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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 21, 1996
REGISTRATION NO. 333-08017
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________________
WEGENER CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 81-0371341
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
11350 TECHNOLOGY CIRCLE
DULUTH, GEORGIA 30136
(770) 623-0096
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ROBERT A. PLACEK
PRESIDENT AND CHIEF EXECUTIVE OFFICER
11350 TECHNOLOGY CIRCLE
DULUTH, GEORGIA 30136
(770) 623-0096
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
Copies to:
HELEN T. FERRARO, ESQ.
SMITH, GAMBRELL & RUSSELL
3343 PEACHTREE ROAD, N.E., SUITE 1800
ATLANTA, GEORGIA 30326
(404) 264-2620
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 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, 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. / /
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED (1) SHARE (2) PRICE (2) FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $0.01
per share..................... 150,000 shares $6.50 $975,000 $336.21
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(1) The additional shares of Common Stock being registered hereby are issuable
upon conversion of the Registrant's 8% Convertible Debentures Due 1999 (the
"Debentures"). Because the Debentures carry a variable conversion rate
that fluctuates with the market price of the Company's Common Stock, the
aggregate number of shares being registered on this Registration
Statement constitutes the Company's reasonable estimate of the maximum
number of shares that may be needed upon conversion. Pursuant to Rule
416, the Registration Statement also covers such indeterminate number of
additional shares of Common Stock as may become issuable on conversion of
the Debentures as a result of any future adjustments in the conversion
price in accordance with the terms of the Debentures.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c).
___________________________________
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
PROSPECTUS
871,989 SHARES
WEGENER CORPORATION
COMMON STOCK
THE SHARES OF COMMON STOCK, $0.01 PAR VALUE PER SHARE (THE "COMMON STOCK"),
OF WEGENER CORPORATION (THE "COMPANY") COVERED BY THIS PROSPECTUS ARE SHARES
WHICH MAY BE OFFERED AND SOLD (THE "OFFERING"), FROM TIME TO TIME, BY CERTAIN
SHAREHOLDERS OF THE COMPANY (COLLECTIVELY, THE "SELLING SHAREHOLDERS"). SEE
"SELLING SHAREHOLDERS." THE SHARES OF COMMON STOCK COVERED BY THIS
PROSPECTUS ARE ISSUABLE TO THE SELLING SHAREHOLDERS UPON CONVERSION OF THE
COMPANY'S 8% CONVERTIBLE DEBENTURES DUE 1999 (THE "DEBENTURES"). ALL OF THE
SHARES COVERED HEREBY WILL ONLY BE SOLD BY THE SELLING SHAREHOLDERS. THIS
PROSPECTUS DOES NOT PURPORT TO COVER THE INITIAL ISSUANCE BY THE COMPANY OF
THE SHARES OF COMMON STOCK UPON CONVERSION OF THE DEBENTURES, BUT ONLY THE
REOFFER AND RESALE OF SUCH SHARES BY THE SELLING SHAREHOLDERS. THE COMPANY
WILL NOT RECEIVE ANY OF THE PROCEEDS FROM THE SHARES SOLD BY THE SELLING
SHAREHOLDERS.
THE SELLING SHAREHOLDERS MAY FROM TIME TO TIME SELL THE SHARES OF COMMON
STOCK COVERED BY THIS PROSPECTUS TO OR THROUGH ONE OR MORE UNDERWRITERS, AND
MAY ALSO SELL SHARES OF COMMON STOCK DIRECTLY TO OTHER PURCHASERS OR THROUGH
AGENTS, ON THE NASDAQ SMALL-CAP MARKET IN ORDINARY BROKERAGE TRANSACTIONS, IN
NEGOTIATED TRANSACTIONS, OR OTHERWISE, AT MARKET PRICES PREVAILING AT THE
TIME OF SALE, AT PRICES RELATED TO THE THEN PREVAILING MARKET PRICE OR AT
NEGOTIATED PRICES. SEE "PLAN OF DISTRIBUTION."
THE COMMON STOCK IS QUOTED ON THE NASDAQ SMALL-CAP MARKET SYSTEM UNDER THE
SYMBOL "WGNR." THE LAST SALE PRICE OF THE COMMON STOCK ON AUGUST 20, 1996 AS
REPORTED ON THE NASDAQ SMALL-CAP MARKET SYSTEM WAS $6.25 PER SHARE. SEE
"PRICE RANGE OF COMMON STOCK."
SEE "RISK FACTORS" ON PAGES 3 THROUGH 5 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY.
