As filed with the Securities and Exchange Commission on April 24, 1998
Registration No.333-50749
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1 TO REGISTRATION STATEMENT ON
FORM S-3
UNDER THE SECURITIES ACT OF 1933
ENERGY CONVERSION DEVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 8731 38-1749884
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification
No.)
1675 West Maple Road
Troy, MI 48084
(248) 280-1900
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
ROGER JOHN LESINSKI, ESQ.
Energy Conversion Devices, Inc.
1675 West Maple Road
Troy, MI 48084
(248) 280-1900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
CRAIG A. ROEDER, ESQ. SIDNEY TODRES, ESQ.
JENNER & BLOCK EPSTEIN, BECKER & GREEN, P.C.
One IBM Plaza 250 Park Avenue
Chicago, IL 60611 New York, NY 10177
(312) 222-9350 (212) 351-4500
Approximate date of proposed commencement of sale to the public:
As soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.[ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest-reinvestment plans, check the following box.
[X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective Registration Statement for the same offering. [ ]
- -----------------------.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective Registration
Statement for the same offering. [ ]
- ------------------------.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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ENERGY CONVERSION DEVICES, INC.
CROSS-REFERENCE SHEET
Item Number and Heading in
Form S-3 Registration Statement Location in Prospectus
------------------------------- ----------------------
1. Forepart of the Registration Statement and Outside Front Cover Page
Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages Inside Front Cover Page
of Prospectus
3. Summary Information, Risk Factors and Ratio Risk Factors
of Earnings to Fixed Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Outside Front Cover Page;
Plan of Distribution
6. Dilution Risk Factors
7. Selling Security-holders Inapplicable
8. Plan of Distribution Outside Front Cover Page;
Plan of Distribution
9. Description of Securities to be Registered Outside Front Cover Page;
Documents Incorporated by
Reference; Description of
Warrants
10. Interests of Named Experts and Counsel Inapplicable
11. Material Changes Risk Factors
12. Incorporation of Certain Information by Documents Incorporated by
Reference Reference
13. Disclosure of Commission Position on Inapplicable
Indemnification for Securities Act
Liabilities
<PAGE>
Subject to Completion, Dated April 24, 1998
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 ________; no minimum number of Units is required
to be sold.
Each Warrant entitles the holder to purchase one share of Common Stock for
$____ on or prior to January 31, 2000, and for $__ 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
anu 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)
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Per Unit $______ $______ $_____
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Total Units(3) $______ $______ $_____
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(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 April __, 1998.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may any
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sales of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to the registration or qualification under the securities laws of any such
State.
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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.
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 and December 31, 1997, 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
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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 ................................................. 3
Documents Incorporated By Reference ................................... 3
Special Note Regarding Forward-Looking Statements ..................... 5
The Company ........................................................... 5
Risk Factors .......................................................... 6
Description of Warrants ............................................... 11
Use of Proceeds ....................................................... 11
Plan of Distribution .................................................. 11
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.
Recent Events
On April 23, 1998, United Solar Systems Corp. ("United Solar"), the
Company's joint venture with Canon Inc. for the production of photovoltaic
products, announced the formation of Sky Solar, L.L.C. ("Sky Solar"), a joint
venture of United Solar and Sky Station International, Inc. ("Sky Station"). Sky
Solar, which is owned 60% by United Solar and 40%
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by Sky Station, has been established to manufacture photovoltaic products for
stratospheric platforms and space telecommunications satellites. United Solar's
contribution to the venture is a license of its proprietary photovoltaic
technology and Sky Station is providing funding to optimize United Solar's
technology for stratospheric and space applications and for construction of
dedicated stratospheric-space photovoltaic production equipment.
The Company recently received, subject to closing, a line of credit of up
$5 million to be secured by the Company's inventory and accounts receivable and
a 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.
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 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
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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 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.
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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
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
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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 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
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combined voting power of the Company (approximately 50.5% in the event they
exercise their options to acquire Class A Common Stock).
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 $___ 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 $____ in the net tangible book value per
share of the Common Stock from the offering 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.
