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As Filed With The Securities and Exchange Commission On October 20, 2000
Registration Statement No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WAVO CORPORATION
(Exact name of registrant as specified in its Charter)
INDIANA 86-0491428
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3131 E. CAMELBACK RD., SUITE 320
PHOENIX, ARIZONA 85016
(602) 952-5500
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
DAVID E. DEEDS, CHIEF EXECUTIVE OFFICER
WAVO CORPORATION
3131 E. CAMELBACK RD., SUITE 320
PHOENIX, ARIZONA 85016
(602) 952-5500
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
COPY TO: COPY TO:
DOUGLAS J. REICH, ESQ. STEVEN D. PIDGEON, ESQ.
WAVO CORPORATION SNELL & WILMER L.L.P.
3131 E. CAMELBACK RD., SUITE 320 ONE ARIZONA CENTER
PHOENIX, ARIZONA 85016 PHOENIX, ARIZONA 85004-0001
(602) 952-5500 (602) 382-6000
FAX (602) 952-5517 FAX (602) 382-6070
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]
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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. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
AMOUNT
PROPOSED MAXIMUM PROPOSED MAXIMUM OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED (1) PER SHARE (2) OFFERING PRICE FEE
--------------------------- -------------- ------------- -------------- ---
<S> <C> <C> <C> <C>
Common shares 1,722,018 Shares $0.565 $ 972,940 $257
Common shares issuable upon
exercise of warrants 350,666 Shares $0.565 $ 198,126 $52
Total 2,072,684 Shares $1,171,066 $309
</TABLE>
(1) The shares of common stock that may be offered pursuant to this Registration
Statement consist of 1,722,018 shares issued to National Datacast, Inc. ("NDI")
in connection with an amendment to the terms of the Data Delivery Network
Agreement between the registrant and NDI dated October 15, 1996, 125,666 shares
underlying warrants issued to Silicon Valley Bank ("SVB") in connection with a
modification of the terms of the Loan and Security Agreement between the
registrant and SVB dated October 14, 1997, and 225,000 shares underlying
warrants issued to affiliates of Stonegate Securities, Inc. ("Stonegate") in
connection with a Consulting Agreement between the registrant and Stonegate
dated December 7, 1999, as amended on May 24, 2000.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based upon the average of the high and low prices of
the common stock on October 16, 2000, as reported by the Nasdaq National Market.
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.
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Subject to Completion, dated October 19, 2000
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING SHAREHOLDERS MAY NOT SELL THE SECURITIES OFFERED BY THIS PROSPECTUS
UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
Wavo Corporation
2,072,684 Common Shares
This prospectus relates to 2,072,684 shares of common stock of WAVO
Corporation which may be sold from time to time by the selling shareholders
named herein, or their respective transferees, pledgees, donees or successors.
The shares are being registered to permit the selling shareholders to
sell those shares attributable to them from time to time in the public market.
The selling shareholders may sell the shares through ordinary brokerage
transactions, directly to market makers of our shares, or through any other
means described in the section entitled "Plan of Distribution" beginning on page
15. We cannot assure you that the selling shareholders will sell all or any
portion of the shares offered hereby.
We will not receive any of the proceeds from the sale of these shares,
although we have paid the expenses of preparing this prospectus and the related
Registration Statement.
Our common stock is traded on the Nasdaq National Market under the
symbol "WAVO."
We are an Indiana corporation formed on November 13, 1990. Our
principal executive offices are located at 3131 E. Camelback Rd., Suite 320,
Phoenix, Arizona and our telephone number is (602) 952-5500.
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BEFORE PURCHASING ANY OF THE SHARES COVERED BY THIS PROSPECTUS, CAREFULLY READ
AND CONSIDER THE RISK FACTORS INCLUDED IN THE SECTION ENTITLED "RISK FACTORS"
BEGINNING ON PAGE 3. YOU SHOULD BE PREPARED TO ACCEPT ANY AND ALL OF THE RISKS
ASSOCIATED WITH PURCHASING THE SHARES, INCLUDING A LOSS OF ALL OF YOUR
INVESTMENT.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THE SALE OF THE COMMON STOCK OR DETERMINED THAT THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT IS ILLEGAL FOR ANY
PERSON TO TELL YOU OTHERWISE.
The date of this prospectus is October ___, 2000.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
WAVO Corporation...................................................... 1
Recent Developments................................................... 2
Risk Factors.......................................................... 3
Use of Proceeds....................................................... 8
Selling Shareholders.................................................. 9
Description of Securities............................................. 10
Plan of Distribution.................................................. 14
Legal Opinions........................................................ 15
Experts ............................................................. 15
Where You Can Find More Information................................... 16
</TABLE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS AND IN ANY ACCOMPANYING PROSPECTUS SUPPLEMENT. NO ONE HAS
BEEN AUTHORIZED TO PROVIDE YOU WITH DIFFERENT INFORMATION.
THE COMMON STOCK IS NOT BEING OFFERED IN ANY JURISDICTION WHERE THE OFFER IS NOT
PERMITTED.
YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT PAGE OF
THE PROSPECTUS OR PROSPECTUS SUPPLEMENT.
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WAVO CORPORATION
We are a digital media services company, connecting media providers
with media consumers. We partner with prominent providers of news, business
data, consumer content and multimedia programming to deliver value added digital
media services to businesses and consumers. Our technologies and services
aggregate, filter, customize and distribute digital media (text, music, graphics
and video), using a variety of delivery systems, including the Internet,
satellite broadcast systems, television and FM radio. Our recently launched
MediaXpress(TM) service leverages our established relationships with over 1,800
prominent news, business information and multimedia content providers, and
delivers that content in a customized, Extensible Markup Language ("XML")-based
format to businesses and consumers. Our most recent product offering, Virgin
JamCast(TM), a music portal, is a collaboration with Virgin Entertainment Group
that uses our proprietary multicast "push" technology to deliver digital music
to consumers.
MEDIAXPRESS: Our MediaXpress service (formerly "NewsPak") delivers
pre-licensed, filtered, real-time news, information and entertainment to any Web
server, wherever located. MediaXpress aggregates content from our extensive base
of content providers of more than 1,800 sources, many of which are leaders in
their respective markets. These content providers include such well-known
companies as Reuters, Dow Jones & Company, Standard & Poors and Associated
Press, among many others. MediaXpress aggregates the content by collecting
digital media from the content providers and translating it from its original
format into richly marked-up XML documents. Using our advanced technologies, and
employing proprietary hardware and software schemes, MediaXpress personalizes
the digital media for each customer. Only the content desired by the customer,
defined by the user via topic and key word selection, is delivered to that
customer. MediaXpress allows Web site operators to access and integrate our
digital media offerings into their Web sites without the burden of license
negotiations, dedicated lines and special hardware. MediaXpress enables any
user, from the largest commercial portals to small Web sites, to go to the
MediaXpress Web site, complete the online subscription transaction, download a
server application and immediately begin to receive and publish streaming
digital media on their Web site. For the six months ended June 30, 2000,
MediaXpress generated revenues of $902,000.
Our proprietary WAVO Internet Delivery System ("WINDS") is utilized to
transport the MediaXpress digital media to client Web sites. The WINDS protocol
creates a virtual private network on the Internet that allows us to move digital
media securely and with assured delivery. The MediaXpress feed distribution
system enforces publisher-dictated policies with regard to usage, embargos,
re-distribution and syndication.
VIRGIN JAMCAST: In September 1999, we formed JamCast.com, Inc., and
partnered with Virgin Entertainment Group, Inc., to offer "Virgin JamCast(TM)",
a digital music Internet service. Wavo Corporation and Virgin Entertainment
Group own 75% and 25%, respectively, of JamCast.com, Inc. Virgin JamCast was
created as an innovative digital music Web portal to use our proprietary
multicast "push" technology to deliver digital music to an Internet-wide
audience by delivering it in the background on the customer's existing
connection to the Internet. Virgin JamCast also enabled customers to purchase
music online from the Virgin Mega Store, an affiliate of Virgin Entertainment
Group, and from other major music distributors.
