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As filed with the Securities and Exchange Commission on May 31, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
BOCA RESEARCH, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Florida 592479377
(State or Other Jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
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1601 Clint Moore Road
Boca Raton, FL 33487
(561) 997-6227
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Robert W. Ferguson
Chief Executive Officer
Boca Research, Inc.
1601 Clint Moore Road
Boca Raton, FL 33487
(561) 997-6227
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
copy to:
Francis J. Feeney, Jr.
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, Massachusetts 02110
(617) 951-6600
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest investment 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
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<CAPTION>
Title of Each Class of Amount to be Registered (1) Proposed Maximum Proposed Maximum Aggregate Amount of
Securities to be Registered Offering Price per Share (2) Offering Price (2) Registration Fee
<S> <C> <C> <C> <C>
common stock, par value 1,250,000 shares $4.0625 $5,078,125.00 $1,340.63
$.01
</TABLE>
(1) The shares of common stock set forth in the Calculation of Registration
Fee Table, and which may be offered pursuant to this Registration
Statement, includes, pursuant to Rule 416 of the Securities Act such
additional number of shares of the Registrant's common stock that may
become issuable as a result of any stock splits, stock dividends or other
similar events.
(2) Estimated solely for the purpose of computing the registration fee, based
upon the average of the high and low prices of the Company's common stock
as reported on The Nasdaq National Stock Market on May 24, 2000 in
accordance with Rule 457(c) under the Securities Act.
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, AS AMENDED, 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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PROSPECTUS
SUBJECT TO COMPLETION, DATED MAY 31, 2000
1,250,000 Shares of Common Stock
BOCA RESEARCH, INC.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 2 OF
THIS PROSPECTUS BEFORE PURCHASING ANY OF THE SHARES OF BOCA COMMON STOCK OFFERED
BY THIS PROSPECTUS.
The selling shareholders identified on page 7 of this Prospectus are
offering these shares of common stock. For additional information on the methods
of sale, you should refer to the section entitled "Plan of Distribution" on page
5. We will not receive any portion of the proceeds from the sale of these
shares. This offering is not being underwritten. The selling shareholders may
offer the shares registered pursuant to this Prospectus, or the Boca shares,
from time to time through public or private transactions, on or off the United
States exchanges, at prevailing market prices, or at privately negotiated
prices.
The Boca shares were issued pursuant to the exemption from the
registration requirements set forth in Section 4(2) of the Securities Act of
1933, as amended. Boca's common stock is listed on The Nasdaq National Stock
Market under the ticker symbol "BOCI." On May 30, 2000, the last reported
price of one share of Boca common stock on The Nasdaq National Stock Market
was $5.00 per share.
The information in this Prospectus is not complete and may not be
changed. We may not sell these securities until the registration statement filed
with the SEC is effective. This Prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Date of this Prospectus Is May 31, 2000
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THE COMPANY
Boca Research, Inc. is a supplier of computer enhancement products
including modems, Input/Output systems, graphics and video systems, and
communications software. For many years, the Company was a leading provider of
hardware and software technology, designing, manufacturing, and marketing
products that provided communications solutions to enable data transmission,
connectivity of devices, and access to applications and information via the
Internet, PCs, and/or server-based environments. While the Company continues to
market communications software as well as data communications, I/O, multiport,
and video products, it has positioned itself to transition to a software and
systems solutions-based enterprise, enabling communications and access to
applications and information via the Internet and client/server networking. The
Company has transitioned its participation in the thin client, network
appliance, and set top box businesses from manufacturing and marketing these
devices, to provide custom design services related to these devices for third
parties. Our wholly-owned subsidiaries include:
- Inprimis TM Technologies, Inc. plans to focus on technology design
services for Internet-based information and entertainment
appliances, including product design, systems engineering, and
software development services to consumer electronics, computer,
communications, and specialized line-of-business solutions providers
that are responding to consumer needs for Internet-related products
and services. In addition, Inprimis plans to have the capability for
developing hardware reference platforms that can be quickly adapted
to meet specific customer product requirements. Inprimis was
established to provide customized design and development services,
by licensing its designs to customers on a royalty basis;
- Boca Global, Inc. is a supplier of computing enhancement products,
including I/O cards, graphics, video systems, and modems. Boca
Global's strong brands, Boca Research (TM) and Global Village(R),
address the growing demand for software, peripherals, and
accessories for PCs and Macintosh(R) computers for both home and
business use; and
- AppsCom, Inc. was organized in August 1999 with a view to providing
computer applications outsourcing by renting and leasing
applications to remote users via an application server based
network. Although we are focused primarily on its transition to a
software and systems solutions-based enterprise, we are still
evaluating whether to enter this business and pursue the development
of AppsCom, Inc.
