BOGEN COMMUNICATIONS INTERNATIONAL, INC.
9,400,442 Shares of Common Stock
333-76993
Filed pursuant to Rule 424(b)(1)
We are offering 3,822,900 shares of our common stock, consisting of:
o 3,072,900 shares of our common stock issuable upon exercise of
warrants issued in our initial public offering, and an additional
300,000 shares of common stock issuable upon exercise of warrants
issued in connection with a bridge financing; and
o 150,000 shares of common stock issuable upon exercise of unit purchase
options (each unit consists of one share of common stock and two
common stock purchase warrants), and an additional 300,000 shares of
common stock issuable upon exercise of the warrants which are part of
the units.
A holder of a publicly traded warrant or a bridge warrant may purchase one
share of our common stock. The publicly traded warrants and bridge warrants are
exercisable at $5.50 per share, and expire on October 7, 2000. The unit purchase
options are exercisable in cash at $6.60 per unit or, alternately, on a cashless
exercise basis, and expire on October 7, 1999; the related warrants are
exercisable at $5.50 per share and expire on October 7, 1999. If all of the
publicly traded warrants, bridge warrants, unit purchase options and warrants
comprising part of the unit purchase options are exercised, and assuming no
cashless exercise of the unit purchase options, we would receive $21,190,950,
less expenses and solicitation fees, if any.
The selling security holders identified in this prospectus may sell up to
5,577,542 shares of our common stock, consisting of:
o 4,425,772 shares of common stock currently outstanding;
o 250,000 shares of common stock issuable upon exercise of warrants,
which warrants are exercisable at $5.00 per share and expire on
January 1, 2003;
o 325,885 shares of common stock issuable upon exercise of options,
which options are exercisable at $5.00 per share and expire on
November 27, 2007; and
o 575,885 shares of common stock issuable upon exercise of warrants,
which warrants are exercisable at $5.50 per share and expire on
November 27, 2002.
We will not receive the proceeds from the sale of the common stock by the
selling security holders. We will receive, however, gross proceeds up to
$6,046,793 if the selling security holders exercise all of the warrants and
options. The options to purchase 325,885 shares of common stock at $5.00 per
share are not currently exercisable and 458,000 shares of common stock currently
outstanding are held in escrow for certain selling security holders and
currently may not be transferred.
The shares offered by the selling security holders may be offered for sale
from time to time in one or more transactions, including block trades, in the
over the counter market, on NASDAQ, in privately negotiated transactions, or in
a combination of any such methods of sale.
The selling security holders may sell shares of common stock in amounts and
at times determined by them. We have not been advised by any of the selling
security holders of any present intention to sell shares.
The selling security holders and any broker-dealer or agent that
participates with the selling security holders in the distribution at the common
stock may be deemed to be "underwriters" within the meaning of Section 2(11) of
the Securities Act of 1933, in which case any commissions or profits on the
resale of the shares may be deemed underwriting commissions or discounts under
the Securities Act.
We will pay all the costs and fees relating to the registration of the
shares covered by this prospectus and solicitation fees, if any, for exercises
of the publicly traded warrants and bridge warrants. We will not pay, however,
any discounts, concessions or commissions payable to underwriters, dealers or
agents incident to the offering of the shares or fees and expenses of counsel
for the selling security holders, if any.
Our common stock trades on NASDAQ NMS under the symbol BOGN. The last sales
price of our common stock on April 30, 1999 was $7.8125. Our publicly traded
warrants trade on NASDAQ NMS under the symbol BOGNW. The last sales price of our
warrants on April 30, 1999 was $3.00.
See "Risk Factors" beginning on page 3 for a discussion of certain factors
you should consider before investing in our securities.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is May 3, 1999.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information electronically with the SEC. You may read and copy any of the
reports, statements or other information that we file with the SEC at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20547.
You may also do so at the following regional offices of the SEC: 7 World
Trade Center, Suite 1300, New York, New York 10048, and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661.
