As filed with the Securities and Exchange Commission on July __, 1996
Reg. No. 333-1055
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under The Securities Act of 1933
THE DIANA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-2448698
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8200 West Brown Deer Road
Suite 200
Milwaukee, Wisconsin 53223
(414) 355-0037
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Richard Y. Fisher
The Diana Corporation
8200 West Brown Deer Road
Suite 200
Milwaukee, WI 53223
(414) 355-0037
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications to:
Larry D. Lieberman
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, WI 53202
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this
Registration Statement.
If the only securities being registered on this Form
are being offered pursuant to dividend or 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, 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>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Shares Maximum Maximum
Title of Each to be Offering Aggregate Amount of
Class of Registered Price Offering Registration
Securities to be Per Unit Price Fee
Registered
Common Stock . . . 350,000 $15.5625 $5,446,875 $1,879(1)
Common Stock . . . 620,000 $ (2) $ $
(1) Paid on February 20, 1996.
(2) Estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457(c) under the
Securities Act of 1933 based on the reported average of the
high and low prices of the Common Stock on the New York
Stock Exchange on July __, 1996.
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.
<PAGE>
EXPLANATORY NOTE
This Registration Statement consists of two
prospectuses. The first prospectus for 470,000 shares relates to
offers and sales from time to time by selling shareholders. The
second prospectus for 500,000 shares relates to offers and sales
on a continuous or delayed basis by the Registrant.
<PAGE>
PROSPECTUS
470,000 Shares
The Diana Corporation
Common Stock
This Prospectus relates to up to 470,000 shares of common
stock, $1.00 par value per share (the "Shares"), of The Diana
Corporation (the "Company") which may be offered from time to time
by the selling shareholders named herein (the "Selling
Shareholders"). The Company is offering up to an additional
500,000 Shares for its own account by a separate Prospectus. The
Company will not receive any of the proceeds from the sale of the
Shares by the Selling Shareholders. The Company will bear the
costs relating to the registration of the Shares, estimated to be
approximately $30,000.
The Shares may be offered for sale from time to time by the
Selling Shareholders named herein, or by their pledgees, donees,
transferees or other successors in interest, to or through
underwriters or directly to other purchasers or through agents in
one or more transactions on or through the facilities of the New
York Stock Exchange, Inc. ("NYSE"), in the over-the-counter
market, in one or more private transactions, or in a combination
of such methods of sale, at prices and on terms then prevailing,
at prices related to such prices, or at negotiated prices. A
Selling Shareholder may pledge all or a portion of the Shares as
collateral in loan transactions. Upon default by any such Selling
Shareholder, the pledgee in such loan transaction would have the
same rights of sale as the Selling Shareholder under this
Prospectus. A Selling Shareholder may also transfer Shares by
gift, and upon any such transfer the donee would have the same
rights of sale as such Selling Shareholder under this Prospectus.
The Selling Shareholders and any brokers and dealers through whom
sales of the Shares are made may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended, and
the commissions or discounts and other compensation paid to such
persons may be regarded as underwriters' compensation.
The Shares are included for quotation on the NYSE under the
symbol "DNA". On July ___, 1996 the last sale price of a Share on
the NYSE was $ ____.
See "Risk Factors" beginning on page 3 for a discussion of
certain information that should be considered in connection with
an investment in the Shares.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is July , 1996.
<PAGE>
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 and
information statements and other information with the Securities
and Exchange Commission (the "Commission"). The Company has filed
with the Commission a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Shares offered
hereby. This Prospectus does not contain all the information set
forth in the Registration Statement and exhibits thereto, or
amendments thereto, to which reference is hereby made. Such
reports, proxy and information statements, Registration Statement
and exhibits and other information filed by the Company may be
inspected and, upon payment of prescribed fees, copied at the
public reference facilities of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C. 20549,
and at the Regional Offices of the Commission at 7 World Trade
Center, 13th Floor, New York, New York 10048, and at Suite 1400,
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661.
In addition, the Company's Common Stock is included for quotation
on the NYSE, and such reports, proxy and information statements,
Registration Statement and other information concerning the
Company should be available for inspection and copying at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005, on which exchange the Shares are traded.