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As of June 30, 2000, approximately $3.2 million of our assets were
related to Virgin JamCast. To date, we have received negligible revenues from
Virgin JamCast, and are currently incurring approximately $300,000 to $500,000
in monthly expenses relating to its operation. We are discussing with Virgin
Entertainment Group the structure of our current relationship regarding Virgin
JamCast, and we expect that the nature of the Virgin JamCast business will
change from a retail business to that of a technology provider. Accordingly, we
expect to discontinue Virgin JamCast's retail music operations as of October 31,
2000, and expect to reposition JamCast.com, Inc. as a provider of our
proprietary multicast technology to Virgin Entertainment Group and possibly
others in the entertainment industry for use in the distribution of digital
media. As a result of our discussions with Virgin Entertainment Group and any
related changes to the Virgin JamCast business, up to approximately $3.2
million of recorded assets relating to such business will be subject to
adjustment.
RECENT DEVELOPMENTS
On September 11, 2000, we entered into an asset purchase agreement with
our wholly-owned subsidiary, WavePhore Networks, Inc. ("Networks"), and Cidera,
Inc. ("Cidera"), pursuant to which Cidera agreed to purchase substantially all
of the assets of Networks relating to the satellite and FM delivery of data in
exchange for $12,000,000 in cash, 285,731 shares of Cidera's common stock, and
assumption of specified liabilities. Cidera also agreed to become a preferred
Original Equipment Manufacturer ("OEM") of our MediaXpress service for Cidera's
information provider customers. This transaction was completed on October 11,
2000.
The assets sold to Cidera constituted approximately 33% of our total
assets and accounted for approximately 71% and 27% of our total revenue and
expenses, respectively, on a consolidated basis as of and for the fiscal year
ended December 31, 1999, and approximately 41%, 76% and 23% of such amounts,
respectively, as of and for the six months ended June 30, 2000. We expect to
recognize a gain of approximately $2 million as a result of this transaction.
Also on September 11, 2000, we entered into an agreement with National
Datacast, Inc. ("NDI") to restructure our Data Delivery Network Agreement (the
"Network Agreement") with NDI. This restructuring reduced the cash amounts
payable by us to NDI under the Network Agreement from $4.4 million due through
March 2002 to payments of $2 million due through April 2001 and provided for the
issuance in September 2000 to NDI of 1,722,018 shares of our common stock, all
of which may be offered pursuant to this prospectus. If NDI does not realize at
least $1.4 million from the sale of all of these shares, we have agreed to
deliver a promissory note to NDI for the difference payable in three equal
monthly installments, commencing 30 days after the issuance of the promissory
note. In addition, if we elect to use the data delivery network to transmit data
in the future, or elect to renew the agreement for a further five year term, we
will be required to make all payments then due to NDI under the terms of the
original data delivery network agreement. If we do not use this network in the
future or contract with a third party to sublease this network, we will record a
one time charge equal to the total unrecognized commitment to NDI and the
carrying value of certain equipment related to our use of the network and our
technology, which totalled approximately $2.7 million as of September 30, 2000.
We are currently in discussions with third parties regarding the sublease of
this network and the license of our related technology. However, there can be no
assurance that we will be successful in this regard.
As of October 12, 2000, we had approximately $10 million in cash or
cash equivalents. We are currently using approximately $1.5 million in cash each
month in our operations. We are taking actions to reduce our future expenses. We
are also continuing to evaluate our technologies and business strategies. We
believe that we will have sufficient cash to continue to operate our business
for at least the next twelve months.
On September 15, 2000, we restructured our credit facility with
Silicon Valley Bank ("SVB"), and issued warrants to SVB to purchase up to
125,666 shares of our common stock at an exercise price of $0.70 per share.
These warrants expire on September 15, 2005. We also lowered our bank line of
credit from $5 million to $2 million, accelerated payment of $500,000 of our
term loan to the closing of the Cidera transaction, and modified or eliminated
certain financial covenants related to this credit facility.
For purposes of this Registration Statement, the term "selling
shareholders" means NDI, SVB and certain specified principals affiliated with
Stonegate as described in this prospectus under "Selling Shareholders," with
respect to those shares of our common stock beneficially held by each of them as
described herein, and "selling shareholder" means any one of them.
We intend to notify our shareholders of a special meeting currently
scheduled for November 27, 2000, at which the shareholders will be asked to
consider and vote upon a proposal to approve and adopt an amendment to our
Articles of Incorporation that will result in an eight-for-one reverse stock
split and an increase in the number of our authorized shares of common stock to
25,000,000 shares after giving effect to the reverse stock split. The purpose of
this approval is to increase the share price of our common stock above $1.00,
which is one of the maintenance criteria to be satisfied in order for our common
stock to maintain its listing on The Nasdaq Stock Market, Inc. For additional
information regarding the special meeting, you may examine a copy of our proxy
statement at www.sec.gov or you may request a copy of the proxy statement by
writing or telephoning us at the following address:
Investor Relations
WAVO Corporation
3131 East Camelback Road
Suite 320
Phoenix, AZ 85016
(602) 952-5500
SEE RISK FACTORS BEGINNING ON PAGE 3.
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RISK FACTORS
Before purchasing any of the shares covered by this prospectus, you should
carefully read and consider the risk factors set forth below. You should be
prepared to accept any and all of the risks associated with purchasing the
shares, including a loss of all of your investment.
WE HAVE A HISTORY OF LOSSES AND MAY NEVER BECOME PROFITABLE
We have generated relatively limited revenues from operations and
incurred significant expenses in developing our products and services. As a
result, we have realized net losses each year since our inception in November
1990. We incurred net losses of approximately $19.8 million in 1997,
approximately $28.5 million in 1998, approximately $31.1 million in 1999, and
approximately $12.4 million for the six months ended June 30, 2000. As of
December 31, 1999 and June 30, 2000, we had an accumulated deficit of
approximately $128.5 million and $143.6 million, respectively. We expect to
incur significant operating losses for 2000 and may continue to incur operating
losses after 2000. Given our history of losses, limited revenues from operations
and significant expenses, we may never become profitable.
IF WE DO NOT GENERATE WIDESPREAD DEMAND FOR OUR MEDIAXPRESS AND VIRGIN JAMCAST
SERVICES WE MAY NEVER BECOME PROFITABLE
To become profitable, we need to generate broad-based market acceptance
for our MediaXpress and Virgin JamCast services, which to date have generated
only limited revenues. For the six months ended June 30, 2000, MediaXpress
generated revenues of $902,000 and Virgin JamCast generated revenues of $414.
The markets for these services are relatively new and evolving. In addition to
achieving widespread consumer demand, the success of our various services
depends on our ability to meet the following objectives, none of which we may
achieve.
- attracting and retaining the most popular information providers;
- including our software and technology in products manufactured by
others, including personal computers, set top boxes and other
consumer products;
- generating significant revenues through e-commerce, technology
licensing and other opportunities;
- demonstrating a technological or economic advantage over our
competitors;
- providing strong customer service to support these services; and
- increasing sales through our direct sales force.
LOSS OF REVENUE FROM SALE OF NETWORKS MAY HAMPER OUR ABILITY TO OBTAIN
ADDITIONAL FINANCING
Although completing the sale to Cidera of Networks assets relating to the
satellite and FM delivery of data resulted in the payment of $12,000,000 in cash
to WAVO Corporation, the sale of these assets significantly reduces our cash
flow from operations following the sale. As a result, despite the cash raised
from the sale, we will be required to seek substantial additional capital in the
future to maintain and grow operations from our remaining lines of business.
Unless we begin to generate significant cash flow from our MediaXpress Digital
Media Delivery or Virgin JamCast services, we may encounter difficulties in
obtaining any necessary financing on acceptable terms, if at all.
WE MAY NOT BE ABLE TO RAISE THE SUBSTANTIAL ADDITIONAL CAPITAL REQUIRED TO
EXECUTE OUR BUSINESS PLAN
We expect to continue to incur significant operating expenses in
continuing to develop and market our products and services. Although we believe
currently available funds and capital resources will be sufficient to meet
anticipated needs for capital through 2001, we expect that we will need
substantial additional capital to fully implement our business plan after that
date. We also may need to raise additional funds in order to acquire
complementary businesses, products, or technology. Additional financing may
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not be available on terms favorable to us, or at all. If adequate funds are not
available or are not available on acceptable terms, we may not be able to
execute our business plan or take advantage of our business opportunities. In
addition, if we elect to raise capital by issuing additional shares of stock,
existing shareholders may incur dilution. As of October 12, 2000, we had
approximately $10 million in cash and cash equivalents. We are currently using
approximately $1.5 million in cash each month in our operations.