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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PROCEEDS TO
PRICE TO UNDERWRITING SELLING PROCEEDS TO
PUBLIC DISCOUNT SHAREHOLDERS(1) COMPANY
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<S> <C> <C> <C> <C>
SEE TEXT SEE TEXT SEE TEXT
PER SHARE(1) . . . . . . BELOW BELOW BELOW $0
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SEE TEXT SEE TEXT SEE TEXT
TOTAL. . . . . . . . . . BELOW BELOW BELOW $0
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(1) THE SELLING SHAREHOLDERS HAVE ADVISED THE COMPANY THAT THEY PROPOSE TO
OFFER FOR SALE AND TO SELL THE COMMON STOCK FROM TIME TO TIME UNTIL MAY 31,
1999 THROUGH BROKERS IN THE OVER-THE-COUNTER MARKET, IN PRIVATE
TRANSACTIONS, AND OTHERWISE, AT MARKET PRICES THEN PREVAILING OR
OBTAINABLE. ACCORDINGLY, SALES PRICES AND PROCEEDS TO THE SELLING
SHAREHOLDERS WILL DEPEND UPON PRICE FLUCTUATIONS AND THE MANNER OF SALE.
IF THE COMMON STOCK IS SOLD THROUGH BROKERS, THE SELLING SHAREHOLDERS WILL
PAY BROKERAGE COMMISSIONS AND OTHER CHARGES (WHICH COMPENSATION AS TO A
PARTICULAR BROKER-DEALER MAY BE IN EXCESS OF CUSTOMARY COMMISSIONS).
EXCEPT FOR THE PAYMENT OF SUCH BROKERAGE COMMISSIONS AND CHARGES AND THE
LEGAL FEES, IF ANY, OF THE SELLING SHAREHOLDERS, THE COMPANY WILL BEAR ALL
EXPENSES IN CONNECTION WITH REGISTERING THE SHARES OFFERED HEREBY. SUCH
EXPENSES ARE ESTIMATED TO TOTAL APPROXIMATELY $35,000. SEE "PLAN OF
DISTRIBUTION."
THIS PROSPECTUS ALSO RELATES TO SUCH ADDITIONAL SHARES AS MAY BE ISSUED TO
THE SELLING SHAREHOLDERS BECAUSE OF FUTURE STOCK DIVIDENDS, STOCK
DISTRIBUTIONS, STOCK SPLITS, OR SIMILAR CAPITAL READJUSTMENTS.
THE DATE OF THIS PROSPECTUS IS __________, 1996
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AVAILABLE INFORMATION
The Company is subject to certain informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and, in accordance
therewith, files reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports and other information
can be inspected and copied at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's regional offices located at 7 World Trade Center,
13th Floor, New York, New York 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
also be obtained at prescribed rates by writing to the Securities and
Exchange Commission, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, such reports, proxy statements and
other information concerning the Company may be inspected at the offices of
the National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006-1506.
The Company has filed a Registration Statement on Form S-3 (together with
all amendments and exhibits filed or to be filed in connection therewith, the
"Registration Statement") under the Securities Act of 1933, as amended, with
respect to the Common Stock offered hereby. This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. Statements contained herein concerning the provisions of
documents are necessarily summaries of such documents, and each statement is
qualified in its entirety by reference to the copy of the applicable document
filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission pursuant to
the 1934 Act are hereby incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended September 1,
1995;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended December
1, 1995;
3. The Company's Quarterly Report on Form 10-Q for the quarter ended March 1,
1996;
4. The Company's Quarterly Report on Form 10-Q for the quarter ended May 31,
1996; and
5. The description of the Company's Common Stock contained in the
Registration Statement on Form 8-A of Telecrafter Corporation, predecessor
to the Company, Registration No. 0-11003 as filed with the Securities and
Exchange Commission on March 25, 1983.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the respective
dates of filing of such documents. 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 other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified and superseded, to constitute a
part of this Prospectus.
The Company will provide without charge to each person to whom a Prospectus
is delivered, upon written or oral request of such person, a copy of any and
all of the information that has been incorporated by reference in this
Prospectus (excluding exhibits unless such exhibits are specifically
incorporated by reference into such documents). Please direct such requests
to the Secretary, Wegener Corporation, 11350 Technology Circle, Duluth,
Georgia 30136, telephone number (770) 623-0096.