Forward-Looking Statements
In accordance with the Private Securities Litigation Reform
Act of 1995, the Company can obtain a "safe-harbor" for forward-
looking statements by identifying those statements and by
accompanying those statements with cautionary statements which
identify factors that could cause actual results to differ from
those in the forward-looking statements. Accordingly, the
following information contains or may contain forward-looking
statements (1) information included or incorporated by reference
in this Prospectus and the Registration Statement, including,
without limitation, statements made under "Management's Discussion
and Analysis of Financial Condition and Results of Operations"
included in the Company's most recent Annual Report on Form 10-K
(and amendments thereto) (Item 7) and subsequent Quarterly Reports
on Form 10-Q (and amendments thereto) (Item 2), (2) information
included or incorporated by reference in future filings by the
Company with the Commission including, without limitation,
statements with respect to potential customers or product
deliveries, product pricing (other than historical product
pricing), projected unit or dollar sales, anticipated financing
needs or requirements for the Company or any of its subsidiaries,
statements with respect to projected costs or capital
expenditures, and product development and product roll-out plans,
and (3) information contained in written material, releases and
oral statements issued by, or on behalf of, the Company including,
without limitation, statements with respect to potential customers
or product deliveries, product pricing (other than historical
product pricing), projected unit or dollar sales, anticipated
financing needs or requirements for the Company or any of its
subsidiaries, statements with respect to projected costs or
capital expenditures, and product development and product roll-out
plans. The Company's actual results may differ materially from
those contained in the forward-looking statements identified
above. Factors which may cause such a difference to occur
include, but are not limited to, (i) those identified under "Risk
Factors" beginning on page 3 hereof, (ii) those identified or
referenced under "Forward-Looking Statements" in the Company's
most recent Form 10-K, (iii) product demand, (iv) industry
conditions and developments, and (v) other risks indicated in
filings with the Commission.
<PAGE>
No person has been authorized to give any information or to
make on behalf of the Company or the Selling Shareholder any
representations, other than those contained in this Prospectus, in
connection with the offer made hereby, and, if given or made, such
other information or representation must not be relied upon as
having been authorized by the Company or the Selling Shareholder.
This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any security other than the
securities offered hereby, or an offer to sell or solicitation of
any offer to buy such securities in any jurisdiction in which such
offer or solicitation is not qualified or to any person to whom
such offer or solicitation would be unlawful. Neither the
delivery of this Prospectus nor any sale made hereunder shall
under any circumstances create any implication that there has been
no change in the affairs of the Company since the date hereof or
that the information contained or incorporated by reference herein
is correct as of any date subsequent to the date hereof.
RISK FACTORS
Prior to making an investment, prospective purchasers of the
Shares should consider all of the information included or
incorporated by reference in the Prospectus and, in particular,
should evaluate the following risk factors:
Pending Sale of Atlanta Provision Company, Inc. ("APC")
The Company has entered into an agreement with an
undisclosed buyer for the sale of APC. The transaction has not
closed because the buyer has not been able to obtain sufficient
financing to consummate the transaction. No assurances can be
given that the transaction will be consummated.
Approximately 88% of the Company's fiscal 1996 sales were
derived from APC's meat and seafood distribution operations. The
sale of APC, if consummated, would result in the Company being
solely engaged in the telecommunications equipment and the voice
and data network installation and service industries. The loss of
APC's revenue would magnify the effect, on a consolidated basis,
of changes in revenue in the Company's remaining businesses. As a
result, the Company's reported operating results could be even
more volatile and susceptible to developments in the
telecommunications equipment and the voice and data network
installation and service industries.
The loss of revenue resulting from the sale of APC should be
substantially offset by elimination of the related costs, but no
assurances can be given. APC generated an operating loss of
$306,000 in fiscal 1996 compared to operating losses of $164,000
for the other business segments and $2,036,000 on a consolidated
basis.
Resignation of Key Employees of C&L Communications, Inc.
("C&L")
During fiscal 1996, C&L experienced a loss of sales when
compared to fiscal 1995 of approximately 28%. Since prior
management was unsuccessful in implementing its business plan, the
Chief Executive Officer of C&L was replaced on October 5, 1995.
Immediately thereafter, the Chief Financial Officer and Vice
President of Sales and Marketing resigned from C&L and formed a
competitive business. In addition, the sales manager and six out
of fourteen sales people, among others, resigned from C&L, some of
whom went to work for the newly formed competitor. Subsequently,
C&L's leading salesman, who was one of those who left the Company,
returned to C&L. Although C&L is now operating with a full
complement of employees, there can be no assurances that its past
level of profitability will be restored.
<PAGE>
Loan Covenant Violations
In fiscal 1996, APC has violated some of its financial
covenants. In August and November 1995 and in June 1996, APC and
its lender entered into waiver and amendment agreements relating
to the Loan and Security Agreement in order to avoid violating
certain financial covenants in fiscal 1996 and 1997.
At March 30, 1996, C&L violated its financial covenant
requiring a minimum level of pre-tax income. In June 1996, C&L
and its lender entered into a waiver and amendment agreement
relating to its revolving line of credit in order to avoid
violating certain financial covenants at March 30, 1996 and in
fiscal 1997.
