As filed with the Securities and Exchange Commission on September 11, 1997
Registration No. 333----------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------------
VARI-L COMPANY, INC.
(Exact name of registrant as specified in its charter)
Colorado 06-0679347
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11101 East 51st Avenue
Denver, Colorado 80239
(303) 371-1560
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
JOSEPH H. KISER
Chairman of the Board
Vari-L Company, Inc.
11101 East 51st Avenue
Denver, Colorado 80239
(303) 371-1560
(Address, including zip code, and telephone number,
including area code, of registrant's agent for service)
--------------------------
With copies to:
S. LEE TERRY, JR., Esq.
Gorsuch Kirgis L.L.C.
1401 17th Street, Suite 1100
Denver, Colorado 80202
(303) 299-8900
---------------------------
Approximate date of commencement of proposed sale to the public:
From time to time after this registration statement becomes effective when
warranted by market conditions and other factors.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box.
[X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
EACH CLASS OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO TO BE PRICE PER OFFERING REGISTRATION
BE REGISTERED REGISTERED SHARE (1) PRICE (1) FEE
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value per share 795,000 $9.625 $7,651,875 $2,318.75
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee. The price of $9.625 per share is the last sale
price reported by The Nasdaq Stock Market on September 9, 1997.
The Registrant hereby amends this Registration Statement on such
dates 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.
SUBJECT TO COMPLETION, DATED SEPTEMBER 11, 1997
[LOGO TO BE
INSERTED]
VARI-L COMPANY, INC.
795,000 Shares
Common Stock
$0.01 Par Value
This Prospectus relates to the offer and sale of 795,000 shares of
common stock, par value $0.01 per share (the "Shares") of Vari-L Company,
Inc. (the "Company") by certain warrant holders and shareholders of the
Company (the "Selling Shareholders"). The Shares may be sold from time to
time by the Selling Shareholders, through ordinary brokerage transactions
in negotiated transactions or otherwise, at fixed prices which may be
changed, at market prices prevailing at the time of sale or at negotiated
prices. See - "Selling Shareholders" and "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares. The Company has agreed to bear certain expenses in connection
with the registration of the Shares being offered and sold by the Selling
Shareholders.
The Company's Common Stock, $0.01 par value per share (the "Common
Stock") is traded on The Nasdaq Stock Market -- National Market System
under the symbol "VARL." On September 10, 1997, the last reported sale
price of the Company's Common Stock was $9.6875.
THESE ARE SPECULATIVE SECURITIES.
SUCH SECURITIES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" AT PAGE 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
No person has been authorized to give any information or to make any
representation other than those contained in the Prospectus in connection
with the offering made hereby, and if given or made, such information or
representation must not be relied upon as having been authorized by the
Company or by the Selling Shareholders. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that the information herein is correct as of any
time subsequent to the date hereof.
--------------------------
The date of this Prospectus is September 11, 1997.
AVAILABLE INFORMATION
Vari-L Company, Inc. (the "Company") has filed with the Securities
and Exchange Commission (the "Commission") a Registration Statement on
Form S-3 (the "Registration Statement" ) under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Common Stock
offered hereby. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth
in the Registration Statement and the exhibits and schedules thereto or
incorporated by reference therein. Such information, including exhibits
and schedules to the Registration Statement incorporated by reference
therein, can be inspected and copied at the Public Reference Section of
the Commission, 450 Fifth Street, N.W., Washington, D.C 20549. Statements
made in this Prospectus as to the contents of any contract or any other
document referred to are not necessarily complete, and, in each instance,
reference is made to the copy of such contract or document filed as an
exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports, proxy statements and other information
with the Commission. All such information may be inspected and copied at
the public reference facilities maintained by the Commission at its
principal office at 450 Fifth Street, N.W., Room 1024, Judiciary Plaza,
Washington, D.C. 20549, and at the following regional offices of the
Commission: 1801 California Street, Suite 4800, Denver, Colorado 80202-
2648; Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of such material can also be obtained from
the Public Reference Section of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission also maintains a site on the World Wide Web at
http://www.sec.gov/edgarhp.htm that contains reports, proxy and
information statements and other information concerning registrants that
file electronically with the Commission. The Common Stock is traded on
the National Association of Securities Dealers, Inc., Automated Quotation
System ("Nasdaq"). Information filed by the Company with Nasdaq may be
inspected at the offices of Nasdaq at 1735 K Street, N.W., Washington,
D.C. 20006.