WE FACE POSSIBLE DELISTING FROM NASDAQ
Our common stock is currently listed on The Nasdaq National Market. We
have been notified by the Nasdaq Stock Market, Inc., however, that our common
stock will be delisted from Nasdaq if the share price of our common stock
continues to be below $1.00 for a period of 90 days. We intend to apply to
Nasdaq for a hearing, and, if granted, the delisting will be stayed during the
hearing period. If a delisting occurs, our common stock would trade on the OTC
Bulletin Board or in the "pink sheets" maintained by the National Quotation
Bureau, Inc.
If we fail to maintain our Nasdaq listing, the market value of our
common stock may decline further and trading in our stock is likely to be
materially adversely affected. Among other things, because our common stock
would then constitute "penny stock" under the Securities Exchange Act of 1934,
as amended, any broker engaging in a transaction in our securities would be
required to provide any customer with a risk disclosure document, disclosure of
market quotations, if any, disclosure of the compensation of the broker-dealer
and its sales person in the transaction, and monthly account statements showing
the market values of our securities held in the customers' accounts. The bid and
offer quotation and compensation information must be provided prior to effecting
the transaction and must be contained on the customer's confirmation. If brokers
become subject to the "penny stock" rules when engaging in transactions in our
securities, they would become less willing to engage in such transactions,
thereby making it more difficult for our security holders to sell their common
stock, which may result in a further decline in stock value.
In an effort to increase the share price of our common stock to above
$1.00, our Board of Directors has considered and approved an amendment to our
Articles of Incorporation that will result in a eight-for-one reverse stock
split and an increase in the amount of our authorized common stock to 25,000,000
shares after giving effect to the reverse stock split. Even if this amendment is
approved by the shareholders, however, there can be no assurance that the
reverse stock split will result in a share price above $1.00 for Nasdaq
compliance purposes.
OUR PRODUCTS AND SERVICES MAY BECOME OBSOLETE UNLESS WE ADAPT TO RAPID
TECHNOLOGICAL CHANGE AND FREQUENT NEW PRODUCT INTRODUCTIONS BY OUR COMPETITORS
The markets for our products and services experience rapid
technological change, frequent new product introductions, and evolving industry
standards. Rapid technological change and new product introduction could render
one or more of our products or services obsolete or place us at a competitive
disadvantage. Accordingly, we believe that our success depends upon our ability
to anticipate changes in consumer preferences, develop and market products and
services that incorporate new technologies, and enhance and expand our existing
product lines and services to keep pace with competing products. We expect to
enter into strategic relationships with other technology companies to develop,
market and enhance our products and services to meet and take advantage of
technological changes. Our failure to anticipate or adapt to technological
change or evolving industry standards, and to successfully introduce new
products and services, could materially and adversely affect our business.
WE MAY NOT SUCCEED UNLESS WE ARE ABLE TO SUCCESSFULLY ADDRESS THE DIFFERENT
COMPETITIVE CHALLENGES IN EACH OF OUR MARKETS
Each of the markets in which we compete presents different competitive
challenges. For example, we currently provide our MediaXpress service primarily
to business users. We must respond to different competitive challenges and
compete with a different set of competitors in each of our markets. In addition,
with the rapid expansion of the Internet, the number of companies that can
provide similar products and services in each of our markets is growing
significantly. As a result, we expect that more competitors will enter the
markets in which we operate. Increased competition may result in price
reductions, reduced gross margins and loss of market share.
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The Internet, content aggregation and digital medial delivery industry
is intensely competitive, rapidly changing and significantly affected by new
product introductions and other market activities. Each of the markets in which
we operate includes numerous competitors with well recognized brand names that
provide products and services that compete with those we offer, including, but
not limited to:
- certain content providers and content delivery providers, such
as Screaming Media.net, iSyndicate.com, Tibco, Starburst,
Globalcast, Harmonic Data Systems, Digital Island, Akamai,
Loral Space and Communications, YellowBrix, Inc., Moreover.com
and Trapezo; and
- digital media delivery services providers, such as News Edge
Corporation, Data Broadcasting Corporation, AP SatNet,
Sandpiper Networks, Fantastic Corporation, MicroSpace Corp.,
EchoStar and Hughes DirectPC.
Many of our competitors have longer operating histories and greater
presence in key markets, greater name recognition, access to larger customer
bases and significantly greater financial, sales, marketing, distribution,
technical and other resources. Given these competitive disadvantages, we may not
be able to compete effectively against these competitors. Our inability to
compete would have a material adverse effect on our business. These competitors
may be able to adapt to new or emerging technologies and changes in customer
requirements more quickly than we can. They might also be able to devote greater
resources to the development, promotion and sale of competing products and
services.
THIRD PARTY INFORMATION PROVIDERS MAY TERMINATE OR CHOOSE NOT TO RENEW
AGREEMENTS TO PROVIDE CONTENT WHICH WOULD ADVERSELY AFFECT OUR SERVICE OFFERINGS
We currently rely on a number of content and information providers to
supply entertainment, news, and other information we offer through our various
services. Our agreements with information providers are generally for a term of
one or more years. The termination of or failure to renew one or more
significant information provider agreements would decrease the available
entertainment, news and information that we can offer our customers. Many of the
agreements automatically renew unless notice of termination is provided before
the end of the term by either party. However, most of these agreements may be
terminated by the information provider if we fail to fulfill our obligations
under the agreement and some agreements are terminable at will. We cannot
guarantee that an information provider will not terminate its agreement with us
or that it will choose to renew the agreement at the end of its term.
FAILURE OR DISRUPTION OF OUR TELECOMMUNICATIONS SYSTEMS MAY DISRUPT OUR
OPERATIONS AND SERVICE OFFERINGS TO OUR CUSTOMERS
Our customers rely on our ability to provide and distribute information
24 hours a day seven days a week without failures. As a result, our business
depends to a significant extent on our ability to maintain continuous operation
of our computer and telecommunications systems. Any damage to or loss of our
computer and telecommunications networks, including our network operations
centers, or damage to or loss of any third party controlled systems, including
satellites or those operated by Internet service providers, could have a
material adverse effect on our business. Our systems may suffer damage or
disruption from fire, natural disaster, power loss, telecommunications failure,
or similar events. Our operations also depend in significant part on our network
operations centers in Phoenix, Arizona and Salt Lake City, Utah. Although we
have arranged for off-site back-up for our network control, this arrangement
does not eliminate the significant risk to our operations from a natural
disaster or system failure. In addition, growth of our customer base may strain
the capacity of our computer and telecommunications systems or lead to
degradations in performance or system failure.
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ANY DISRUPTION IN RECEIVING INFORMATION FROM THIRD PARTY INFORMATION PROVIDERS
WILL DISRUPT OUR ABILITY TO PROVIDE TIMELY INFORMATION TO OUR CUSTOMERS
We depend on the timely receipt of information feeds and computer
downloads from third parties. Any loss, interruption or disruption of the
transmission of this information to our news consolidation facility would result
in delay, loss, interruption or disruption of the transmission to the end users.
In addition to affecting customers of our information providers, these events
would adversely affect customers of our services. These disruptions could result
in those customers terminating, or failing to renew, their contracts with us. In
either case, our business could be materially and adversely affected.
We also depend largely on the integrity, capability, and maintenance of
third party controlled systems, including satellites and the Internet. The loss
or disruption of any facility or equipment, or the interruption of any
facility's or equipment's transmission capabilities, could adversely affect our
ability to deliver services and information. It could also cause one or more of
our customers to terminate their contracts with us or fail to renew their
contracts.
WE MAY ISSUE ADDITIONAL SHARES AND DILUTE YOUR OWNERSHIP PERCENTAGE
Certain events over which you have no control could result in the
issuance of additional shares of our common stock, which would dilute your
ownership percentage in Wavo Corporation. We may issue additional shares of
common stock or preferred stock:
- to raise additional capital or finance acquisitions;
- upon the exercise or conversion of outstanding options, warrants
and shares of convertible preferred stock; or
- in lieu of cash payment of dividends.
