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As filed with the Securities and Exchange Commission on April 28, 2000
Registration No. 333-33810
_________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________
AMENDMENT
NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________________
TELULAR CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 36-3885440
(State or other (I.R.S. Employer
jurisdiction Identification No.)
of incorporation or
organization)
______________________________
647 NORTH LAKEVIEW PARKWAY
VERNON HILLS, ILLINOIS 60061
(Address, including zip code, and telephone
number, including area code of
Registrant's principal executive offices)
______________________________
JEFFREY L. HERRMANN
CHIEF OPERATING OFFICER
TELULAR CORPORATION
647 NORTH LAKEVIEW PARKWAY
VERNON HILLS, ILLINOIS 60061
(847) 247-9400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
MICHAEL E. CUTLER, ESQ.
COVINGTON & BURLING
1201 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20004
(202) 662-6000
______________________________
Approximate date of commencement of proposed
sale to public: From time to time after this
Registration Statement becomes effective.
______________________________
If the only securities being registered on this Form are to be
offered pursuant to dividend or interest reinvestment plans, please check
the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
<PAGE>
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
offer. [ ]
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 on the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Amount of
Each Class be Maximum Maximum Registration
of Registered Offering Price Aggregate Fee(3)
Securities (1) Per Share (2) Offering Price(2)
To be
Registered
Common 1,035,041 $8.44 $8,735,746 $409
Stock, par
value $.01
per share
(1) In accordance with Rule 416 under the Securities Act of 1933, this
Registration Statement also covers such indeterminate number of
additional shares of Common Stock as may become issuable upon
exercise of warrants and an option for shares of Common Stock to
prevent dilution resulting from stock splits, stock dividends or
similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based on the average of the high and low
sale prices of the shares of Common Stock as reported on the Nasdaq
National Market on April 24, 2000.
(3) The registration fee for 851,634 of the shares registered hereby
($3,400) was paid in connection with the initial filing of the
registration statement on March 31, 2000. The registration fee noted
above relates to the registration of an additional 183,407 shares.
__________________________________________
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The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
The information in this prospectus is not complete and may be
changed. The selling shareholders may not sell these
securities until the registration statement filed with the
Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
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Preliminary Prospectus Dated April 28, 2000
Subject To Completion
TELULAR CORPORATION
1,035,041 SHARES
COMMON STOCK
The shareholders identified in the "Selling Shareholders" section of
this prospectus are offering up to 1,035,041 shares of our common stock.
The shares they are offering (i) have been issued by us to them pursuant
to a private placement of common stock on March 3, 2000, (ii) will be
issued to them upon exercise of certain fixed-price warrants and a
fixed-price contractual option granted to them on March 3, 2000, (iii)
will be issued upon exercise of a fixed-price warrant granted on
January 7, 2000 or (iv) will be issued upon exercise of fixed price
warrants granted on April 12, 2000.
The selling shareholders may sell the common stock at the prevailing
market price or at negotiated prices. We will not receive any proceeds
from sales of common stock by the selling shareholders.
Our common stock is traded on the Nasdaq National Market under the
symbol "WRLS". On April __, 2000, the last sale price for the common
stock was $_______ per share.
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____________________
Investing in our common stock involves a high degree of risk. See
"Risk Factors" on page 4.
____________________
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
____________________
The date of this prospectus is _________, 2000
You should rely only on the information provided in, or incorporated
by reference in, this prospectus. We have not authorized anyone else to
provide you with any information that is not in, or incorporated by
reference in, the prospectus. This prospectus is not an offer to sell
the common stock in any state where the offer is not permitted.
<PAGE>
TABLE OF CONTENTS
Page
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Where You Can Find More Information About Us.......... 2
Incorporation of Information by Reference............. 2
A Warning About Forward Looking Statements............ 3
About Telular......................................... 3
Recent Developments................................... 4
Risk Factors.......................................... 4
Our Dividend Policy................................... 17
Use of Proceeds....................................... 18
Selling Shareholders.................................. 18
Plan of Distribution.................................. 19
Legal Matters......................................... 21
Experts............................................... 21
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WHERE YOU CAN FIND MORE INFORMATION ABOUT US
This prospectus is part of a registration statement we have filed
with the SEC relating to the common stock being offered by the selling
shareholders. The registration statement contains exhibits and other
information about us and the offering that are not included in this
prospectus. We also file annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy
these documents, as well as the registration statement, at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
You may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site
at which our SEC filings may be found. The address of that site is
http://www.sec.gov. You can also obtain information about us at our
website, the address of which is http://www.telular.com.
INCORPORATION OF INFORMATION 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 to those documents. The information incorporated by
reference is considered to be a part of this prospectus and information
we file with the SEC at a later date automatically will update and
supersede this information. We incorporate by reference the documents
listed below and any future filings that we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until the offering is completed:
o our Annual Report on Form 10-K for the year ended September 30,
1999;
o our Quarterly Report on Form 10-Q for the quarter ended
December 31, 1999;
o our Current Reports on Form 8-K filed on October 21, 1999, and
March 6, 2000; and
o the description of our common stock contained in the
registration statement on Form 8-A that we filed with the SEC
on January 13, 1994.
<PAGE>
We will send you at no cost a copy of any filing that is
incorporated by reference in the prospectus. You may request a copy of
any of these filings by writing or calling Jeffrey Herrmann, Executive
Vice President, Telular Corporation, 647 North Lakeview Parkway, Vernon
Hills, Illinois 60061, (847) 247-9400
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus contain forward-looking statements about our financial
condition, results of operations and business. You can find many of
these statements by looking for words such as "may," "estimate,"
"project," "believe," "anticipate," "intend," "expect," "plan" and
similar expressions, although some forward-looking statements are
expressed differently. These statements reflect our current views about
future events based on information currently available and assumptions we
make. These statements are not guarantees of future performance and are
subject to risks and uncertainties that are difficult to predict. We
caution you that our actual performance and results could differ
significantly from those contemplated in the forward-looking statements
due to many factors, including those discussed in the "Risk Factors"
section. You also should be aware that we have no obligation to, and do
not intend to, update any forward-looking statements to reflect events or
circumstances occurring after the date of this prospectus that may cause
our actual results or performance to differ form those expressed in the
forward-looking statements.