This Prospectus incorporates by reference documents which are not
presented herein or delivered herewith. Copies of these documents (other
than exhibits to such documents unless such exhibits are specifically
incorporated by reference) are available to any person, including any
beneficial owner, to whom this Prospectus is delivered, on written or oral
request, without charge, directed to David G. Sherman, President, Vari-L
Company, Inc., 11101 East 51st Avenue, Denver, Colorado 80239, telephone
number 303/371-1560.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference
(Commission File No. 0-23866):
1. Annual Report on Form 10-KSB for the year ended December 31,
1996, filed March 31, 1997;
2. Quarterly Reports on Form 10-QSB for the quarter ended March 31,
1997, filed May 15, 1997 and for the quarter ended June 30, 1997, filed
August 13, 1997.
3. Form 8-A (Commission File No. 0-23866) filed April 20, 1994;
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus and prior to the termination of the offering
shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such reports and documents. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein prior to the date hereof shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
A copy of the documents incorporated by reference other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference in the information contained in this Prospectus), may be
obtained upon request without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered
upon the written or oral request of such person. Requests for such copies
should be made to David G. Sherman, President, Vari-L Company, Inc., 11101
East 51st Avenue, Denver, Colorado 80239, telephone number 303/371-1560.
In addition, such materials filed electronically by the Company with the
Commission are available at the Commission's World Wide Web site at
http://www.sec.gov/edgarhp.htm.
THE COMPANY
Vari-L Company, Inc. (the "Company") designs, manufactures and
markets a wide range of signal processing components and devices which are
used in communications equipment and systems, such as cellular telephones
and base stations, local area computer networks, and satellite
communications equipment, as well as military and aerospace applications,
such as advanced radar systems, missile guidance systems, and navigational
systems. The Company sells its products primarily to original equipment
manufacturers of communications systems.
The Company was founded in 1953 in Stamford, Connecticut, relocated
to Denver, Colorado in 1969, and reincorporated under Colorado law in
1985. The Company's manufacturing and corporate facilities are located at
11101 East 51st Avenue, Denver, Colorado 80239, and its telephone number
is 303/371-1560.
The Company's products are used in wireless communications equipment.
Wireless communication is the transmission of voice and data signals
through the air, without a physical connection, such as a metal wire or
fiber-optic cable. Wireless communications systems currently in use
include cellular telephones and base stations, wireless cable (LMDS),
satellite communications, global positioning systems, local area networks,
as well as radar systems, missile guidance systems and navigational
systems. Communications systems currently in the development stage
include personal communications systems and direct broadcast satellites.
The Company's products are designed for use in all of these applications.
RISK FACTORS
An investment in the Company involves a high degree of risk. In
addition to the other information set forth in this Prospectus,
prospective investors should carefully consider the following risk factors
when evaluating an investment in the Company.
PRODUCT OBSOLESCENCE. The industry in which the Company competes,
and the technologies for which the Company's products are designed, are
subject to rapid technological changes. These rapid changes may result in
product obsolescence or declining prices. Accordingly, the ability of the
Company to remain competitive will depend in a large part upon its ability
to innovate and generally keep abreast of technological changes, of which
there can be no assurance.
COMPETITION. The Company faces competition in the sale of virtually
all of its products, including competition from major corporations with
greater financial, technical, marketing and other resources than the
Company. There can be no assurance that the Company will be able to
remain competitive in the future.
DEFENSE INDUSTRY DOWNSIZING: HISTORICAL DEPENDENCE ON GOVERNMENT
CONTRACTS. World events have resulted in a decreased demand for defense-
related products and a general downsizing of the American defense
industry. This factor, along with federal budget constraints, is likely
to have an adverse impact on the Company's ability to continue to attract
and retain orders from defense contractors which, as a group, still
account for a significant portion of the Company's business. While the
Company has mitigated this risk by the addition of commercial business,
there is no assurance that it will always to be able to do so.
DEPENDENCE ON SUPPLIERS. The success of the business of the Company
may depend in part upon the reliability of the Company's suppliers of
subcomponents and raw materials. The Company is subject to the risks of
shortages and delays in delivery of subcomponents and such materials.
There can be no assurance that the Company will continue to be able to
locate reliable secondary sources of these subcomponents and materials.
DEPENDENCE ON KEY MANAGEMENT AND EMPLOYEES. The Company is highly
dependent upon the efforts of its management for its success. The loss of
the services of one or more of its key officers, particularly Joseph H.
Kiser, Chairman of the Board and Chief Scientific Officer and David G.
Sherman, President and Chief Executive Officer, could have a material
adverse effect on the Company's business. The Company maintains "key man"
life insurance on the lives of Messrs. Kiser and Sherman, each of whom has
an employment agreement with the Company. The success of the Company also
depends upon the Company's ability to attract and retain other qualified
personnel, particularly technical personnel for research and development,
of which there can be no assurance.