You can receive additional information about the operations of the SEC's
Public Reference Rooms by calling the SEC at 1-800-SEC-0330. Our SEC filings are
also available from the website maintained by the SEC at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This prospectus is part of a registration we filed with the SEC to register
the common stock. It does not repeat important information that you can find in
our registration statement or in the reports and other documents we file the
SEC. The SEC allows us to incorporate by reference the information we file with
it. This means that we can disclose important information to you by referring
you to the other documents that are legally considered to be part of this
prospectus, and later information that we file with the SEC will automatically
update and supercede the information in this prospectus and the documents listed
below. We incorporate by reference any documents we may file with the SEC in the
future under Sections 13(a), 13(c), 14 and 15 of the Securities Exchange Act of
1934 and the documents listed below:
o Our annual report on Form 10-K for the year ended December 31, 1998,
filed on March 31, 1999; and
o The description of our common stock contained in our registration
statement on Form 8-A, dated June 30, 1993 (Commission File No.
0-22046).
You can request a free copy of the above filings or any filings
subsequently incorporated by reference into this prospectus by writing or
calling us at the following address or number:
Bogen Communications International, Inc.
Attn: Yoav M. Cohen, Secretary
50 Spring Street
Ramsey, New Jersey 07446
Telephone: (201) 934-8500
You should rely on the information incorporated by reference or provided in
this prospectus or any amendment or supplement to this prospectus. We have not
authorized anyone else to provide you with different or additional information.
You should not assume that any information in this prospectus or any amendment
or supplement in this prospectus, is accurate at any date other than the date
indicated on the cover page of these documents.
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
All statements contained in this prospectus that are not historical facts,
including, but not limited to, statements regarding our current business
strategy, projected sources and uses of cash, and our plans for future
development and operations, are based upon current expectations. These
statements are forward-looking in nature and involve a number of risks and
uncertainties. Actual results may differ materially. Among the factors that
could cause our actual results to differ materially are the following:
competitive factors, including the fact that our competitors may have greater
resources and/or name recognition than we have; changes in technology and our
ability to develop or acquire new or improved products and/or modify and upgrade
our existing products; changes in labor, equipment and capital costs; changes in
access to suppliers and sub-contractors, including the current instability in
Asia which may adversely affect our suppliers and subcontractors; currency
fluctuations; changes in regulations affecting our business; future acquisitions
or strategic partnerships; the availability of sufficient capital to finance our
business plans on terms satisfactory to us; general business and economic
conditions; political instability in certain regions; employee turnover; issues
relating to our internal systems, including Year 2000 issues; and other factors
described from time to time in the reports we file with the SEC. We wish to
caution you not to place undue reliance on any such forward-looking statements,
which are made pursuant to the Private Litigation Reform Act of 1995 and, as
such, speak only as of the date made.
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RISK FACTORS
You should carefully consider the following risk factors, together with the
other information contained in this prospectus, including information
incorporated by reference, before buying shares of our common stock. If any of
the following risks actually occur, our business, financial condition, operating
results or cash flow could be materially adversely affected. This could cause
the trading price of our common stock to decline and you may lose all or part of
your investment.
Our revenue and operating results are difficult to predict and may fluctuate
significantly.
As a result of a number of factors, many of which are outside of our
control, our revenue, operating expenses and operating results are difficult to
predict and may fluctuate significantly. These factors include:
o product, price and dealer competition;
o continued and future customer acceptance of our products;
o our ability to respond to technological change and integrate new
product introductions and product enhancements and corresponding
impact on research and development costs;
o capacity and supply constraints or difficulties;
o success in expanding our customer base and distribution channels and
success of our marketing programs;
o entry of new competitors in our markets;
o activities of and acquisitions by competitors and by us;
o level of international as compared to domestic sales;
o timing of new hires and retention of key personnel;
o changes in foreign currency exchange rates; and
o dependence on significant customers.
One or more of the foregoing factors may cause our operating expenses to be
disproportionately high during any given period or may cause our revenue,
operating expenses and operating results to fluctuate significantly. If our
operating results fall below the expectations of investors or public market
analysts, the price of our common stock could fall dramatically.
We must rapidly develop new products in order to compete effectively.
Product technology in our industry, particularly, in the telephony and
unified messaging businesses, evolves rapidly, and making timely product
innovations is essential to our success in the marketplace. The introduction by
our competitors of products with improved technologies or features may render
our existing products obsolete and unmarketable. If we cannot develop products
in a timely manner in response to industry changes, or if our products do not
perform well, our business and financial
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condition will be adversely affected. Also, our new products may contain defects
or errors which give rise to product liability claims against us or cause the
products to fail to gain market acceptance.
