Pursuant to Rule 424(b) Registration Statement N0. 333-50749
PROSPECTUS
ENERGY CONVERSION DEVICES, INC.
2,000,000 Units
Each Unit consists of one share of Common Stock, $.01 par value,
and one Warrant to purchase one share of Common Stock, $.01 par value,
which are immediately separately transferrable.
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All of the 2,000,000 Units offered hereby are being issued and sold by
Energy Conversion Devices, Inc. (the "Company"). Sales of the Units offered
hereby will be limited to "qualified institutional buyers" as defined in Rule
144A under the Securities Act of 1933, as amended. Janney Montgomery Scott Inc.
("JMS") and Nolan Securities Corporation ("Nolan") are acting as placement
agents for the Units on a best-effort basis. The offer will terminate at 5:00
P.M. Eastern Daylight Time on May 15, 1998; no minimum number of Units is
required to be sold.
Each Warrant entitles the holder to purchase one share of Common Stock for
$17.89 on or prior to January 31, 2000, and for $20.54 at any time thereafter on
or prior to July 31, 2001, the expiration date of the Warrants.
The Company's Common Stock is traded on the Nasdaq Stock Market's National
Market under the symbol "ENER." On April 21, 1998, the closing price of the
Common Stock, as reported by the Nasdaq Stock Market, was $13.313 per share.
There is no public market for the Warrants and there can be no assurances that
any such market for the Warrants will develop.
An investment in the Units offered hereby involves a high degree of Risk.
See "Risk Factors" on Page 6.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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Fees and Proceeds to
Price Commissions(1) the Company (2)
- --------------------------------------------------------------------------------
Per Unit $13.25 $.795 $12.455
- --------------------------------------------------------------------------------
Total Units(3) $26,500,000 $1,590,000 $24,910,000
================================================================================
(1) The Company has agreed to indemnify JMS and Nolan (the "Placement
Agents") against certain liabilities, including liabilities under the Securities
Act of 1933, as amended, and to issue to the Placement Agents as additional
compensation a unit purchase warrant to purchase such number of additional Units
as shall equal 4% of the number of Units sold. (See Plan of Distribution.)
(2) Before deducting expenses payable by the Company, estimated at
approximately $250,000, including reimbursement of certain expenses of the
Placement Agents.
(3) Assumes all 2,000,000 Units offered hereby are sold.
JANNEY MONTGOMERY SCOTT INC. NOLAN SECURITIES CORPORATION
Placement Agents
The date of this Prospectus is May 12, 1998.
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No dealer, salesman, or any 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 offering herein contained and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell,
or a solicitation of an offer to buy, the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make an offer or
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
been no change in the facts herein set forth since the date hereof.
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AVAILABLE INFORMATION
The Company is subject to the information 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 material may be
inspected and copies made at the regional offices of the Commission at Seven
World Trade Center, Suite 1300, New York, New York 10048, and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago Illinois 60661-2511. This
material may also be inspected and copies made at and, upon written request
copies obtained at prescribed rates from the Public Reference Section of the
Commission at Room 1024 at its principal office, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission maintains a Web site that
contains reports, proxy and information statements and other information of
registrants that file electronically with the Commission pursuant to the EDGAR
system. The address of the Commission's Web Site is http://www.sec.gov.
The Company has filed with the Commission in Washington, D.C. a registration
statement on Form S-3 (the "Registration Statement") under the Securities Act of
1933 with respect to the securities covered by this Prospectus. As permitted by
the rules and regulations of the Commission, this Prospectus does not contain
all of the information set forth in the Registration Statement. For further
information with respect to the Company and the securities offered hereby,
reference is made to the Registration Statement, including the exhibits filed or
incorporated as a part thereof. Statements contained herein concerning the
provisions of documents filed with, or incorporated by reference in, the
Registration Statement as exhibits are necessarily summaries of such documents
and each such statement is qualified in its entirety by reference to the copy of
the applicable documents filed with the Commission.