As of October 16, 2000, there were outstanding convertible preferred
shares, warrants, and options to acquire up to approximately 15,060,456
additional shares of common stock at prices ranging from $.5774 to $13.51 per
share. If converted or exercised, these securities will dilute your percentage
ownership of common stock. These securities, unlike the common stock, generally
provide for antidilution protection upon the occurrence of stock splits,
redemptions, mergers, reclassifications, reorganizations and other similar
corporate transactions, and, in some cases, major corporate announcements. If
one or more of these events occurs, the number of shares of common stock that
may be acquired upon conversion or exercise may increase significantly. In
addition, the number of shares that may be issued upon conversion of or payment
of dividends in lieu of cash on our Series D Preferred Shares could increase
substantially if the market price of our common stock decreases during the
period the Series D Preferred Shares are outstanding.
On May 15, 2000, the holders of our common stock approved the issuance of the
Series D Preferred Shares and the shares of common stock subject to issuance
upon conversion of, or as dividends on, the Series D Preferred Shares, and upon
exercise of the related warrants. Because of this shareholder approval, there is
no limit on the amount of shares of common stock that could be issued upon
conversion or the payment of dividends in lieu of cash on the Series D Preferred
Shares. As of October 16, 2000, we had issued 16,794,975 shares of our common
stock to the holders of the Series D Preferred Shares upon their conversion and
as dividends on the Series D Preferred Shares and there were approximately
47,728,931 shares of our common stock issued and outstanding.
OUR BUSINESS IS LIKELY TO BE HURT IF WE ARE UNABLE TO KEEP OUR SENIOR EXECUTIVE
OFFICERS AND KEY EMPLOYEES
We rely considerably on the abilities and performance of our senior
executive officers. We have not entered into employment agreements with any of
senior executive officers other than our President, Michael J. Coffin, and are
not the beneficiary of life insurance on any of them. Although we have
agreements with some members of management not to compete with us, there can be
no assurance that these agreements will be enforceable or effective in retaining
these individuals. As a result, we may lose one or more key individuals to
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resignation or death and may be unable to adequately replace these individuals.
In addition, our products and services are highly technical and require key
employees with high levels of technical expertise. Demand for these individuals,
particularly in the locations where we operate, is very high. The loss of the
services of any of our key employees, or the failure to attract and retain
qualified personnel to replace them, could have a material adverse effect on our
business.
AS AN INTERNET-BASED COMPANY OUR COMMON STOCK PRICE IS UNUSUALLY VOLATILE, WHICH
MAY IMPEDE OUR ABILITY TO RAISE CAPITAL, AND CAUSE OUR INVESTORS TO LOSE MONEY
The market price of our common stock, like the stock of many other
technology companies, particularly those involved in Internet-related businesses
and e-commerce, has been highly volatile. In addition, we have experienced, and
may continue to experience, significant fluctuations in revenues and operating
results from period to period, which tends to increase the volatility of our
common stock price. Factors that affect volatility include:
- unexpected fluctuations in our operating results;
- announcements of technological innovations and new products by us
or our competitors;
- increases in governmental regulation;
- developments or changes in legislation affecting the industries in
which we operate;
- developments in our patent or other proprietary rights or those of
our competitors;
- analyst reports, media stories, news broadcasts, and interviews;
and
- market conditions for technology and Internet-related stocks in
general.
OUR GOVERNING DOCUMENTS AND INDIANA LAW CONTAIN PROVISIONS THAT COULD PREVENT
TRANSACTIONS IN WHICH YOU WOULD RECEIVE A PREMIUM FOR YOUR STOCK
Our Articles of Incorporation and the Indiana Business Corporation Law
contain provisions that could have the effect of delaying, deferring, or
preventing a change in control and the opportunity to sell your shares at a
premium over current market prices. Although intended to protect Wavo
Corporation and its shareholders from unwanted takeovers, their effect could
hinder or prevent transactions in which you might otherwise receive a premium
for your common stock over then-current market prices, and may limit your
ability to approve transactions which may be in your best interests. As a
result, the mere existence of these provisions could adversely affect the price
of our common stock.
WE ARE SUBJECT TO RESTRICTIONS ON DIVIDENDS AND REDEMPTIONS AND DO NOT INTEND TO
PAY ANY DIVIDENDS
We have not paid any dividends on the common stock, and do not plan to
pay any dividends on the common stock for the foreseeable future. The provisions
of the Series 1994 Preferred Shares and the Series D Preferred Shares prohibit
the payment of dividends on the common stock unless the dividends on those
preferred shares are first paid and we get the consent of the holders of the
Series D Preferred Shares. In addition, although our credit facility does not
include any specific prohibitions on the payment of dividends, it does include
various financial covenants that could have the effect of limiting cash dividend
or redemption payments. The Indiana Business Corporation Law includes
limitations on the ability of corporations to pay dividends on or to purchase or
redeem their own stock. Accordingly, you should not expect that dividends will
be paid on your common stock.
WE MAY ISSUE ADDITIONAL SHARES OF PREFERRED STOCK WITHOUT SHAREHOLDER APPROVAL
THAT HAVE RIGHTS SENIOR TO THOSE OF COMMON SHAREHOLDERS
Our Board of Directors has the authority to issue a total of up to
25,000,000 shares of preferred stock and to fix the rates, preferences,
privileges, and restrictions, including voting rights, of the preferred stock,
which typically are senior to the rights of the common shareholders, without any
further vote or action by you and the other common shareholders. Your rights
will be subject to, and may be adversely affected by, the rights of the holders
of the
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preferred stock that have been issued, or might be issued in the future.
Preferred stock also could have the effect of making it more difficult for a
third party to acquire a majority of the outstanding voting stock of Wavo
Corporation. This could delay, defer, or prevent a change in control.
Furthermore, holders of preferred stock may have other rights, including
economic rights, senior to the common stock. As a result, their existence and
issuance could have a material adverse effect on the market value of the common
stock. We have in the past issued, and, may from time to time in the future
issue, preferred stock for financing or other purposes with rights, preferences,
or privileges senior to the common stock.
WE MAKE FORWARD-LOOKING STATEMENTS IN THIS PROSPECTUS THAT MAY NOT PROVE TO BE
ACCURATE
This prospectus contains or incorporates forward-looking statements
including statements regarding, among other items, our business strategy, growth
strategy, and anticipated trends in our business. We may make additional written
or oral forward-looking statements from time to time in filings with the
Securities and Exchange Commission or otherwise. When we use the words
"believe," "expect," "anticipate," "project" and similar expressions, this
should alert you that this is a forward-looking statement. Forward-looking
statements speak only as of the date the statement is made. These
forward-looking statements are based largely on our expectations. They are
subject to a number of risks and uncertainties, some of which cannot be
predicted or quantified and are beyond our control. Future events and actual
results could differ materially from those set forth in, contemplated by, or
underlying the forward-looking statements. Statements in this prospectus, and in
documents incorporated into this prospectus, including those set forth in "Risk
Factors" and "WAVO Corporation", describe factors, among others, that could
contribute to or cause these differences. In light of these risks and
uncertainties, there can be no assurance that the forward-looking information
contained in this prospectus will in fact transpire or prove to be accurate. All
subsequent written and oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by this
section.
USE OF PROCEEDS
The selling shareholders will receive all of the proceeds from the sale
of the common stock offered pursuant to this prospectus, although Wavo
Corporation may receive funds from the exercise of the warrants held by SVB or
issue less than the total amount of shares underlying the warrants in a cashless
exercise.
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<PAGE> 15
SELLING SHAREHOLDERS
The shares of common stock being offered by NDI were issued to NDI in
connection with the amendment of the Network Agreement between us and NDI. If
proceeds received by NDI from the sale of the shares of common stock being
offered by this prospectus are less than $1,400,000, we have agreed to pay the
amount of any shortfall to NDI in the form of a promissory note payable in three
installments over a 90 day period. If the proceeds received by NDI from the sale
of the shares of common stock being offered by this prospectus reach $1,750,000,
NDI has agreed to stop selling any additional shares of common stock and return
any unsold shares to us. NDI also has agreed it will not sell, on any trading
day, more than the greater of 20,000 shares or 10% of the trading volume of our
common stock for the previous trading day, except that, with our prior consent,
this limitation will not apply to negotiated block trades executed at prices
equal to or greater than the average closing sale price of our common stock for
the ten trading days prior to the block trade.
