As filed with the Securities and Exchange Commission
on June 21, 1996
Registration No.
-----------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
----------------------------------
FARMSTEAD TELEPHONE GROUP, INC.
(Exact name of issuer as specified in charter)
Delaware 06-1205743
-------- ----------
(State or other juris- (I.R.S. Employer
diction of incorporation Identification
or organization) No.)
----------------------------------
81 Church Street
East Hartford, Connecticut 06108
(860) 282-0010
(Address of principal executive offices, including zip code)
1992 Stock Option Plan
(Full Title of the Plan)
----------------------------------
ROBERT G. LAVIGNE
Farmstead Telephone Group, Inc.
81 Church Street
East Hartford, Connecticut 06108
(860) 282-0010
(Name, Address and telephone number of Agent for Service)
----------------------------------
Copy to:
IRVING ROTHSTEIN, ESQ
Heller, Horowitz & Feit, P.C.
292 Madison Avenue
New York, New York 10017
----------------------------------
Approximate date of commencement of proposed sale to public:
As soon as practicable after the effective date
of the registration statement
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, check the following box. /x/
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
Title of Securities Amount to be Proposed Proposed Amount of
to be Registered Registered Maximum Maximum Registra-
- ------------------- ------------ offering Aggregate tion Fee
Price per Price (3) ---------
Share (2) ----------
---------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value 3,500,000 $0.50 $1,750,000 $603.40
Common Stock, $0.001 par value 748,500 .42 314,370 (4)
Common Stock, $0.001 par value 600,000 .52 312,200 (4)
Common Stock, $0.001 par value 250,000 .462 115,500 (4)
Common Stock, $0.001 100,000 .34 34,000 (4)
par value
Common Stock, $0.001 par value 100,000 .33 33,000 (4)
TOTALS 5,298,500 $2,559,070 $603.40
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------------------------
(1) Represents (i) 3,500,000 shares issued and issuable pursuant to exercise of
stock options granted under the 1992 Stock Option Plan (the "Plan"); and (ii)
the resale of up to 1,798,500 shares of Common Stock issuable upon the exercise
of stock options granted under the Plan to persons who may be deemed affiliates
of the company.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Proposed maximum offering price per share is estimated based upon the
closing sale price of the Company's Common Stock on June 18, 1996.
(4) No fee is payable pursuant to Rule 457(h)(3).
IN ADDITION TO THE PROSPECTUS REQUIRED TO BE INCLUDED IN THIS
REGISTRATION STATEMENT ON FORM S-8, AN ADDITIONAL PROSPECTUS PREPARED IN
ACCORDANCE WITH THE REQUIREMENTS OF FORM S-3 IS FILED HEREWITH PURSUANT TO
GENERAL INSTRUCTION C TO FORM S-8.
Prospectus
- ----------
1,798,500 Shares
FARMSTEAD TELEPHONE GROUP, INC.
Common Stock
---------------------------------
This Prospectus relates to an aggregate of 1,798,500 shares of the
Common Stock, par value $.001 per share (the "Common Stock"), of Farmstead
Telephone Group, Inc. (the "Company") which, following the date hereof, may be
issued, to the selling shareholders identified herein under "Selling
Shareholders," upon the exercise of stock options granted to them pursuant to
the Company's 1992 Stock Option Plan (the "Plan"). The Company will not receive
any part of the proceeds from the sale of any of these shares by the Selling
Shareholders. THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE
"RISK FACTORS."
On June 18, 1996, the closing sale price of the Company's Common Stock,
as reported on the NASDAQ System, was $.50.