Our products are sensitive to pricing and general economic conditions.
Our sales and earnings can be affected by changes in the general economy
since purchases of certain of our products are discretionary and there is
intense price competition. Our success is also influenced by a number of
economic factors, such as employment levels, business conditions, interest rates
and taxation rates. Adverse changes in these economic factors, among others, may
restrict consumer and small business spending, thereby negatively affecting our
sales and profitability.
We face substantial competition.
Our competition varies from market to market and product to product. We
compete on the basis of several different factors, including name recognition,
price, delivery, availability, innovation and product features and quality.
However, such factors vary in relative importance depending on the markets and
products involved. A number of our competitors are larger and more established
than us and have substantially more resources.
Our U.S. telephony products compete in the message/music-on-hold ("MOH")
and over-head paging niches of the market. In the MOH market, our competitors
include relatively small companies as well as many telephone system
manufacturers, which offer small MOH systems as options to their telephone
equipment. Our main competitors in the MOH voice processing market are NelTech
Labs, Premier, and Mackenzie Labs. In the overhead paging market, our main
competitor is Valcom, a company which has been established in this market for
over 20 years. Several other U.S. companies, which have been losing market share
over the past few years, and several companies attempting to enter the market
also compete with our overhead paging products.
The commercial sound customer market is characterized by intense
competition, particularly from several overseas companies, with no one company
accounting for more than 10% of the U.S. market. In the distributor channel, we
face full line competitors such as Paso, University, and others, as well as
specialized competitors such as Atlas Soundolier, Quam Nichols, Lowell, Shure
Brothers, and CTI/Astatic, which market and sell products such as amplifiers,
speakers, horns, microphones and other non-amplifier items. At the contractor
level, we face competition from many sources, including a number of overseas
companies. Our principal competitor at the contractor level is TOA, comprising
approximately 10% of the U.S. market. TOA invests considerable resources in
developing sound systems. We compete with a number of other amplifier
manufacturers.
The engineered system customer market is a highly specialized market
characterized by low unit volume and high dollar sales. Our principal competitor
is Rauland Borg, the market leader in this area, and Dukane, each of which, like
us, has been in the market for several decades and has well established name
recognition and distribution channels.
Our main competitor in Germany is a provider of telephone peripherals
primarily at the low-end of our product range (simple music-on-hold units and
announcers) and there is no single dominating company in the European market for
small to mid-size private branch exchange peripherals. With the exception of
Octel, Northern Telecom, Lucent and a handful of other competitors who are
highly focused on the large, customized systems market, our competitors in
Europe include a large number of smaller companies offering PC-based voice mail
systems. These companies tend to be highly focused in their national markets.
Some of our competitors in Europe include Beyer (Germany), a maker of MOH and
announcer products, and U.S companies such as Active Voice and AVT,
manufacturers of higher-end PC-
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based voice mail products (mainly active in the U.K.). Our major customers in
this market include European PBX manufacturers, which purchase PBX peripherals
from the Company rather than manufacture peripherals for themselves. However,
there can be no assurances that such PBX manufacturers will not decide to
manufacture their own peripherals in the future.
Future acquisitions may negatively impact our business or operating results.
We may pursue acquisitions of complementary technologies, product lines or
businesses. Acquisitions entail numerous risks, including entering markets where
we have no or limited prior experience, the potential loss of key employees of
the acquired company, and impairment of relationships with existing employees,
customers and business partners. Further acquisitions may also impact our
financial position. For example, we may use significant cash or incur additional
debt, which would weaken our balance sheet. We may also amortize expenses
related to the goodwill and intangible assets acquired or incur one-time
non-recurring charges, which may reduce our profitability. We cannot guarantee
that future acquisitions will not negatively impact our business or operating
results.
A significant portion of our revenue is derived outside of the United States and
currency fluctuations may adversely impact our earnings.
In the normal course of business, we are exposed to fluctuations in
interest rates on our debt and credit facilities. We are also exposed to
fluctuations in foreign currency exchange rates as the financial results of our
foreign subsidiaries are translated into U.S. dollars in consolidation. We do
not generally use derivative instruments or hedging to manage our exposures.
Approximately 39% of our revenues are derived outside of the United States,
primarily in Germany. Over the course of 1998, the Deutsche Mark exchange rate
averaged at the rate of 1.7584 to the U.S. dollar, with a low of 1.6136 and a
high of 1.8535. This represents a 14.87% movement of the DM relative to the U.S.
dollar throughout the year.