ABOUT TELULAR
Telular Corporation is a Delaware corporation engaged in the fixed
wireless telecommunications industry. We design, manufacture and sell
products that allow traditional wireline communications devices, such as
telephones, fax machines, modems and alarm systems, to communicate over
wireless (cellular) telecommunications networks. These products are
based on our patented "intelligent interface" technology. When wireline
equipment (which is commonly called customer premises equipment or "CPE")
is connected to a cellular transceiver using our technology, the
intelligent interface provides a standard dial tone and other detection
signals and generates a send signal to the cellular transceiver when the
caller has finished entering the phone number.
Our technology has several different applications, such as:
o providing primary telephone service when wireline systems are
unavailable, unreliable or uneconomical;
o providing emergency backup and disaster recovery service for
wireline telephone systems; and
o wireless alarm signaling.
Our principal product lines are PHONECELL, a line of fixed wireless
terminals to which different types of CPE can be connected, and TELGUARD,
a line of wireless alarm signaling products. We also license our
technology to other telecommunications equipment manufacturers.
Our common stock is traded on the Nasdaq National Market under the
symbol "WRLS." Our mailing address is 647 North Lakeview Parkway, Vernon
Hills, Illinois 60061, and our telephone number (847) 247-9400.
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RECENT DEVELOPMENTS
On April 24, 2000, Mark R. Warner resigned from our Board of Directors
to explore a candidacy for the Governor of the Commonwealth of Virginia. We
have no immediate plans to replace Mr. Warner.
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RISK FACTORS
You should carefully consider the following risks before you decide
to buy our common stock. If any one of these risks or uncertainties were
to occur, our business, financial condition, results and performance
could be seriously harmed and/or the price of our common stock might
significantly decrease.
We expect to continue to have losses and we may never achieve
profitability.
We started operations in 1986. Although we had a profit in the
fourth quarter of our 1996 fiscal year and the first quarter of our 1997
fiscal year, we have never had an annual profit. In order to develop our
business we already have spent significant amounts to defend our patents,
research and develop the technology we use in our products, develop new
products, and market those products. We believe that to be profitable
ultimately, we must continue to make significant investment in these
areas. However, we do not expect to generate revenues from product sales
or licensing that exceed our expenses in the near term, which would
result in continued losses during this period.
In order for us to achieve and sustain profitability, we must
generate significant and consistent revenues from operations through
increased sales of our products and/or licensing revenues. We cannot
assure you that we will be able to do this, so we may never achieve, or
be able to sustain, profitability.
We may not be able to obtain the funding we need to operate our business.
Our ability to continue operations depends on having adequate funds to
cover our expenses. Our current operating plan provides for significant
expenditures for research and development of new products, development of
new markets for our products, and marketing programs for our products.
At March 17, 2000, we had $23.6 million in cash and cash equivalents and
a working capital surplus of $31.8 million. This includes the proceeds
of $2.1 million under a $5 million credit facility with Wells Fargo Bank
("Wells") entered into on January 7, 2000, and the proceeds of a $10
million private placement of 444,444 shares of Common Stock, together
with warrants for additional shares, on March 3, 2000. Based on our
current operating plan, we believe that our existing capital resources,
including the Wells credit facility, revenues from sales and royalty
income from licensees, will allow us to maintain our current and planned
operations.
However, we caution you that our cash requirements may vary and are
difficult to predict. There are many uncertainties involved in
technological research. We also target markets in developing countries
for product sales, and the nature of these markets makes it difficult to
predict costs and revenues. Events that we cannot anticipate, such as
litigation, may also increase our capital needs. We also may change our
operating plan in ways that would increase our costs. Thus, our actual
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cash requirements may be greater than we currently anticipate. Also, it
is difficult to predict the amount of sales revenue we will generate or
the amount of royalty income we will receive from our licensees.
Accordingly, we may not have adequate funds to cover our expenses.
If this is the case, we would need to find other financing sources to
provide the necessary funds, such as public or private sales of our
equity or debt securities. We cannot assure you that if we needed
additional funds we would be able to obtain them or obtain them on terms
we find acceptable. If we could not obtain the necessary financing we
would be forced to cut back operations, which might include the scaling
back or elimination of research and development programs.
Unfavorable economic events in our target markets could lead to lower
sales of our products.
Sales of our products depend on the growth of the fixed wireless
telecommunications industry in general and increased demand for fixed
wireless products worldwide, particularly in developing countries. Based
on observed trends, we believe that the market for fixed wireless
terminals, such as our PHONECELL products, will experience substantial
growth over the next five years. We believe that nearer term prospects
should enable our sales to grow, but at more modest rates. We anticipate
that significant opportunities for product sales will develop in the near
future in Africa, Brazil, the Dominican Republic, Mexico, Malaysia,
Turkey, the USA and Venezuela. However, we cannot assure you that we will
have significant sales in any of these markets or that any sales will be
made in the near term. Each of these markets will develop at a different
pace, and some or all of them may not develop to the point that will
enable us to achieve significant revenues.
In addition, unfavorable general economic conditions in any market
will have a negative affect on sales in that market. Because economic
conditions in one region often affect conditions globally, unfavorable
general economic conditions in one market or region might result in
damage to industry growth and demand in other markets as well. For
instance, the recent economic turmoil experienced by Russia and many
Asian nations has and will continue to negatively affect our growth
prospects in the near term. If the unfavorable economic conditions in
these regions continue, or if conditions in other countries decline, our
product sales and financial condition could be seriously harmed.
Our competitive position will be seriously damaged if we cannot protect
intellectual property rights in our technology.
We believe that our success depends, in part, on our ability to
obtain and enforce intellectual property protection for our technology.