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DOCUMENTS INCORPORATED BY REFERENCE
The Company's (i) Annual Report on Form 10-K/A (Amendment No. 1) for the
fiscal year ended June 30, 1997, (ii) Quarterly Reports on Form 10-Q for the
periods ended September 30, 1997, December 31, 1997 and March 31, 1998, and
(iii) description of the Common Stock of the Company included in the Company's
Registration Statement on Form 8-A as filed with the Commission on November 27,
1968, including any amendments or reports filed for the purpose of updating such
description, are incorporated in and made a constituent part of this Prospectus
by reference. All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
Prospectus and prior to termination of the offering of the Units covered by this
Prospectus shall likewise be deemed incorporated herein and made a constituent
part hereof by reference from the respective dates of filing.
Any statement contained in a document 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 subsequently filed document that is also incorporated by reference
herein modifies or replaces such statement. Any statements so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Upon oral or written request, the Company will provide without charge a copy
of any document incorporated in this Prospectus by reference, exclusive of
exhibits unless specifically incorporated herein by reference, to each person to
whom this Prospectus is delivered. Requests for such documents should be
directed to the Secretary of the Company, 1675 West Maple Road, Troy, MI 48084.
TABLE OF CONTENTS
Page
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Available Information ................................................. 2
Documents Incorporated By Reference ................................... 3
Special Note Regarding Forward-Looking Statements ..................... 4
The Company ........................................................... 4
Risk Factors .......................................................... 5
Description of Warrants ............................................... 11
Use of Proceeds ....................................................... 11
Plan of Distribution .................................................. 12
Validity of Securities ................................................ 12
Experts ............................................................... 12
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated herein by reference contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 (the "Securities Act") and Section 21E of the Securities Exchange
Act of 1934 (the "Exchange Act" ) which are not historical facts and involve
risks and uncertainties that could cause actual results to differ materially
from those expected and projected. These forward-looking statements concern,
among other things, the Company's expectations, plans and strategies for the
development and commercialization of products based on its technologies and are
generally identified by the use of such terms as "intends," "expects," "plans,"
"projects," "estimates," "anticipates," "should" and "believes."
All of such forward-looking statements are based on assumptions which the
Company, as of the date of this Prospectus, believes to be reasonable and
appropriate. The Company cautions, however, that the actual facts and conditions
that may exist in the future could vary materially from the assumed facts and
conditions upon which such forward-looking statements are based.
The factors discussed in this Prospectus under "Risk Factors" and in other
documents and reports filed by the Company with the Securities and Exchange
Commission pursuant to the requirements of the federal securities laws could
cause the actual facts and conditions that may exist in the future to vary
materially from the assumed facts and conditions upon which the forward-looking
statements contained herein are based.
THE COMPANY
The Company is in the business of synthesizing new materials and developing
advanced production technology and innovative products based on amorphous
(disordered) and related materials, with an emphasis on alternative energy and
advanced information technologies. The Company's products and production
technology in the field of alternative energy are being manufactured and
marketed through alliances throughout the world with major companies, such as
General Motors Corporation and Canon, Inc. In the field of information
technology, the Company's Ovonic phase change erasable optical memory technology
is licensed by major optical memory disk manufacturers, including Matsushita
Electric Industries Co., Ltd. and Sony Corporation.
The Company's principal executive offices are located at 1675 West Maple
Road, Troy, Michigan 48084, and its telephone number is (248) 280-1900.
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Recent Events
On April 23, 1998, United Solar Systems Corp. ("United Solar"), the
Company's photovoltaic (solar energy) joint venture with Canon Inc. of Japan,
and Sky Station International, Inc. ("Sky Station") announced the formation of
Sky Solar, L.L.C. to manufacture photovoltaic ("PV") products for stratospheric
platforms and space satellites. The venture is owned 60% by United Solar, which
is contributing its proprietary PV technology to the venture, and 40% by Sky
Station which is to provide the funding to optimize United Solar's technology
for stratospheric and space ("strato-space") applications and for construction
of a dedicated strato-space PV production line. In connection with this
agreement, substantial amounts of the funding will be used for the development
and construction of the equipment which will be subcontracted by United Solar to
the Company to produce the PV products for these platforms and satellites. Final
contracts for the development and construction of this equipment are pending the
successful completion of Sky Station's funding.