2
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RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, THE
FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING THE COMPANY
AND ITS BUSINESS BEFORE PURCHASING ANY OF THE SHARES OF COMMON STOCK OFFERED
HEREBY. EXCEPT FOR HISTORICAL INFORMATION CONTAINED IN THIS PROSPECTUS AND IN
THE DOCUMENTS INCORPORATED IN THIS PROSPECTUS BY REFERENCE, THE MATTERS
DISCUSSED HEREIN AND THEREIN CONTAIN FORWARD-LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE SUGGESTED IN THE FORWARD-LOOKING STATEMENTS, INCLUDING WITHOUT
LIMITATION, THE EFFECT OF ECONOMIC CONDITIONS, PRODUCT DEMAND, COMPETITIVE
PRODUCTS AND OTHER RISKS DETAILED HEREIN AND IN THE COMPANY'S OTHER FILINGS
WITH THE COMMISSION.
WORKING CAPITAL REQUIREMENTS; NEED FOR ADDITIONAL FINANCING. The Company
may require additional capital or other financing to finance its operations
and continued growth. The Company may seek additional equity financing
through the issuance of Common Stock upon the exercise of outstanding
warrants and options or through the sale of securities on a public or a
private placement basis on such terms as are reasonably attainable. There
can be no assurance that the Company will be able to obtain such financing
when needed, or that if obtained, it will be sufficient or on terms and
conditions acceptable to the Company.
LIMITED HISTORY OF PROFITABILITY. Over the past five fiscal years, the
Company has reported positive net income only in the most recent fiscal year.
As a consequence, the Company had an accumulated deficit of $2,524,553 at the
end of the fiscal year ended September 1, 1995. The deficit was $2,092,029
at May 31, 1996. There can be no certainty regarding the Company's ability
to achieve or sustain profitability in the future. Whether or not the
Company is able to operate profitably, the Company may require additional
capital to finance its operations. During the second half of fiscal 1995
(year ended September 1, 1995) the Company issued 1.7 million shares of
Common Stock in private placements and received net proceeds of $7,662,000.
During May 1996, the Company issued $5,000,000 aggregate principal amount of
8% Convertible Debentures due 1999, also in a private placement. The
proceeds received in the private placements as well as the Company's other
current sources of funds (including a $8.5 million revolving line of credit)
are expected to satisfy the Company's liquidity needs in the short term.
Depending on the levels of revenues and profitability for the remainder of
fiscal 1996 and for fiscal 1997, additional funds for working capital may be
needed. Management believes that the Company's ability to continue
operations is dependent upon successfully obtaining additional funds through
debt or equity financing to provide working capital and other funds for
operations, and ultimately, the achievement of sustained profitability.
There can be no assurance that the Company will be successful in achieving
these goals.
TECHNOLOGICAL CHANGE AND NEW PRODUCTS. The market for the Company's
products is characterized by rapidly changing technology, evolving industry
standards and frequent product introductions. Product introductions are
generally characterized by increased functionality and better quality,
sometimes at reduced prices. The introduction of products embodying new
technology may render existing products obsolete and unmarketable. The
Company's ability to successfully develop and introduce on a timely basis new
and enhanced products that embody new technology, and achieve levels of
functionality and price acceptable to the market will be a significant factor
in the Company's ability to grow and to remain competitive. If the Company
is unable, for technological or other reasons, to develop competitive
products in a timely manner in response to changes in the industry, the
Company's business and operating results will be materially and adversely
affected.
CONCENTRATION OF CUSTOMERS. The Company sells to a variety of domestic and
international customers on an open-unsecured account basis. The customers
principally operate in the cable television, broadcast
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business music, private network and data communications industries. One
customer, Glenayre Technologies, Inc., accounted for approximately 15.0% of
revenues in fiscal 1995. Sales to Muzak accounted for approximately 18.6% of
revenues in fiscal 1994, and 13.3% of revenues in fiscal 1993. Sales to a
relatively small number of major customers have typically comprised a
majority of the Company's revenues. This trend is expected to continue, and
there can be no assurance that the loss of one or more of these customers
would not have an adverse effect on the Company's operations.
SOURCES AND AVAILABILITY OF RAW MATERIALS. Raw materials consist of
passive electronic components, electronic circuit boards and fabricated sheet
metal. The Company purchases approximately one-half of its raw materials from
direct dealers and the other half is purchased from distributors. Passive
and active components include parts such as resistors, integrated circuits
and diodes. The Company uses approximately ten distributors to supply its
electronic components. Direct sources provide sheet metal, electronic
circuit boards and other materials built to specifications. The Company
maintains relationships with almost twenty direct dealers. Most of the
Company's materials are available from a number of different suppliers,
however, certain components used in existing and future products are
currently available from single or limited sources. Although the Company
believes that all single-source components currently are available in
adequate quantities, there can be no assurance that shortages or
unanticipated delivery interruptions will not develop in the future. Any
disruption or termination of supply of certain single-source components could
have an adverse effect on the Company's business and results of operations.