We believe that the U.S. patent for our intelligent interface technology
is valid. However, it is possible that this patent, any of our other
existing patents, or any patents that we may obtain in the future, will
be challenged, invalidated or circumvented. If we lose or cannot enforce
patent protection in the U.S. for our technology and products, our
competitive position will be significantly harmed because it would be
much easier for competitors to sell products similar to ours.
It also is possible that a competitor may independently develop and/or
patent technologies that are substantially equivalent to or superior to our
technology. If this happens, our patents will not provide protection and
our competitive position will be significantly harmed.
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We believe that our intelligent interface technology can be adapted
for use with new wireless services, such as telemetry. However, we
cannot be sure that any new services will fall within the boundaries of
the patent we hold. If we expand our product line or develop new uses
for our products, these uses may be outside the protection provided by
our current patents and other intellectual property rights. In addition,
if we develop new products or enhancements to existing products we cannot
assure you that we will be able to obtain patents to protect them. Even
if we do get patents for new products, these patents may not provide
meaningful protection.
In some countries outside of the U.S., such as Brazil and many
African nations, patent protection is not available. Moreover, some
countries that do allow registration of patents do not provide meaningful
redress for violations of patents. As a result, protecting intellectual
property in these countries is difficult. In addition, neither we nor
any of our competitors in the past obtained patent protection for our
core intelligent interface technology in many countries, including the
principal countries of Western Europe, and we and our competitors are now
legally barred from obtaining patents in these countries.
In countries where we do not have patent protection or where patents
provide little, if any, protection, we have to rely on other factors to
differentiate our products from our competitors' products. These factors
include:
o the features and functions of our products;
o our reputation and experience in the industry;
o the quality of our products; and
o the desirability of products that meet the same specifications
as those in the U.S. and in other countries where we do have
patent protection.
Although we believe our products are superior to those of competitors, it
is easier for competitors to sell products similar to ours in countries
where we do not have meaningful patent protection. This could result in
a loss of potential sales.
The intense competition in the fixed wireless industry could prevent us
from achieving or sustaining profitability.
The market for fixed wireless products is extremely competitive, and
we may not be able to successfully compete with other companies already
in the market and new companies that enter the market. The major
national and international companies in this market are:
o Motorola;
o Ericsson; and
o Nokia.
Many of these competitors have greater resources than us in many areas
critical to succeeding in the industry, including:
o financial resources;
<PAGE>
o manufacturing capabilities;
o name recognition;
o research and development capabilities;
o technical expertise;
o sales and marketing staffs; and
o distribution channels.
Because of these advantages our competitors may succeed in developing
products that are more effective, desirable and/or cheaper than ours or
that render our products and technology obsolete. They also may have
better and more efficient marketing and distribution structures than we
do.
In addition, we have granted non-exclusive, royalty bearing licenses
to Motorola, Ericsson and Nokia, which permits these companies to produce
and sell products using our technology that compete with ours. Because
these companies have greater resources than us, they may be able to sell
similar products more effectively and cheaper than we can.
Our success depends on the growth and availability of wireless
telecommunications services in the markets we target.
Currently, some of our largest potential markets are developing
countries where the demand for basic telephone service has started to
grow significantly only in recent years, such as Brazil, Mexico, Turkey,
the Dominican Republic, the USA and Venezuela. In these countries, the
relatively low cost of developing and constructing wireless communications
infrastructure as compared to traditional wireline infrastructure may
make wireless an attractive alternative to wireline. Our success depends
to a large extent on the continued growth and increased availability of
cellular and other wireless telecommunications services in these
countries and the availability of such services at competitive prices.
However, these countries may decline to construct wireless systems,
or construction may be delayed, for a variety of reasons, including
government regulation, general economic factors, the availability of
funding and other competitive factors. These factors may also limit or
delay purchases of equipment used to provide telephone services, such as
our products. If system construction and equipment purchases in these
countries are not made or are delayed, the demand for our products in
these countries will be limited or delayed. Similarly, if the cost of
using wireless telecommunications services in these countries is not cost
effective, the demand for our products may be limited.
While wireless telecommunication systems in the U.S. are more
developed than in many other markets that we target, continued expansion
of wireless infrastructure and demand for fixed wireless products in the
U.S. is also important for the growth of our business. As is the case
with conditions in other target markets, there is no guarantee that
wireless telecommunications systems will continue to develop.
Delaware law and our charter documents may inhibit a potential takeover
bid that would be beneficial to common stockholders.
<PAGE>
Delaware law and our certificate of incorporation may inhibit
potential acquisition bids for Telular common stock at a price greater
than the market price of the common stock. We are subject to the
antitakeover provisions of the Delaware General Corporation Law, which
could delay, deter or prevent a change of control of Telular or make this
type of transaction more difficult. In addition, our board of directors
does not need the approval of common stockholders to issue shares of
preferred stock having rights that could significantly weaken the voting
power of the common stockholders and, as a result, make a change of
control more difficult.
An agreement among our principal stockholders and Motorola may inhibit a
potential takeover bid that would be beneficial to common stockholders.
We and our principal stockholders, including Motorola, have entered
into an agreement under which we and these stockholders are required to
notify Motorola before:
o we or the other stockholders solicit any purchase offers for
all or substantially all of our assets or a majority of the
outstanding common stock; or
o we or the other stockholders accept any unsolicited offer for
all or substantially all of our assets or a majority of the
outstanding common stock.
After Motorola has been notified, it has the right to submit a bid for
the proposed sale and we and the other stockholders cannot make any sale
at a valuation lower than Motorola's bid, if any. Motorola's contractual
right may inhibit other companies from making takeover bids at a price
that would benefit the common stockholders.
Our operating results may fluctuate greatly from quarter to quarter,
which may cause the price of our common stock to be volatile.