We are transitioning from a manufacturer of hardware into a software
and systems solutions-based enterprise with a strategy to (1) develop in
Inprimis the ability to provide product design, systems engineering, and
software development services, and to (2) strengthen our core businesses through
the Boca Global subsidiary by introducing new products, strengthening our
distribution channels, and building a Web-based e-commerce business. This
strategy is designed to enable us to transition into leading edge markets and
technology while increasing revenues and restoring profitability to its core
business. We will concentrate on geographic markets where we ourselves or our
strategic alliance partners have access to the most effective distribution
channels to reach a critical mass of targeted end users.
Boca was founded in 1985 under the laws of the state of Florida. Our
principal executive offices are located at 1601 Clint Moore Road, Boca Raton, FL
33487 and our telephone number is (561) 997-6227. As used in this prospectus,
the terms "we," "us," "our," and "Boca" refer to BOCA RESEARCH, INC., a Florida
corporation, and its wholly owned subsidiaries.
FORWARD-LOOKING INFORMATION
This Prospectus, and the documents incorporated in it by reference,
includes "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934
including, in particular, the statements about Boca's plans, strategies,
prospects under the heading "Risk Factors." You can identify these statements by
words such as "expect", "anticipate", "intend", "plan", "seek", "estimate",
"may", "will" and "continue" or similar words. Although we believe that our
plans, intentions and expectations reflected in or suggested by such
forward-looking statements are reasonable, we can give no assurance that such
plans, intentions or expectations will be achieved. Important factors that could
cause actual results to differ materially from the forward-looking statements we
make in this Prospectus are set forth below and elsewhere in this Prospectus.
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RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully by potential purchasers in evaluating an
investment in the Common Stock offered hereby.
TRANSITION OF THE COMPANY
The Company embarked upon a plan in early 2000 to transition from being
primarily a data communication products manufacturer to its new focus on
providing software and systems solutions-based services. The Company has very
limited experience providing software and systems solutions-based services, and
there can be no assurances that the Company will succeed in implementing its
as-yet unproven business plan. The Company anticipates that it will provide a
significant amount of formal engineering and design services to the infotainment
appliance industry, yet has limited experience to date in doing so. Risks
associated with this transition include:
a. the existence of a limited number of network operators and
information appliance manufacturers that have deployed products and
services using the Company's technology;
b. potential delays in deploying high-speed networks and
internet-enhanced services and applications by the Company's
customers;
c. an unproven business model, which depends on revenues from
engineering services and royalty fees paid by information appliance
manufacturers and network operators; and
d. a potential inability of the Company to expand its engineering and
design staff, increase its sales or marketing activities, and invest
in its technological infrastructure.
BOCA GLOBAL, INC.; DECLINING REVENUE
If sales of Boca Global, Inc. fail to improve, the Company may need to
evaluate its options with respect to this business unit to minimize losses and
cash out flow.
INPRIMIS TECHNOLOGIES, INC.; UNCERTAINTY IN DEVELOPMENT OF AN EVOLVING INDUSTRY
The market for intelligent computing devices is emerging and the
potential size of this market and the timing of its development are not known.
As a result, the profitability of the Inprimis subsidiary is uncertain and its
revenue may not grow as fast as anticipated, if at all. The Company is dependent
upon the broad acceptance by business and consumers of a wide variety of
intelligent computing devices, which depend on many factors, including:
a. the development of content and applications for intelligent
computing devices;
b. the willingness of large numbers of businesses and consumers to use
devices such as handheld and palm-size PCs and handheld industrial
data collectors to perform functions currently carried out manually
or by traditional PCs, including inputting and sharing data,
communicating among users and connecting to the Internet; and
c. the evolution of industry standards that facilitate the distribution
of content over the Internet to these devices via wired and wireless
telecommunications systems, satellite or cable.
The Company cannot guarantee that it will succeed in achieving its
goals, and its failure to do so would have a material adverse effect on its
business, prospects, financial condition and operating results.
SOFTWARE DEVELOPMENT AND SERVICES MARKET; LOW BARRIERS TO ENTRY
The market for software development and services is becoming
increasingly competitive. Increased competition may result in price reductions,
lower gross margins and loss of market share, which would harm the Company's
planned business through its Inprimis subsidiary. The Company faces competition
from:
a. current and potential customers' internal research and development
departments that may seek to develop their own proprietary
solutions;
b. large professional engineering services firms that may enter the
market;
c. established intelligent computing device software and tools
manufacturers; and
d. small- and medium-sized engineering service companies.
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As the Company develops new products, particularly products focused on
specific industries, they may begin competing with companies in sectors that
were not listed. It is also possible that new competitors will enter the market
or that existing competitors will form alliances that may enable them to rapidly
increase their market share. The barriers to entering the market as software
developer or hardware design consultant for intelligent computing devices are
low. New market entrants may have lower overhead than the Company and therefore
be able to offer advantageous pricing. The Company expects that competition will
increase as other established and emerging companies enter the intelligent
computing device market and as new products and technologies are introduced.
NEW PRODUCTS, TECHNOLOGICAL CHANGES AND INVENTORY MANAGEMENT
The markets for the Company's products are characterized by rapidly
changing technology, evolving industry standards and short product life cycles.