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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
$____ per share (equal to 135% of the per Unit offering price of the Units
offered hereby) on or prior to January 31, 2000 and at $____ per share (equal to
155% of the per Unit offering price of the Units offered hereby) at any time
thereafter and 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 $__ million. 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.
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
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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.
12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Registration fee............................................ $ 21,415.64
NASD fee.................................................... 3,225.00
NASDAQ listing fees......................................... 17,500.00
Legal fees and expenses..................................... 45,000.00*
Accountants' fees and expenses.............................. 25,000.00*
Placement Agent Reimbursable Expenses....................... 100,000.00*
Miscellaneous............................................... 37,859.36*
------------
Total ................................................ $250,000.00
------------
- ----------
* Estimated
The Company will bear all of the foregoing expenses.
Item 15. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware
provides that a corporation may indemnify any person who was or is a party to or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director, officer, employee of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
actions, suit or proceeding if he 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 proceedings, had no
reasonable cause to believe his conduct was unlawful; provided, however, in a
suit by or in the right of the corporation no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery of the State of Delaware or the court in which such action or
suit was brought has determined upon application that, despite the adjudication
of liability but in view of all of the circumstances of the case, such person is
fairly and reasonably entitled to indemnity or such expenses deemed proper by
the court.
The Company's Certificate of Incorporation provides that the Company will
indemnify its directors and officers (and their heirs, executors and
administrators) against expenses reasonably incurred or imposed upon them in
connection with or arising out of any action, suit or proceeding in which they
may be involved or to which they may be made a party by reason of being or
having been a director or officer of the Company, or, at the Company's request,
any other corporation of which the Company is a stockholder or creditor and from
which they are not entitled to be indemnified, except in respect of matters as
to which they are finally
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<PAGE>
adjudged in such action, suit or proceeding to be liable for negligence or mis-
conduct. In the event of the settlement of any such action, suit or proceeding,
the Company is obligated to provide indemnification only in connection with such
matters covered by the settlement as to which the Company is advised by counsel
that the person to be indemnified did not commit a breach of duty.
The Company's Bylaws provide that the Company will indemnify each person
who is or was a director or officer of the Company, or is or was serving as a
director or officer of another corporation or as a trustee or officer of an
association or trust of which the Company owns stock or shares or of which the
Company is a creditor, against all liabilities and expenses at any time imposed
upon or reasonably incurred by such person in connection with, arising out of or
resulting from any action, suit or proceeding in which such person may be
involved or with which such person may be threatened, by reason of his then
serving or theretofore having served as such director, trustee or officer, or by
reason of any alleged act or omission by him in any such capacity, whether or
not he is serving as such director, trustee or officer at the time any or all of
such liabilities or expenses are imposed upon or incurred by him. The matters
covered by the foregoing indemnity include amounts paid by any such person in
compromise or settlement, if such compromise or settlement is approved as in the
best interests of the Company by vote of a majority of disinterested directors
then in office or by vote of a majority of the shares of stock held by
disinterested stockholders entitled to vote at a meeting called for such
purpose. The foregoing indemnity excludes liabilities or expenses incurred in
connection with any matters as to which the person seeking indemnification is
finally adjudged in such action, suit or proceeding to be liable by reason of
negligence or misconduct in the performance of his duties as such director,
trustee or officer.
Item 16. Exhibits
See Exhibit Index.
Item 17. Undertakings
A. Rule 415
The Company 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 mate-
rial information with respect to the plan of distribution not previously dis-
closed in the Registration Statement or any material change to such information
in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the Offering.
B. Incorporation by Reference.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Indemnification.
Insofar as the indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company 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.
D. Rule 430A
The Company hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
Prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of Prospectus shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of Troy, State of Michigan, on April 22, 1998.
ENERGY CONVERSION DEVICES, INC.