A significant portion of our sales are made to a small number of customers, and
the loss of any such customer may have a material adverse effect on our
business.
Sales to two customers of Speech Design totaled approximately $14 million
in 1998. Speech Design's main customers include leading PBX manufacturers which
could determine to manufacture their own peripherals rather than purchase them
from us. Also, our domestic operations have significant customers. The loss of
any of these customers or a reduction in orders from these customers could have
a material adverse affect on our business, results of operation and financial
condition.
Many of our suppliers and subcontractors are based in Asia and may have been
adversely impacted by the Asian economic crisis.
For our U.S. operations, we rely principally upon an established network of
suppliers and subcontractors primarily located in the Republic of South Korea,
and to a lesser extent in the Asia Pacific Region, and in the United States.
During 1997 and 1998, the affects of the adverse economic conditions in the
Republic of South Korea and other countries in the Asia Pacific Region included
a national liquidity crisis, significant depreciation in the value of the Won,
high interest rates and a general reduction in spending throughout the region.
We are currently monitoring this situation closely and are taking precautions to
ensure that production of our products will continue without interruption.
Should production by our suppliers be curtailed, we believe suitable suppliers
in other parts of the world will be available to satisfy our production
requirements. There can be no assurance, however, that events beyond our control
will not disrupt production or that suitable alternative sources of production
can be identified
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on a timely basis. Any disruption in the source of supplies and production could
have a material adverse effect on our results of operations.
Our officers, directors and management personnel have significant holdings in
the Company.
As of March 31, 1999, our officers, directors and management personnel and
their affiliates owned over 27% of the outstanding shares of common stock (or
over 36% of the outstanding shares of our common stock including shares subject
to currently exercisable options). As a result, if these people act in concert,
they should have significant influence to direct our affairs and business and to
determine the outcome of corporate actions requiring stockholder approval. This
type of influence by existing stockholders may delay or prevent a change in
control and could result in the denial to minority stockholders of a premium
price for their stock in a change in control.
Certain of our products are regulated by the U.S. and foreign governments and
must be authorized by the Underwriter's Laboratory and similar organizations
outside the United States.
The U.S. Federal government regulates domestic telecommunications equipment
and related industries. The Federal agency vested with primary jurisdiction over
the telecommunication industry is the Federal Communications Commission (the
"FCC"). Many telephone peripheral producers and distributors, while not directly
regulated by the FCC, are nevertheless substantially affected by the enforcement
of its regulations and changes in its regulatory policy.
The FCC has adopted regulations regarding attachments to the telephone
networks as well as regulations imposing radio frequency emanation standards for
telephony and radio equipment and many of our products require authorization by
the FCC. In addition, many of our products also require the authorization of the
Underwriter's Laboratory ("UL"). To date, all such required authorizations have
been obtained. As a result of modifications and improvements to our products,
however, we will be obligated to seek new authorizations where there is a
degradation in the radio frequency emissions. Failure to obtain such
authorizations may preclude us from selling our products in the U.S.
To successfully access the Canadian market, we must obtain Underwriter's
Laboratory Canada and Canadian Standards Association authorizations for all AC
powered products, which we have done for all of our current products which we
sell in Canada.
Our products which are sold in Europe have been adapted to the technical
(PTT-approvals) and commercial sound requirements of West European markets, and
carry the Community European ("CE") marking, which is the equivalent of a UL
certification in the United States.
There are no assurances, however, that we will be able to obtain the
required approvals and certifications in the future. Our ability to sell and
market new products could be materially impaired if we are not able to obtain
any of the above described approvals or certifications.
Our intellectual property rights may not be fully protected.
We hold several patents and registered trademarks. We cannot, however,
guarantee that any patent or trademark would ultimately be proven valid if
challenged. Any such claim, with or without merit, could:
o be time consuming to defend;
o result in costly litigation;
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o divert management's attention and resources;
o cause product development or shipment delays; and
o if successful, require us to pay monetary damages or enter into
royalty or licensing agreements.
A successful claim of product infringement against us and our failure
or inability to license or create a workaround for such infringed or similar
technology may materially and adversely affect our business, operating results
and financial condition.