DEPENDENCE ON MANAGEMENT AND KEY EMPLOYEES. The Company's development,
management of its growth and other activities depend on the efforts of key
management and technical employees, and, in particular, Robert A. Placek and
C. Troy Woodbury, Jr., the President and Chief Executive Officer and
Treasurer and Chief Financial Officer, respectively. The Company does not
have an employment agreement with either Mr. Placek or Mr. Woodbury, but
carries key man life insurance on the life of Mr. Placek in the amount of $2
million. Competition for qualified personnel is intense. The Company uses
incentives, including competitive compensation and stock option plans, to
attract and retain well-qualified employees. There can be no assurance,
however, that the Company will continue to attract and retain personnel with
the requisite capabilities and experience. The loss of one or more of the
Company's key management or technical personnel also could adversely affect
the Company. The Company does not have employment agreements with its key
management personnel or technical employees. The Company's future success is
also dependent upon its ability to effectively attract, retain, train,
motivate and manage its employees. Failure to do so could have a material
adverse effect on the Company's business and operating results.
COMPETITION. The Company competes with companies which have substantially
greater resources and a larger number of products than the Company, as well
as with small specialized companies. Competition in the emerging distance
learning industry is comprised of both established firms as well as relative
newcomers. Through relationships with satellite service providers, the
Company has positioned itself to provide end-to-end solutions to its
customers. Competition in the market for the Company's MPEG-2 broadcast
television electronics products, including digital video equipment, is driven
by timelines, performance, and price. Although design improvements continue,
the Company has begun deliveries of its broadcast digital video products
which are aggressively priced, with unique, desirable features. These
products are physically smaller and priced below other equivalent products on
the market today. The competitive situation for data products is
significantly different than that of the markets for other WCI products. Due
to the large number of potential end users, both small and large competitors
continue to emerge. The Company believes it has positioned itself to
capitalize on the market trends in this business through careful development
of its product and market strategies, which have proven successful in
increasing revenues from this sector. In the cable television market the
Company believes that the
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competitive position for its products is dominant. Products for cable
television include proprietary cueing and network control devices.
Competition for radio network products, including the Company's digital audio
products, is very aggressive and pricing is very competitive. The Company
believes that its continued success in all of its markets will depend on
aggressive marketing and product development.
NO ASSURANCE OF CONTINUED TRADING MARKET IN COMPANY SECURITIES. The
Company's Common Stock is traded on the Nasdaq SmallCap Market. There is no
assurance that a public market for the Company's Common Stock will continue
to be made or that persons purchasing the Company's securities will be able
to avail themselves of a public trading market for the Common Shares in the
future. The requirements for continued listing on the Nasdaq SmallCap Market
include that the issuer have two active market makers, total assets of at
least $2 million, capital and surplus of at least $1 million, a minimum bid
price per share of $1.00, at least 300 shareholders, and at least 100,000
publicly held shares with a market value of at least $200,000, among other
requirements. The Company currently satisfies all requirements for continued
eligibility for trading on the Nasdaq SmallCap Market. There can be no
assurance that the Company will remain in compliance with Nasdaq's continued
listing requirements. If the Common Stock is delisted by Nasdaq, the trading
market for the Common Stock will be adversely affected, as price quotations
for the Common Stock will not be as readily obtainable, which would likely
have a material adverse effect on the market price of the Common Stock.
VOLATILITY OF STOCK PRICE. The Company's Common Stock has experienced
substantial price volatility and such volatility may occur in the future,
particularly as a result of quarter to quarter variations in the actual or
anticipated financial results of the Company or other companies in the
satellite communications industry or in the markets served by the Company.
These and other factors may adversely affect the market price of the Common
Stock.
NO DIVIDENDS. The Company has never paid cash dividends on its Common
Stock and has no plans to pay cash dividends in the foreseeable future. The
policy of the Company's Board of Directors is to retain all available
earnings for use in the operation and expansion of the Company's business.