By Stanford R. Ovshinsky*
--------------------------------------------
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Company in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
Stanford R. Ovshinsky* Director, President and Chief April 24, 1998
- -------------------------- Executive Officer (principal --------------
Stanford R. Ovshinsky executive officer)
Stephan W. Zumsteg* Treasurer April 24, 1998
- ---------------------- (principal financial officer --------------
Stephan W. Zumsteg and principal accounting
officer)
Robert C. Stempel* Chairman of the Board of April 24, 1998
- ---------------------- Directors --------------
Robert C. Stempel
Iris M. Ovshinsky* Director April 24, 1998
- ---------------------- --------------
Iris M. Ovshinsky
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<PAGE>
Nancy M. Bacon* Director April 24, 1998
- ---------------------- --------------
Nancy M. Bacon
Umberto Colombo* Director April 24, 1998
- ---------------------- --------------
Umberto Colombo
Hellmut Fritzsche* Director April 24, 1998
- ---------------------- --------------
Hellmut Fritzsche
Joichi Ito* Director April 24, 1998
- ---------------------- --------------
Joichi Ito
Director
- ---------------------- --------------
Seymour Liebman
Director
- ---------------------------
Walter J. McCarthy, Jr. --------------
Florence I. Metz* Director April 24, 1998
- ---------------------- --------------
Florence I. Metz
Director
- ----------------------
Haru Reischauer ---------------
Nathan J. Robfogel* Director April 24, 1998
- ---------------------- --------------
Nathan J. Robfogel
Stanley K. Stynes* Director April 24, 1998
- ---------------------- --------------
Stanley K. Stynes
*By /s/ Roger John Lesinski
- ---------------------------------------
Roger John Lesinski, Attorney-in-Fact
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<PAGE>
EXHIBIT INDEX
PAGE OR
EXHIBIT NO. REFERENCE
- ----------- ---------
1.1 Form of Placement Agreement by and among
the Registrant, Janney Montgomery Scott Inc.
and Nolan Securities Corporation *
3.1 Restated Certificate of Incorporation filed
September 29, 1967 (a)
3.2 Certificate of Amendment to Certificate of Incorporation
filed September 15, 1978 increasing and extending voting
rights of the Company's Class A Common Stock and
establishing class voting with respect to other matters (b)
3.3 Certificate of Amendment to Certificate of Incorporation
filed January 7, 1982 increasing and extending voting
rights to the Company's Class A Common Stock (c)
3.4 Certificate of Amendment to Certificate of Incorporation
filed September 13, 1993 extending voting rights of the
Company's Class A Common Stock (d)
3.5 Certificate of Amendment to Certificate of Incorporation
filed February 24, 1998 increasing to 20,000,000 the
number of shares of Common Stock, par value one cent
($.01) per share *
3.6 Bylaws of the Company in effect as of July 17, 1997 (e)
3.7 Amendment to Article VIII of Bylaws *
4.1 Form of Warrant Agreement and Warrant *
10.1 Agreement among the Company, Stanford R. Ovshinsky
and Iris M. Ovshinsky, relating to the automatic
conversion of Class A Common Stock into the Company's
Common Stock upon the occurrence of certain events,
dated September 15, 1964 (f)
5.1 Opinion of Jenner & Block *
23.1 Consent of Jenner & Block (included in the opinion
filed as Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP *
24.1 Power of Attorney (included in the Signature Page
contained in Part II of the Registration Statement) *
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<PAGE>
Notes to Exhibit List
---------------------
(a) Filed as Exhibit 2-A to the Company's Form 8-A and incorporated
herein by reference.
(b) Filed as Exhibit 3-A-2 to Post-Effective Amendment No. 1 to the
Company's Registration Statement on Form S-1 (Registration No.
2-61551) and incorporated herein by reference.
(c) Filed as Exhibit 1 to the Company's Quarterly Report on Form 10-Q
for the quarter ended December 31, 1981 and incorporated herein by
reference.
(d) Filed as Exhibit 3.11 to the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1993 and incorporated herein by
reference.
(e) Filed as Exhibit 3.10 to the Company's Annual Report on Form 10-K/A
(Amendment No. 1) for the fiscal year ended June 30, 1997 and
incorporated herein by reference.
(f) Filed as Exhibit 13-D to the Company's Registration Statement on
Form S-1 (Registration No. 2-26772) and incorporated herein by
reference.
* Previously filed with Registration Statement No. 333-50749 on April 22,
1998.
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