The Company's success depends upon its ability to enhance its existing products
and to introduce new products with features that meet changing end user
requirements. Moreover, because of short product life cycles coupled with long
lead times for many components used in the Company's products, the Company may
not be able to quickly reduce its inventory levels in response to unexpected
shortfalls in sales or, conversely, to increase production or inventory levels
in response to unexpected demand. The Information Technology ("IT") sector in
which the Company offers outsourcing and other services is characterized by
rapidly changing technology with continuous improvements in both computer
hardware and software and rapid obsolescence of current systems. The Company's
success will depend in part on its ability to develop solutions that keep pace
with continuing changes in information technology, evolving industry standards
and changing client preferences. Additionally, there can be no assurance that
the Company will be successful in identifying new markets, in developing,
manufacturing and marketing new products, or in enhancing its existing products,
either internally or through strategic relationships with third parties. The
Company's business would be adversely affected if the Company were to incur
delays in developing new products or enhancing existing products, if the Company
experiences delays in obtaining any required regulatory approvals for its
products or if any such new products or enhancements did not gain market
acceptance. In addition, there can be no assurance that products or technologies
developed by others will not render the Company's products or technologies
noncompetitive or obsolete.
Sales of individual products and product lines are typically
characterized by rapid declines in sales, pricing and margins toward the end of
the respective product's life cycle, the precise timing of which may be
difficult to predict. As new products are planned and introduced, the Company
attempts to monitor closely the inventory of older products and to phase out
their manufacture in a controlled manner. Nevertheless, the Company could
experience unexpected reductions in sales of older generation products as
customers anticipate the availability of new products. These reductions could
give rise to additional charges for obsolete or excess inventory, returns of
older generation products by distributors or substantial price protection
charges. To the extent that the Company is unsuccessful in managing product
transitions, its business and operating results could be materially adversely
affected.
Because the majority of the Company's products are used in PCs and
computer networks, the Company's future operating results could be adversely
affected by changes in the PC and computer networking markets, including major
technological developments or fluctuations in the growth rate. In addition,
there is a trend in original PC system manufacturing to integrate additional
functionality onto the system board of the PC or to utilize chipsets that
incorporate additional functionality, thereby decreasing the market for PC
enhancement products. Moreover, it is a concern in the PC industry that the
penetration of PCs into the home has flattened and the PC growth will slow as
PCs become more of a replacement market. This could impact modem sales to the
Company's OEM customers in the future. Any decrease in the markets for PC
enhancement or networking products or reduction in the growth rates in such
markets could have a material adverse effect on the Company's operating results.
POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS
The Company's quarterly operating results have varied significantly,
and continue to vary significantly, depending on a number of factors, some of
which could adversely affect the Company's operating results and the trading
price of the Company's Common Stock. These factors include the level of demand
for the Company's products, competitive pricing pressures, the timing of orders
from and shipments to major customers, the timing of new product introductions
by the Company and its competitors, the availability and pricing of components
for the Company's products, the timing of phase-outs of the Company's products,
variations in the Company's product mix and component costs, variations in the
proportion of sales made to wholesale distributors, OEMs, VARs and retailers,
product returns or price protection charges from customers, the timing of sales
of the Company's products to end users by the Company's customers, seasonal
promotions by the Company, its customers' and competitors' economic conditions
prevailing within the computer industry and economic conditions generally.
Quarterly sales depend on the volume and timing of orders received
4
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during a quarter, which are difficult to forecast. Customers generally order
products on an as-needed basis, and accordingly the Company has historically
operated with a relatively small backlog. Moreover, as is typical of companies
in the PC industry, a disproportionate percentage of the Company's net sales in
any quarter are typically generated in the last month of a quarter. As a result,
a shortfall in net sales in any quarter as compared to expectations may not be
identifiable until the end of the quarter. In addition, from time to time, a
significant portion of the Company's sales are derived from a limited number of
customers, the loss of one or more of which could adversely impact operating
results. There can be no assurance that the Company will be able to return to
its growth in sales or profitability on a quarterly or annual basis. The
Company's expense levels are based, in part, on its expectations as to future
sales. If sales levels are below expectations, operating results may be
adversely affected, which would likely have an adverse effect on the trading
price of the Company's Common Stock.
ACQUISITIONS
The Company may from time to time pursue the acquisition of other
companies, assets, technologies or product lines that would complement or expand
its existing business. Certain of these acquisitions may involve businesses in
which the Company lacks experience. Acquisitions involve a number of risks that
could adversely affect the Company's operating results, including the diversion
of management's attention, the assimilation of the operations, products and
personnel of the acquired companies, the amortization of acquired intangible
assets and the potential loss of key employees of the acquired companies. There
can be no assurance that the Company will be able to identify businesses that
would complement or expand its existing business or such acquisitions, manage
one or more acquisitions successfully, or that the Company will be able to
integrate the operations, products, or personnel gained through such acquisition
without a material adverse impact on the Company's business, financial
condition, and results of operations, particularly in the quarters immediately
following such acquisitions.