Our quarterly operating results may fluctuate greatly due to
numerous factors, including:
o our reliance on large volume orders from only a few customers
for most of our product sales, so we may experience volatility
when those orders are filled if we do not then have other
orders;
o variations in our distribution channels;
o the mix of products we sell;
o general economic conditions in our target markets;
o the timing of final product approvals from any major
distributor or end user;
o the timing of orders from and shipments to major customers;
o the timing of new product introductions by us or our
competitors;
o changes in the pricing policies of our suppliers;
<PAGE>
o the availability and cost to us of the key components for our
products;
o the timing of personnel hirings; and
o market acceptance of our new products or enhanced versions of
our existing products.
These quarterly fluctuations may cause volatility in the price of our
common stock, as described in the following paragraph.
Our common stock price has been extremely volatile, and extreme price
fluctuations could negatively affect your investment.
The market price of our common stock has been extremely volatile.
Since January 1, 1999, the price of our common stock (calculated on the
basis of the reverse stock split implemented in January 1999) has ranged
from a high of $32.00 to a low of $1.00 per share.
Publicized events and announcements may have a significant impact on
the market price of our common stock. For example, the occurrence of any
of the following events could have the effect of temporarily or
permanently driving down the price of our common stock:
o shortfalls in our revenue or net income;
o the results of trials or the introduction of new products by us
or our competitors;
o market conditions in the telecommunications, technology and
emerging growth sectors; and
o rumors related to us or our competitors.
In addition, the stock market from time to time experiences extreme price
and volume fluctuations which particularly affect the market prices for
emerging growth and technology companies, like Telular, and which often
are unrelated to the operating performance of the affected companies.
These broad fluctuations may negatively affect your ability to sell your
shares at a price equal to or greater than the price you paid for them.
In addition, a decrease in the price of our common stock could cause it
to be delisted from the Nasdaq National Market.
Sales of common stock issuable on the exercise of outstanding and
contemplated options and warrants may depress the price of the common
stock.
As of March 17, 2000, there were options granted to employees and
directors to purchase approximately 929,500 shares of the Company's
common stock. However, options to purchase only 214,635 of these shares
were exercisable at that time. The exercise prices for the exercisable
options ranges from $1.44 to $39.00 per share, with a weighted average
exercise price of $10.77. Options to purchase the remaining 714,865
shares will become exercisable over the next five years. The exercise
prices for the options that are not yet exercisable have a weighted
average exercise price of $5.83.
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In connection with the credit facility with Wells, we issued to Wells
warrants to purchase 50,000 shares of common stock at an exercise price
<PAGE>
of $16.29 per share. In connection with the private placement of 444,444
shares of common stock, we issued warrants to purchase 100,000 additional
shares at an exercise price of $29.25 per share, warrants to purchase
183,407 additional shares at an exercise price of $12.27 per share, an
option to purchase 177,746 additional shares at an exercise price of
$28.13 per share, and the right to receive additional warrants to purchase
50,000 additional shares at an exercise price of $31.50 per share. In
the future we may issue additional shares of common stock, convertible
securities, options and warrants.
/R
The issuance of shares common stock issuable upon the exercise of
options or warrants could cause substantial dilution to holders of
common stock. It also could negatively affect the terms on which we
could obtain equity financing.
Technology changes rapidly in our industry and our future success will
depend on our ability to keep pace with these changes and meet the needs
of our customers.
The telecommunications equipment industry is characterized by rapid
technological advances, evolving industry standards, changing customer
needs and frequent new product introductions and enhancements. The
wireless telecommunications industry also is experiencing significant
technological change, such as the transformation of cellular systems from
analog to digital. The introduction of products embodying new
technologies and the emergence of new industry standards could render our
existing products and technology obsolete and unmarketable.
To succeed, we must timely develop and market new products and
enhancements to existing products that keep pace with advancing
technological developments and industry standards and that address the
needs of customers. We may not be successful in developing and marketing
new products and enhancements or we may experience difficulties that
prevent development of products and enhancements in a timely manner. In
addition, our products may fail to meet the needs of the marketplace or
achieve market acceptance. Any of these circumstances would seriously
harm our results and financial condition.
We must devote substantial resources to research and development to
remain competitive and we may not have the resources to do so.
For us to be competitive, we must continue to dedicate substantial
resources to research and development of new products and enhancements of
current and future products as described in the preceding paragraph. We
cannot assure you that we will have sufficient resources to fund the
necessary research and development or that our research and development
efforts will be successful.
<PAGE>
We may face litigation that could significantly damage our business and
financial condition.
In the telecommunications equipment and other high technology
industries, litigation increasingly has been used as a competitive tactic
by both established companies seeking to protect their position in the
market and by emerging companies attempting to gain access to the market.
In this type of litigation, complaints may be filed on various grounds,
such as:
o antitrust;
o breach of contract;
o trade secret;
o copyright or patent infringement;
o patent or copyright invalidity; and
o unfair business practices.
If we have to defend ourselves against one or more of these claims,
whether or not they have any merit, we are likely to incur substantial
expense and management's attention will be diverted from operations.
This type of litigation also may cause confusion in the market and make
our licensees and distributors reluctant to commit resources to our
products. Any of these effects could have a significant negative impact
on our business and financial condition.
In the event that any of our patents or other intellectual property
rights were deemed invalid or were determined not to prohibit competing
technologies as a result of litigation, our competitive position would be
significantly harmed. See "Our competitive position will be seriously
damaged if we cannot protect intellectual property rights in our
technology._
In order to succeed we must develop markets for our products and we may
be unable to do so.
Our ability to achieve profitability depends on our ability to
develop both domestic and international markets for our products and on
the acceptance of our products by these markets. We cannot assure you
that we will be able to develop adequate markets or generate enough sales
to achieve and sustain profitability.
Certain former holders of our 5% Series A Convertible Preferred Stock
believe that we did not issue them enough common stock on conversion of
their preferred stock.