In April 1998, the Company entered into a one-year financing agreement with
Standard Federal Bank for a line of credit of up to $5,000,000. This financing
bears an interest rate of prime plus 1/2%, is secured by a first interest in the
Company's accounts receivable and inventory and contains certain financial cove-
nants relating to the Company's tangible net worth, working capital and total
debt to tangible net worth. Also in April 1998, the Company entered into a
$6,000,000 credit arrangement with Finova Capital Corporation, which has two
components. One component, which has been fully utilized, provided $2,000,000 to
refinance existing leased equipment (resulting in $1,200,000 net cash to the
Company), has a three-year term at the expiration of which the Company will be
required to purchase the equipment for 10% of the original cost. The second
component provides for up to $4,000,000 of financing through December 31, 1998
for the Company's sale and leaseback of equipment it acquired subsequent to June
30, 1996; at the expiration of the related five-year lease, the Company will be
required to purchase the leased equipment for 10% of the original cost.
RISK FACTORS
The following risk factors should be considered in conjunction with the
other information included and incorporated by reference in this Prospectus
before purchasing or otherwise acquiring the Units offered hereby.
History of Losses
From its founding through December 31, 1997, the Company has incurred net
losses totaling approximately $182.9 million. The Company's ability in future
years to achieve profitability will depend largely on securing additional
licensing agreements
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and the successful commercialization of its products as to which there can be no
assurance.
Need to Raise Additional Capital
The Company has in the past experienced substantial losses and negative
cash flow from operations and has required significant additional financing in
order to pursue the commercialization of products based on its technologies. The
Company cannot predict when or if additional financing will be needed or, if
needed, in what amounts and may seek additional financing at any time, including
the next 12 months. There can be no assurance that such additional financing
will be available or that the terms of such additional financing, if available,
will be acceptable to the Company. Additional equity financing by the Company
may result in substantial dilution to the Company's stockholders,
including purchasers of the Units.
The Company is currently in the process of finalizing a definitive
agreement for a line of credit of up to $5 million to be secured by the
Company's inventory and accounts receivable and has line of credit of up to $6
million for the refinancing of currently or previously leased manufacturing
equipment, the sale and leaseback of certain other manufacturing equipment owned
by the Company and the purchase of additional equipment, no part of which line
has been taken down.
Dependence Upon Licensing Arrangements and Joint Ventures
In the fields of consumer rechargeable batteries, electric vehicle
batteries, scooter batteries, photovoltaics and information technologies, the
Company has entered into licensing and/or joint venture agreements with estab-
lished industrial companies. Any revenues or profits which may be derived by the
Company from these licensing and joint venture agreements will be sub-
stantially dependent upon the willingness and ability of the Company's licensees
and joint venture partners to devote their financial resources and manufacturing
and marketing capabilities to commercialize products based on the Company's
technologies. There can be no assurance that such financial resources will be
available or that such commercialization will be successful. Certain of the
Company's joint venture and business agreements contain conditions which, if not
satisfied, permit the joint venture or business partner to discontinue such
arrangements. Many of such conditions are outside of the Company's control and
there can accordingly be no assurance that such conditions will be satisfied.
There are also various business, technological and other uncertainties that
affect the Company and its joint venture partners and licensees. In fields in
which it is not presently a party to joint venture or license agreements, the
Company may be required to enter into collaborative arrangements with
established industry partners to produce products on a commercial scale. There
can be no assurance that the Company will be able to enter into such
collaborative arrangements.
Concentration of Revenues
The Company historically has entered into agreements with a relatively
small number of major customers throughout the world. For the six months ended
December 31, 1997, three major customers--General Motors Corporation, GM Ovonic
L.L.C. ("GM Ovonic") and G.P.Batteries International, Ltd. ("G.P. Batteries")--
accounted for approximately 61% of total revenue. GM Ovonic and GP
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Batteries accounted for approximately 56% of total revenue for the year ended
June 30, 1997.