INTERNATIONAL OPERATIONS
The Company's international sales are subject to the risks inherent in
international sales, including various regulatory requirements (including the
need to obtain certifications for the Company's data communications products),
political and economic changes and disruptions, tariffs or other barriers,
difficulties in staffing and managing foreign operations, and potentially
adverse tax consequences. In addition, fluctuations in exchange rates may render
the Company's products less competitive relative to local product offerings or
expose the Company to foreign currency exchange losses. One or more of these
factors may have a material adverse effect on the Company's future international
sales and, consequently, on the Company's operating results.
DEPENDENCE ON SUPPLIERS
The major components of the Company's products include circuit boards,
microprocessors, chipsets and memory components. Most of the components used in
the Company's products are available from multiple sources. However, certain
components used in the Company's products are currently obtained by Boundless
Manufacturing Services, Inc. ("Boundless"), who manufactures the Company's
products, from single sources. Certain modem chipsets used in the Company's data
communications products in the past have been in short supply and are frequently
on allocation by semiconductor manufacturers. Similar to others in the computer
industry, the Company has, from time to time, experienced difficulty in
obtaining certain components. Neither the Company nor Boundless has guaranteed
supply arrangements with any of its suppliers and there can be no assurance that
these suppliers will continue to meet the Company's requirements. Shortages of
components not only limit Boundless' production capacity but also could result
in higher costs due to the higher costs of components in short supply or the
need to utilize higher cost substitute components. An extended interruption in
the supply of any of these components or a reduction in their quality or
reliability would have a material adverse effect on the Company's operating
results. While Boundless believes that with respect to its single source
components it could obtain similar components from other sources, the Company
could be required to alter product designs to use alternative components. There
can be no assurance that severe shortages of components will not occur in the
future which could increase the cost or delay the shipment of the Company's
products and have a material adverse effect on the Company's operating results.
Significant increases in the prices of these components could also have a
material adverse effect on the Company's operating results since the Company may
not be able to adjust product pricing to reflect the increases in component
costs. Moreover, a number of components for the Company's products are obtained
from foreign suppliers. Increases in tariffs on such components or fluctuations
in exchange rates could result in increases in the prices paid by the Company
for these components, which could impact the Company's ability to compete with
foreign manufacturers and have a material adverse effect on the Company's
operating results.
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SALES CHANNEL RISKS
The Company sells its products to OEMs, national, regional and
international wholesale distributors and retailers and catalog companies. Sales
to OEMs accounted for approximately 45% of net sales in 1997, 49% of net sales
in 1998 and 28% of net sales in 1999. OEMs have significantly different
requirements, and in most cases, more stringent purchasing procedures and
quality standards than wholesale distributors and other resellers. There can be
no assurance that the Company will be successful in developing products for, and
delivering products to, the OEM market, or that it will be successful in
establishing and maintaining an effective distribution and customer support
system for OEMs. The Company's business could be adversely affected if it is
unsuccessful in developing, manufacturing and marketing products for sale to
OEMs. In addition, OEMs may require special distribution arrangements and
product pricing, which could have a material adverse effect on the Company's
operating results. A decline in sales to large customers or a delay or default
in payment by one or more of such customers could have a material adverse effect
on the Company's results of operations or financial condition.
The Company's three largest wholesale distributors account for
approximately 18% of the Company's net sales in 1997, 32% of net sales in 1998
and 47% of net sales in 1999. The PC distribution industry has been
characterized by rapid change, including consolidations and financial
difficulties of wholesale distributors and the emergence of alternative
distribution channels. The Company is dependent upon the continued viability and
financial stability of its wholesale distributors. The loss or ineffectiveness
of any of the Company's three largest wholesale distributors or a number of its
smaller wholesale distributors could have a material adverse effect on the
Company's operating results. In addition, an increasing number of vendors are
competing for access to wholesale distributors which could adversely affect the
Company's ability to maintain its existing relationships with its wholesale
distributors or could negatively impact sales to such distributors.
COMPETITION
The markets for the Company's products are intensely competitive
resulting in constant pricing pressures. Some of the Company's competitors have
significantly greater financial, technical, product development, manufacturing
or marketing resources than the Company. The Company believes that its ability
to compete depends on a number of factors, including price, product quality and
reliability, product availability, credit terms, name recognition, delivery
time, and post-sale service and support. There can be no assurance that the
Company will be able to continue to compete successfully with respect to these
factors. A variety of companies currently offer products that compete directly
with the Company's products. These competitors could introduce additional
products or add features to their existing products that are superior to the
Company's products or that achieve greater market acceptance. In addition to
U.S.-based firms, the Company faces competition from Pacific Rim suppliers,
which generally offer products at significantly lower prices. The introduction
of lower priced competitive products or significant price reductions by the
Company's competitors would result in price reductions in the Company's products
that could have a material adverse effect on the Company's operating results. In
addition, as the Company enters into new product markets, such as Internet TV
appliances, the Company anticipates that it will encounter competition from a
number of well-established companies, many of which have greater financial,
technical, product development, manufacturing or marketing resources and
experience.