The Selling Shareholders may be deemed to be "affiliates" of the
Company, as that term is defined under the Securities Act of 1933, as amended
(the "Act"). In connection with this offering, each of the Selling Shareholders
may be deemed to be an "underwriter" of the Company's Common Stock offered
hereby, as that term is defined under the Act. The Selling Shareholders intend
to sell the shares offered hereby from time to time for their own respective
accounts in the open market at the prices prevailing therein or in individually
negotiated transactions at such prices as may be agreed upon. Each Selling
Shareholder will bear all expenses with respect to the offering of shares by him
except the costs associated with registering his shares under the Act and
preparing and printing this Prospectus.
---------------------------------
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 June 20, 1996.
TABLE OF CONTENTS
Page No.
--------
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . 3
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . 3
SELLING SHAREHOLDERS. . . . . . . . . . . . . . . . . . . 10
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . 11
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . 11
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . 11
No person has been authorized by the Company to give any information or
to make any representations not contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
so authorized. This Prospectus does not constitute an offer of any interest in
the Shares of the Company in any state or other jurisdiction where such offer
would be unlawful. Neither the delivery of this Prospectus nor any sale
hereunder shall under any circumstances create an implication that the
information herein is correct as of any time subsequent to its date.
2
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such Reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at certain of its Regional
Offices located at: 7 World Trade Center, 13th Floor, New York, New York 10048;
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at
prescribed rates.
THE COMPANY
Farmstead Telephone Group, Inc. was incorporated in Delaware on October
8, 1986 (the "Company"). The Company's predecessor, The Farmstead Group, Inc.,
was in business from 1984 to 1987. The Company is principally engaged in the
resale of used AT&T business telephone parts and systems, and in the manufacture
and distribution of voice processing systems. The Company additionally provides
AT&T telephone equipment repair, refurbishing, rental and inventory management
and other value-added services. The Company's corporate office is located at 81
Church Street, East Hartford, Connecticut 06108 at which its telephone number is
(860) 282-0010.
RISK FACTORS
THE SECURITIES BEING OFFERED HEREBY REPRESENT A SPECULATIVE INVESTMENT
AND A HIGH DEGREE OF RISK. THEREFORE, PROSPECTIVE INVESTORS SHOULD THOROUGHLY
CONSIDER ALL OF THE RISK FACTORS DISCUSSED BELOW AND SHOULD UNDERSTAND THAT THEY
COULD LOSE ALL OR PART OF THEIR INVESTMENT. NO PERSON SHOULD CONSIDER INVESTING
WHO CANNOT AFFORD TO LOSE A SUBSTANTIAL PART OR ALL OF HIS INVESTMENT OR WHO IS
IN ANY WAY DEPENDENT UPON THE FUNDS THAT HE IS INVESTING.
HISTORY OF LOSSES AND LOW EARNINGS; ACCUMULATED DEFICIT. The Company
sustained a loss of $299,000 during 1991, earned $180,000 during 1992, lost
$1,166,000 during 1993, earned $172,000 during 1994 and lost $553,000 during
1995. At December 31, 1995, the Company had an accumulated deficit of
$5,446,000. There can be no assurance that the Company's future activities will
be successful or profitable.
3
COMPANY STILL DEVELOPING ITS VOICE PROCESSING PRODUCTS AND
INTERNATIONAL EXPANSION. Potential investors should be aware of the risks,
problems, delays, expenses and difficulties encountered by an enterprise in an
early stage of development such as the Company with regard to its voice
processing business and international expansion, especially in view of the
intense competition that the Company has, and will assuredly continue to,
encounter. Such matters include the complications inherent in consistent and
timely trans-Pacific shipping, currency exchange fluctuations, political
policies, cultural biases and retention of qualified personnel.
EXPECTED RELIANCE ON STRATEGIC PARTNERS FOR INTERNATIONAL EXPANSION.