PRICE STABILITY. Competition provides constant downward pressure on
the prices of the components sold by the Company in the commercial
marketplace. The Company's sales to defense-related contractors and
manufacturers have historically occurred in a relatively stable price
environment. Moreover, political pressures on defense spending may
adversely affect prices and profit margins in that market comparable to
those already present in the commercial market. While the Company
believes that its ongoing expansion into high volume, low-cost production
capabilities will permit it to respond successfully to these price
pressures, there can be no assurance that it will do so.
LIMITED PATENT PROTECTION. The Company's success is dependent upon
its proprietary technology. Currently, only some of the Company's
products are protected by patents. The Company relies on confidentiality
and non-disclosure agreements and on trade secret laws to protect its
unpatented technology. There can be no assurance that the steps taken by
the Company in this regard will be adequate to deter misappropriation of
its proprietary technology or that the protection afforded by trade secret
laws will adequately protect the Company. Although the Company believes
that its products and technology do not infringe on any existing
proprietary rights of others, there can be no assurance that third parties
will not assert infringement claims in the future.
RELIANCE ON KEY CUSTOMERS. While the Company sold its products to
over 450 separate companies or divisions of companies in 1996, the Company
relies on certain key customers, defense programs, and commercial programs
throughout periods of the year. No single customer represented more than
11% of total sales in 1996. Nevertheless, the loss of certain key
customers could materially and adversely affect the Company.
POSSIBLE PRICE VOLATILITY. The market price of the Common Stock may
be significantly affected by factors such as announcements of new products
by the Company or its competitors, as well as variations in the Company's
results of operations and market conditions in the electronic components
industry in general. Market prices may also be affected by movements in
prices of securities in general. Although the Common Stock is traded on
the Nasdaq Stock Market, there is no assurance that it will remain
eligible to be included on Nasdaq.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
of Common Stock by the Selling Shareholders. The Selling Shareholders
have agreed to pay all commissions and other compensation to any
securities broker-dealers through whom they sell any of the Shares.
SELLING SHAREHOLDERS
The following table sets forth certain information regarding the
Selling Shareholders and the Shares offered by the Selling Shareholders
pursuant to this Prospectus. None of the Selling Shareholders within the
past three years has had any material relationship with the Company or any
of its affiliates except as described below. The information as to
beneficial ownership is based upon statements furnished to the Company by
the Selling Shareholders or their agents.
<TABLE>
<CAPTION>
NO. OF NO. OF
NAME OF SHARES SHARES SHARES TO BE BENEFICIALLY
SELLING BENEFICIALLY BEING OWNED ON COMPLETION OF
SHAREHOLDER OWNED OFFERED THE OFFERING
Number % of Class
<S> <C> <C> <C> <C>
Millenco LP 172,500(1) 172,500(2) 0 0
Newark Sales 45,000(1) 45,000 (2) 0 0
Sales Link 180,000(1) 180,000(2) 0 0
Rita Folger 15,000(1) 15,000(2) 0 0
Carla Stewart 15,000(1) 15,000(2) 0 0
Ace Foundation 22,500(1) 22,500(2) 0 0
Jules Nordlicht 150,000(1) 150,000(2) 0 0
Mark Nordlicht 60,000(1) 60,000(2) 0 0
Broadway Partners 45,000(1) 45,000(2) 0 0
Robert Cohen 22,500(1) 22,500(2) 0 0
Ellen Cohen 7,500(1) 7,500 (2) 0 0
Lenore Katz 7,500(1) 7,500(2) 0 0
Jeff Rubin 7,500(1) 7,500(2) 0 0
Eugene L. Neidiger 8,418(3) 8,418(3) 0 0
Charles C. Bruner 22,218(4) 8,418(3) 13,800 *
J. Henry Morgan 6,450(4) 3,450(3) 3,000 *
Robert L. Parrish 19,232(4) 3,538(3) 15,694 *
Anthony B. Petrelli 10,856(4) 8,418(3) 2,438 *
John J. Turk, Jr. 2,442(4) 942(3) 1,500 *
Regina L. Neidiger 2,656(3) 2,656(3) 0 0
George L. McCaffrey 4,580(3) 4,580(3) 0 0
Michael P. McCaffrey 4,580(3) 4,580(3) 0 0
</TABLE>
* Less than one percent
(1) Includes Shares issuable upon exercise of Warrants purchased from the
Company pursuant to the Securities Purchase Agreement (as defined
below).