Consolidation of Long Distance and/or Local Carriers and Its
Possible Effect on the Company
Over the last few years, the telecommunications industry has
experienced significant consolidation of smaller long distance
carriers. As a result, C&L, which historically has marketed its
products to smaller long distance carriers, has experienced
significant reduction in demand for certain of its products as
many of its customers were consolidated. C&L has attempted to
mitigate this problem, in part, by diversifying its product
offerings. In addition, the Company believes that the recently
enacted Federal Telecommunications Act of 1996 will benefit Sattel
Communications LLC ("Sattel") because of the potential new demand
for inexpensive and scalable switching equipment sold by Sattel.
Continuing consolidation of long distance carriers, however, could
adversely affect demand for Sattel's products from those
customers.
Current Information Regarding the Company's Success in
Introducing DataNet Into the Telecommunications Market
Sattel's DataNet product has undergone successful internal
and external testing. However, because the product has yet to
establish a successful track record in production environments
over extended periods of time, there can be no assurance of its
acceptance in volume by, and operation in, the telecommunications
market in general will be successful.
Existing Competition to DataNet and Other Digital Switching
Products of Sattel
The digital switching market in general and the
Internet/Online market in particular are extremely competitive.
The Company uses a combination of patents, trade secrets and
confidentiality agreements to protect the products and features
that it believes give it competitive advantages. There can be no
assurance, however, that other competitors, some of whom have much
greater access to resources and funding, cannot functionally
replicate most of the Company's products and features. Likewise,
while the Company will continue to develop new and improved
products and features, there is no guarantee that other
competitive firms cannot develop features which equal or possibly
exceed the Company's offerings.
Manufacturing Capacity and Product Margins
Sattel currently outsources its manufacturing to Sattel
Technologies, Inc. ("STI") (California); Sun, Moon, Star (Taiwan)
and other contract manufacturers. It is currently increasing its
capacity every month as well as developing new manufacturing
sources. There can be no assurance, however, that in the event of
substantial increases in demand, that Sattel can successfully
deliver its products in a timely fashion and/or without additional
expense which would result in a deterioration in product margins.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission pursuant to the Exchange Act are incorporated in this
Prospectus by reference:
(1) the Company's Annual Report on Form 10-K for the
year ended March 30, 1996 and Form 10-K/A for the year ended
April 1, 1995 filed with the Commission on July __, 1996;
(2) the Company's Form 10-Q/A for the quarter ended
January 6, 1996 filed with the Commission on July __, 1996;
(3) the Company's Current Reports on Form 8-K/A filed
with the Commission on April 1, 1996 and July __, 1996;
(4) the description of the Company's Common Stock
contained in the Company's Registration Statement on Form 8-
A filed with the Commission under the Exchange Act,
including any amendment or report filed for the purpose of
updating such description.
All reports and other documents subsequently filed by the
Company pursuant to Section 13, 14 or 15(d) of the Exchange Act
and prior to the termination of the offering of the Common Stock
offered hereby shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof. Such documents, and
the documents listed above, are hereinafter referred to as
"Incorporated Documents." Any statement contained herein or in an
Incorporated Document 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 Incorporated
Document 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.
The information relating to the Company contained in this
Prospectus summarizes, is based upon, or refers to, information
and financial statements contained in one or more Incorporated
Documents; accordingly, such information contained herein is
qualified in its entirety by reference to Incorporated Documents
and should be read in conjunction therewith.
The Company will provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the
written or oral request of any such person, a copy of any or all
of the Incorporated Documents, other than exhibits to such
documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests for such copies should
be directed to Corporate Secretary, The Diana Corporation, 8200
West Brown Deer Road, Suite 200, Milwaukee, Wisconsin 53223,
telephone (414) 355-0037.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of
the Shares by the Selling Shareholders.
<PAGE>
SELLING SHAREHOLDERS
The following information regarding the Shares offered
hereby has been provided to the Company by the Selling
Shareholders identified below and reflects information concerning
beneficial ownership of Shares as of the date of this Prospectus.
In recognition of the fact that the Selling Shareholders may
wish to be legally permitted to sell their Shares, other than in
transactions exempt from registration under the securities laws,
when they deem appropriate, the Company has filed with the
Commission a Registration Statement on Form S-3 under the
Securities Act, of which this Prospectus forms a part, with
respect to the resale of the Shares from time to time. The Shares
may be resold in transactions on the NYSE, on which exchange the
Shares are included and traded, in other public securities markets
or in private transactions or other transactions exempt from
registration under the Securities Act. See "Plan of
Distribution."