One element of the Company's strategy is to form alliances with strategic
partners to assist the Company in identifying, developing and exploiting
opportunities in international markets. The Company has only recently entered
into alliances with some strategic partners and it is premature to determine
whether such alliances will be successful. There can be no assurance that the
Company will be able to locate additional strategic partners or that such
strategy ultimately will be successful. The Company's success will also depend,
in part, upon its ability to provide its international customers, either
directly or through others, technical support and customer service for its
products. The Company does not presently have the personnel to provide such
services and initially intends to rely on its strategic partners to provide such
services. There can be no assurance that such services can be negotiated on
acceptable terms, if at all. Failure to provide such technical support and
customer services could have a material adverse effect on the Company's ability
to expand into international markets.
CONTINUING NEED FOR AT&T'S SUPPORT OF THE SECONDARY MARKET. Since 1985,
AT&T has provided support to the secondary market by continuing to offer
installation, maintenance, repair, reconditioning and certification services for
its products purchased by end-users through equipment resellers (such as the
Company). AT&T also generally provides a one year warranty for products
purchased from AT&T for resale, provided it performs the installation. Should
AT&T decide no longer to provide such support to the secondary market, the
business of the Company could be materially adversely affected.
UNCERTAINTY CAUSED BY RESTRUCTURING OF AT&T. In September 1995, AT&T
initiated a restructuring of its businesses by splitting its operations into
three separate companies. While the Company's contract with AT&T was assigned to
one of these new companies, Lucent Technologies, Inc., and the business
relationship has not been affected, no assurance can be given that AT&T's
restructuring will not cause a disturbance in the Company's relationship going
forward.
4
COMPANY MAY BE SUBJECT TO SIGNIFICANT COMPETITION. The market for used
telephone parts and systems and for voice processing products is highly
competitive. Many of the companies which now offer or may be expected to offer
products with which the Company will compete are more established, benefit from
greater market recognition and have significantly greater financial,
technological, manufacturing and marketing resources than the Company. The
Company's telephone equipment competitors include AT&T, other secondary market
AT&T resellers and other telephone equipment manufacturers. The Company's voice
processing systems competitors also include major telecommunications equipment
manufacturers and telephone companies as well as independent call processing
equipment manufacturers. As the industry evolves to further integrate telephones
with PCs, the Company anticipates that it will encounter a broader variety of
competitors, including new entrants from related computer and communication
industries. There can be no assurance that the Company will be able to develop
more technologically advanced products or that even if it is able to develop, or
acquire rights to incorporate into its products, the next generation of
technology, that such products will perform as well as competitor's products or
that such products will be accepted by the market or that the Company will see
any financial benefit therefrom.
DEPENDENCE ON SUPPLIERS. The Company's voice processing products
incorporate certain component parts and subassemblies produced or assembled by
third parties. The Company's reliance on third parties to manufacture and
subassemble certain components involves significant risks, including reduced
control over delivery schedules, the inability to ship its product under
"just-in-time" arrangements and quality assurance, which may have a material
adverse effect on the Company's business. As a result, the Company may be
required to devote significant amounts of capital to inventory, and may be
dependent on timely supply of purchased inventory. Failure to obtain an adequate
supply of components on a timely basis could have a material adverse effect on
the Company.
TECHNOLOGICAL CHANGES. The technology underlying the telecommunications
industry generally and voice processing products in particular is subject to
extremely rapid change, including potential introduction of new products and
technologies which may have a materially adverse impact on the Company's
products. The Company will need to maintain an on-going research, development
and engineering program and its success, if any, will depend in part on its
ability to respond quickly to technological advances by developing and
introducing new products or features. Alternatively, the Company can attempt to
purchase new technologies as they become available. There can be no assurance
that the Company will be able to foresee and respond to such advances in a
timely manner, if at all. In addition, there can be no assurance that the
development of technologies and products by competitors
5
will not render the Company's products non-competitive or obsolete.