On February 19, 1999, a complaint was filed in Landericht Dusseldorf Court
(4th civil Chamber) claiming patent infringement and unfair competition by our
Speech Design subsidiary and its managing directors. Since the second quarter of
1998, Speech Design has been contesting the plaintiffs' patent, which is the
subject of the complaint, in the German Patent Office. The case entitled
Wolfgang Beyer KG and COM Electronic GmbH v. Speech Design GmbH, Hans Mieler and
Kasimir Arciszewski, 4-0-87/99, is currently scheduled for a preliminary oral
hearing on April 29, 1999. The plaintiffs have temporarily estimated, but have
not limited, the damages at DM 500,000 (or approximately $270,000) and are also
requesting injunctive relief. While we intend to defend this lawsuit vigorously
and do not believe it will have a material adverse effect on us, there can be no
assurances as to the final outcome of this litigation.
We are dependent on key personnel.
Our success depends to a large extent upon the efforts and abilities of
Jonathan Guss, our Chief Executive Officer, Michael P. Fleischer, our President,
Yoav M. Cohen, our Senior Vice President - Business Development and Finance and
Chief Financial Officer, Kasimir Arciszewski, Co-Managing Director of Speech
Design, and Hans Meiler, Co-Managing Director of Speech Design. The loss of any
of Messrs. Guss, Fleischer, Cohen, Arciszewski or Meiler could have a material
adverse effect on our business, operating results and financial condition.
Our future success will also depend in large part on the continued service
of many of our technical, marketing, sales and management personnel and on our
ability to attract, train, motivate and retain highly qualified employees. Our
employees may voluntarily terminate their employment with us at any time.
Competition for highly qualified employees is intense, and the process of
locating technical, marketing, sales and management personnel with the
combination of skills and attributes required to execute our strategy is often
lengthy. We believe that we will need to hire additional technical personnel in
order to enhance our existing products and to develop new products. If we are
unable to hire additional technical personnel, the development of new products
and enhancements would likely be delayed. The loss of the services of key
personnel or the inability to attract new personnel could have a material
adverse effect upon our results of operations.
If we fail to implement our year 2000 compliance program or if the systems of
our suppliers and customers are not compliant, our business and operations may
be materially adversely affected.
The year 2000 readiness issue is the result of information technology
system programs being written using two digits rather than four digits to define
the application year. Any of our information technology systems that have
date-sensitive software may recognize a date using "00" for the applicable year
as the year 1900 and not the year 2000. This could result in miscalculations,
system failures, or other business disruptions.
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We have implemented a plan which addresses year 2000 technology compliance
for our information technology and non-information technology systems. The plan
includes a review of our suppliers and customers to assure that they are working
toward year 2000 compliance.
We use information technology systems in various aspects or our business,
including manufacturing, research and development, distribution and many
administrative functions. A significant amount of our software and systems may
need to be updated, modified or replaced to address the year 2000 readiness
issue. We have retained consultants to upgrade our information technology
systems and to address the year 2000 readiness of our information technology
systems.
We have prioritized our information technology systems into three
categories: critical, necessary or other. We currently expect that critical and
necessary systems, the loss or failure of which could result in a serious
disruption of revenue or serious processing delay, respectively, will be year
2000 compliant by the third quarter of 1999, with modifications to the existing
software and/or conversions to new software. We currently expect that the
remainder of our information technology systems will be year 2000 compliant
within such timeframe or shortly thereafter. There can be no assurance, however,
that our critical, necessary and other information technology systems will
become year 2000 compliant by our projected time.
Our non-information technology systems include embedded technology such as
microcontrollers included in production equipment, office equipment,
environmental control equipment and time locks. All of our non-information
technology systems are currently year 2000 ready.
We have reviewed our current product lines and determined that all our
current products are year 2000 complaint, however several of our discontinued
products are not year 2000 compliant. We are evaluating alternatives for the
discontinued products and expect this review to be completed by third quarter of
1999.
Material third party vendors have been contacted and asked to attest to
their year 2000 compliance. Alternate vendors will be evaluated as potential
replacements for non-compliant or non-responsive vendors.
Currently, we estimate that we will expend up to $1,000,000 (including
capital lease obligations) on system upgrades and replacement projects, which
upgrades and replacements will, among other things, make our information
technology systems year 2000 compliant. Most of these upgrades, and related
costs, will be made in 1999. We anticipate that year 2000 remediation programs
and ongoing systems upgrades and replacement projects will be funded through our
operations.