The shares of common stock being offered by SVB are issuable upon
exercise of warrants granted to SVB in connection with the modification of the
terms of the Loan and Security Agreement between us and SVB. Pursuant to the
modification agreement, we agreed to register the shares of common stock
underlying the warrants issued to SVB.
The shares of common stock being offered by the affiliates of Stonegate
identified below are issuable upon exercise of warrants granted in connection
with a Consulting Agreement between us and Stonegate. Pursuant to this
Consulting Agreement, we agreed to register the shares of common stock
underlying the warrants issued to the Stonegate affiliates identified below.
Except for the ownership of the shares of common stock by NDI, the
ownership of the warrants by SVB, and the ownership of the warrants by the
persons and entity affiliated with Stonegate identified below, the selling
shareholders have not had any material relationship with us within the past
three years (other than the relationships between us, NDI, SVB and Stonegate
pursuant to the agreements described in this prospectus). The table below lists
the selling shareholders and other information regarding the beneficial
ownership of the common stock by each of the selling shareholders. The second
column lists, for each selling shareholder, the number of shares of common stock
beneficially owned by each of the selling shareholders as of October 16, 2000,
assuming the exercise of the warrants held by SVB and the Stonegate affiliates
on that date.
<TABLE>
<CAPTION>
COMMON SHARES COMMON SHARES COMMON SHARES
NAME OF SELLING BENEFICIALLY OWNED OFFERED OWNED AFTER PERCENTAGE
SHAREHOLDER PRIOR TO OFFERING BY THIS PROSPECTUS OFFERING OF CLASS
----------- ----------------- ------------------ -------- --------
<S> <C> <C> <C> <C>
National Datacast, Inc. 1,722,018 1,722,018 0 0%
Silicon Valley Bank 125,666 (1) 125,666 0 0%
Jesse B. Shelmire 97,500 (2) 97,500 0 0%
Scott R. Griffith 97,500 (2) 97,500 0 0%
Griffith Shelmire Partners, 30,000 (3) 30,000 0 0%
Inc.
</TABLE>
(1) Includes 125,666 shares that may be issued pursuant to the
exercise of warrants granted to SVB at an exercise price of $.70 per share.
(2) Includes 85,000 shares that may be issued pursuant to warrants
granted to the holder at an exercise price of $2.06 per share and 12,500 shares
that may be issued pursuant to warrants granted to the holder at an exercise
price of $4.65 per share.
(3) Includes 30,000 shares that may be issued pursuant to warrants
granted to the holder at an exercise price of $2.06 per share.
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<PAGE> 16
DESCRIPTION OF SECURITIES
We are authorized to issue up to 100,000,000 shares of common stock and
25,000,000 preferred shares. As of October 16, 2000, approximately 47,728,931
shares of common stock were issued and outstanding, and a total of 502,064
preferred shares were issued and outstanding.
The approximately 47,728,931 shares of common stock outstanding on
October 16, 2000 does not include approximately 12,801,605 shares of common
stock issuable upon exercise of currently outstanding warrants and stock
options.
The following summary of certain provisions of the common stock and
preferred shares does not purport to be complete and is subject to, and is
qualified by, our amended Articles of Incorporation, Restated Code of Bylaws,
and by the provisions of applicable law.
COMMON STOCK
The holders of our common stock are entitled to one vote per share on
all matters on which shareholders are entitled to vote. Subject to the rights of
holders of any class or series of shares, including preferred shares, having a
preference over the common stock as to dividends or upon liquidation, the
holders of our common stock are also entitled to dividends as may be declared by
our Board of Directors out of funds that are lawfully available, and are
entitled upon liquidation to receive pro rata the assets that are available for
distribution to holders of common stock. Holders of the common stock have no
preemptive, subscription, or conversion rights. The common stock is not subject
to assessment and has no redemption provisions.
PREFERRED STOCK
Our Board of Directors has the authority, without further action by the
shareholders, to issue a total of up to 25,000,000 preferred shares in one or
more series and to fix the rights, preferences, privileges and restrictions
granted to or imposed upon any series of unissued preferred shares and to
determine the number of shares constituting any series and the designation of
the series, without any further vote or action by the shareholders.
SERIES D PREFERRED SHARES
GENERAL.
On October 4, 1999, we issued 1,500 shares of our Series D Convertible
Preferred Stock, $10,000 stated value per share, and warrants to purchase
900,000 shares of our common stock in a private placement to institutional
investors. Prior to the date hereof, we issued 16,794,975 shares of our common
stock upon conversion of 1399 Series D Preferred Shares and as dividends on the
Series D Preferred Shares. As of the date of this prospectus, there were 101
Series D Preferred Shares that remained outstanding.
DIVIDENDS.
The Series D Preferred Shares carry a dividend rate of 10% per annum,
payable quarterly or upon conversion or redemption. At our option, the quarterly
dividend may be paid in cash or shares of common stock, subject to satisfaction
of certain conditions described below. If we choose to pay dividends in shares
of our common stock, the number of shares to be issued in payment of the
dividend on the Series D Preferred Shares will be equal to the accrued dividends
divided by the applicable conversion price as described below. For purposes of
this calculation, the applicable conversion price will be equal to the lowest
weighted average price of our common stock during the six consecutive trading
days ending on and including the second trading day prior to the date of
determination.
We will not have the right to pay dividends in shares of our common
stock if a triggering event (as defined in Section 3(b) of the Articles of
Amendment relating to the Series D Preferred Shares) has occurred and is
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continuing or the registration statement covering the shares of common stock
underlying the Series D Preferred Shares is not effective and available for
resale of all shares required to be registered. Triggering events include the
following:
- the suspension or delisting from trading of our common stock
on the Nasdaq National Market, the New York Stock Exchange, or
the American Stock Exchange for a period of at least five
consecutive trading days or for more than ten trading days in
any 365 day period;
- our notice to any holder of Series D Preferred Shares of our
intent not to comply with a request for conversion tendered in
accordance with the terms of the Series D Preferred Shares;
- our failure to issue shares of common stock upon conversion
prior to the 10th business day after the required date of
delivery;
- our failure to issue shares of common stock after a proper
request from a holder of the Series D Preferred Shares due to
the limitation on the number of shares we may issue to comply
with NASD rules; or
- the breach of any representation, warranty, covenant or other
term or condition of the documents governing the issuance of
the Series D Preferred Shares unless the breach would not have
a material adverse effect or is cured within 20 days after it
occurs.
MATURITY DATE.
The remaining Series D Preferred Shares mature on April 6, 2001,
subject to extension in certain circumstances, at which time the remaining
Series D Preferred Shares must be redeemed or converted at our option. If we
elect to redeem any Series D Preferred Shares outstanding on April 6, 2001, the
amount required to be paid will be equal to the liquidation preference of the
Series D Preferred Shares, which equals the price originally paid for such
shares plus accrued and unpaid dividends. If we elect to convert any Series D
Preferred Shares that remain outstanding on April 6, 2001, we will be required
to issue shares in an amount determined as described below under "Description of
Securities - Series D Preferred Shares - Conversion."
CONVERSION.
Subject to certain conditions described below, the selling shareholders
will have the right to convert the remaining Series D Preferred Shares into
shares of our common stock. The number of shares of common stock to be issued
upon conversion of a Series D Preferred Share is determined by dividing the sum
of $10,000 (the amount paid for that share) plus accrued and unpaid dividends by
the applicable conversion price as described below. The applicable conversion
price will be 100% of the lowest dollar-volume weighted average price of our
common stock for any day during the six trading days ending on and including the
conversion date, provided that the conversion price may not exceed $10.00 per
share. The lowest dollar-volume weighted average of our common stock as of
October 16, 2000 was $.5774. The dollar-volume weighted average price is a
calculated number which reflects an average of the prices at which the common
stock trades during a trading day, giving weight to the prices at which the
common stock trades based upon the number of shares which trade at such prices.
Thus, the larger the number of shares which trade at a particular price, the
greater the weight that will be given to that price in calculating the average
price for that day. The dollar-volume weighted average price of the common stock
for a trading day will not necessarily equate to other frequently used measures
of a stock's price, such as the bid, ask, high, low or close prices.
We would be required to issue 1,754,972 shares of common stock upon
conversion of all Series D Preferred Shares currently outstanding at an assumed
conversion price of $.5774 per share of common stock as of October 16, 2000.