UNCERTAINTY OF PROTECTION OF PATENTS AND PROPRIETARY RIGHTS. The
Company's success may depend in part on its ability to obtain patents, maintain
trade secrets and operate without infringing on the proprietary rights of
others, both in the U.S. and in other countries. The patent positions of
software companies can be highly uncertain and involve complex legal and factual
questions, and therefore the breadth and enforceability of claims allowed in
software patents cannot be predicted. There can be no assurance that any issued
or pending patents will not be challenged, invalidated or circumvented, or that
the rights granted thereunder will provide proprietary protection or competitive
advantages to the Company.
The commercial success of the Company also will depend, in part, on the
Company not infringing patents issued to others and not breaching the technology
licenses upon which any Company products are based. It is uncertain whether any
third-party patents will require the Company to alter its products or processes,
obtain licenses or cease certain activities. In addition, if patents are issued
to others which contain dominating claims, and such claims are ultimately
determined to be valid, the Company may be required to obtain licenses to these
patents or to develop or obtain alternative technology. If any licenses are
required, there can be no assurance that the Company will be able to obtain any
such licenses on commercially favorable terms, if at all. The Company's breach
of an existing license or failure to obtain a license to any technology that it
may require to commercialize its products may have a material adverse impact on
the Company. Litigation, which could result in substantial costs to the Company,
may also be necessary to enforce any patents licensed or issued to the Company
or to determine the scope and validity of third-party proprietary rights. If
competitors of the Company prepare and file patent applications in the U.S. that
claim technology also claimed by the Company, the Company may have to
participate in interference proceedings declared by the U.S. Patent and
Trademark Office to determine priority of invention, which could result in
substantial costs to the Company, even if the eventual outcome is favorable to
the Company. An adverse outcome could subject the Company to significant
liabilities to third parties, require disputed rights to be licensed from third
parties or require the Company to cease using such technology.
The Company also relies on secrecy to protect its technology,
especially where patent protection is not believed to be appropriate or
obtainable. There can be no assurance that the Company's trade secrets will not
become known or be independently discovered by competitors.
6
POSSIBLE ISSUANCE OF SUBSTANTIAL AMOUNTS OF ADDITIONAL SHARES WITHOUT
STOCKHOLDER APPROVAL. The Company currently contemplates offering 1,000,000
Units consisting of one share of Common Stock and two Common Stock Purchase
Warrants (the "Secondary Offering"). In addition, the Company obtained
stockholder approval to enact a reverse split of its outstanding securities (the
"Reverse Split").
After the Secondary Offering, the Company will have an aggregate of
approximately 1,372,545 shares of Common Stock authorized but unissued and not
reserved for specific purposes (26,462,255 after adjusting for the Reverse
Split) and an additional 7,388,779 shares of Common Stock (1,413,878 after
adjusting for the Reverse Split) unissued but reserved for future issuance. All
of such shares may be issued without any action or approval by the Company's
stockholders. Although there are no other present plans, agreements, commitments
or undertakings with respect to the issuance of additional shares of Common
Stock, or securities convertible into any such shares by the Company, any shares
issued would further dilute the percentage ownership of the Company held by the
public stockholders.
RELIANCE UPON MANAGEMENT. The Company is and will be substantially
dependent, for the foreseeable future, upon its Chairman of the Board, President
and Chief Executive Officer, George J. Taylor, Jr., who currently devotes his
full time and efforts to the management of the Company. If the Company were to
lose the services of Mr. Taylor for any significant period of time, its business
may be materially adversely affected. While the Company owns key man life
insurance in face amount of $500,000 on the life of Mr. Taylor, there can be no
assurance that the insurance proceeds would adequately compensate the Company
for the loss of Mr. Taylor.
VOTING CONTROL; POTENTIAL ANTI-TAKEOVER EFFECT. As of April 30, 1996,
Mr. Taylor beneficially owned approximately 12.5% of the outstanding stock of
the Company (8.5% assuming completion of the Secondary Offering), and all
directors and officers as a group beneficially own approximately 15.9% of the
outstanding stock (11% assuming completion of the Secondary Offering) taking
into account currently exercisable stock options held by them. Mr. Taylor, as
the Company's largest stockholder, may still continue to be able to elect all of
its Directors and to control the Company's business and affairs. In addition,
the Company is subject to provisions of the General Corporation Law of the State
of Delaware respecting business combinations which could, under certain
circumstances, also hinder or delay a change in control.