PROPRIETARY RIGHTS; DEPENDENCE ON SOFTWARE LICENSES
The Company receives from time to time, and may receive in the future,
communications from third parties asserting intellectual property rights
relating to the Company's products and technologies. There can be no assurance
that in the future the Company will be able to obtain licenses of any
intellectual property rights owned by third parties with respect to the
Company's products or that any such licenses can be obtained on terms favorable
to the Company. If the Company is unable to obtain licenses of protected
technology, it could be prohibited from manufacturing and marketing products
incorporating that technology. The Company could also incur substantial costs in
redesigning its products or in defending any legal action taken against it.
Should the Company be found to infringe the proprietary rights of others, the
Company could be required to pay damages to the infringed party, which could
have a material adverse effect on the Company's operating results.
In certain of its products, the Company includes software licensed from
third parties. The Company's operating results could be adversely affected by a
number of factors relating to this third party software, including lack of
market acceptance, failure by the licensors to promote or support the software,
delays in shipment of the Company's products as a result of delays in the
introduction of licensed software or errors in the licensed software, or excess
customer support costs or product returns experienced by the Company due to
errors in the licensed software. Moreover, any impairment or termination of the
Company's relationship with any licensors of third party software could have a
material adverse effect on the Company's operating results.
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RELIANCE ON CENTRALIZED MANUFACTURING
All of the Company's manufacturing occurs at Boundless' manufacturing
facility in Boca Raton, Florida (see Note 14 to the Company's Consolidated
Financial Statements contained in Item 8 to the March, 2000 Form 10-K
incorporated herein by reference). Boundless' manufacturing operations utilize
certain equipment which, if damaged or otherwise rendered inoperable, would
result in the disruption of Boundless' manufacturing operations. Although the
Company maintains business interruption insurance which the Company believes is
adequate, any extended interruption of the operations at Boundless' facility
would have a material adverse effect on the Company's operating results.
PRODUCT RETURNS, PRICE PROTECTION AND WARRANTY CLAIMS
Like other manufacturers of computer products, the Company is exposed
to the risk of product returns from wholesale distributors and retailers, either
through contractual stock rotation privileges or as a result of the Company's
interest in assisting customers in balancing inventories. Although the Company
attempts to monitor and manage the volume of sales to wholesale distributors and
retailers, large shipments in anticipation of sales by wholesale distributors
and retailers can lead to substantial overstocking by the Company's wholesale
distributors and retailers and to higher than normal returns. Moreover, the risk
of product returns may increase if demand for the Company's products declines.
When the Company reduces its prices, the Company credits its wholesale
distributors and retailers for the difference between the purchase price of
products remaining in their inventory and the Company's reduced price for such
products on terms negotiated with the Company, the result of which could have a
material adverse effect on the Company's operating results. The Company's
limited five-year warranty permits customers to return any product for repair or
replacement if the product does not perform as warranted. The Company to date
has not encountered material warranty claims or liabilities. The Company seeks
to continually introduce new and enhanced products, which could result in higher
product returns and warranty claims due to the risks inherent in the
introduction of such products. The Company has established reserves for product
returns, price protection and warranty claims which management believes are
adequate. There can be no assurance that product returns, price protection and
warranty claims will not have a material adverse effect on future operating
results.
VOLATILITY OF STOCK PRICE
The price of the Company's Common Stock historically has been volatile
due to fluctuations in operating results and other factors relating to the
Company's operations, the market's changing expectations for the Company's
growth, overall equity market conditions relating to the market for technology
stocks generally and other factors unrelated to the Company's operations,
including announcements by or relating to the Company's competitors. Such
fluctuations are expected to continue. In addition, stock markets have
experienced more price volatility in recent years. This volatility has had a
substantial effect on the market prices of securities issued by many technology
companies, often for reasons unrelated to the operating performance of the
specific companies.
DEPENDENCE ON KEY PERSONNEL AND MANAGEMENT OF GROWTH
The Company is highly dependent on its executive officers and other key
personnel, many of whom could be difficult to replace. If certain of these
people were to leave the Company, operating results could be adversely affected.
The future growth and success of the Company also depends in part on its ability
to attract and retain skilled employees and on the ability of its officers and
key employees to manage growth successfully. The Company has no long-term
employment contracts with any of its executive officers.
LIQUIDITY AND CAPITAL RESOURCES
The Company has incurred substantial operating losses in 1997, 1998,
1999, and in the first quarter of fiscal 2000. Although cash and cash
equivalents were $10.7 million as of March 31, 2000, the Company's net cash used
in operating activities was over $3 million for the three months ended March 31,
2000. Furthermore, it is likely that the Company's operations will continue to
consume cash during the remainder of 2000. The Company's collateralized line of
credit which expires on November 9, 2000, was reduced from $5 million to $2.5
million in March 2000. No borrowings were outstanding as of December 31, 1999 or
March 31, 2000.
Management has implemented efforts to bring the Company's expense
structure in line with the reduced revenue levels currently being achieved.