Under the terms of our 5% Series A Convertible Preferred Stock, on
October 18, 1999, all of the 11,350 outstanding shares of preferred stock
automatically were converted into approximately 2.1 million shares of
common stock at the minimum conversion price of $8.00 per common share
specified in the terms. However, we received notice from two holders of
preferred stock, NP Partners and Olympus Securities, Ltd., that they
believe that they were entitled to additional shares of common stock
because the minimum conversion price did not apply to the automatic
conversion. We do not agree with this interpretation and we have
<PAGE>
notified these holders of our position. NP Partners and Olympus
Securities have not indicated the number of additional shares to which
they believe they are entitled. However, we have determined that if the
minimum conversion price did not apply, all former holders of preferred
stock would have been entitled to a total of approximately 4.2 million
additional shares. If we were required to issue these shares it would
cause substantial dilution to our stockholders.
We rely on third parties to manufacture components for our products.
We manufacture some of our products and product components in-house.
We also use subcontractors to manufacture certain product components,
such as cellular transceivers and radio modules, and to assemble some of
our products, such as fixed wireless terminals. In the past, we
experienced delays in receiving subcontracted components and assembled
products which resulted in delays in our ability to deliver products. We
may experience similar delays in the future.
Our inability to obtain sufficient quantities of raw materials and
key components when required, or to develop alternative sources of supply
if required in the future, could result in delays or reductions in
product shipments and increased costs for affected parts. In addition,
production capacity restraints at our subcontractors or in our own
manufacturing facilities could prevent us from meeting production
obligations.
Delays in product deliveries for any reason or our failure to
deliver products could significantly harm customer relationships and
result in the loss of potential sales. Delivery delays or failures also
could subject to litigation. See "Risk Factors --We may face litigation
that could significantly damage our business and financial condition."
We depend on Motorola to supply the transceivers for our products.
We currently obtain some of the cellular transceivers we use in our
products from Motorola, which is one of our major stockholders and
competitors. Motorola has agreed to make transceivers available to us
based on any transmission technology that Motorola's Cellular Subscriber
Group offers, when, as and if these products are offered to the public.
Motorola has a right of first refusal to supply all of our transceiver
needs on the same terms as we could get from a competitor of Motorola,
provided that Motorola manufactures a product comparable to the
competitor's and our customer does not specifically request another
manufacturer's transceiver. If we are unable to get sufficient
quantities of Motorola transceivers, we might have to redesign our
products. This could increase our costs and cause shipments delays.
Quality control problems could harm our sales.
We believe that our products currently meet high standards of
quality. We have instituted quality monitoring procedures and we are
ISO-9001 compliant. All of our major subcontractors also have quality
control procedures in place and are ISO-9001 compliant. However, we
and/or our subcontractors may experience quality control problems in the
future. If this occurs, the quality of our products could suffer, which
could significantly harm product sales.
<PAGE>
We operate in developing markets which may subject us to volatile
conditions not present in the U.S.
Developing countries are some of our largest potential markets. As
we expand our operations in these countries, our business and performance
could be negatively affected by a variety of factors and conditions that
businesses operating in the U.S. generally do not have to contend with,
such as:
o foreign currency exchange fluctuations and instability of
foreign currencies;
o political or economic instability and volatility in particular
countries or regions;
o limited protection for intellectual property;
o difficulties in staffing and managing international operations;
and
o difficulties in collecting accounts receivable.
To date, our sales have not been negatively affected by currency
fluctuations. We currently require either letters of credit or
qualification for export credit insurance underwritten by the U.S.
Export-Import Bank or other third party insurers on a substantial portion
of our international orders. We also try to conduct all of our
international transactions in U.S. dollars to minimize the effects of
currency fluctuations. However, as our international operations grow,
foreign exchange fluctuations and foreign currency inflation may pose
greater risks for us and we may be required to develop and implement
additional strategies to mange these risks. If we are not successful in
managing these risks our business and financial condition could be
seriously harmed.
Some of our directors may have conflicts of interest that may adversely
affect our business.
Our board of directors currently includes, and we expect that it
will continue to include, persons designated by companies that we have
business relationships with. It is possible that the companies that
designate these directors, such as Motorola, may be in direct or indirect
competition with us or among themselves for business activities or
transactions. Although the affected directors may abstain from voting on
matters in which Telular's interests and the interests of another company
are in conflict, the presence of potential or actual conflicts could
affect the process or outcome of board deliberations in ways that would
harm our business and financial condition.
A small number of our existing stockholders exercise significant control
over our affairs.
As of March 17, 2000, our officers and directors, together with
entities affiliated with our directors, beneficially owned 24.14% of our
common stock (this is assuming that they had actually exercised all stock
options that were exercisable at that time). If these stockholders act
together, they have a significant impact on director elections and
matters that require stockholder approval, such as a change of control of
Telular. Thus, these stockholders may have the ability to direct our
<PAGE>
affairs in a manner that is beneficial for themselves but harmful to
other shareholders.
Under a shareholders agreement, Motorola has the right to nominate a
number of directors that is proportionate to its holding of common stock.
As of March 17, 2000, Motorola held 9.44% of our common stock, which
entitled it to nominate at least one director. Certain other
shareholders have agreed to vote in favor of each Motorola nominee.
OUR DIVIDEND POLICY
To date, we have paid no cash dividends on our common stock. We
currently intend to retain all future earnings, if any, to fund the
development and growth of our business. Thus, we do not anticipate that
we will pay any cash dividends in the foreseeable future.
Under the Company's credit facility with Wells, it has covenanted
not to pay dividends on its stock.
USE OF PROCEEDS
We will not receive any proceeds from the sale of our common stock
by the selling shareholders.
<R
SELLING SHAREHOLDERS
The table below sets forth information concerning:
o the identity of each selling shareholder;
o the number and percentage of shares of common stock
beneficially owned (as defined under Exchange Act Rule 13d-3)
on April 15, 2000;
o the number of shares of common stock being offered; and
o the number of shares of common stock beneficially owned after
the offering.
The number of shares shown as beneficially owned is the number of shares
common stock issuable on conversion of all warrants and options held by
the selling shareholder.
<PAGE>
Unless otherwise indicated below, to our knowledge all of the
persons listed below have sole voting and investment power with respect
to their shares of common stock. None of the selling shareholders has
had any position, office or other material relationship with us in the
past three years.