UNSPECIFIED ACQUISITIONS. The Company may engage in acquisitions of
other companies and businesses and may use its stock as consideration therefor.
This may result in a dilution of the percentage of the equity to be owned by the
investors in this
7
Offering. In addition, such acquisitions may involve speculative and risky
undertakings by the Company. Under Delaware law, acquisitions do not require
stockholder approval; however, certain acquisitions accomplished by merger or
consolidation do require stockholder approval. The Company does not, in general,
intend to submit acquisitions to stockholder vote except where required by
Delaware Law. The Company does not currently have any plans, arrangements or
understandings regarding future material business acquisitions.
DILUTION. Certain stockholders of the Company acquired their interests
in the Company at an average cost per share which is significantly lower than
that which purchasers of the Common Stock offered hereby will pay for their
stockholdings. Accordingly, purchasers of the Common Stock in this Offering will
experience immediate and substantial dilution in net tangible book value of the
shares of Common Stock purchased hereby.
NO PAYMENT OF DIVIDENDS ON COMMON STOCK. The Company has not paid any
dividends on its Common Stock. For the foreseeable future, the Company
anticipates that all earnings, if any, that may be generated from the Company's
operations will be used to make payments to finance the growth of the Company
and that cash dividends will not be paid to holders of the Common Stock. In
addition, as a condition of doing business, the maker of the Company's revolving
line of credit has the right of prior approval of the declaration of any
dividends.
LIMITED MARKET FOR SECURITIES. The Company's securities currently trade
on the NASDAQ market and trading volume generally is not at a high level. As a
result, there is a limited market in the Company's securities, and there can be
no assurance that a more active market will develop. Accordingly, any
investments in the Company's securities may be highly illiquid.
POSSIBLE DEPRESSIVE EFFECT OF RULE 144 SALES AND SALES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF OPTIONS AND/OR WARRANTS. As of April 30, 1996,
1,781,811 unregistered shares of the Company's Common Stock (178,181 after
adjusting for the Reverse Split) are held by George J. Taylor, Jr. the Company's
Chairman, President and Chief Executive Officer. Under Rule 144 of the
Securities Act of 1933, all of such shares can currently be publicly sold or
otherwise transferred, subject to volume restriction. In addition, approximately
6,638,779 shares of Common Stock are issuable by the Company pursuant to
currently outstanding options and/or warrants and shares reserved for issuance
pursuant to the Company's stock option plans (663,878 after adjusting for the
Reverse Split). Any such issuances could have a depressive effect on the market
price for the Common Stock.
8
MAINTENANCE REQUIREMENTS FOR NASDAQ SECURITIES. It is anticipated that
the Units and the Warrants will be approved for inclusion in NASDAQ. An issuer
seeking continued inclusion of its securities in NASDAQ is required to meet
certain criteria including (i) total assets of at least $2,000,000; (ii) capital
and surplus of at least $1,000,000; and (iii) a minimum bid price of $1.00 per
share unless the market value of its public float is at least $1,000,000 and it
has at least $2,000,000 in capital and surplus. Upon completion of this
offering, the Company anticipates that it will satisfy the criteria for
continued inclusion of its securities in NASDAQ. However, there can be no
assurance that the Company will continue to satisfy such criteria and for how
long. If the Company became unable to meet the continued quotation criteria of
NASDAQ and was suspended therefrom, the Company's securities could be subject to
a rule that imposes additional sales practice requirements on certain
broker/dealers who sell such securities to persons other than established
customers and accredited investors. Consequently, an investor would likely find
it more difficult to dispose of, or to obtain accurate quotations as to the
value of, the Company's securities.