SHARES ELIGIBLE FOR FUTURE SALE. The Company currently has 8,761,533
shares of Common Stock outstanding. Of these shares, a total of 6,397,674
are eligible for sale in the open market without restriction under the
Securities Act of 1933, as amended (the "Securities Act"), except to the
extent any shares are purchased by "affiliates" (as that term is defined
under the Securities Act) of the Company. All of the remaining 2,363,859
shares of Common Stock are "restricted securities" as that term is defined in
Rule 144 promulgated under the Securities Act, none of which are currently
eligible for sale in the public market. Because the Debentures carry a
variable conversion rate that fluctuates with the market price of the
Company's Common Stock, it is not possible to currently quantify the precise
number of shares to be issued upon future conversion. Accordingly, the
Company has registered up to 1,150,000 for resale, which constitutes
management's estimate of the maximum number of shares to be issued upon
conversion, giving effect to possible fluctuations in the market price of the
Common Stock. All 1,150,000 of such shares, of which the 871,989 shares
offered hereby constitute a part, will be eligible for sale in the open market
without restriction upon completion of this offering. Additional shares of
Common Stock, including shares issuable upon exercise of options to purchase
Common Stock, will also become eligible for sale in the public market from
time to time. Following this offering, sales and potential sales of
substantial amounts of the Company's Common Stock in the public market
pursuant to Rule 144 or otherwise could adversely affect the prevailing
market prices for the Common Stock and impair the Company's ability to raise
additional capital through the sale of equity securities.
CONVERSION AT DISCOUNT TO MARKET PRICE OF COMMON STOCK. The shares of
Common Stock offered hereby will be issued to the Selling Shareholders upon
conversion of the Debentures. Such conversion will be at a discount to the
market price of the Common Stock prevailing at the time of such conversion.
The shares will be resold by the Selling Sharehonders to the public at the
prevailing market price. See "Selling Shareholders."
5
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THE COMPANY
Wegener Corporation (the "Company"), was formed in 1977 and is a Delaware
corporation. The Company conducts its continuing business through Wegener
Communications, Inc. (WCI), its wholly-owned subsidiary, and Wegener
Communications International, Inc., a wholly-owned subsidiary of WCI. The
Company's principal executive offices are located at 11350 Technology Circle,
Duluth, Georgia 30136 and its telephone number is (770) 623-0096.
WCI was formed in April 1978 and is a Georgia corporation. Its
wholly-owned subsidiary, Wegener Communications International, Inc., is a
Small Foreign Sales Corporation. WCI manufacturers and distributes satellite
communications electronics to cable television operators, radio and
television broadcasters, the business music industry and to private network
systems. Products are sold in international and domestic markets.
SATELLITE COMMUNICATIONS ELECTRONICS. WCI manufacturers electronics for the
distance learning, broadcast television and radio, cable television, business
music, private network and data communications industries. WCI services all
of the products that it sells. The Company warrants its products for a
period of one year. There were no significant warranty claims outstanding as
of May 31, 1996.
WCI manufacturers primarily high volume standard products. During fiscal
1994, the Company divested its low volume custom products operations and
entered into a distributor agreement for the sale of these products.
Throughout fiscal 1995 and the first nine months of fiscal 1996, WCI
continued to produce and develop digital compression products. These
products are in use world wide in distance learning, radio, cable television,
and private business networks. In terms of new orders, compressed digital
products are the fastest growing product segment for the Company. Bookings
for the Company's digital video products are increasing and management
believes they will more than compensate for other areas which are being
impacted due to shifts in technology. As expected, demand for the Company's
analog products have begun to decline following market demand for, and the
Company's emphasis on, digital technology.
DIGITAL COMMUNICATIONS. The demand for digital products is being driven by
the high cost of satellite capacity. Satellite capacity is scarce due to
pressures on both the supply and demand side of the market. On the supply
side, satellites are extremely expensive to launch, build, and maintain. The
useful life of a satellite is limited by the amount of positioning fuel that
can be carried. Also, the placement of satellites is regulated by the FCC
and therefore the number of satellites within range of any given location is
limited. On the demand side, the cost of receive hardware is being steadily
reduced through advancing technology. The reduction in the cost of network
hardware increases the economic feasibility of a greater number of networks.
This is evidenced by the trend in both television and radio towards
narrow-casting to well-defined market segments as opposed to broadcasting to
the general population. Digital compression technology allows a four to
ten-fold, or more, increase in the throughput of a satellite channel. For
the network it represents an opportunity to reduce the cost of satellite use.
For the satellite operator it represents an opportunity to increase the
revenue generated by an expensive asset. The market as a whole has built up
demand for digital technology which has finally arrived.
With ongoing breakthroughs in digital compression, digitized audio and
video products have become increasingly important. In 1995, WCI began
delivering its MPEG-1 digital video products under a multi-year,
multi-million dollar contract with Foundation Telecommunications, Inc. (FTI).