(2) Consists of Shares issuable upon exercise of Warrants purchased from
the Company pursuant to the Securities Purchase Agreement (as defined
below).
(3) Consists of Shares issuable upon exercise of Agent's Warrants (as
defined below) paid to NTB as part of its compensation for acting as
placement agent for the private offering and subsequently assigned by
NTB to the individuals named.
(4) Includes Shares issuable upon exercise of Agent's Warrants (as
defined below) paid to NTB as part of its compensation for acting as
placement agent for the private offering and subsequently assigned by
NTB to the individuals named.
- --------------------------------
Neidiger, Tucker, Bruner, Inc. ("NTB"), a registered broker-dealer,
acted as the Company's underwriter in its initial public offering in 1994
and recently acted as Selling Agent in a private offering of securities of
the Company which is described below. Prior to the private offering and
other than NTB, the Company has had no relationship with the Selling
Shareholders.
On March 4, 1997, Millenco LP, Newark Sales, Sales Link, Rita Folger,
Carla Stewart, Ace Foundation, Jules Nordlicht, Mark Nordlicht, Broadway
Partners, Robert Cohen, Ellen Cohen, Lenore Katz and Jeff Rubin
(collectively, the "Purchasers") entered into a Securities Purchase
Agreement (the "Securities Purchase Agreement") with the Company which
provided for the sale by the Company to the Purchasers of up to $7,500,000
in subordinated debentures convertible into shares of Common Stock (the
"Debentures") and 750,000 warrants to purchase shares of the Common Stock
(the "Warrants"). For the initial purchase, $5,000,000 of Debentures and
500,000 warrants were sold. The Purchasers had the option for a period of
150 days from the date of the Agreement to purchase up to an additional
50% of the amount of their original purchases of Debentures and Warrants
(the "Options"). For the last 30 days of the 150 day period, NTB could
sell the Debentures and Warrants underlying any unexercised portion of the
Options to third parties. Subject to the restrictions discussed below,
the Debentures were convertible into Common Stock at the option of the
holder at the lower of (i) $9.50 per share, or (ii) 84% of the average
closing bid price on Nasdaq for the ten trading days prior to the date
that the Company receives a notice of conversion. Debentures bore
interest at the rate of 7% per annum until the first to occur of four
years from the date of issuance or conversion. If the conversion price of
a Debenture for which conversion was requested was $8 per share or less on
the applicable conversion date, the Company had the option to decline to
convert the Debenture and instead redeem the Debenture by payment of 116%
of the principal amount plus accrued interest. Repayment of the principal
and interest of the Debentures was subordinated to the Company's secured
debt in favor of banks, savings and loan associations, institutions or
other asset-based lenders, in an amount up to $25,000,000, irrespective of
whether such debt was currently owed or was incurred in the future. Upon
exercise of their Options, all of the remaining $2,500,000 of Debentures
and 250,000 Warrants were sold to the Purchasers. Subject to the
restrictions described below, Warrants may be exercised by the holders for
three years at an exercise price of $9.50. Warrants may not be redeemed
by the Company.
Under the Securities Purchase Agreement, the Purchasers were entitled
to demand registration of the Common Stock issuable upon conversion of the
Debentures and exercise of the Warrants under the Securities Purchase
Agreement and have exercised their rights for the Shares being registered
herein. The Company sought and received shareholder approval at the 1997
annual meeting of the Company's shareholders held on June 20, 1997. Until
shareholder approval of the Securities Purchase Agreement and the
transactions thereunder was obtained (i) the Debentures were convertible
into a maximum aggregate of 765,367 shares of Common Stock on a first-
converted basis, and (ii) the Warrants were not exercisable.
For acting as the Selling Agent for the placement of the Debentures
and the Warrants pursuant to the Securities Purchase Agreement, NTB
received a commission of 5% of the amount sold in the offering and 45,000
Agent's Warrants as additional compensation. The Agent's Warrants have
the same terms as the Warrants except that (i) the exercise price is the
same as the conversion price of the Debentures (rather than the exercise
price of the Warrants), (ii) the Agent's Warrants have a term of five
years (rather than the three-year term of the Warrants), and (iii) the
Agent's Warrants carry unlimited piggyback registration rights (rather
than the demand registration rights of the Warrants and the Debentures).
The Shares underlying the Agent's Warrants (including any additional
Agent's Warrants issuable upon exercise of Options) are being registered
hereunder pursuant to the exercise of such piggyback registration rights.
