upon written or oral
request, a copy of any or all of the foregoing documents (other than exhibits to
such documents unless such exhibits are specifically incorporated by reference
into the information that this prospectus incorporates).
Requests should be directed to Conolog Corporation, 5 Columbia Road, Somerville,
New Jersey 08876, telephone (908) 722-8081.
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