Competition
The Company and its affiliates compete with firms, both domestic and
foreign, that perform research and development, as well as firms that
manufacture and sell products. Some competing firms are among the largest
industrial companies in the world and have well-established business
organizations and product lines, extensive resources and large research and
development staffs and facilities. There can be no assurance that one or more
such companies will not succeed in developing technologies or products that will
become available for commercial sale prior to the Company's products, that will
have performance superior to the Company's products or that would otherwise
render the Company's products obsolete or non-competitive.
Technology Risks
Technology Risks
Additional research and development efforts will be required before certain
of the Company's products and technologies may be manufactured and sold
commercially. There can be no assurance that such research and development
efforts will be successful or that the Company will be able to develop
commercial applications for its products and technologies. The areas in which
the Company is developing technologies and products are characterized by rapid
and significant technological change. Rapid technological development may result
in the Company's products becoming obsolete or non-competitive before the
Company is able to recover any portion of the research and development and other
expenses it has incurred to develop its products and technologies.
Manufacturing Uncertainties
In order to produce products on a commercial scale, the Company and its
joint venture partners and certain of its licensees will be required to expand
or establish manufacturing capabilities significantly greater than the
manufacturing capabilities currently being used to produce certain of the
Company's products. Although substantially all of its joint venture partners and
licensees have experience in commercial scale manufacturing, the Company has
little such experience and there can be no assurance that the Company or such
other parties will expand or establish manufacturing capabilities for
manufacturing the Company's products beyond those presently in existence.
Uncertainty of Market Acceptance
The market prices for the Company's products may exceed the prices of
competitive products based on current technologies or new products based on
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technologies currently under development by competitors. There can be no
assurance that the prices of the Company's products will be perceived by
consumers as cost-effective or that the prices of such products will be
competitive with existing products or with other new products or technologies.
Uncertainty of Patents and Protection of Proprietary Technology
The Company's ability to compete effectively will depend, in part, on its
ability to protect and maintain the proprietary nature of its technology. There
can be no assurance as to the degree of protection offered by the patents owned
by the Company, or as to the likelihood that additional patents will be issued
based upon pending patent applications. Patent applications in the United States
are maintained in secrecy until patents are issued and the Company, therefore,
cannot be certain that it was the first creator of the inventions covered by its
patents or pending patent applications, or that it was the first to file patent
applications for such inventions. The high costs of enforcing patent and other
proprietary rights may also limit the degree of protection afforded the Company.
Claims alleging the invalidity of the Company's patents, such as proceedings
which have been brought in the French and German patent offices seeking to have
certain of the Company's issued patents nullified, or other proprietary rights,
even if unfounded, may have a material adverse effect on the commercialization
of products or technologies based on such rights. The Company also relies on
unpatented proprietary technology, and there can be no assurance that others may
not independently develop the same or similar technology or otherwise obtain
access to the Company's proprietary technology. There can be no assurance that
the Company's patents or other proprietary rights will be determined to be valid
or enforceable if challenged in court or administrative proceedings or that the
Company's patents or other proprietary rights, even if determined to be valid,
will be broad enough in scope to enable the Company to prevent third parties
from producing products using similar technologies or processes. There can also
be no assurance that the Company will not become involved in disputes with
respect to the patents or proprietary rights of third parties. See " - Legal
Proceedings." An adverse outcome from such proceedings could subject the Company
to significant liabilities to third parties, require disputed rights to be
licensed from third parties, prevent the Company from collecting royalties from
licensees or require the Company to stop using such technology, any of which
would have a material adverse effect on the Company's financial condition and
business prospects.
Dependence on Key Personnel
The Company's success is highly dependent on the continued services of a
limited number of skilled managers and scientists. The loss of any of these
individuals could have a material adverse effect on the Company. In addition,
the success of the Company will depend upon, among other factors, the
recruitment and retention of additional highly skilled and experienced
management and technical personnel. There
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can be no assurance that the Company will be able to retain existing employees
or to attract and retain additional personnel on acceptable terms given the
competition for such personnel in industry, universities and non-profit
research institutions.