Shares Owned
Name of Prior to Shares Shares Owned
Selling Shareholder this Offering Offered Hereby(1) After Offering (1)
Sattel Technologies,
Inc. ("STI") 300,000 300,000 0
Porridge Partners II 60,000 60,000 0
Arthur J. Samberg 20,000 20,000 0
Joseph D. Samberg 20,000 20,000 0
Ardent Research
Partners, L.P. 40,000 40,000 0
Europa International Inc. 20,000 20,000 0
John M. Kratky 10,000 10,000 0
(1) Some or all of the Shares covered by this Prospectus may be
offered from time to time on a delayed or continuing basis by the
Selling Shareholder.
STI acquired its Shares on January 16, 1996 in connection
with the Company's acquisition of an additional 30% interest in
Sattel. Since October 1994, the Company has invested $13.9
million and issued 300,000 shares of stock in order to acquire its
80% interest in Sattel, to acquire ownership of the intellectual
property and licenses necessary to manufacture and sell DSS and
Datanet switches, to further engineer and advance such switches,
and to fund Sattel's startup costs, working capital and investment
in Concentric Network Corporation. As of the date hereof, STI
still owns a 4% interest in Sattel. STI and the Company formed
the predecessor of Sattel in 1994. STI has transferred certain
intellectual property rights to Sattel and has entered, and likely
will continue to enter, into other arrangements with Sattel in the
ordinary course of business, including supplying inventory to
Sattel on agreed-upon terms. The Chairman, President, Chief
Executive Officer and majority shareholder of STI is also a member
of the Board of Directors of Sattel. The other Selling
Shareholders purchased their Shares from the Company on March 29,
1996 in a transaction exempt from the Securities Act pursuant to
Section 4(2) thereof. Arthur J. Samberg and Joseph D. Samberg are
general partners of Porridge Partners II.
<PAGE>
PLAN OF DISTRIBUTION
Any distribution of the Shares by a Selling Shareholder, or
by pledgees, donees, transferees or other successors in interest,
may be effected from time to time in one or more of the following
transactions: (a) to underwriters who will acquire the Shares for
their own account and resell them in one or more transactions,
including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale (any
public offering price and any discount or concessions allowed or
reallowed or paid to dealers may be changed from time to time);
(b) through brokers, acting as principal or agent, in transactions
(which may involve crosses and block transactions) on or through
the facilities of the NYSE, other exchanges, in the over-the-
counter market, in special offerings, or otherwise, at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices, at negotiated prices or at fixed prices;
or (c) directly or through brokers or agents in private sales at
negotiated prices, or by any other legally available means.
The Selling Shareholders and any such underwriters, brokers,
dealers or agents, upon effecting the sale of the Shares, may be
deemed "underwriters" as that term is defined by the Securities
Act.
Underwriters participating in any offering made pursuant to
this Prospectus (as amended or supplemented from time to time) may
receive underwriting discounts and commissions, and discounts or
concessions may be allowed or reallowed or paid to dealers, and
brokers or agents participating in such transactions may receive
brokerage or agent's commissions or fees.
In order to comply with the securities laws of certain
states, if applicable, the Shares will be sold in such
jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states the Shares may not be
sold unless the Shares have been registered or qualified for sale
in such state or an exemption from registration or qualification
is available and complied with.
All costs, expenses and fees in connection with the
registration of the Shares will be borne by the Company.
Commissions and discounts, if any, attributable to the sale of the
Shares will be borne by the Selling Shareholders. The Selling
Shareholders and/or the Company may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions
involving sales of the Shares against certain liabilities,
including liabilities arising under the Securities Act. The
Company and the Selling Shareholders may agree to indemnify each
other and certain other persons against certain liabilities in
connection with the offering of the Shares, including liabilities
arising under the Securities Act.
The Selling Shareholders may also sell Shares pursuant to
Rule 144 under the Securities Act, or otherwise, in lieu of sales
by means of this Prospectus.
LEGAL OPINION
The validity of the Shares hereby has been passed upon by
Godfrey & Kahn, S.C.
EXPERTS
The consolidated financial statements of the Company
appearing in its Annual Report (Form 10-K) for the year ended
March 30, 1996, have been audited by Price Waterhouse LLP (fiscal
1996) and Ernst & Young LLP (fiscal 1995 and 1994), independent
auditors, as set forth in their reports thereon included therein
and incorporated herein by reference. Such financial statements
are incorporated herein in reliance upon the reports of Price
Waterhouse LLP and Ernst & Young LLP pertaining to such financial
statements given upon the authority of such firms as experts in
accounting and auditing.
<PAGE>
PROSPECTUS
500,000 Shares
The Diana Corporation
Common Stock
This Prospectus relates to up to 500,000 shares of common
stock, $1.00 par value per share (the "Shares"), of The Diana
Corporation (the "Company") which may be offered from time to time
by the Company. Certain Selling Shareholders are offering up to
an additional 470,000 Shares for their own accounts by a separate
Prospectus. The Company will bear the costs relating to the
registration of the Shares, estimated to be approximately $30,000.