If we fail to properly remediate our information technology systems
affected by the year 2000 issue, such systems could conceivably cause
technological failures throughout our business, disrupting normal operations.
While we expect to have contingency plans that address the most reasonably
likely worst case year 2000 scenarios, in the event that we cannot complete our
system upgrades and replacement projects in a timely manner, we may be required
to use a software patch to make information technology systems year 2000
compliant.
While certain of our suppliers and vendors have provided us with written
certification that their information technology systems will be year 2000
compliant prior to the year 2000, we are currently in the process of identifying
the potential risks of external business relationships. If any of our
significant customers or suppliers do not successfully and in a timely manner
achieve year 2000 compliance, our business could be materially adversely
affected.
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USE OF PROCEEDS
If all the publicly traded warrants and bridge warrants were to be
exercised, we would receive gross proceeds of $18,550,950. If all unit purchase
options were to be exercised for cash and all warrants comprising those units
were to be exercised, we would receive additional gross proceeds of $2,640,000.
However, if a holder of a unit purchase option elects the cashless exercise
feature, such holder will receive a reduced number of units upon exercise of the
option, but will not be required to pay the $6.60 per unit exercise price. The
number of units issuable upon a cashless exercise of the unit purchase options
is based upon the following formula:
o the excess of the market price of the units over the exercise price of
the units, divided by
o the market price of a unit.
If all the warrants and options held by selling security holders were to
exercised, we would receive additional gross proceeds of $6,046,793. Options to
purchase up to 325,885 shares of common stock at $5.00 per share are not
currently exercisable.
The proceeds of any warrants or options exercised will be used for general
working capital purposes, including, but not limited to, debt reduction and for
acquisitions. In addition, we may pay certain solicitation fees in connection
with the exercise of the publicly traded warrants and bridge warrants. At the
time the publicly traded warrants were first issued in our initial public
offering, we agreed to pay GKN Securities, the managing underwriter of our
initial public offering, a fee equal to 5% of the exercise price of each such
warrant the exercise of which was solicited by GKN Securities. The payment of
such solicitation fee is subject to several conditions, including among others,
limitations imposed by the National Association of Securities Dealers on the
payment and scope of such fees.
SELLING SECURITY HOLDERS
The following table sets forth information we know regarding the beneficial
ownership of our common stock held by each selling security holder as of April
15, 1999, and as adjusted to reflect the sale of common stock offered hereby. As
of April 15, 1999, there were 6,672,471 shares of common stock outstanding.
Selling security holders will sell shares of common stock in amounts, and
at times, chosen by them. For purposes of preparing the table presented below,
we have assumed that all securities offered hereby will be sold. We have not
been advised by any of the selling security holders of any present intention to
sell their shares.
<TABLE>
<CAPTION>
Number of
Number of Shares of Shares of
Common Stock and Number of Common
Percentage of Class Shares of Stock
Beneficially Owned Common Stock Owned After
Name of Selling Security Holder as of April 15, 1999 (1)(2) Offered Hereby the Offering
- ------------------------------- --------------------------- -------------- ------------
<S> <C> <C> <C> <C>
Alfred Partners, LLC 68,626(3) 1.0% 68,626 0
Kasimir Arciszewski 274,800(4) 4.1% 274,800 0
Bedford Falls Investors, L.P. 825,043(5) 12.4% 825,043 0
BGN Investors, L.L.C. 147,056(6) 2.2% 147,056 0
Carolyn Partners, L.P. 49,019(7) * 49,019 0
DFG Corp. 39,215(8) * 39,215 0
D&S Capital, LLC 323,295(9) 4.7% 323,295 0
Alan A. Fleischer IRA 19,607(10) * 19,607 0
Michael Fleischer 28,667(11) * 165,442 3,167
Gotham Capital III, L.P. 127,448(12) 1.9% 127,448 0
Jonathan Guss 26,500(13) * 165,443 1,000
Helix Capital II, LLC 707,135(14) 7.9% 575,885 131,250
Highbridge International LDC 725,473(15) 10.9% 725,473 0
James G. Dinan Foundation 10,000(16) * 10,000 0
Hans Meiler 183,200(17) 2.7% 183,200 0
Metropolitan Capital Advisors
International Limited 35,600(18) * 35,600 0
John Sandelman 10,000(19) * 10,000 0
Jeffrey E. Schwarz 53,440(20) * 29,440 24,000
Sherwood Schwarz 12,500(21) * 12,500 0
Scoggin Capital Management, L.P. 392,148(22) 5.9% 392,148 0
Scoggin International Fund, Ltd. 172,056(23) 2.6% 172,056 0
Waveland International Ltd. 274,503(24) 4.1% 274,503 0
York Capital Management, L.P. 343,915(25) 5.2% 343,915 0
York Select, L.P. 44,116(26) * 44,116 0
York Investment Ltd. 563,712(27) 8.4% 563,712 0
</TABLE>
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- -------------
* Less than 1%
(1) Based upon outstanding shares of our common stock as of April 15, 1999.