No holder may convert any Series D Preferred Shares exceeding the
number of shares which, upon giving effect to such conversion, would cause the
holder's beneficial ownership to exceed 4.99% of the common stock then
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<PAGE> 18
outstanding (excluding any shares of common stock underlying Series D Preferred
Shares that have not been converted and warrants that have not been exercised).
LIQUIDATION PREFERENCE.
In the event of our liquidation, the holders of any remaining Series D
Preferred Shares will be entitled to a liquidation preference before any amounts
are paid to the holders of our common stock. The liquidation preference is equal
to the amount originally paid for any remaining Series D Preferred Shares, or
$10,000 per share, plus accrued and unpaid dividends on any remaining Series D
Preferred Shares. The holders' right to any assets available following a
liquidation are equal to the rights of the holders of our Series 1994 Preferred
Shares.
WARRANTS.
The warrants to purchase the 900,000 shares of our common stock are
exercisable at the price of $4.641 per share, subject to certain antidilution
adjustments. We intend to use the proceeds from any warrant exercises for
working capital and to grow our business.
VOTING RIGHTS.
Other than as required by law, the holders of the Series D Preferred
Shares have no voting rights except that consent of holders of at least
two-thirds of the outstanding Series D Preferred Shares will be required to
effect any change in our articles of incorporation that would change any of the
rights of the Series D Preferred Shares or to issue any other series of
preferred shares.
SERIES 1994 PREFERRED SHARES
We have authorized, issued and outstanding 501,963 of our Series 1994
Cumulative Convertible Preferred Shares. These shares have a stated value of
$11.00 per share and are convertible at any time into common stock at $11.00 per
share. The conversion provisions are subject to adjustment if there is a stock
split, dividend, distribution, reorganization, reclassification, merger,
consolidation, share exchange, or other similar corporate transaction.
Cumulative dividends on the shares accrue at the rate of 10% per annum and are
payable when declared by the Board of Directors. We may not pay dividends on the
common stock or other series junior to these preferred shares unless all accrued
dividends have been paid on the latter. On liquidation, the holder of the
preferred shares will be entitled to receive, before any distribution to holders
of our common stock or other series junior to the preferred shares, liquidation
distributions equal to the stated value of $11.00 per preferred share, plus
accrued and unpaid dividends. We may redeem the preferred shares at any time, on
at least 30 days written notice, at the redemption price of $11.00 per share,
plus accrued and unpaid dividends, provided that the redemption has been
approved by a majority of the Board of Directors who are not holders of the
preferred shares. The preferred shares have no voting rights except as otherwise
provided by law or the Articles of Incorporation. David E. Deeds, the Chairman
and Chief Executive Officer, owns all of the Series 1994 Preferred Shares.
SERIES A, SERIES B, AND SERIES C PREFERRED SHARES
We were authorized to issue, and in the past did issue, three separate
series of convertible preferred shares called the Series A, Series B, and Series
C Convertible Preferred Shares, all with varying provisions. All of these
preferred shares have been converted into common stock and are no longer
outstanding.
WARRANTS
As of the date of this prospectus, we have the following warrants
outstanding:
- In connection with the sale of our Series D Preferred Shares,
we issued warrants to purchase up to 900,000 shares of common
stock. The exercise price of these warrants is $4.641 per
share. These warrants expire on October 4, 2004. The exercise
price and number of shares purchasable upon exercise of the
warrants are subject to adjustment upon the occurrence of
certain dilution events.
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- We issued a warrant to Castle Creek Technology Partners, LLC
in connection with a private placement. This warrant enables
Castle Creek to purchase an aggregate of 250,000 shares of
common stock at a purchase price of $10.66 per share. The
exercise price and number of shares purchasable upon exercise
of the warrants are subject to adjustment upon the occurrence
of a stock split, reverse stock split, or distribution to
shareholders. The warrants expire on March 25, 2004.
- In connection with the formation of JamCast.com, Inc. we
issued to Virgin Entertainment Group, Inc. warrants to
purchase an aggregate of 1,000,000 shares of our common stock.
Warrants to purchase 500,000 shares are exercisable at $4.00
per share and expire on September 14, 2001. Warrants to
purchase the remaining 500,000 shares are exercisable at $5.00
per share and expire on September 14, 2004.
- In connection with a loan modification agreement with SVB, we
issued to SVB a warrant to purchase 7,500 shares of our common
stock. The warrants are exercisable at $5.42 per share. The
warrants expire on September 24, 2002. The exercise price and
number of shares purchasable upon exercise of the warrants are
subject to adjustment upon the occurrence of certain dilution
events.
- In connection with a further loan modification agreement with
SVB, we issued to SVB a warrant to purchase 41,666 shares of
our common stock and a warrant to purchase 84,000 shares of
our common stock. The resale of the shares of common stock
underlying these warrants are covered by this prospectus. The
warrants are exercisable at $0.70 per share. The warrants
expire on September 15, 2005. The exercise price and number of
shares purchasable upon exercise of the warrants are subject
to adjustment upon the occurrence of certain dilution events.
- In connection with a Consulting Agreement between us and
Stonegate dated December 7, 1999, as amended on May 24, 2000,
we issued warrants on December 7, 1999 to certain affiliates
of Stonegate to acquire up to 25,000 shares of our common
stock at an exercise price of $4.65 per share. These warrants
expire on December 7, 2002. On May 24, 2000, we issued
additional warrants to certain affiliates of Stonegate to
acquire up to an additional 200,000 shares of our common stock
at an exercise price of $2.06 per share. These warrants expire
May 24, 2003. In each case, the exercise price and number of
shares purchasable upon exercise of the warrants are subject
to adjustment upon the occurrence of certain dilution events.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for our common stock is Computershare
Investor Services, Inc.
CHARTER PROVISIONS AND EFFECTS OF INDIANA LAW
Our Articles of Incorporation require that proposals for consideration
at a meeting of shareholders must be submitted to the Secretary not later than
the earlier of:
- 270 days after the adjournment of the previous annual meeting;
or
- the close of business on the seventh day following the date on
which notice of the meeting is given to shareholders.
Under the Indiana Business Corporation Law, any person who acquires 10%
of the voting power of the common stock of a corporation is considered an
"interested shareholder." For a period of five (5) years after an acquisition,
certain business combinations between Wavo Corporation and the interested
shareholder are prohibited, unless prior to the acquisition of that common stock
by the interested shareholder, the Board of Directors approves the acquisition
of common stock or the business combination. After the five-year period, only
the following three types of business combinations between Wavo Corporation and
the interested shareholder are permitted:
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- a business combination approved by the Board of Directors
before the acquisition of common stock by the interested
shareholder;
- a business combination approved by holders of a majority of
the common stock not owned by the interested shareholder; and
- a business combination in which the shareholders receive a
price for their common stock at least equal to a formula price
based on the highest price per share paid by the interested
shareholder.
In addition, under Indiana law, a party acquiring Wavo Corporation common stock
may lose the right to vote some or all of those shares if the acquisition
results in that party holding greater than 20%, 33%, or 50% of the outstanding
shares of Wavo Corporation. An acquiring party can avoid the loss of the right
to vote these shares if the right to vote is approved by shareholders holding a
majority of the "disinterested" common stock, and, if authorized by a provision
of our Articles of Incorporation or Bylaws adopted before the time that party
became an interested shareholder, permit the redemption of the acquiring party's
common stock. We have not adopted this kind of a redemption provision.
PLAN OF DISTRIBUTION
NDI (or, subject to applicable law, its respective pledgees, donees,
distributees, transferees, or successors in interest) may offer from time to
time pursuant to this prospectus up to 1,722,018 shares that were issued to it
on September 11, 2000 in connection with the restructuring of the Network
Agreement. SVB (or, subject to applicable law, its respective pledgees, donees,
distributees, transferees, or successors in interest) may offer from time to
time pursuant to this prospectus up to 125,666 shares issuable upon exercise of
the warrants granted by us to SVB on September 15, 2000 in connection with the
modification of our loan agreement with SVB. The selling shareholders affiliated
with Stonegate (or, subject to applicable law, each of their respective
pledgees, donees, distributees, transferees, or successors in interest) may
offer from time to time pursuant to this prospectus up to 225,000 shares
issuable upon exercise of the warrants granted by us to those selling
shareholders in connection with the Consulting Agreement between us and
Stonegate dated December 7, 1999, as amended on May 24, 2000. This prospectus
covers the selling shareholders' resale of all of such shares, as well as any
additional shares that may become issuable upon because of stock splits, stock
dividends and other similar transactions.