The terms of the offering of the Shares, the initial
offering price and the use of proceeds will be set forth in an
accompanying supplement to this Prospectus (each, a "Prospectus
Supplement"). This Prospectus may not be used to consummate sales
of Shares unless accompanied by a Prospectus Supplement.
The Shares may be sold through underwriters, dealers or
agents or may be sold directly to purchasers. If any
underwriters, dealers or agents are involved in the sale of any
Shares, their names and any applicable fee, commission or discount
arrangements will be set forth in the accompanying Prospectus
Supplement. The net proceeds to the Company of the sale of Shares
will be the purchase price of such Shares less attributable
issuance expenses, including underwriters', dealers' or agents'
compensation arrangements. See "Plan of Distribution" for
possible indemnification arrangements for underwriters, dealers
and agents.
The Shares are included for quotation on the NYSE under the
symbol "DNA". On July ___, 1996 the last sale price of a Share on
the NYSE was $ ____.
See "Risk Factors" beginning on page 3 for a discussion of
certain information that should be considered in connection with
an investment in the Shares.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is July , 1996.
<PAGE>
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 and
information statements and other information with the Securities
and Exchange Commission (the "Commission"). The Company has filed
with the Commission a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Shares offered
hereby. This Prospectus does not contain all the information set
forth in the Registration Statement and exhibits thereto, or
amendments thereto, to which reference is hereby made. Such
reports, proxy and information statements, Registration Statement
and exhibits and other information filed by the Company may be
inspected and, upon payment of prescribed fees, copied at the
public reference facilities of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C. 20549,
and at the Regional Offices of the Commission at 7 World Trade
Center, 13th Floor, New York, New York 10048, and at Suite 1400,
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661.
In addition, the Company's Common Stock is included for quotation
on the NYSE, and such reports, proxy and information statements,
Registration Statement and other information concerning the
Company should be available for inspection and copying at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005, on which exchange the Shares are traded.
Forward-Looking Statements
In accordance with the Private Securities Litigation Reform
Act of 1995, the Company can obtain a "safe-harbor" for forward-
looking statements by identifying those statements and by
accompanying those statements with cautionary statements which
identify factors that could cause actual results to differ from
those in the forward-looking statements. Accordingly, the
following information contains or may contain forward-looking
statements (1) information included or incorporated by reference
in this Prospectus and the Registration Statement, including,
without limitation, statements made under "Management's Discussion
and Analysis of Financial Condition and Results of Operations"
included in the Company's most recent Annual Report on Form 10-K
(and amendments thereto) (Item 7) and subsequent Quarterly Reports
on Form 10-Q (and amendments thereto) (Item 2), (2) information
included or incorporated by reference in future filings by the
Company with the Commission including, without limitation,
statements with respect to potential customers or product
deliveries, product pricing (other than historical product
pricing), projected unit or dollar sales, anticipated financing
needs or requirements for the Company or any of its subsidiaries,
statements with respect to projected costs or capital
expenditures, and product development and product roll-out plans,
and (3) information contained in written material, releases and
oral statements issued by, or on behalf of, the Company including,
without limitation, statements with respect to potential customers
or product deliveries, product pricing (other than historical
product pricing), projected unit or dollar sales, anticipated
financing needs or requirements for the Company or any of its
subsidiaries, statements with respect to projected costs or
capital expenditures, and product development and product roll-out
plans. The Company's actual results may differ materially from
those contained in the forward-looking statements identified
above. Factors which may cause such a difference to occur
include, but are not limited to, (i) those identified under "Risk
Factors" beginning on page 3 hereof, (ii) those identified or
referenced under "Forward-Looking Statements" in the Company's
most recent Form 10-K, (iii) product demand, (iv) industry
conditions and developments, and (v) other risks indicated in
filings with the Commission.
<PAGE>
No person has been authorized to give any information or to
make on behalf of the Company or the Selling Shareholder any
representations, other than those contained in this Prospectus, in
connection with the offer made hereby, and, if given or made, such
other information or representation must not be relied upon as
having been authorized by the Company or the Selling Shareholder.
This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any security other than the
securities offered hereby, or an offer to sell or solicitation of
any offer to buy such securities in any jurisdiction in which such
offer or solicitation is not qualified or to any person to whom
such offer or solicitation would be unlawful. Neither the
delivery of this Prospectus nor any sale made hereunder shall
under any circumstances create any implication that there has been
no change in the affairs of the Company since the date hereof or
that the information contained or incorporated by reference herein
is correct as of any date subsequent to the date hereof.