(2) Beneficial ownership is determined in accordance with the rules of the
SEC. The number of shares beneficially owned by a person includes
shares of common stock subject to options held by that person that are
currently exercisable or exercisable within 60 days of April 15, 1999.
Such shares issuable pursuant to such options are deemed outstanding
for computing the percentage ownership of the persons holding such
options but are not deemed outstanding for the purpose of computing the
percentage ownership of any other person.
(3) Includes 68,626 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(4) Includes 274,800 shares of common stock issued in connection with our
acquisition of the remaining 33% interest in Speech Design which we did
not previously own. All 274,800 shares are held in escrow and currently
are not transferable.
(5) Includes 825,043 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(6) Includes 147,056 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(7) Includes 49,019 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(8) Includes 39,215 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(9) Includes 46,295 shares of common stock held by D&S Capital, 27,000
shares of common stock issued upon conversion of our preferred stock
and accrued dividends and 250,000 shares of common stock issuable to
D&S Capital upon the exercise of warrants. Messrs. Jonathan Guss and
Michael P. Fleischer, respectively, the Chief Executive Officer and
President of Bogen, hold all of the equity interests in D&S Capital.
(10) Includes 19,607 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
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(11) Includes 2,500 shares of common stock issued upon conversion of our
preferred stock and accrued dividends and 3,167 shares of common stock
purchased in open market transactions. Does not include 139,942 shares
of common stock issuable upon the exercise of options which are not
currently exercisable and shares of common stock held by or issuable to
D&S Capital.
(12) Includes 127,448 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(13) Includes 2,500 shares of common stock issued upon conversion of our
preferred stock and accrued dividends and 1,000 shares of common stock
purchased in open market transactions. Does not include 139,943 shares
of common stock issuable upon the exercise of options which are not
currently exercisable and shares of common stock held by or issuable to
D&S Capital.
(14) Includes 131,250 shares of common stock held by Helix Capital II
and 575,885 shares of common stock issuable to Helix Capital II upon
the exercise of warrants.
(15) Includes 725,473 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(16) Includes 10,000 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(17) Includes 183,200 shares of common stock issued in connection with our
acquisition of the remaining 33% interest in Speech Design which we did
not previously own. All 183,200 shares are held in escrow and currently
are not transferable.
(18) Includes 35,600 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(19) Includes 10,000 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(20) Includes 29,440 shares of common stock issued upon conversion of our
preferred stock and accrued dividends. Also includes 9,000 shares of
common stock purchased in open marker transactions and 15,000 shares of
common stock held by trusts established for certain of Mr. Schwarz's
family members. Mr. Schwarz disclaims beneficial ownership of the
shares held by such trusts. Directly and/or through affiliates, Mr.
Schwarz has dispositive and voting power over shares of common stock
held by Bedford Falls Investors, BGN Investors and Metropolitan Capital
Advisors International. The shares of common stock held by such
entities are included elsewhere in this table and are not listed with
respect to Mr. Schwarz.
(21) Includes 12,500 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(22) Includes 392,148 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(23) Includes 172,056 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
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(24) Includes 274,503 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(25) Includes 343,915 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(26) Includes 44,116 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
(27) Includes 563,712 shares of common stock issued upon conversion of our
preferred stock and accrued dividends.