Shares of Common Beneficial
Stock Beneficially Shares of Ownership
Owned Prior to this Common of Common
Name Offering Stock Stock
Being After
Offered Offering
Number Percent
Halifax Fund, L.P. 724,479(1) 5.63% 724,479 0
Elliott Associates, 90,559(1) 0.72 90,559 0
L.P.
Westgate 90,559(1) 0.72 90,559 0
International, L.P.
Cardinal 79,444(1) 0.63 79,444 0
Securities, L.L.C.
Wells Fargo 50,000(2) 0.40 50,000 0
Business Credit,
Inc.
________________
(1) Includes shares issuable upon exercise of contractual options and
warrants at fixed prices ranging from $12.27 to $31.50 per share.
(2) Shares issuable upon exercise of a warrant at an exercise price of
$16.29 per share.
/R
PLAN OF DISTRIBUTION
The purpose of this prospectus is to permit the selling shareholders
to sell some or all of their shares of common stock at times, in the
manner, and at prices they choose. The selling shareholders may offer
the common stock through underwriters or agents or directly to
purchasers. They may make sales in market transactions or private
transactions. They may sell at the prevailing market price, at a price
related to the market price, or at a negotiated price.
Methods of Sale
The selling shareholders may sell all or a portion of the common
stock in one or more of, or through a combination of, the following
types of transactions:
o a block trade;
o purchases by a broker-dealer as principal and the resale of the
shares by the broker-dealer under this prospectus for its
account;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
o other market transactions;
<PAGE>
o private transactions; and
o any other legal method of disposition.
If it is required, we will amend or supplement this prospectus to
describe a specific plan of distribution that will be used by a selling
shareholder.
Short Sales
Without limiting anything else they may do, the selling shareholders
may enter into hedging transactions with broker-dealers or other financial
institutions. These broker-dealers and institutions may engage in short
sales of the common stock in the course of hedging the positions they
assume with the selling shareholders. The selling shareholders may sell
common stock short and redeliver shares to close out their short positions.
Options and Pledges
Without limiting anything else they may do, the selling shareholders
may enter into option or other transactions with broker-dealers or other
financial institutions which require the delivery to the broker-dealer
or institution of the shares offered in this prospectus, which the
broker-dealer or institution may then resell under this prospectus.
The selling shareholders also may pledge the shares to a broker-dealer
or other financial institution and, upon a default, the broker-dealer or
institution may sell the pledged shares under this prospectus.
Compensation to Brokers and Dealers
If the selling shareholders sell common stock through brokers,
dealers or agents, the selling shareholders may pay compensation in the
form of commissions, discounts or concessions. These brokers or dealers
and any other brokers or dealers who participate in a sale may, under
some circumstances, be deemed to be "underwriters" within the meaning of
the Securities Act. Any commission, discount or concession they receive
may be deemed to be underwriting discounts and commissions under the
Securities Act.
Costs of Registration
We will pay the costs associated with the registration of the common
stock. The selling shareholders will be responsible for all commissions,
discounts and transfers taxes, if any, associated with sales of common
stock. We will supply each selling shareholder with a reasonable number
of copies of this prospectus on its request. The selling shareholders
are responsible for complying with the prospectus delivery requirements
of the Securities Act in connection with offers and sales of the common
stock.
Indemnification
The selling shareholders have agreed to indemnify us, and may agree
to indemnify any underwriter, against certain liabilities related to the
offering of the common stock, including liabilities under the Securities
Act. We have agreed to indemnify the selling shareholders and any
underwriter against certain liabilities related to the offering of the
common stock, including liabilities under the Securities Act.
<PAGE>
LEGAL MATTERS
Covington & Burling of Washington, D.C. has issued an opinion
regarding the legality of the common stock.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our
consolidated financial statements and schedules included in our Annual
Report on Form 10-K for the year ended September 30, 1999, as set forth
in their report, which is incorporated by reference in this prospectus
and elsewhere in the registration statement. Our financial statements
and schedules are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and
auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered hereby
(other than underwriting discounts and commissions) are set forth below*:
<R
Securities and Exchange Commission Registration Fee $ 3,809
Nasdaq Listing Fee 10,350
Accounting Fees and Expenses 1,000
Legal Fees and Expenses 50,000
Miscellaneous Expenses 2,000
Total 67,159
______________________
* Except for the Securities and Exchange Commission registration fee
and the Nasdaq listing fee, all expenses are estimated.
/R
Item 15. Indemnification of Officers and Directors
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides that a corporation may indemnify any person,
including any officer or director, who was or is a party or who is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation), by reason of the fact that he is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise ("such Person"), against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, actually and reasonable
incurred by such Person, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Section 145 also
provides that in any threatened, pending or completed action by or in the
right of the corporation, a corporation also may indemnify any such
Person for expenses (including Attorneys' fees) actually and reasonably
incurred by him in connection with that action's defense or settlement,
if he acted in good faith and in a manner reasonably believed to be in or
not opposed to the best interests of the corporation; however, no
indemnification shall be made with respect to any claim, issue or matter
as to which such Person shall have been adjudged to be liable to the
corporation, unless and only to the extent that a court shall determine
that such indemnity is proper. Where a director, officer, employee or
agent is successful on the merits or otherwise in the defense of any
action referred to above, the corporation is required under the DGCL to
indemnify him against the expenses (including attorneys' fees) that such
officer or director actually and reasonably incurred in connection
therewith.
The Registrant's Bylaws provide that the Registrant will indemnify
such Persons against all liability and expense arising out of such
Person's connection with the business of the Registrant, provided that
<PAGE>
the Board of Directors determines that such Person acted in good faith
and reasonably believed that his actions were not opposed to the best
interests of the Registrant; and with respect to any criminal action or
proceeding, that such Person had no reasonable cause to believe his
conduct was unlawful. In the case of any action, suit or proceeding by
or in the right of the Registrant in which such Person is adjudged liable
to the Registrant, the Registrant will indemnify such Person for expenses
only to the extent that the court in which such action is brought
determines, upon application, that such Person is entitled to indemnity
for reasonable expenses, and in no case shall such indemnification extend
to liability. Advances against reasonable expenses may be made by the
Registrant on terms fixed by the Board of Directors subject to an
obligation to repay if indemnification proves unwarranted.