RISK FACTORS
Prior to making an investment, prospective purchasers of the
Shares should consider all of the information included or
incorporated by reference in the Prospectus and, in particular,
should evaluate the following risk factors:
Pending Sale of Atlanta Provision Company, Inc. ("APC")
The Company has entered into an agreement with an
undisclosed buyer for the sale of APC. The transaction has not
closed because the buyer has not been able to obtain sufficient
financing to consummate the transaction. No assurances can be
given that the transaction will be consummated.
Approximately 88% of the Company's fiscal 1996 sales were
derived from APC's meat and seafood distribution operations. The
sale of APC, if consummated, would result in the Company being
solely engaged in the telecommunications equipment and the voice
and data network installation and service industries. The loss of
APC's revenue would magnify the effect, on a consolidated basis,
of changes in revenue in the Company's remaining businesses. As a
result, the Company's reported operating results could be even
more volatile and susceptible to developments in the
telecommunications equipment and the voice and data network
installation and service industries.
The loss of revenue resulting from the sale of APC should be
substantially offset by elimination of the related costs, but no
assurances can be given. APC generated an operating loss of
$306,000 in fiscal 1996 compared to operating losses of $164,000
for the other business segments and $2,036,000 on a consolidated
basis.
Resignation of Key Employees of C&L Communications, Inc.
("C&L")
During fiscal 1996, C&L experienced a loss of sales when
compared to fiscal 1995 of approximately 28%. Since prior
management was unsuccessful in implementing its business plan, the
Chief Executive Officer of C&L was replaced on October 5, 1995.
Immediately thereafter, the Chief Financial Officer and Vice
President of Sales and Marketing resigned from C&L and formed a
competitive business. In addition, the sales manager and six out
of fourteen sales people, among others, resigned from C&L, some of
whom went to work for the newly formed competitor. Subsequently,
C&L's leading salesman, who was one of those who left the Company,
returned to C&L. Although C&L is now operating with a full
complement of employees, there can be no assurances that its past
level of profitability will be restored.
<PAGE>
Loan Covenant Violations
In fiscal 1996, APC has violated some of its financial
covenants. In August and November 1995 and in June 1996, APC and
its lender entered into waiver and amendment agreements relating
to the Loan and Security Agreement in order to avoid violating
certain financial covenants in fiscal 1996 and 1997.
At March 30, 1996, C&L violated its financial covenant
requiring a minimum level of pre-tax income. In June 1996, C&L
and its lender entered into a waiver and amendment agreement
relating to its revolving line of credit in order to avoid
violating certain financial covenants at March 30, 1996 and in
fiscal 1997.
Consolidation of Long Distance and/or Local Carriers and Its
Possible Effect on the Company
Over the last few years, the telecommunications industry has
experienced significant consolidation of smaller long distance
carriers. As a result, C&L, which historically has marketed its
products to smaller long distance carriers, has experienced
significant reduction in demand for certain of its products as
many of its customers were consolidated. C&L has attempted to
mitigate this problem, in part, by diversifying its product
offerings. In addition, the Company believes that the recently
enacted Federal Telecommunications Act of 1996 will benefit Sattel
Communications LLC ("Sattel") because of the potential new demand
for inexpensive and scalable switching equipment sold by Sattel.
Continuing consolidation of long distance carriers, however, could
adversely affect demand for Sattel's products from those
customers.
Current Information Regarding the Company's Success in
Introducing DataNet Into the Telecommunications Market
Sattel's DataNet product has undergone successful internal
and external testing. However, because the product has yet to
establish a successful track record in production environments
over extended periods of time, there can be no assurance of its
acceptance in volume by, and operation in, the telecommunications
market in general will be successful.
Existing Competition to DataNet and Other Digital Switching
Products of Sattel
The digital switching market in general and the
Internet/Online market in particular are extremely competitive.
The Company uses a combination of patents, trade secrets and
confidentiality agreements to protect the products and features
that it believes give it competitive advantages. There can be no
assurance, however, that other competitors, some of whom have much
greater access to resources and funding, cannot functionally
replicate most of the Company's products and features. Likewise,
while the Company will continue to develop new and improved
products and features, there is no guarantee that other
competitive firms cannot develop features which equal or possibly
exceed the Company's offerings.