Management is also embarking upon a plan to transition the Company from
primarily a data communication products manufacturer to a company that provides
software and systems solutions-based services, however, this market is just
emerging and the potential size of this market and the timing of its development
are not known.
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Although there can be no assurances that the Company will return to
profitable operations in 2000, management believes that existing cash balances,
availability of funds under the credit line and cash generated from operations
will be sufficient to meet the Company's liquidity and capital needs for the
next twelve months. However, should the Company require additional capital,
there can be no assurance that any such required capital will be available on
terms acceptable to the Company, if at all, at such time or times as required by
the Company. The Company cannot guarantee that it will succeed in achieving its
goals, and its failure to do so would have a material adverse effect on its
business, prospects, financial condition and operating results. If these and
other negative factors as discussed above occur, the Company's liquidity could
become strained in the latter part of the year 2000.
8
<PAGE>
USE OF PROCEEDS
All proceeds from the sale of the Boca shares are solely for the
account of the selling shareholder. Accordingly, we will not receive any
proceeds from sales of the Boca shares.
ISSUANCE OF COMMON STOCK TO SELLING SHAREHOLDER
On April 28, 1999, we issued an aggregate of 1,747,965 shares of common
stock to Infomatec AG International, Inc. ("Infomatec"), pursuant to a Common
Stock Purchase Agreement dated as of April 28, 1999, as amended by the Amended
Common Stock Purchase Agreement dated May 21, 1999, between the Company and
Infomatec.
PLAN OF DISTRIBUTION
Shares of common stock covered hereby may be offered and sold from time
to time by the selling shareholder including donees, transferees, pledgees or
other successors in interest that receive the Boca shares as a gift, pledge,
partnership distribution or other non-sale related transfer. The selling
shareholder may sell no more than 611,788 of the Boca Shares covered hereby in
any given consecutive, three-month period commencing on the effective date of
this Registration Statement, and the selling shareholder shall be bound by the
other terms and conditions contained in that certain share disposition agreement
between the Company and Infomatec dated May 31, 2000. The selling shareholder
may sell the Boca shares being offered hereby on The Nasdaq National Market, or
otherwise, at prices and under terms then prevailing or at prices related to the
then current market price or at negotiated prices. The Boca shares may be sold
by one of more of the following means of distribution:
- a block trade in which the broker-dealer so engaged will attempt to
sell shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its own account pursuant to the rules of the
Nasdaq National Market;
- an over-the-counter distribution in accordance with the rules of the
Nadsaq National Market;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- in privately negotiated transactions; or
- in any combination of the above transactions.
To the extent required, this Prospectus may be amended and supplemented
from time to time to describe a specific plan of distribution. In connection
with distributions of the Boca shares or otherwise, the selling shareholder may:
- enter into hedging transactions with broker-dealers or other
financial institutions;
- enter into transactions with broker-dealers or other financial
institutions in connection with which broker-dealers or other
financial institutions may engage in short sales of our common stock
in the course of hedging the positions they assume with the selling
shareholder and sell our common stock short and redeliver the shares
to close out these short positions;
- enter into option or other transactions with broker-dealers or other
financial institutions which require the delivery to the
broker-dealer or other financial institution of shares offered
hereby, which shares the broker-dealer or other financial
institution may resell pursuant to this prospectus (as supplemented
or amended to reflect such transaction);
- pledge shares to a broker-dealer or other financial institution,
and, upon a default, the broker-dealer or other financial
institution, may effect sales of the pledged shares pursuant to this
prospectus (as supplemented or amended to reflect such
transaction); or
- enter into a combination of any of the above transactions.
9
<PAGE>
In effecting sales, brokers, dealers or agents engaged by the selling
shareholder may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
selling shareholder in amounts to be negotiated prior to the sale. These brokers
or dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 in connection
with these sales, and any of these commissions, discounts or concessions may be
deemed to be underwriting discounts or commissions under the Securities Act of
1933. We will pay all expenses incident to the filing of this registration
statement other than commissions and discounts of underwriters, broker-dealers
or agents or legal fees and disbursements of counsel for the selling
shareholder.
In order to comply with the securities laws of some states, if
applicable, the Boca shares must be sold in these jurisdictions only through
registered brokers or dealers. In addition, in some states the Boca shares may
not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
We have advised the selling shareholder that the anti-manipulation
rules of Regulation M under the Securities Exchange Act of 1934 may apply to
sales of the Boca shares in the market and to the activities of the selling
shareholder and his affiliates. In addition, we will make copies of the
Prospectus and any Prospectus supplement available to the selling shareholder
and have informed it of the need for delivery of copies of this Prospectus and
any Prospectus supplements to purchasers at or prior to the time of any sales of
the Boca shares offered hereby. The selling shareholder may indemnify any
broker-dealer that participates in transactions involving the sale of the Boca
shares against certain liabilities, including liabilities under the Securities
Act of 1933.
We have agreed to keep the registration statement of which this
Prospectus constitutes a part effective until May 31, 2001. No sales may be made
pursuant to this prospectus after that date unless we amend or supplement this
prospectus to indicate that we have agreed to extend this period of
effectiveness. There can be no assurance that the selling shareholder will sell
all or any of the shares of common stock offered hereunder.