REQUIRED DISCLOSURE CONCERNING TRADING OF PENNY STOCKS OR LOW-PRICED
SECURITIES. The Securities and Exchange Commission ("SEC") has adopted
regulations that define a "penny stock" to be any equity security that has a
market price (as defined) of less than $5.00 per share or an exercise price of
less than $5.00 per share, subject to certain exceptions. Effective July 15,
1992, for any transaction involving a penny stock, unless exempt, the rules
require the delivery, prior to the transaction, of a disclosure schedule
prepared by the SEC relating to the penny stock market. Commencing January 1,
1993, the broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must disclose this fact and the broker-dealer's presumed control over the
market. Finally, monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks.
While many NASDAQ-listed securities would be covered by the definition
of penny stock, transactions in a NASDAQ-listed security would be exempt from
all but the sole market-maker provision for (i) issuers who have $2,000,000 in
tangible assets ($5,000,000 if the issuer has not been in continuous operation
for three years), (ii) transactions in which the customer is an institutional
accredited investor, and (iii) transactions that are not recommended by the
broker-dealer. In addition, transactions in a NASDAQ security directly with a
NASDAQ market-maker for such securities would be subject only to the sole
market-maker disclosure, and the disclosure with respect to commissions to be
paid to the broker-dealer and the registered representative. Finally, all NASDAQ
securities would be exempt if NASDAQ raised its requirements for continued
listing so that any issuer with less
9
than $2,000,000 in net tangible assets or stockholders' equity would be subject
to delisting. These criteria are more stringent than the current NASDAQ
maintenance requirements. Consequently, these rules may restrict the ability of
broker-dealers to sell the Company's securities and may affect the ability of
purchasers to sell the Company's securities in the secondary market.
SELLING SHAREHOLDERS
An aggregate of 1,798,500 shares of the Company's Common Stock is being
offered pursuant to this Prospectus by the persons whose names appear below (the
"Selling Shareholders"). These shares will be issued to the Selling Shareholders
pursuant to the exercise of stock options. The shares may be offered by the
Selling Shareholders from time to time at prevailing market prices. The
following table sets forth with respect to each Selling Shareholder: (i) the
nature of any position, office or other material relationship he has had within
the past three years with the Company; (ii) the number of shares of Common Stock
beneficially owned by him prior to the offering, including shares of Common
Stock underlying warrants and stock options, whether or not exercisable; (iii)
the amount to be offered for his account; and (iv) the amount and percentage of
the outstanding Common Stock to be owned by him after the offering if he sells
all shares offered, and all other factors remain constant.
<TABLE>
<CAPTION>
Shares
Owned Shares Owned After
Name and Before Shares Offering
Relationship Offering Offered Amount %(1)
- ------------ -------- ------- ------ ----
<S> <C> <C> <C> <C>
George J. Taylor, Jr. (2) 3,188,011 850,000 2,338,011 10.58
Robert G. LaVigne (3) 505,000 275,000 230,000 1.06
Harold L Hansen (4) 65,000 60,000 5,000 *
Hugh M. Taylor (4) 102,370 63,500 38,870 *
Joseph J. Kelley (4) 10,000 10,000 0 *
Alexander E. Capo (5) 62,800 50,000 12,800 *
Joseph A. Novak, Jr. (6) 234,500 170,000 64,500 *
Neil R. Sullivan (7) 100,000 100,000 0 *
John G. Antonich (8) 349,000 220,000 129,000 *
</TABLE>
- -------------------------
* represents less than 1%
10
(1) The percentages are based upon 21,238,676 shares of Common
Stock issued and outstanding as of May 5, 1996, plus the amount offered by each
person and any other currently exercisable warrants or options beneficially
owned by each person.