FTI is using the WCI products to deliver distance learning programming to
universities. Also in 1995 Dow Jones Investor
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Network and NBC Desktop Video installed WCI MEPG-1 digital video products for
use in subscription-based business information networks which deliver
compressed video to PCS.
WCI will manufacture MPEG-2 broadcast quality digital video products for
commercial program distribution. These products will be installed at video
programming origination points both at network studios and in satellite news
gathering trucks for on-location transmissions. Initial shipments of these
products began in the second and third quarters of fiscal 1996.
The Company's digital audio products employ MPEG digital audio compression
technology and are used to distribute radio and business music programming to
network affiliates. During fiscal 1995, orders for WCI's digital audio
receiver products came from new networks in Spain, France, Mexico, Colombia,
Brazil, Finland, Germany, Belgium, Switzerland, Singapore, and the United
States.
The Company manufactures specialized data communications products used in
satellite broadcast data applications. Bookings for these products were very
strong in fiscal 1995. WCI manufactures satellite data receivers for
Glenayre Technologies which are used to expand Glenayre's paging network.
Reuters also chose WCI data equipment to expand distribution for its
international news feed.
CABLE TELEVISION PRODUCTS. WCI's products are widely employed in the cable
industry to provide a variety of audio, data, and video services to cable
subscribers. These products deliver high quality video and stereo sound to
cable headends via satellite. This includes transmission of stereo sound
associated with cable television programming, discrete audio-only services
provided to cable systems, automated program delivery for regional sports
networks, and pay-per-view movies.
A wide variety of data transmission products are used to deliver
specialized data services to cable headends and subscribers. These
applications range from data to feed news services, weather and program guide
graphics, delivery to personal computers, and control of cable subscribers'
addressable converters.
Other cable products are cue and control equipment for cable television
networks. Cueing signals are used on advertising supported networks to
permit affiliated cable systems to insert local commercials at appropriate
times. Control equipment delivers switching commands from the network to
provide program routing and blackouts.
An additional product family of the cable television segment is graphic
generators. These products deliver custom data by satellite that is
graphically displayed on a subscriber's television. Products in this area
were among the first generated by WCI. WCI has continued to add new products
to this family to meet market demand.
RADIO AND TELEVISION BROADCASTING. Broadcasters use WCI equipment to
distribute digital audio, analog audio, video, and cue/network control
signals. Satellite based radio networks use WCI products to provide program
audio and remote control of affiliate stations. Television networks use WCI
products to deliver video, stereo sound, and data, as well as network
management. Television stations use audio and data products for terrestrial
microwave and fiber optic studio-to-transmitter links.
OPTICAL FIBER AND TERRESTRIAL MICROWAVE. Most of WCI's products used on
satellite communications links are easily used on existing microwave or fiber
circuits. Typical applications are voice and data circuits that accompany a
television signal.
7
<PAGE>
BUSINESS MUSIC. This market consists of suppliers of business music to
retail restaurants, offices and retail establishments. WCI manufactures the
equipment required to transmit audio and data from the business music
supplier to the end user via satellite circuits. The equipment is controlled
by the business music supplier using WCI's network control technology.
Potential users of this WCI equipment include any business purchasing
background music, foreground music or broadcast data.
USE OF PROCEEDS
All of the shares of the Common Stock registered for sale hereby will be
offered and sold by the Selling Shareholders. Accordingly, the Company will
not receive any of the proceeds from such sales.
8
<PAGE>
SELLING SHAREHOLDERS
This Prospectus covers offers from time to time by each Selling Shareholder
(after such person becomes a holder of Common Stock) of the Common Stock to
be owned by such person. The Selling Shareholders will hold shares of Common
Stock issued or issuable upon the conversion of the Debentures. The
Debentures were issued in a private placement conducted pursuant to
Regulation D promulgated pursuant to the Securities Act and consummated on
May 31, 1996. The registration of the shares of Common Stock offered for
resale hereby is pursuant to a Registration Rights Agreement dated May 31,
1996, entered into in connection with the original issuance of the Debentures
(the "Registration Rights Agreement"). The Debentures are convertible at the
option of the holder at any time through the close of business on May 31,
1999, into a number of shares of Common Stock at a price equal to the lesser
of (i) $12.25 per share or (ii) a percentage (currently 90%, decreasing to
82.5% on August 29, 1996) of the average of the lowest sale price of the
Company's Common Stock on each of the five trading days immediately preceding
the conversion date, subject to adjustment under certain circumstances. As
of August 1, 1996, the Debentures were convertible into an aggregate of
871,989 shares of Common Stock at a conversion price of $5.6475 per share.