The selling shareholders may sell the shares of common stock described
in this prospectus directly or through underwriters (or, subject to applicable
law, the respective pledgees, donees, distributees, transferees, or successors
in interest) may offer from time to time pursuant to this prospectus up to
broker-dealers or agents. The selling shareholders may also transfer, devise or
gift any or all of these shares by other means not described in this prospectus.
As a result, pledgees, donees, transferees or other successors in interest that
receive such shares as a gift, partnership distribution or other non-sale
related transfer may offer such shares of common stock. In addition, if any
shares covered by this prospectus qualify for sale pursuant to Rule 144 under
the Securities Act, the Selling Shareholders may sell such shares under Rule 144
rather than pursuant to this prospectus.
The selling shareholders may sell shares of common stock from time to
time in one or more transactions:
- at fixed prices that may be changed,
- at market prices prevailing at the time of sale, or
- at prices related to such prevailing market prices or at
negotiated prices.
The selling shareholders may offer their respective shares of our
common stock in one or more of the following transactions:
- on any national securities exchange or quotation service on
which the common stock may be listed or quoted at the time of
sale, including the Nasdaq National Market,
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<PAGE> 21
- in the over-the-counter market,
- in privately negotiated transactions,
- through options,
- by pledge to secure debts and other obligations,
- by a combination of the above methods of sale, or
- to cover short sales made pursuant to this prospectus.
In effecting sales, brokers or dealers engaged by either selling
shareholder may arrange for other brokers or dealers to participate in the
resales. The selling shareholders may enter into hedging transactions with
broker-dealers, and in connection with those transactions, broker-dealers may
engage in short sales of the shares. The selling shareholders also may sell
shares short and deliver the shares to close out such short positions, provided
that the short sale is made after the Registration Statement has been declared
effective and a copy of this prospectus is delivered in connection with the
short sale. The selling shareholders also may enter into option or other
transactions with broker-dealers that require the delivery to the broker-dealer
of the shares, which the broker-dealer may resell pursuant to this prospectus.
The selling shareholders also may pledge the shares to a broker or dealer, and
upon a default, the broker or dealer may effect sales of the pledged shares
pursuant to this prospectus.
The SEC may deem the selling shareholders and any underwriters,
broker-dealers or agents that participate in the distribution of the shares of
common stock to be "underwriters" within the meaning of the Securities Act. The
SEC may deem any profits on the resale of the shares of common stock and any
compensation received by any underwriter, broker-dealer or agent to be
underwriting discounts and commissions under the Securities Act. At the time
each Selling Shareholder purchased such shares, it was not a party to any
agreement or other understanding to distribute the securities, directly or
indirectly.
Under the Exchange Act, any person engaged in the distribution of the
shares of common stock may not simultaneously engage in market-making activities
with respect to the common stock for five business days prior to the start of
the distribution. In addition, the selling shareholders and any other person
participating in a distribution will be subject to the Exchange Act, which may
limit the timing of purchases and sales of common stock by the selling
shareholders or any such other person.
LEGAL OPINIONS
Barnes & Thornburg, of Indianapolis, Indiana, will pass upon the
validity of the common stock offered under this prospectus.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference from Wavo Corporation's Annual Report on Form 10-K for the year
ended December 31, 1999 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
The consolidated financial statements of Wavo Corporation (formerly
known as WavePhore Corporation) appearing in our Annual Report (Form 10-K) for
the years ended December 31, 1997 and 1998 have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. These consolidated financial statements
are incorporated herein by reference in reliance upon the report given upon the
authority of Ernst & Young LLP, as experts in accounting and auditing.
15
<PAGE> 22
WHERE YOU CAN FIND MORE INFORMATION
GOVERNMENT FILINGS: We file annual, quarterly and special reports and
other information with the Securities and Exchange Commission. You may read and
copy any document that we file at the Commission's Public Reference Room at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at its regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048,
and at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Please call the Commission at 1-800-SEC-0330 for more
information about the Public Reference Rooms. Most of our filings are also
available to you free of charge at the Commission's web site at
http://www.sec.gov.
STOCK MARKET: Our common stock is listed on the Nasdaq National Market
and similar information can be inspected and copied at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
REGISTRATION STATEMENT: We have filed a Registration Statement under
the Securities Act with the Commission with respect to the common stock offered
under this prospectus. This prospectus is a part of the Registration Statement.
However, it does not contain all of the information contained in the
Registration Statement and its exhibits. You should refer to the Registration
Statement and its exhibits for further information about Wavo Corporation and
the common stock offered under this prospectus.
INFORMATION INCORPORATED BY REFERENCE: The Commission allows us to
"incorporate by reference" the information we file with it, which means that we
can disclose important information to you by referring you to those documents.
The information incorporated by reference is an important part of this
prospectus, and information that we file later with the Commission will
automatically update and supersede this information. We have filed the following
documents with the Commission and they are incorporated by reference into this
prospectus:
- our Annual Report on Form 10-K for the fiscal year ended
December 31, 1999;
- our Quarterly Reports on Form 10-Q for the first quarter ended
March 31, 2000, and the second quarter ended June 30, 2000;
- our Proxy Statement for the 2000 Annual Meeting of Security
Holders, dated April 6, 2000;
- our Reports on Form 8-K, including Exhibits, filed February 1,
2000, and September 13, 2000, respectively;
- Our preliminary proxy statement filed in connection with a
special meeting of shareholders to be held November 27, 2000;
and
- the description of our capital stock contained in our
Registration Statement on Form 8-A, including all amendments
or reports filed for the purpose of updating the description.
Please note that all other documents and reports filed under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act following the date of this prospectus and
prior to the termination of this offering will be deemed to be incorporated by
reference into this prospectus and to be made a part of it from the date of the
filing of our reports and documents.
You may request free copies of these filings by writing or telephoning
us at the following address:
Investor Relations
Wavo Corporation
3131 E. Camelback Road, Suite 320
Phoenix, Arizona 85016
(602) 952-5500
16
<PAGE> 23
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF INSURANCE AND DISTRIBUTION
The following are the estimated expenses in connection with the
issuance and distribution of the securities being registered, all of which will
be paid by Wavo Corporation:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee $ 309
Nasdaq Listing Fee $ 17,500
Legal Fees and Expenses $ 7,500
Accounting Fees and Expenses $ 10,000
Transfer Agent Fees and Expenses $ 500
Miscellaneous $ 1,000
-----------
TOTAL $ 36,809
</TABLE>
-------------------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Unless limited by the Articles of Incorporation, the Indiana Business
Corporation Law (the "IBCL") requires that a corporation indemnify a director
who was successful, on the merits or otherwise, in the defense of any proceeding
to which the director was a party because the director is or was a director of
the corporation, against reasonable expenses incurred by the director in
connection with the proceeding. The IBCL permits a corporation to indemnify an
individual, made a party to a proceeding because the individual is or was a
director, against liability incurred in the proceeding if: (1) the individual's
conduct was in good faith; and (2) the individual reasonably believed: (A) in
the case of conduct in the individual's official capacity with the corporation,
that the individual's conduct was in its best interest; and (B) in all other
cases, that the individual's conduct was at least not opposed to its best
interests; and (3) in the case of any criminal proceeding, the individual
either: (A) had reasonable cause to believe the individual's conduct was lawful;
or (B) had no reasonable cause to believe the individual's conduct was unlawful.
Unless a corporation's articles of incorporation provide otherwise, an officer
of the corporation, whether or not a director, is entitled to mandatory and
court-ordered indemnification to the same extent as a director; and the
corporation may indemnify an officer, employee or agent of the corporation,
whether or not a director, to the same extent as a director, and to the extent,
consistent with public policy, that may be provided by its articles of
incorporation, bylaws, general or specific action of its board of directors, or
contract. The indemnification provisions of the IBCL are not exclusive of any
other rights to indemnification that a person may have under the corporation's
articles of incorporation or bylaws, a resolution of the board of directors or
of the shareholders, or any other authorization, whenever adopted, after notice,
by a majority vote of all of the voting shares then issued and outstanding.