PLAN OF DISTRIBUTION
All of the Shares offered hereby are being sold by the Selling
Shareholders. The Shares will be offered by the Selling Shareholders from
time to time at market prices prevailing on the Nasdaq National Market
System at the time of offer and sale, at prices related to such prevailing
market prices, in negotiated transactions, or in a combination of such
methods of sale. The Selling Shareholders may effect such transactions by
offering and selling the Shares directly to or through securities broker-
dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions, or commissions from the Selling Shareholders
and/or the purchasers of the Shares for whom such broker-dealers may act
as agent or to whom the Selling Shareholders may sell as principal, or
both (which compensation as to a particular broker-dealer might be in
excess of customary commissions).
The Selling Shareholders and any broker-dealers who act in connection
with the sale of the Shares hereunder may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act of 1933 (the
"Securities Act") and any commissions received by them and profit on any
resale of the Shares as principal might be deemed to be underwriting
discounts and commissions under the Securities Act. The Company has
agreed to indemnify the Selling Shareholders against certain liabilities,
including liabilities under the Securities Act as underwriters or
otherwise.
Under applicable rules and regulations under the Securities and
Exchange Act of 1934, as amended (the "Exchange Act") any person engaged
in a distribution of any of the Shares may not simultaneously engage in
market activities with respect to the Common Stock for the applicable
period under Regulation M prior to the commencement of such distribution.
In addition and without limiting the foregoing, the Selling Shareholders
will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, including without limitation Rules 10b-5 and
Regulation M, which provisions may limit the timing of purchases and sales
of any of the Shares by the Selling Shareholders. All of the foregoing
may affect the marketability of the Common Stock.
The executive officers, Directors and certain large shareholders of
the Company are "affiliates" of the Company which subject them to the
limitations of Rule 144, promulgated under the Securities Act ("Rule
144"). In general, under Rule 144 as currently in effect, an "affiliate"
of the Company or a person who has beneficially owned shares which are
"restricted securities" as defined in Rule 144 for at least one year, is
entitled to sell within any three-month period a number of shares that
does not exceed the greater of: (i) one percent (1%) of the then
outstanding shares of Common Stock of the Company, or (ii) the average
weekly trading volume of the Common Stock during the four calendar weeks
preceding a sale by such person. Sales under Rule 144 are also subject to
certain manner of sale provisions, notice requirements and the
availability of current public information about the Company. Under Rule
144, however, a person who is not, and for the three months prior to the
sale of such shares has not been, an affiliate of the Company is free to
sell shares which are not "restricted securities," or "restricted
securities" which have been held for at least two years, without regard to
the limitations contained in Rule 144.
Under Section 16 of the Securities Exchange Act of 1934, any
executive officer, Directors, and 10% or greater shareholders of the
Company will be liable to the Company for any profit realized from any
purchase and sale (or any sale and purchase) of Common Stock within a
period of less than six months.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the shares of Common Stock is
American Securities Transfer & Trust, Inc., 1825 Lawrence Street, #444,
Denver, Colorado, 80202.
LEGAL MATTERS
The validity of the securities to be offered hereby will be passed
upon for the Company by Gorsuch Kirgis L.L.C., Denver, Colorado, counsel
for the Company.
EXPERTS
The financial statements of Vari-L Company, Inc. as of December 31,
1996 and 1995 and for the years then ended have been incorporated by
reference herein and in the registration statement in reliance upon the
report of Haugen, Springer & Co., independent certified public
accountants, incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing.
INDEMNIFICATION OF DIRECTORS
The Securities Purchase Agreement provides that the Company and its
officers, Directors, and controlling shareholders are indemnified against
losses arising out of any untrue statement of a material fact or any
omission to state a material fact necessary to make the statements in the
registration statement or prospectus, in light of the circumstances under
which they were made, not misleading, to the extent that such untrue
statement or omission is contained in any information or affidavit a
Selling Shareholder furnished to the Company.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the small business issuer pursuant to the
foregoing provisions, or otherwise, the small business issuer has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimates of fees and expenses incurred or to be incurred in
connection with the issuance and distribution of securities being
registered are as follows:
Securities and Exchange Commission Filing Fee $ 2,319
State Securities Laws (Blue Sky) Fees and
Expenses 200
Printing and Mailing Costs and Fees 1,000
Legal Fees and Costs 4,500
Accounting Fees and Costs 500
Miscellaneous 1,481
--------
TOTAL $ 10,000
All fees and expenses are estimated except for the filing fee paid to the
Commission.
The Selling Shareholders have agreed to pay all commissions and other
compensation to any securities broker-dealers through whom they sell any
of the Shares.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The only statute, bylaw, contract or arrangement under which any
controlling person, director or officer of the Company is insured or
indemnified in any matter against liability which he may incur in his
capacity as such, is as follows:
Paragraph 2 of Article X of the Restated Articles of Incorporation
with Amendments of the Company includes the following provision:
The Board of Directors of the Corporation shall have every power
and duty of indemnification of directors, officers, employees and
agents, without limitation, provided by the laws of the State of
Colorado.