Manufacturing Capacity and Product Margins
Sattel currently outsources its manufacturing to Sattel
Technologies, Inc. ("STI") (California); Sun, Moon, Star (Taiwan)
and other contract manufacturers. It is currently increasing its
capacity every month as well as developing new manufacturing
sources. There can be no assurance, however, that in the event of
substantial increases in demand, that Sattel can successfully
deliver its products in a timely fashion and/or without additional
expense which would result in a deterioration in product margins.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission pursuant to the Exchange Act are incorporated in this
Prospectus by reference:
(1) the Company's Annual Report on Form 10-K for the
year ended March 30, 1996 and Form 10-K/A for the year ended
April 1, 1995 filed with the Commission on July __, 1996;
(2) the Company's Form 10-Q/A for the quarter ended
January 6, 1996 filed with the Commission on July __, 1996;
(3) the Company's Current Reports on Form 8-K/A filed
with the Commission on April 1, 1996 and July __, 1996;
(4) the description of the Company's Common Stock
contained in the Company's Registration Statement on Form 8-
A filed with the Commission under the Exchange Act,
including any amendment or report filed for the purpose of
updating such description.
All reports and other documents subsequently filed by the
Company pursuant to Section 13, 14 or 15(d) of the Exchange Act
and prior to the termination of the offering of the Common Stock
offered hereby shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof. Such documents, and
the documents listed above, are hereinafter referred to as
"Incorporated Documents." Any statement contained herein or in an
Incorporated Document 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 Incorporated
Document 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.
The information relating to the Company contained in this
Prospectus summarizes, is based upon, or refers to, information
and financial statements contained in one or more Incorporated
Documents; accordingly, such information contained herein is
qualified in its entirety by reference to Incorporated Documents
and should be read in conjunction therewith.
The Company will provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the
written or oral request of any such person, a copy of any or all
of the Incorporated Documents, other than exhibits to such
documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests for such copies should
be directed to Corporate Secretary, The Diana Corporation, 8200
West Brown Deer Road, Suite 200, Milwaukee, Wisconsin 53223,
telephone (414) 355-0037.
USE OF PROCEEDS
The net proceeds from the sale of the Shares by the Company
will be used as set forth in the applicable Prospectus Supplement.
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Shares to or through underwriters,
dealers, or agents, and also may sell the Shares directly to one
or more other purchasers or through a combination of any such
methods of sale.
The Prospectus Supplement with respect to the Shares sets
forth the terms of the offering (and, in certain circumstances,
any reoffering), including the name or names of any underwriters,
agents or other purchasers, the purchase price in respect of the
Shares, the proceeds to the Company, any initial public offering
price, any discounts, commissions and other items constituting
compensation from the Company and any discounts, concessions or
commissions allowed or reallowed or paid by any underwriters to
other dealers.
The distribution of the Shares may be effected by one or
more agents, broker-dealers, underwriters or other purchasers from
time to time in one or more transactions on or through the
facilities of the NYSE, in the over-the-counter market, in
negotiated transactions, or in a combination of such methods of
sale, at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. If
underwriters or dealers are used in the sale, the Shares will be
acquired by the underwriters or dealers for their own account and
may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The
Shares may be offered to the public through underwriting
syndicates represented by managing underwriters or by underwriters
without a syndicate. Unless otherwise set forth in the Prospectus
Supplement, the obligations of any agent, broker-dealer,
underwriter or other purchaser to purchase Offered Securities will
be subject to satisfaction of certain conditions, and such
underwriters will be obligated to purchase all such Shares if any
are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time. Unless otherwise indicated in
the Prospectus Supplement, any agent will be acting on a best
efforts basis for the period of its appointment.
If the Company sells Shares "at the market" on or through
the facilities of the NYSE at other than a fixed price, the Shares
will be sold through an underwriter or underwriters, acting as
principal(s) or as agent(s) for the Company, and will be named in
a Prospectus Supplement included in a post-effective amendment to
the Registration Statement.
Underwriters, agents and other purchasers who participate in
the distribution of the Shares may be entitled under agreements
which may be entered into by the Company to indemnification by the
Company against certain liabilities, including liabilities under
the Securities Act of 1933, as amended, or to contribution with
respect to payments which the underwriters, agents or other
purchasers may be required to make in respect thereof. Such
underwriters, agents and other purchasers may be customers of,
engage in transactions with, or perform services for the Company
in the ordinary course of business.
LEGAL OPINION
The validity of the Shares hereby has been passed upon by
Godfrey & Kahn, S.C.
EXPERTS
The consolidated financial statements of the Company
appearing in its Annual Report (Form 10-K) for the year ended
March 30, 1996, have been audited by Price Waterhouse LLP (fiscal
1996) and Ernst & Young LLP (fiscal 1995 and 1994), independent
auditors, as set forth in their reports thereon included therein
and incorporated herein by reference. Such financial statements
are incorporated herein in reliance upon the reports of Price
Waterhouse LLP and Ernst & Young LLP pertaining to such financial
statements given upon the authority of such firms as experts in
accounting and auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses to be
incurred by the Company in connection with the distribution of the
securities being registered hereby:
SEC registration fee . . . . . . . . . . $
Accounting fees and expenses . . . . . . 8,000
Legal fees and expenses . . . . . . . . . 10,000
Miscellaneous . . . . . . . . . . . . . .