10
<PAGE>
SELLING SHAREHOLDER
All of the common stock registered for sale pursuant to this Prospectus
will be owned immediately after registration by the selling shareholder,
Infomatec. This registration statement shall also cover any additional shares of
common stock which become issuable in connection with the shares registered for
sale by reason of any stock dividend, stock split, recapitalization or other
similar transaction effected without the receipt of consideration which results
in an increase in the number of the outstanding shares of common stock.
Infomatec is entitled to designate two members to serve on Boca's Board of
Directors under the Common Stock Purchase Agreement dated as of April 28, 1999,
as amended by the Amended Common Stock Purchase Agreement dated as of May 21,
1999, between the Company and Infomatec for so long as Infomatec continues to
own at least 874,000 Boca Shares and shall be entitled to designate one member
to Boca's Board of Directors for so long Infomatec continues to own at least
437,000 Boca Shares. Infomatec shall have no rights to designate members to
Boca's Board of Directors if Infomatec no longer holds at least 437,000 Boca
Shares.
The following table sets forth relevant information known to us with
respect to beneficial ownership of Boca's common stock as of May 31, 2000, by
the selling shareholder. The following table assumes that the selling
shareholder sells all of the Boca shares. Boca is unable to determine the exact
number of Boca shares that actually will be sold.
<TABLE>
<CAPTION>
SHARES WHICH
SHARES BENEFICIALLY MAY BE SOLD SHARES
OWNED PURSUANT TO BENEFICIALLY OWNED
PRIOR TO OFFERING(1) THIS PROSPECTUS AFTER OFFERING(2)
-------------------------- --------------- -------------------------
SELLING SHAREHOLDER NUMBER PERCENT NUMBER PERCENT
<S> <C> <C> <C> <C> <C>
Infomatec 1,747,965 15.1% 1,250,000 497,965 4.3%
</TABLE>
(1) The number and percentage of shares beneficially owned was determined in
accordance with Rule 13d-3 of the Exchange Act, and the information is
not necessarily indicative of beneficial ownership for any other purpose.
Under Rule 13d-3, beneficial ownership includes any shares as to which
the individual has sole or shared voting power or investment power and
also any shares which the individual has the right to acquire within 60
days of the date of this Prospectus through the exercise of any stock
option or other right. Unless otherwise indicated in the footnotes, each
person has sole voting and investment power (or shares these powers with
his or her spouse) with respect to the shares shown as beneficially
owned.
(2) Assumes that the selling shareholder will sell all of the Boca shares set
forth above under "Shares Which May Be Sold Pursuant to This Prospectus".
There can be no assurance that the selling shareholder will sell all or
any of the Boca shares offered under this prospectus.
LEGAL MATTERS
The validity of the Boca shares offered hereby will be passed upon by
Hutchins, Wheeler & Dittmar, A Professional Corporation, Boston, Massachusetts,
counsel to Boca.
EXPERTS
The consolidated financial statements and the related financial
statement schedule incorporated in this prospectus by reference from the
Company'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.
11
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements,
registration statements and other information with the SEC. Our SEC filings are
available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may read and copy any document we file at the SEC's
public reference room at 450 Fifth Street, N.W. Washington, D.C. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms.
We have filed with the SEC a registration statement under the
Securities Act of 1933 to register the common stock offered by this Prospectus.
This Prospectus is only part of the registration statement and does not contain
all of the information in the registration statement and its exhibits because
certain parts are allowed to be omitted by SEC rules. Statements in this
Prospectus about documents filed as an exhibit to the registration statement or
otherwise filed with the SEC are only summary statements and may not contain all
the information that may be important to you. For further information about us,
and the common stock offered under this Prospectus, you should read the
registration statement, including its exhibits and the documents incorporated
into it by reference.
The SEC allows us to incorporate by reference the information we file
with them, 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. Information that we file later with the
SEC will automatically update and supersede this information. We incorporated by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until we sell all of the common stock offered under this Prospectus:
1. Annual Report on Form 10-K for the fiscal year ended December 31,
1999;
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 2000;
3. The description of the common stock in the registration statements
filed by us pursuant to Section 12 of the Exchange Act and any amendment or
report filed for the purpose of updating any such description.
You should rely only on the information incorporated by reference or
provided in this Prospectus or any Prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of common stock in any state where the offer is not permitted. You should
not assume that the information in this Prospectus is accurate as of any date
other than the date on the front of this Prospectus.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Robert W. Ferguson, Chief Executive Officer, Boca Research, Inc., 1601
Clint Moore Road, Boca Raton, FL 33487, (561) 997-6227.
12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Boca will pay all expenses incident to the offering and sale to the
public of the shares being registered other than the fees and disbursements of
the selling shareholder's legal counsel and other than brokerage commissions,
which shall be paid by the selling shareholder. Such expenses are set forth in
the following table. All of the amounts shown are estimates except the SEC
registration fee.