Section 7-109-101 of the Colorado Business Corporation Act provides
that each corporation shall have the following powers using the following
definitions:
"As used in this article:
(a) "Corporation" includes any domestic or foreign entity that is a
predecessor of a corporation by reason of a merger or other transaction in
which the predecessor's existence ceased upon consummation of the
transaction.
(b) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation, is or
was serving at the corporation's request as a director, officer, partner,
trustee, employee, fiduciary, or agent of another domestic or foreign
corporation or other person or of an employee benefit plan. A director is
considered to be serving an employee benefit plan at the corporation's
request if his or her duties of the corporation also impose duties on, or
otherwise involve services by, the director to the plan or to participants
in or beneficiaries of the plan. "Director" includes, unless the context
requires otherwise, the estate or personal representative of a director.
(c) "Expenses" includes counsel fees.
(d) "Liability" means the obligation incurred with respect to a
proceeding to pay a judgment, settlement, penalty, fine, including an
excise tax assessed with respect to an employee benefit plan, or
reasonable expenses.
(e) "Official capacity" means, when used with respect to a director,
the office of director in a corporation and, when used with respect to a
person other than a director as contemplated in section 7-109-107, the
office in a corporation held by the officer or the employment, fiduciary,
or agency relationship undertaken by the employee, fiduciary, or agent on
behalf of the corporation. "Official capacity" does not include service
for any other domestic or foreign corporation or other person or employee
benefit plan.
(f) "Party" includes a person who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(g) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
7-109-102. AUTHORITY TO INDEMNIFY DIRECTORS.
(1) Except as provided in subsection (4) of this section, a
corporation may indemnify a person made a party to a proceeding because
the person is or was a director against liability incurred in the
proceeding if:
(a) The person conducted himself or herself in good faith; and
(b) The person reasonably believed:
(I) In the case of conduct in an official capacity with
the corporation, that his or her conduct was in the corporation's best
interests; and
(II) In all other cases, that his or her conduct was at
least not opposed to the corporation's best interests; and
(c) In the case of any criminal proceeding, the person had no
reasonable cause to believe his or her conduct was unlawful.
(2) A director's conduct with respect to an employee benefit plan
for a purpose the director reasonably believed of be in the interests of
the participants in or beneficiaries of the plan is conduct that satisfies
the requirement of subparagraph (II) of paragraph (b) of subsection (1) of
this section. A director's conduct with respect to an employee benefit
plan for a purpose that the director did not reasonably believe to be in
the interests of the participants in or beneficiaries of the plan shall be
deemed not to satisfy the requirements of paragraph (a) of subsection (1)
of this section.
(3) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of
conduct described in this section.
(4) A corporation may not indemnify a director under this section.
(a) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation;
or
(b) In connection with any other proceeding charging that the
director derived an improper personal benefit, whether or not involving
action in an official capacity, in which proceeding the director was
adjudged liable on the basis that he or she derived an improper personal
benefit.
(5) Indemnification permitted under this section in connection with
a proceeding by or in the right of the corporation is limited to
reasonable expenses incurred in connection with the proceeding.
7-109-103. MANDATORY INDEMNIFICATION OF DIRECTORS. Unless limited
by its articles of incorporation, a corporation shall indemnify a person
who was wholly successful, on the merits or otherwise, in the defense of
any proceeding to which the person was a party because the person is or
was a director, against reasonable expenses incurred by him or her in
connection with the proceeding.
7-109-104. ADVANCE OF EXPENSES TO DIRECTORS.
(1) A corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of final
disposition of the proceeding if:
(a) The director furnishes to the corporation a written
affirmation of the director's good faith belief that he or she has met the
standard of conduct described in section 7-109-102;
(b) The director furnishes to the corporation a written
undertaking, executed personally or on the director's behalf, to repay the
advance if it is ultimately determined that he or she did not meet the
standard of conduct; and
(c) A determination is made that the facts then known to those
making the determination would not preclude indemnification under this
article.
(2) The undertaking required by paragraph (b) of subsection (1) of
this section shall be an unlimited general obligation of the director but
need not be secured and may be accepted without reference to financial
ability to make repayment.
(3) Determinations and authorizations of payments under this section
shall be made in the manner specified in section 7-109-106.
7-109-105. COURT-ORDERED INDEMNIFICATION OF DIRECTORS.