TOTAL . . . . . . . . . . . . . . . $30,000
All of the above expenses other than the SEC registration
fee are estimates. All of the expenses listed will be paid by the
Company.
Item 15. Indemnification of Directors and Officers.
Under Section 145 of the Delaware General Corporation Law,
the Company is in certain circumstances permitted, and in other
circumstances may be required, to indemnify its directors and
officers against certain expenses (including attorneys' fees) and
other amounts paid in connection with certain threatened, pending
or completed civil, criminal, administrative or investigative
actions, suits or proceedings (including certain civil actions and
suits which may be instituted by or in the right of the Company),
in which such persons were or are parties, or are threatened to be
made parties, by reason of the fact that such persons were or are
directors or officers of the Company. Such section also permits
the Company to purchase and maintain insurance on behalf of its
directors and officers against liability which may be asserted
against, or incurred by, such persons in their capacities as
directors or officers of the Company, or which may arise out of
their status as directors or officers of the Company whether or
not the Company would have the power to indemnify such persons
against such liability under the provisions of such section.
Under Article IX of the Company's Bylaws, the Company is in
certain instances required to indemnify its directors and officers
against certain expenses (including attorneys' fees) and other
amounts paid in connection with the defense or settlement of
certain threatened, pending or completed civil, criminal,
administrative or investigative actions, suits or proceedings
(including suits which may be instituted by or in the name of the
Company), in which such persons were or are parties, or are
threatened to be made parties, by reason of the fact that such
persons were or are directors or officers of the Company.
Through insurance, the officers and directors of the Company
may from time to time also be insured for acts or omissions
related to the conduct of their duties.
The Company's Restated Certificate of Incorporation limits
the personal liability of directors to the fullest extent
permitted by Delaware law.
<PAGE>
Item 16. Exhibits.
The following Exhibits are filed as part of this
Registration Statement.
Exhibit No.
5.1 Opinion of Counsel
10.1 Loan and Security Agreement dated January 2, 1996
between Sanwa Business Credit Corporation and C&L
Communications, Inc., one of the Company's
subsidiaries *
10.2 Exchange Agreement dated January 16, 1996 between the
Company and Sattel Technologies,
Inc. *
23.1 Consent of Ernst & Young LLP
23.2 Consent of Price Waterhouse LLP
23.3 Consent of Perisho, Tombor, Loomis & Ramirez PC
23.4 Consent of Counsel (included in Exhibit 5.1)
24.1 Powers of Attorney *
* Filed on February 20, 1996
Item 17. Undertakings.
**(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or
events arising after the effective date of the
Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) to include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference 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.
(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.
<PAGE>
**(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the 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.
**(h) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification
is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defence of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
**(i) The undersigned Registrant hereby undertakes that (1)
for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it was declared effective; and (2) for the purpose of
determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
** Paragraph references correspond to those of Item 512 of
Regulation S-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this Amendment to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Milwaukee, State of Wisconsin, on July
__, 1996.
THE DIANA CORPORATION
By: /s/ Richard Y. Fisher
---------------------
Richard Y. Fisher,
Chairman of the Board,
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 in the capacities on the dates indicated.
Signature Title
*
- ----------------------- Chairman of the Board,
Richard Y. Fisher Chief Executive Officer
and Director
*
- ------------------------ President and Director
Donald E. Runge
*
- ------------------------ Senior Vice President and Director
Sydney B. Lilly
*
- ------------------------ Vice President, Treasurer and
R. Scott Miswald Controller (Principal Financial
and Accounting Officer)
- ------------------------ Director
Bruce C. Borchardt
*
- ----------------------- Director
Jack E. Donnelly
*
---------------------- Director
Jay M. Lieberman
* Signed on July __, 1996 on behalf of the undersigned and
on behalf of the persons indicated pursuant to a power of attorney
previously filed.
/s/ Richard Y. Fisher
-------------------------
Richard Y. Fisher
<PAGE>
EXHIBIT INDEX
5.1 Opinion of Counsel
10.1 Loan and Security Agreement dated January 2, 1996
between
Sanwa Business Credit Corporation and C&L
Communications, Inc.,
one of the Company's subsidiaries *
10.2 Exchange Agreement dated January 16, 1996 between the
Company
and Sattel Technologies, Inc. *
23.1 Consent of Ernst & Young LLP
23.2 Consent of Price Waterhouse LLP
23.3 Consent of Perisho, Tombor, Loomis & Ramirez PC
23.4 Consent of Counsel (included in Exhibit 5.1)
24.1 Powers of Attorney *
* Filed on February 20, 1996.
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