(2) Chairman, President, Chief Executive Officer and a
Director of the Company's 50% owned affiliate, Beijing Antai Communication
Equipment Company, Ltd. ("ATC")
(3) Vice President- Finance & Administration, Chief Financial
Officer, Secretary, Treasurer, Director and a Director of ATC.
(4) Director
(5) Vice President- marketing and Sales.
(6) Vice President- Operations, and Vice General Manager and a
Director of ATC.
(7) General Manager and Assistant Secretary. Corporate
Controller from October 1994 until May 1996.
(8) General Manager, Cobotyx Division. Director of Sales from
July 1993 until February 1996.
PLAN OF DISTRIBUTION
The Selling Shareholders intend to sell the shares offered hereby from
time to time for their own respective accounts in the open market at the prices
prevailing therein or in individually negotiated transactions at such prices as
may be agreed upon. Each Selling Shareholder will bear all expenses with respect
to the offering of shares by him except the costs associated with registering
his shares under the Act and preparing and printing this Prospectus.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Annual Report on Form 10-KSB of Farmstead Telephone Group, Inc. for the
year ended December 31, 1995 have been audited by Deloitte & Touche, LLP,
independent auditors, as stated in their report with respect thereto, and have
been so included herein in reliance upon the report of such firm given on their
authority as experts in accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
are incorporated herein by reference:
11
(a) The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1995.
(b) The Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended March 31, 1996.
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, dated May 29, 1987, filed pursuant to
Section 12 of the Exchange Act, as amended by Form 8 dated October 1, 1992.
In addition, all reports and other documents filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities offered hereby
then remaining unsold, shall be deemed to be incorporated by reference herein
and shall be deemed to be a part hereof from the date of the filing of each such
report or document.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any or all of
the documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into the information
incorporated herein by reference. Requests should be addressed to: Robert G.
LaVigne, Vice President-Finance and Administration, Farmstead Telephone Group,
Inc., 81 Church Street, East Hartford, Connecticut 06108 (860) 282-0010.
12
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation Of Certain Documents By Reference
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1995, filed pursuant to Section 13 of the Exchange Act.
(b) The Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended March 31, 1996, filed pursuant to Section 13 of the Exchange Act.
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, dated May 29, 1987, filed pursuant to
Section 12 of the Exchange Act, as amended by Form 8 dated October 1, 1992.
In addition, all reports and other documents filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities offered hereby
then remaining unsold, shall be deemed to be incorporated by reference herein
and shall be deemed to be a part hereof from the date of the filing of each such
report or document.
Item 4. Description of Securities
Inapplicable.
Item 5. Interests of Named Experts and Counsel
None.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law, as amended,
authorizes the Company to indemnify any director or officer under certain
prescribed circumstances and subject to certain limitations against certain
costs and expenses, including attorneys' fees actually and reasonably incurred
in connection with any action, suit or proceeding, whether civil, criminal,
II-1
administrative or investigative, to which such person is a party by reason of
being a director or officer of the Company if it is determined that such person
acted in accordance with the applicable standard of conduct set forth in such
statutory provisions. Article 9 of the Company's Certificate of Incorporation
contains provisions relating to the indemnification of directors and officers,
to the full extent permitted by Delaware law.
The Company may also purchase and maintain insurance for the benefit of
any director or officer which may cover claims for which the Company could not
indemnify such person.
Item 7. Exemption from Registration Claimed
The securities to be reoffered and resold pursuant to this Registration
Statement were or will be issued upon exercise of stock options in transactions
that were exempt from registration pursuant to Section 4(2) of the Securities
Act. The selling shareholders are officers and/or directors of the Company with
access to all material information concerning the Company.
Item 8. Exhibits
The following exhibits are filed as part of this Registration
Statement:
4.1 1992 Stock Option Plan (incorporated by reference from the
Company's Annual Report on Form 10-K for the year ended December 31, 1992).
5. Opinion of Counsel.
24.1 Consent of Counsel (included in the Opinion of Counsel filed as
part of Exhibit No. 5).