Legal Proceedings
Although there are no currently pending legal proceedings to which the
Company is a party which management believes to be material, the Company is
involved in legal proceedings arising in the normal course of business. Due to
the inherent uncertainties of legal proceedings, the outcome of any such
proceedings could be unfavorable, and the Company may choose to make payments,
or enter into other arrangements, to settle such proceedings or may be required
to pay damages or other expenses, which could have a material adverse effect on
the Company's financial condition or results of operations. The Company has been
subject to legal proceedings in recent years involving the validity and
enforceability of certain of its patents. While such patent-related legal
proceedings have been successfully resolved in favor of the Company, such
proceedings can require the expenditure of substantial management time and
financial resources and can adversely affect the financial performance of the
companies involved. There can be no assurance that the Company will not be a
party to other legal proceedings in the future.
Concentration of Ownership
Mr. Stanford R. Ovshinsky and his wife, Dr. Iris M. Ovshinsky (executive
officers, directors and co-founders of the Company), own of record 153,420
shares and 65,601 shares, respectively (or approximately 69.8% and 29.8%,
respectively), of the outstanding shares of Class A Common Stock, which are
entitled to 25 votes per share, as compared to the Common Stock which has one
vote per share. Mr. and Dr. Ovshinsky also have the right to acquire 126,082 and
84,055 shares, respectively, of Class A Common Stock pursuant to the exercise of
presently exercisable stock options. Class A Common Stock is convertible into
Common Stock on a share-for-share basis at any time and from time to time at the
option of the holders, and will be deemed to be so converted on September 14,
1999, unless such conversion date is extended with the approval of the Company's
stockholders. As of March 31, 1998, Mr. Ovshinsky also had the right to vote
126,500 shares of Common Stock owned by Sanoh Industrial Co., Ltd. which shares,
together with the shares of Class A Common Stock and 9,989 shares of Common
Stock owned by Mr. and Dr. Ovshinsky, give Mr. and Dr. Ovshinsky voting control
over outstanding shares representing approximately 34.5% of the combined voting
power of the Company (approximately 50.5% in the event they exercise their
options to acquire Class A Common Stock).
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Upon completion of this offering, assuming the sale of all 2,000,000 Units
offered hereby (without giving effect to the exercise of the Warrants), the
directors and executive officers of the Company will have voting control over
outstanding shares representing approximately 30.6% of the combined voting power
of the Company.
The Company may, from time to time in the future, grant stock options or
warrants to Mr. and Dr. Ovshinsky and other directors and executive officers of
the Company, which may increase the combined voting power of the Company
controlled by these persons.
The Company, the Company's 93.5%-owned subsidiary, Ovonic Battery Company,
Inc. ("Ovonic Battery"), and Mr. Ovshinsky are parties to an employment
agreement providing for Mr. Ovshinsky's right to vote the shares of Ovonic
Battery held by the Company following a change in control of the Company,
enabling Mr. Ovshinsky to control Ovonic Battery and direct its business and
affairs notwithstanding a change in the control of the Company.
The foregoing provisions, together with other provisions of the Company's
Certificate of Incorporation and Bylaws, may have the effect of deterring
hostile takeovers or delaying or preventing changes in the control or management
of the Company, including transactions in which stockholders might otherwise
receive a premium for their shares over prevailing market prices. The Company
may, in the future, adopt additional provisions by amendment of its Certificate
of Incorporation or Bylaws or extend the effectiveness of existing provisions
which could have similar effects.
Possible Volatility of Stock Price
There has been a history of significant volatility in the market price of
the Company's Common Stock. The Company believes that many factors, including
actual or anticipated announcements of technological innovations, new commercial
products, actual or anticipated changes in laws and governmental regulations,
disputes relating to patents or proprietary rights, changes in business
practices and other factors may have a significant effect on the market price of
the Company's Common Stock.
Dilution
The net tangible book value per share of Common Stock at December 31, 1997
was $1.80. Giving effect to the net proceeds from the sale of the 2,000,000
Units offered hereby, the pro forma net tangible book value at December 31,
1997, would have been $3.46 per share (attributing no value to the Warrants
included in the Units). Purchasers of the Units will, therefore, suffer an
immediate and substantial dilution of $9.79 in the net tangible book value per
share of the Common Stock from the offering
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price (attributing no value to the Warrants included in the Units). In addition,
such purchasers will experience dilution upon the exercise of outstanding stock
options and warrants.