PLAN OF DISTRIBUTION
The shares of common stock issuable upon the exercise of the publicly
traded warrants, the bridge warrants, the unit purchase options and the warrants
comprising part of the unit purchase options will be offered solely by us, and
no underwriters are participating in the offering. At the time the publicly
traded warrants were first issued in our initial public offering, however, we
agreed to pay GKN Securities, the managing underwriter of our initial public
offering, a fee equal to 5% of the exercise price of each such warrant the
exercise of which is solicited by GKN Securities. The payment of such
solicitation fee is subject to several conditions, including among others,
limitations imposed by the National Association of Securities Dealers on the
payment and scope of such fees.
For a holder of publicly traded warrants and bridge warrants to exercise
the warrants, there must be a current registration statement covering the common
stock underlying the warrants on file with the SEC. We intend to maintain a
current registration statement while the publicly traded warrants are
exercisable. The publicly traded warrants are currently due to expire on October
7, 2000.
We are also registering the shares offered by the selling security holders.
We will pay all costs and expenses in connection with the preparation of
this prospectus and the registration of the shares. Brokerage commissions and
similar selling expenses, if any, attributable to the sale of shares will be
borne by the selling security holders. Selling security holders may sell their
shares from time to time in one or more types of transactions, which may include
block transactions, on the over the counter market and NASDAQ NMS. The type of
transactions may include:
o negotiated transactions;
o put or call option transactions;
o short sales, including delivering shares of common stock to cover
short sales; or
o a combination of the above transaction at market prices at the
time of sale or at negotiated prices.
These transactions may or may not involve brokers or dealers. The selling
security holders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of the shares, nor is there an underwriter or coordinating broker
acting in connection with the proposed sale of shares by the selling security
holders.
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Selling security holders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of that rule.
The selling security holders and any broker-dealers that act in connection
with the sale of securities might be deemed to be underwriters within the
meaning of Section 2(a)(11) of the Securities Act, and any commissions received
by these broker-dealers and any profit on the resale of the securities sold by
them while acting as principals might be deemed to be underwriting discounts or
commissions under the Securities Act. Because selling security holders may be
deemed to be underwriters within the meaning of Section 2(a)(11) of the
Securities Act, the selling security holders may be subject to the prospectus
delivery requirements of the Securities Act. The selling security holders have
acknowledged that the anti-manipulative provisions of Regulation M promulgated
under the Exchange Act may apply to their sales in the market.
LEGAL MATTERS
The law firm of McDermott, Will & Emery, 50 Rockefeller Plaza, New York,
New York 10020 acted as our counsel in connection with the validity of the
common stock offered hereby.
EXPERTS
The financial statements and schedules of Bogen Communications
International, Inc. as of December 31, 1998 and 1997, and for each of the years
in the two-year period ended December 31, 1998 have been incorporated by
reference herein and in the registration statement in reliance upon the report
of KPMG LLP, independent certified public accountants and
PricewaterhouseCoopers, Munich, Germany as independent certified public
accountants for the 1997 consolidated financial statements of Speech Design,
GmbH, a then 67% owned subsidiary, and upon the authority of said firms as
experts in accounting and auditing. The consolidated financial statements of
Speech Design, as of and for the year ended December 31, 1997, reflect total
assets constituting 21% and total revenues constituting 36% of the related
consolidated totals.
The financial statements as of and for the year ended December 31, 1996
incorporated by reference into this Prospectus have been so included in reliance
on the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
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No dealer, sales representative or any other person has been authorized to give
information or make any representation not contained in this prospectus in
connection with the offer made by this prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by us. This prospectus does constitute an offer to sell or a solicitation of an
offer to buy any securities other than those specifically offered hereby or of
any securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make an offer or solicitation in such jurisdiction. Neither the
delivery of this prospectus nor any sale made hereunder shall, under any
circumstances, create an implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct as of any time subsequent to the date hereof.
TABLE OF CONTENTS
Page
----
Where You Can Find More Information........................... 1
Incorporation of Certain Information by Reference............. 1
Special Note Regarding Forward-Looking
Statements.................................................. 2
Risk Factors.................................................. 3
Use of Proceeds............................................... 9
Selling Security Holders...................................... 9
Plan of Distribution.......................................... 12
Legal Matters................................................. 13
Experts....................................................... 13
9,400,442
Shares of Common Stock
BOGEN COMMUNICATIONS
INTERNATIONAL, INC.
-----------------
PROSPECTUS
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May 3, 1999