(1) Unless otherwise provided in the articles of incorporation, a
director who is or was a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to another court
of competent jurisdiction. On receipt of an application, the court, after
giving any notice the court considers necessary, may order indemnification
in the following manner:
(a) If it determines that the director is entitled to mandatory
indemnification under section 7-109-103, the court shall order
indemnification, in which case the court shall also order the corporation
to pay the director's reasonable expenses incurred to obtain court-ordered
indemnification.
(b) If it determines that the director is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances,
whether or not the director met the standard of conduct set forth in
section 7-109-102(1) or was adjudged liable in the circumstances described
in section 7-109-102(4), the court may order such indemnification as the
court deems proper; except that the indemnification with respect to any
proceeding in which liability shall have been adjudged in the
circumstances described in section 7-109-102(4) is limited to reasonable
expenses incurred in connection with the proceeding and reasonable
expenses incurred to obtain court-ordered indemnification.
7-109-106. DETERMINATION AND AUTHORIZATION OF INDEMNIFICATION OF
DIRECTOR.
(1) A corporation may not indemnify a director under Section 7-109-
102 unless authorized in the specific case after a determination has been
made that indemnification of the director is permissible in the
circumstances because the director has met the standard of conduct set
forth in section 7-109-102. A corporation shall not advance expenses to a
director under section 7-109-104 unless authorized in the specific case
after the written affirmation and undertaking required by section 7-109-
104(1)(a) and (1)(b) are received and the determination required by
section 7-109-104(1)(c) has been made.
(2) The determinations required by subsection (1) of this section
shall be made:
(a) By the board of directors by a majority vote of those
present at a meeting at which a quorum is present, and only those
directors not parties to the proceeding shall be counted in satisfying the
quorum; or
(b) If a quorum cannot be obtained, by a majority vote of a
committee of the board of directors designated by the board of directors,
which committee shall consist of two or more directors not parties to the
proceeding; except that the directors who are parties to the proceeding
may participate in the designation of directors for the committee.
(3) If a quorum cannot be obtained as contemplated in paragraph (a)
of this subsection (2) of this section, and a committee cannot be
established under paragraph (b) of subsection (2) of this section, or,
even if a quorum is obtained or a committee is designated, if a majority
of the directors constituting such quorum or such committee so directs,
the determination required to be made by subsection (1) of this section
shall be made:
(a) By independent legal counsel selected by a vote of the
board of directors or the committee in the manner specified in
paragraph (a) or (b) of subsection (2) of this section or, if a quorum of
the full board cannot be obtained and a committee cannot be established,
by independent legal counsel selected by a majority vote of the full board
of directors; or
(b) By the shareholders.
(4) Authorization of indemnification and advance of expenses shall
be made in the same manner as the determination that indemnification or
advance of expenses is permissible; except that, if the determination that
indemnification or advance of expenses is permissible is made by
independent legal counsel, authorization of indemnification and advance of
expenses shall be made by the body that selected such counsel.
7-109-107. INDEMNIFICATION OF OFFICERS, EMPLOYEES, FIDUCIARIES, AND
AGENTS.
(1) Unless otherwise provided in the articles of incorporation;
(a) An officer is entitled to mandatory indemnification under
section 7-109-103, and is entitled to apply for court-ordered
indemnification under section 7-109-105, in each case to the same extent
as a director;
(b) A corporation may indemnify and advance expenses to an
officer, employee, fiduciary, or agent who is not a director to a greater
extent, if not inconsistent with public policy, and if provided for by its
bylaws, general or specific action of its board of directors or
shareholders, or contract.
7-109-108. INSURANCE. A corporation may purchase and maintain
insurance on behalf of a person who is or was a director, officer,
employee, fiduciary, or agent of the corporation, or who, while a
director, officer, employee, fiduciary, or agent of the corporation, is or
was servicing at the request of the corporation as a director, officer,
partner, trustee, employee, fiduciary, or agent of another domestic or
foreign corporation or other person or of an employee benefit plan,
against liability asserted against or incurred by the person in that
capacity or arising from his or her status as a director, officer,
employee, fiduciary, or agent, whether or not the corporation would have
power to indemnify the person against the same liability under section 7-
109-102, 7-109-103, or 7-109-107. Any such insurance may be procured from
any insurance company designated by the board of directors, whether such
insurance company is formed under the laws of this state or any other
jurisdiction of the United States or elsewhere, including any insurance
company in which the corporation has an equity or any other interest
through stock ownership or otherwise.
7-109-109. LIMITATION OF INDEMNIFICATION OF DIRECTORS.