The IBCL provides that a director is not liable for any action taken as
a director, or any failure to take any action, unless: (1) the director has
breached or failed to perform the duties of the director's office in compliance
with Section 23-1-35-1 of the IBCL; and (2) the breach or failure to perform
constitutes willful misconduct or recklessness. Section 23-1-35-1 of the IBCL
provides that a director shall, based upon the facts then known to the director,
discharge the duties as a director, including the director's duties as a member
of a committee: (a) in good faith; (b) with the care an ordinarily prudent
person in a like position would exercise under similar circumstances; and (c) in
a manner the director reasonably believes to be in the best interests of the
corporation. In discharging the director's duties, a director is entitled to
rely upon information, opinions, reports, or statements, including financial
statements and other financial data, if prepared or presented by: (1) one or
more officers or employees of the
i
<PAGE> 24
corporation whom a director reasonably believes to be reliable and competent in
the matters presented; (2) legal counsel, public accountants, or other persons
as to matters the director reasonably believes are within the person's
professional or expert competence; or (3) a committee of the board of directors
of which the director is not a member if the director reasonably believes the
committee merits confidence. A director is not acting in good faith if the
director has knowledge concerning the matter in question that makes reliance
otherwise permitted by the foregoing provisions unwarranted. A director may, in
considering the best interests of a corporation, consider the effects of any
action on shareholders, employees, suppliers, and customers of the corporation,
and communities in which offices or other facilities of the corporation are
located, and any other factors the director considers pertinent.
Wavo Corporation's Articles of Incorporation provide that the
corporation must 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 (including
any action or suit by or in the right of the corporation) 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 the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, to the maximum extent permitted under the IBCL. Such
indemnification shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any statute, bylaw, agreement, vote of
shareholders or disinterested directors, or otherwise.
Wavo Corporation's Restated Code of Bylaws provide that the corporation
must indemnify any individual who is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director, officer, partner or trustee of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan or
enterprise whether or not for profit, against liability and expenses, including
attorneys fees, incurred by him in any action, suit or proceeding, whether
civil, criminal, administrative, investigative, and whether formal or informal,
in which he has been made or threatened to be made a party by reason of being or
having been in any such capacity, or arising out of his status as such, except
- in the case of any action, suit, or proceeding terminated by
judgment, order or conviction, in relation to matters as to
which he is adjudged to have breached or failed to perform the
duties of his office and the breach or failure to perform
constituted a willful misconduct or recklessness; and
- in any other situation, in relation to matters as to which it
is found by a majority of a committee composed of all
directors not involved in the matter in controversy (whether
or not a quorum) that the person breached or failed to perform
the duties of his office and the breach or failure to perform
constituted willful misconduct or recklessness.
The directors and officers of Wavo Corporation are covered by an
insurance policy indemnifying against certain liabilities which arise from their
activities performed on behalf of Wavo Corporation, including liabilities under
the Securities Act of 1933 in certain circumstances.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that, in the opinion of the SEC, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
ITEM 16. EXHIBITS
EXHIBIT NO. EXHIBIT
3.1 Amended and Restated Articles of Incorporation (incorporated by
reference to Exhibit 3.1 to WAVO Corporation's Current Report on
Form 8-K dated June 4, 1999).
ii
<PAGE> 25
3.2 Articles of Amendment to the Company's Articles of Incorporation
dated September 30, 1999 (incorporated by reference to Exhibit 3.1
to WAVO Corporation's Current Report on Form 8-K filed as of
October 5, 1999).
3.3 Restated Code of Bylaws (incorporated by reference to Exhibit 4.2
to the Company's Registration Statement No. 33-80343 on Form S-8).
4.1 Form of Warrant to purchase 41,666 shares of common stock issued
to SVB on September 15, 2000, including attached Antidilution
Agreement and Registration Rights Agreement.
4.2 Form of Warrant to purchase 84,000 shares of common stock issued
to SVB on September 15, 2000, including attached Antidilution
Agreement and Registration Rights Agreement.
4.3 Form of Warrant to purchase up to 12,500 shares of common stock
granted to Scott R. Griffith on December 7, 1999.
4.4 Form of Warrant to purchase up to 12,500 shares of common stock
granted to Jesse B. Shelmire on December 7, 1999.
4.5 Form of Warrant to purchase up to 85,000 shares of common stock
granted to Scott R. Griffith on May 24, 2000.
4.6 Form of Warrant to purchase up to 85,000 shares of common stock
granted to Jesse B. Shelmire on May 24, 2000.
4.7 Form of Warrant to purchase up to 30,000 shares of common stock
granted to Griffith Shelmire Partners, Inc. on May 24, 2000.
5 Opinion of Barnes & Thornburg regarding legality.
10.1 Amendment No. 1 to Data Delivery Network Agreement made as of
September 11, 2000 by and between WAVO Corporation and National
Datacast, Inc.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Barnes & Thornburg (included in Exhibit 5).
24 Power of Attorney (included on signature page of Registration
Statement).
iii
<PAGE> 26
ITEM 17. UNDERTAKINGS
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. 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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement. 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;
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's Annual Report under 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 under 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.
Insofar as indemnification for liabilities arising under the Securities
Act 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 Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the 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 whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
iv
<PAGE> 27
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Phoenix, State of Arizona, on October 19, 2000.
WAVO CORPORATION
/ s / David E. Deeds
--------------------------
David E. Deeds, Chairman and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints David E. Deeds, Michael J. Coffin and
Kenneth D. Swenson and each of them, his attorneys-in-fact, each with the power
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and sign any Registration Statement for the same
offering covered by this Registration Statement that is to be effective upon
filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933, as
amended, and all post-effective amendments thereto, and to file the same, with
all exhibits thereto and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that such attorneys-in-fact and
agents or any of them, or his or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ David E. Deeds Chairman of the Board and Chief Executive Officer October 19, 2000
------------------------------- (Principal Executive Officer)
David E. Deeds
/s/ Michael J. Coffin President and Director October 19, 2000
------------------------------
Michael J. Coffin
/s/ Kenneth D. Swenson Executive Vice President, Chief Financial Officer, October 19, 2000
------------------------------ Treasurer (Principal Financial Officer and
Kenneth D. Swenson Principal Accounting Officer) and Director
/s/ Glenn Scolnik Director October 19, 2000
-----------------------------
Glenn Scolnik
/s/ J. Robert Collins Director October 19, 2000
-----------------------------
J. Robert Collins
</TABLE>
v
<PAGE> 28
INDEX TO EXHIBITS
EXHIBIT NO. EXHIBIT
3.1 Amended and Restated Articles of Incorporation (incorporated by
reference to Exhibit 3.1 to WAVO Corporation's Current Report on
Form 8-K dated June 4, 1999).
3.2 Articles of Amendment to the Company's Articles of Incorporation
dated September 30, 1999 (incorporated by reference to Exhibit 3.1
to WAVO Corporation's Current Report on Form 8-K filed as of
October 5, 1999).
3.3 Restated Code of Bylaws (incorporated by reference to Exhibit 4.2
to the Company's Registration Statement No. 33-80343 on Form S-8).
4.1 Form of Warrant to purchase 41,666 shares of common stock issued
to SVB on September 15, 2000, including attached Antidilution
Agreement and Registration Rights Agreement.
4.2 Form of Warrant to purchase 84,000 shares of common stock issued
to SVB on September 15, 2000, including attached Antidilution
Agreement and Registration Rights Agreement.
4.3 Form of Warrant to purchase up to 12,500 shares of common stock
granted to Scott R. Griffith on December 7, 1999.
4.4 Form of Warrant to purchase up to 12,500 shares of common stock
granted to Jesse B. Shelmire on December 7, 1999.
4.5 Form of Warrant to purchase up to 85,000 shares of common stock
granted to Scott R. Griffith on May 24, 2000.
4.6 Form of Warrant to purchase up to 85,000 shares of common stock
granted to Jesse B. Shelmire on May 24, 2000.
4.7 Form of Warrant to purchase up to 30,000 shares of common stock
granted to Griffith Shelmire Partners, Inc. on May 24, 2000.
5 Opinion of Barnes & Thornburg regarding legality.
10.1 Amendment No. 1 to Data Delivery Network Agreement made as of
September 11, 2000 by and between WAVO Corporation and National
Datacast, Inc.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Barnes & Thornburg (included in Exhibit 5).
24 Power of Attorney (included on signature page of Registration
Statement).
vi