Because the Debentures carry a variable conversion rate that fluctuates with
the market price of the Company's Common Stock, it is not possible to
currently quantify the precise number of shares to be issued upon future
conversion. Accordingly, the Company has registered up to 1,150,000 shares
for resale, which constitutes management's estimate of the maximum number of
shares to be issued upon conversion, giving effect to possible fluctuations
in the market price of the Common Stock.
The following table reflects the shares issuable to each Selling
Shareholder assuming conversion on August 1, 1996. The actual number of
shares to be sold by a Selling Shareholder upon conversion may be greater or
less than the number of shares shown in the table depending upon the market
price of the Company's Common Stock at the date of conversion. None of the
Selling Shareholders has held any position or office or had any other
material relationship with the Company or any of its predecessors or
affiliates in the last three years.
NUMBER OF SHARES NUMBER OF SHARES NUMBER OF SHARES
NAME OF OWNED BEFORE BEING REGISTERED OWNED AFTER
SELLING SHAREHOLDER THIS OFFERING FOR RESALE THIS OFFERING(1)
- ---------------------- ---------------- ---------------- ----------------
Halifax Fund, L.P. 429,315(2) 429,315(2) -0-
Capital Ventures
International 354,139 354,139 -0-
Kleinwort Benson Ltd. 88,535 88,535 -0-
------- ------- -------
Total 871,989 871,989 -0-
------- ------- -------
------- ------- -------
____________________________
(1) Assumes that all shares held by such Selling Shareholder acquired upon
conversion of the Debentures will be offered and sold.
(2) The Debentures provide that conversions by a Selling Shareholder may only
be effected to the extent that the number of shares to be received upon
such conversion, together with any other shares of the Company's Common
Stock then owned by the Selling Shareholder (exclusive of shares issuable
upon conversion of the unconverted portion of the debentures), does not
exceed 4.9% of the Company's issued and outstanding Common Stock. At
August 1, 1996, the Company had 8,761,533 shares of Common Stock issued
and outstanding. The 429,315 shares shown is 4.9% of the number of
shares outstanding on August 1, 1996. Absent the 4.9% limitation and
assuming conversion on August 1, 1996, Halifax Fund, L.P. would be
entitled to receive and resell up to 442,674 shares.
9
<PAGE>
PLAN OF DISTRIBUTION
The shares of Common Stock covered hereby may be offered and sold from time
to time by the Selling Shareholders. The Selling Shareholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made in the over-the-counter
market or otherwise, at market prices prevailing at the time of the sale, at
prices related to the then prevailing market price or in negotiated
transactions, including pursuant to an underwritten offering or pursuant to
one or more of the following methods: (i) purchases by a broker-dealer as
principal and resale by such broker or dealer for its account pursuant to
this Prospectus; (ii) ordinary brokerage transactions and transactions in
which a broker solicits purchasers; (iii) block trades in which a
broker-dealer engaged by the Selling Shareholders may arrange for other
broker-dealers to participate; (iv) short sales; and (v) any combination of
the foregoing. Broker-dealers may receive commissions or discounts from the
Selling Shareholders in amounts to be negotiated immediately prior to the
sale.
In connection with the sale of shares of Common Stock covered hereby,
underwriters or agents may receive compensation from the Selling Shareholders
or from purchasers of the shares of Common Stock covered hereby for whom they
may act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell shares of Common Stock to or through dealers and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they act as agents. Underwriters, dealers and agents that participate
in the distribution of shares of Common Stock covered hereby may be deemed to
be underwriters, and any discounts or commissions received by them from the
selling Shareholders and any profit on the resale of shares of Common Stock
by them may be deemed to be underwriting discounts and commissions under the
Securities Act.
The Registration Rights Agreement provides that the Company will indemnify
the Selling Shareholders against certain liabilities, including liabilities
under the Securities Act.
This Offering will terminate on the earlier of (i) the date on which all
shares offered hereby have been sold by the Selling Shareholders or (ii) May
31, 1999.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Smith, Gambrell & Russell, Atlanta, Georgia.
EXPERTS
The financial statements and schedules incorporated by reference in this
Prospectus have been audited by BDO Seidman, LLP, independent certified
public accountants, to the extent and for the periods set forth in their
reports incorporated herein by reference, and are incorporated herein in
reliance upon such reports given upon the authority of said firm as experts
in accounting and auditing.