The Registrant's Certificate of Incorporation provides that, to the
fullest extent permitted by Delaware law, its directors shall not be
liable for monetary damages for breach of the directors' fiduciary duty
to the Registrant and its stockholders. This provision in the
Certificate of Incorporation does not eliminate the duty of care. In
appropriate circumstances, equitable remedies such as injunctive or other
forms of non-monetary relief will remain available under Delaware law.
In addition, each director will continue to be subject to liability for
breach of the director's duty of loyalty to the Registrant or its
stockholders, for acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law, for actions leading
to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are
unlawful under Delaware law. The provision also does not affect a
director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws.
Directors and officers of the Registrant are covered by a directors'
and officers' liability insurance policy of the Registrant.
Item 16. Exhibits
Exhibit
Number Description Reference
4.1 Certificate of Incorporated by reference
Incorporation to Exhibit 3.1 to the
Registration Statement of
Telular Corporation on
Form S-1, No. 33-72096, as
amended ("Form S-1")
4.2 Amendment No. 1 to Incorporated by reference
Certificate of to Exhibit 3.2 to Form S-1
Incorporation
4.3 Amendment No. 2 to Incorporated by reference
Certificate of to Exhibit 3.3 to Form S-1
Incorporation
<PAGE>
Exhibit
Number Description Reference
4.4 Amendment No. 3 to Incorporated by reference
Certificate of to Exhibit 3.4 to Form 10-
Incorporation Q for the quarter ended
December 31, 1998
4.5 Amendment No. 4 to Incorporated by reference
Certificate of to Exhibit 3.5 to Form 10-
Incorporation Q for the quarter ended
December 31, 1998
4.6 Bylaws Incorporated by reference
to Exhibit 3.4 to Form S-1
4.7 Certificate of Incorporated by reference
Designations, Rights to Exhibit 99.2 to Form 8-
and Preferences of K filed on April 25, 1997
Series A Convertible
Preferred Stock
<R
4.8 Common Stock Investment Previously filed
Agreement dated
March 3, 2000
4.9 Registration Rights Previously filed
Agreement dated
March 3, 2000
/R
5.1 Opinion of Covington & Filed herewith
Burling
23.1 Consent of Covington & Included in Exhibit 5.1
Burling
23.2 Consent of Ernst & Filed herewith
Young LLP
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to the Registration
Statement:
(1) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(i) 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;
<PAGE>
(ii) 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)(1)(i) and
(a)(1)(ii) do not apply if the Registration Statement
is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-
effective amendment by those paragraphs is contained
in periodic reports filed by the Registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in 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.
(3) To remove from registration by means of a post-
effective amendment any of the securities registered
which remain unsold at the termination of the offering.
(b) The 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 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) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has
been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by
a director, officer or controlling person of the
Registrant in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
<PAGE>
<R
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Amendment No. 1 to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Vernon Hills, State of Illinois,
on the 28th day of April, 2000.
TELULAR CORPORATION
(Registrant)
By: /s/Kenneth E. Millard
Kenneth E. Millard
President,
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 has been signed by the following persons in the capacities
and on the dates indicated.
SIGNATURE TITLE DATE
/s/Kenneth E. Millard President, Chief April 28, 2000
Executive Officer and
Kenneth E. Millard Director
(principal executive
officer)
/s/ Jeffrey L. Chief Operating April 28, 2000
Herrmann Officer, Secretary and
Jeffrey L. Herrmann Executive Vice
President
(principal financial
officer)
/s/ Robert L. Zirk Controller and Chief April 28, 2000
Robert L. Zirk Accounting Officer
/s/ Daniel D. Giacopelli* Executive Vice April 28, 2000
President,
Daniel D. Giacopelli Chief Technology Officer
and Director
<PAGE>
/s/ William L. De Nicolo* Chairman of the Board April 28, 2000
William L. De Nicolo
/s/ John E. Berndt* Director April 28, 2000
John E. Berndt
/s/ Larry J. Ford* Director April 28, 2000
Larry J. Ford
/s/ Richard D. Haning* Director April 28, 2000
Richard D. Haning
*/s/ Jeffrey L. Herrmann Attorney-in-fact April 28, 2000
Jeffrey L. Herrmann
/R
<PAGE>
Exhibit Index
Exhibit
Number Description Reference
4.1 Certificate of Incorporated by reference
Incorporation to Exhibit 3.1 to the
Registration Statement of
Telular Corporation on
Form S-1, No. 33-72096, as
amended ("Form S-1")
4.2 Amendment No. 1 to Incorporated by reference
Certificate of to Exhibit 3.2 to Form S-1
Incorporation
4.3 Amendment No. 2 to Incorporated by reference
Certificate of to Exhibit 3.3 to Form S-1
Incorporation
4.4 Amendment No. 3 to Incorporated by reference
Certificate of to Exhibit 3.4 to Form 10-
Incorporation Q for the quarter ended
December 31, 1998
4.5 Amendment No. 4 to Incorporated by reference
Certificate of to Exhibit 3.5 to Form 10-
Incorporation Q for the quarter ended
December 31, 1998
4.6 Bylaws Incorporated by reference
to Exhibit 3.4 to Form S-1
4.7 Certificate of Incorporated by reference
Designations, Rights to Exhibit 99.2 to Form 8-
and Preferences of K filed on April 25, 1997
Series A Convertible
Preferred Stock
<R
4.8 Common Stock Investment Previously filed
Agreement dated
March 3, 2000
4.9 Registration Rights Previously filed
Agreement dated
March 3, 2000
/R
5.1 Opinion of Covington & Filed herewith
Burling
23.1 Consent of Covington & Included in Exhibit 5.1
Burling
23.2 Consent of Ernst & Filed herewith
Young LLP
<PAGE>
<R
Exhibit 5.1
April 28, 2000
Telular Corporation
647 North Lakeview Parkway
Vernon Hills, Illinois 60061
Gentlemen:
This opinion is being furnished to you in connection with the public
resale by certain investors (collectively, the "Investors"), of up to
1,035,041 shares of Telular Corporation's (the "Company") Common Stock, par
value $.01 per share (the "Shares"), pursuant to a registration statement
on Form S-3, as amended by Amendment No. 1 thereto to be filed by the
Company with the Securities and Exchange Commission (the "Commission") on
the date hereof (the "Registration Statement"). The Shares were issued to
the Investors pursuant to that certain Stock Purchase Agreement dated as of
March 3, 2000 (the "Stock Purchase Agreement") or a warrant issued on
January 7, 2000, or will be issued to the Investors by the Company upon
exercise of certain warrants and options granted by the Company to the
Investors pursuant to the Stock Purchase Agreement. The Shares may be sold
from time to time by the Investors to or through brokers, dealers or other
agents or directly to other purchasers in one or more market transactions,
in one or more private transactions, or in a combination of such methods of
sale, at prices then prevailing, at prices related to such prices, or at
negotiated prices.