As of March 31, 1998, 3,166,257 shares of Common Stock were reserved for
issuance pursuant to the Company's stock option plans. In addition, 474,624
shares of Common Stock were reserved for issuance upon exercise of certain
warrants (other than the Warrants), 219,913 shares of Common Stock were reserved
for the conversion of Class A Common Stock into Common Stock and 6,021 shares of
Common Stock were reserved for conversion of Convertible Investment
Certificates. Future capital funding transactions necessary to fund the
continued operations of the Company may also result in dilution to purchasers of
the Units offered hereby.
DESCRIPTION OF WARRANTS
Each Warrant entitles the holder to purchase one share of Common Stock at
$17.89 per share on or prior to January 31, 2000 and at $20,54 per share at any
time thereafter on or prior to July 31, 2001, the expiration date of the
Warrants.
Warrants are issuable pursuant to a Warrant Agreement between the Company
and the State Street Bank and Trust Company as Warrant Agent. The Warrant
Agreement provides for adjustment of the exercise price of the Warrants and for
change of the number and kind of shares of Common Stock or other securities
purchasable upon exercise of the Warrants upon occurrence of certain events in
order to protect the warrantholders against dilution. The events requiring such
adjustments and changes include stock dividends, split- ups, combinations and
reclassification.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Units offered hereby
(without giving effect to the exercise of the Warrants) are estimated to be
approximately $24,660,000. The Company intends to invest approximately $2.5
million of the net proceeds of this offering in United Solar Systems Corp., the
Company's joint venture with Canon Inc. of Japan, for the production and sale of
photovoltaic products, and approximately $2 million for upgrading Ovonic
Battery's production facilities, with the balance of the net proceeds to be used
for working capital, funding of the Company's ongoing product development
activities and other general corporate purposes.
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PLAN OF DISTRIBUTION
The 2,000,000 Units offered hereby are being issued and sold by the
Company, for whom Janney Montgomery Scott Inc. and Nolan Securities Corporation
are acting as placement agents (the "Placement Agents"), to "qualified
institutional buyers" as defined in Rule 144A under the Securities Act of 1933.
No Units will be issued or sold to purchasers other than the foregoing
institutional buyers. The Company has agreed to pay the Placement Agents a fee
equal to six percent of the gross proceeds to the Company from the sale of the
Units. The Company has also agreed to issue the Placement Agents unit purchase
warrants (the "Placement Agent Warrants") to acquire units of the Company's
securities identical to the Units offered hereby, in an amount equal to four
percent of the number of Units sold, at an exercise price per unit equal to 130%
of the per Unit price of the Units offered hereby. The Placement Agent Warrants
are exercisable at any time, in whole or in part, for a four-year period
commencing one year following the date of issuance. The Company has granted
demand and piggy-back registration rights, at the Company's expense (limited to
$15,000 with respect to a demand registration), for the securities issuable upon
exercise of the Placement Agent Warrants.
The Company has agreed to pay or reimburse the Placement Agents for their
reasonable expenses incurred in connection with this offering up to a maximum of
$100,000, of which $25,000 has been paid. The Company has also agreed to
indemnify the Placement Agents and certain related parties against certain civil
liabilities, including liabilities arising under the Securities Act of 1933.
The selling price of the Units offered hereby will be determined by
negotiation between the Company, the Placement Agents and the purchasers based
on the trading price of the Company's Common Stock on the NASDAQ National Market
System.
VALIDITY OF SECURITIES
The validity of the securities being sold in the offering has been passed
upon for the Company by Jenner & Block, Chicago, Illinois.
EXPERTS
The financial statements incorporated in this Prospectus by reference from
the Company's Annual Report on Form 10-K/A (Amendment No. 1) for the year ended
June 30, 1997 have been audited by Deloitte & Touche LLP, independent auditors,
as stated in their report, which is incorporated herein by reference, and has
been so incorporated in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
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