<TABLE>
<S> <C>
SEC registration fee......................... $1,340.63
Accounting fees and expenses................. $15,000.00
Legal fees and expenses...................... $20,000.00
Printing fees and expenses................... $1,000.00
Miscellaneous expenses....................... $2,000.00
-------------
Total........................................ $39,340.63
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 607.0850 of the Florida Business Corporation
Act, Boca's Amended and Restated Certificate of Incorporation, as amended,
includes a provision that eliminates the personal liability of its directors for
monetary damages for breach or alleged breach of their duty of care. In
addition, Section 607.0850 of the Florida Business Corporation Act and Boca's
Amended and Restated By-laws provide for indemnification of Boca's directors and
officers for liabilities and expenses that they may incur in such capacities. In
general, directors and officers are indemnified with respect to actions taken in
good faith in a manner reasonably believed to be in, or not opposed to, the best
interests of Boca, and with respect to any criminal action or proceeding,
actions that the indemnitee has no reasonable choice to believe were unlawful.
Boca has purchased insurance with respect to, among other things, the
liabilities that may arise under the provisions referred to above. The directors
and officers of Boca also are insured against liabilities, including liabilities
arising under the Securities Act of 1933, as amended, which might be incurred by
them in their capacities as directors and officers of Boca and against which
they are not indemnified by Boca.
In connection with this offering, the selling shareholders have agreed
to indemnify the Registrant, its directors and officers and each such person who
controls the Registrant, against any and all liability arising from inaccurate
information provided to the Registrant by the selling shareholders and contained
herein up to a maximum of the net proceeds received by the selling shareholders
from the sale of their Boca shares hereunder.
ITEM 16. EXHIBITS
5.1 Opinion of Hutchins, Wheeler & Dittmar, A Professional Corporation.
10.1 Share Disposition Agreement dated May 31, 2000 between Boca Research, Inc.
and Infomatec AG International, Inc.
23.1 Independent Auditors' Consent.
23.2 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-3).
II-1
<PAGE>
ITEM 17. UNDERTAKINGS
A. UNDERTAKING PURSUANT TO RULE 415
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:
(a) To include any Prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) 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 and 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; and
(c) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement; provided, however, that paragraphs (a)
and (b) above do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
SEC by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated
by reference into the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof; and
(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 this offering.
B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE
ACT DOCUMENTS BY REFERENCE
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. UNDERTAKING IN RESPECT OF INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act of 1933 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 of 1933 and will be governed by the
final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BOCA RESEARCH, INC.
By: /s/ ROBERT W. FERGUSON
-------------------------------------
Name: Robert W. Ferguson
Title: Chief Executive Officer and
Chairman of the Board of Directors
Date: May 31, 2000
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS THAT each person whose signature appears
below severally constitutes and appoints Robert W. Ferguson with the power to
act as attorney-in-fact, with the power of substitution, for him or her in any
and all capacities, to sign any amendment to this Registration Statement and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting to said
attorney-in-fact, and full power and authority to do and perform each and every
act and thing requisite and necessary to be done in connection therewith, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Robert W. Ferguson
------------------------------
Robert W. Ferguson Chief Executive Officer, May 31, 2000
and Chairman of the Board of Directors
(Principal Executive Officer)
/s/ Robert P. Heinlein
------------------------------
Robert P. Heinlein Vice President of Finance and
Chief Financial Officer May 31, 2000
/s/ Robert W. Ferguson
------------------------------
Robert W. Ferguson Director May 31, 2000
/s/ H. Ric Luhrs
------------------------------
H. Ric Luhrs Director May 31, 2000
/s/ Douglas K. Raborn
------------------------------
Douglas K. Raborn Director May 31, 2000
II-3
<PAGE>
/s/ Joseph M. O'Donnell
------------------------------
Joseph M. O'Donnell Director May 31, 2000
/s/ Arthur R. Wyatt
------------------------------
Arthur R. Wyatt Director May 31, 2000
/s/ Blaine E. Davis
------------------------------
Blaine E. Davis Director May 31, 2000
/s/ Eduard Will
------------------------------
Eduard Will Director May 31, 2000
/s/ Karl Gruns
------------------------------
Karl Gruns Director May 31, 2000
/s/ Michael S. Polacek
------------------------------
Michael S. Polacek Director May 31, 2000
/s/ Bernard A. Carballo
------------------------------
Bernard A. Carballo Director May 31, 2000
/s/ Philip A. Vachon
------------------------------
Philip A. Vachon Director May 31, 2000
/s/ Rob Van Oostenbrugge
------------------------------
Rob van Oostenbrugge Director May 31, 2000
</TABLE>
INDEX TO EXHIBITS
5.1 Opinion of Hutchins, Wheeler & Dittmar, A Professional Corporation.
10.1 Share Disposition Agreement dated as of May 31, 2000 between Boca
Research, Inc. and Infomatec AG International, Inc.
23.1 Independent Auditors' Consent.
23.2 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-3).
II-4