We have acted as counsel for the Company in connection with the
issue and sale of the Shares to the Investors. We have examined copies
of the Registration Statement and all exhibits thereto. We also have
examined and relied upon certain resolutions adopted by the Board of
Directors of the Company and a copy of the Bylaws of the Company, each
certified by the Secretary of the Company, and a copy of the Certificate
of Incorporation of the Company certified by the Secretary of the State
of the State of Delaware. We also have examined such other documents and
made such other investigations as we have deemed necessary to form a
basis for the opinion hereinafter expressed.
In examining the foregoing documents we have assumed the
authenticity of documents submitted to us as originals, the genuineness
of all signatures, the conformity to original documents of documents
submitted as copies, and the accuracy of the representations and
statements included therein.
Based upon the foregoing, it is our opinion that the Shares are duly
authorized and issued or, in the case of Shares to be issued pursuant to
warrants and options, will be validly issued, fully paid and non-
assessable when and if issued in accordance with the terms of such
warrants and options.
We hereby consent to the filing of this opinion as part of the
Registration Statement, and to the use of our name therein and in the
related Prospectus under the caption "Legal Matters".
<PAGE>
It is understood that this opinion is to be used only in connection
with the offer and sale of the Shares while the Registration Statement is
in effect.
Very truly yours,
/s/ Covington & Burling
COVINGTON & BURLING
/R
<PAGE>
<R
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
in the Amendment No. 1 to Registration Statement (Form S-3) and related
Prospectus of Telular Corporation for the registration of 1,035,041 shares
of its common stock and to the incorporation by reference therein of our
report dated October 22, 1999, with respect to the consolidated financial
statements and schedule of Telular Corporation included in its Annual
Report (Form 10-K) for the year ended September 30, 1999, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Chicago, Illinois
April 24, 2000
/R
Exhibit 5.1
April 28, 2000
Telular Corporation
647 North Lakeview Parkway
Vernon Hills, Illinois 60061
Gentlemen:
This opinion is being furnished to you in connection with the public
resale by certain investors (collectively, the "Investors"), of up to
1,035,041 shares of Telular Corporation's (the "Company") Common Stock, par
value $.01 per share (the "Shares"), pursuant to a registration statement
on Form S-3, as amended by Amendment No. 1 thereto to be filed by the
Company with the Securities and Exchange Commission (the "Commission") on
the date hereof (the "Registration Statement"). The Shares were issued to
the Investors pursuant to that certain Stock Purchase Agreement dated as of
March 3, 2000 (the "Stock Purchase Agreement") or a warrant issued on
January 7, 2000, or will be issued to the Investors by the Company upon
exercise of certain warrants and options granted by the Company to the
Investors pursuant to the Stock Purchase Agreement. The Shares may be sold
from time to time by the Investors to or through brokers, dealers or other
agents or directly to other purchasers in one or more market transactions,
in one or more private transactions, or in a combination of such methods of
sale, at prices then prevailing, at prices related to such prices, or at
negotiated prices.
We have acted as counsel for the Company in connection with the
issue and sale of the Shares to the Investors. We have examined copies
of the Registration Statement and all exhibits thereto. We also have
examined and relied upon certain resolutions adopted by the Board of
Directors of the Company and a copy of the Bylaws of the Company, each
certified by the Secretary of the Company, and a copy of the Certificate
of Incorporation of the Company certified by the Secretary of the State
of the State of Delaware. We also have examined such other documents and
made such other investigations as we have deemed necessary to form a
basis for the opinion hereinafter expressed.
In examining the foregoing documents we have assumed the
authenticity of documents submitted to us as originals, the genuineness
of all signatures, the conformity to original documents of documents
submitted as copies, and the accuracy of the representations and
statements included therein.
Based upon the foregoing, it is our opinion that the Shares are duly
authorized and issued or, in the case of Shares to be issued pursuant to
warrants and options, will be validly issued, fully paid and non-
assessable when and if issued in accordance with the terms of such
warrants and options.
We hereby consent to the filing of this opinion as part of the
Registration Statement, and to the use of our name therein and in the
related Prospectus under the caption "Legal Matters".
<PAGE>
It is understood that this opinion is to be used only in connection
with the offer and sale of the Shares while the Registration Statement is
in effect.
Very truly yours,
/s/ Covington & Burling
COVINGTON & BURLING
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
in the Amendment No. 1 to Registration Statement (Form S-3) and related
Prospectus of Telular Corporation for the registration of 1,035,041 shares
of its common stock and to the incorporation by reference therein of our
report dated October 22, 1999, with respect to the consolidated financial
statements and schedule of Telular Corporation included in its Annual
Report (Form 10-K) for the year ended September 30, 1999, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Chicago, Illinois
April 24, 2000