24.2 Consent of Deloitte & Touche LLP.
Item 9. Undertakings
The undersigned small business issuer hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to include any
additional or changed material information.
(2) For determining liability under the Securities Act of 1933, treat
each post-effective amendment as a new Registration Statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
II-2
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-8 and has duly caused this registration
statement or amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of East Hartford and State of Connecticut on the
13th day of June, 1996.
FARMSTEAD TELEPHONE GROUP, INC.
By:/s/ GEORGE J. TAYLOR, JR.
-------------------------
George J. Taylor, Jr.
Chairman of the Board
Chief Executive Officer and President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement or amendment has been signed below by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ GEORGE J. TAYLOR, JR. Chairman of the Board 6/13/96
- ------------------------- Chief Executive Officer
George J. Taylor, Jr. and President (Principal
Executive Officer)
/s/ ROBERT G. LAVIGNE Vice-President-Finance, 6/13/96
- --------------------- Secretary, Treasurer and
Robert G. LaVigne Director (Principal
Financial and Accounting
Officer)
/s/ HAROLD L. HANSEN Director 6/13/96
- --------------------
Harold L. Hansen
/s/ HUGH M. TAYLOR Director 6/13/96
- ------------------
Hugh M. Taylor
/s/ JOSEPH J. KELLEY Director 6/13/96
- --------------------
Joseph J. Kelley
II-3
EXHIBIT 5
HELLER, HOROWITZ & FEIT, P.C.
ATTORNEYS AT LAW
292 MADISON AVENUE
NEW YORK, N.Y. 10017
(212) 685-7600
JACOB W. HELLER COUNSEL
RICHARD F. HOROWITZ ROBERT C. MALABY
ELI FEIT -----
LAWRENCE J. TOSCANO CABLE ADDRESS
STUART A. BLANDER HELLFEITER, N.Y
SIGMUND S. WISSNER-GROSS -----
MAURICE W. HELLER TELECOPIER
ALAN A. HELLER (212) 695-9450
--------
IRVING ROTHSTEIN
MAY ORENSTEIN
JOEL C. HAIMS
June 20, 1996
Farmstead Telephone Group, Inc.
81 Church Street
East Hartford, Connecticut 06108
Gentlemen:
As counsel for your Company, we have examined your Articles of
Incorporation, By-Laws, such other corporate records, documents and proceedings
and such questions of law as we have deemed relevant for the purpose of this
opinion.
We have also, as such counsel, examined the Registration Statement (the
"Registration Statement") of your Company on Form S-8, covering the registration
under the Securities Act of 1933, as amended, of the proposed offer and sale of
up to 3,500,000 shares of Common Stock, par value $.001 (the "Common Stock"),
underlying stock options, including the reoffer and resale of up to 1,798,500
shares of Common Stock underlying stock options currently held by officers
and/or directors of the Company. Our review has also included the exhibits and
forms of prospectus (the "Prospectus") included in the Registration Statement.
On the basis of such examination, we are of the opinion that:
1. The Company is a corporation duly authorized and validly existing
and in good standing under the laws of the State of Delaware, with corporate
power to conduct the business which it conducts as described in the Registration
Statement.
2. The shares of Common Stock identified above have been duly and
validly authorized and created and, subject to the payment therefore pursuant to
the terms of the options, will be duly and validly issued as fully paid and
nonassessable shares of Common Stock of the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/
HELLER, HOROWITZ & FEIT, P.C.
EXHIBIT 24.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
Farmstead Telephone Group, Inc. on Form S-8 of the report of Deloitte & Touche
LLP dated March 8, 1996, appearing in the Annual Report on Form 10-KSB of
Farmstead Telephone Group, Inc. for the year ended December 31, 1995 and to the
reference to Deloitte & Touche LLP under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/
DELOITTE & TOUCHE LLP
Hartford, Connecticut
June 20, 1996