10
<PAGE>
NO DEALER, REPRESENTATIVE OR
ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE INFORMATION
OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE
SELLING SHAREHOLDERS OR BY THE
UNDERWRITERS. 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 HEREIN IS CORRECT AS
OF ANY DATE SUBSEQUENT TO THE
DATE HEREOF. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES
OFFERED HEREBY BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER
OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO
DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
________________________
TABLE OF CONTENTS
________________________
PAGE
AVAILABLE INFORMATION. . . . . . . 2
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE . . . . . 2
RISK FACTORS . . . . . . . . . . . 3
THE COMPANY. . . . . . . . . . . . 6
USE OF PROCEEDS. . . . . . . . . . 8
SELLING SHAREHOLDERS . . . . . . . 9
PLAN OF DISTRIBUTION . . . . . . . 10
LEGAL MATTERS. . . . . . . . . . . 10
EXPERTS. . . . . . . . . . . . . . 10
871,989 Shares
WEGENER
CORPORATION
COMMON STOCK
_____________________
PROSPECTUS
_____________________
AUGUST ____, 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below are estimates of the fees and expenses payable by the
Registrant in connection with the offer and sale of the Common Stock:
SEC Registration Fee. . . . . . . . . . . . $ 3,169
Blue Sky Qualification Fees and Expenses. . 500
Transfer Agent Fees . . . . . . . . . . . . 500
Printing, Materials, and Postage. . . . . . 1,000
Legal Fees and Expenses . . . . . . . . . . 15,000
Accounting Fees and Expenses. . . . . . . . 12,000
Miscellaneous Expenses. . . . . . . . . . . 2,831
--------
TOTAL. . . . . . . . . . . . . . . . . $ 35,000
--------
--------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation and By-laws provide for
indemnification of directors and officers of the Company to the full extent
permitted by Delaware law.
Section 145 of the General Corporation Law of the State of Delaware
provides generally that a corporation may indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at its
request in such capacity in another corporation or business association,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if 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 proceeding, had no
reasonable cause to believe his conduct was unlawful.
In addition, pursuant to the authority of Delaware law, the Certificate of
Incorporation of the Company also eliminates the monetary liability of
directors to the fullest extent permitted by Delaware law.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
Pursuant to Registration Rights Agreements with the Selling Shareholders,
the Company has agreed to indemnify such Selling Shareholders against certain
liabilities, including liabilities under the Securities Act or otherwise.
II-1
<PAGE>
ITEM 16. EXHIBITS.
The following exhibits are filed with this Registration Statement.
Exhibit No. Description of Exhibit
----------- ------------------------------------------------------------
*4.1 Form of 8% Convertible Debenture issued to Halifax Fund, L.P.
($2,500,000), Capital Ventures International ($2,000,000) and
Kleinwort Benson, Ltd. ($500,000).
*4.2 Form of Registration Rights Agreement
*5.1 Opinion of Smith, Gambrell & Russell
23.1 Consent of BDO Seidman, LLP
- ---------------------
* Previously filed
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 the undertakings set forth in paragraphs
(i) and (ii) above 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 this 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 the 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.
(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 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in 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.
II-2
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions referred to
in Item 15 above, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the 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
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable ground 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 Duluth, State of Georgia, on this 19th day of
August, 1996.
WEGENER CORPORATION
By: /s/ C. Troy Woodbury, Jr.
-----------------------------------
C. Troy Woodbury, Jr.
Treasurer and Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURES TITLE DATE
---------- ----- ----
/s/ Robert A. Placek President, Chief August 19, 1996
- ------------------------------ Executive Officer and Director
ROBERT A. PLACEK (Principal Executive Officer)
/s/ C. Troy Woodbury, Jr. Treasurer, Chief August 19, 1996
- ------------------------------ Financial Officer and Director
C. TROY WOODBURY, JR. (Principal Financial and
Accounting Officer)
* Director August 19, 1996
- ------------------------------
JAMES H. MORGAN, JR.
* Director August 19, 1996
- ------------------------------
JOE K. PARKS
*By: /s/ C. Troy Woodbury, Jr.
-----------------------------
C. Troy Woodbury, Jr., pursuant
to a Power of Attorney contained
an original signature page to
this Registration Statement
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
Number Description of Exhibit Page No.
- ------- ------------------------------------- ----------
23.1 Consent of BDO Seidman, LLP
<PAGE>
EXHIBIT 23-1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Wegener Corporation
Duluth. Georgia
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our reports dated
November 20, 1995, relating to the consolidated financial statements and
schedules of Wegener Corporation appearing in the Company's Annual Report on
Form 10-K for the year ended September 1, 1995.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
BDO SEIDMAN, LLP
Atlanta, Georgia
August 19, 1996