(1) A provision treating a corporation's indemnification of, or
advance of expenses to, directors that is contained in its articles of
incorporation or bylaws, in a resolution of its shareholders or board of
directors, or in a contract, except an insurance policy, or otherwise, is
valid only to the extent the provision is not inconsistent with sections 7-
109-101 to 7-109-108. If the articles of incorporation limit
indemnification or advance of expenses, indemnification and advance of
expenses are valid only to the extent not inconsistent with the articles
of incorporation.
(2) Sections 7-109-101 to 7-109-108 do not limit a corporation's
power to pay or reimburse expenses incurred by a director in connection
with an appearance as a witness in a proceeding at a time when he or she
has not been made a named defendant or respondent in the proceeding.
7-109-110. NOTICE TO SHAREHOLDERS OF INDEMNIFICATION OF DIRECTOR.
If a corporation indemnifies or advances expenses to a director under this
article in connection with a proceeding by or in the right of the
corporation, the corporation shall give written notice of the
indemnification or advance to the shareholders with or before the notice
of the next shareholders' meeting. If the next shareholder action is
taken without a meeting at the instigation of the board of directors, such
notice shall be given to the shareholders at or before the time the first
shareholder signs a writing consenting to such action.
Section 7-108-402(2) of the Colorado Revised Statutes states as
follows:
No officer or director shall be personally liable for any injury to
person or property arising out of a tort committed by an employee unless
such officer or director was personally involved in the situation giving
rise to the litigation or unless such officer or director committed a
criminal offense. The protection afforded in this section shall not
restrict other common law protections and rights that an officer or
director may have. This section shall not restrict the corporation's
right to eliminate or limit the personal liability of a director to the
corporation or to its shareholders for monetary damages for breach of
fiduciary duty as a director.
Paragraph 3 of Article X of the Restated Articles of Incorporation
with Amendments of the Company includes the following provision:
The personal liability of any of the Corporation's directors to the
Corporation or to its shareholders for monetary damages for breach of a
fiduciary duty as a director is eliminated, except that this provision
shall not eliminate the liability of the director to the Corporation or to
its shareholders for monetary damages (a) for any breach of the director's
duty of loyalty to the Corporation or its shareholders; (b) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (c) for acts specified in Section 7-5-114 of the
Colorado Corporation Code; or (d) for any transaction from which the
director derived an improper personal benefit.
The Securities Purchase Agreement provides that the Company and its
officers, directors, and controlling shareholders are indemnified against
losses arising out of any untrue statement of a material fact or any
omission to state a material fact necessary to make the statements in the
registration statement or prospectus, in light of the circumstances under
which they were made, not misleading, to the extent that such untrue
statement or omission is contained in any information or affidavit a
Selling Shareholder furnished to the Company.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, or persons
controlling the Company pursuant to the foregoing provisions, the Company
has been informed that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in
the Securities Act of 1933 and is therefore unenforceable.
ITEM 16. EXHIBITS.
EXHIBIT NO. DESCRIPTION
3.1a Restated Articles of Incorporation, as Amended, filed
as Exhibit 4.1 to the Registrant's Form S-8
Registration Statement (No. 33-88666) and incorporated
herein by reference
3.1b Articles of Amendment to the Articles of Incorporation
filed as Exhibit 3.1b to Registrant's Form 10-KSB for
the year ended December 31, 1996 and incorporated
herein by reference
3.2 Restated Bylaws of the Company as adopted by its Board
of Directors on November 4, 1992 filed as Exhibit 3.2
to the Registrant's Form SB-2 Registration Statement
(No. 33-74704-D) and incorporated herein by reference
4.1 Specimen Certificate for $.01 par value Common Stock
of the Company filed as Exhibit 4.3 to the
Registrant's Form SB-2 Registration Statement (No. 33-
74704-D) and incorporated herein by reference
4.2 Specimen Certificate for Warrant to Purchase Common
Stock of the Company filed as Exhibit 4.4 to the
Registrant's Form SB-2 Registration Statement (No. 33-
74704-D) and incorporated herein by reference
4.3 Rights Agreement with American Securities Transfer,
Inc. dated March 15, 1996 filed as Exhibit 4.2 to
Registrant's Form 8-A/A Registration Statement (No. 0-
23866) and incorporated herein by reference
4.4 Specimen Certificate for Right to Purchase $.01 par
value Common Stock of the Company filed as Exhibit 4.3
to Registrant's Form 8-A/A Registration Statement (No.
0-23866) and incorporated herein by reference
4.5 Securities Purchase Agreement between the Registrant
and certain purchasers dated March 4, 1997 filed as
Exhibit 4.5 to Registrant's Form S-3 Registration
Statement (No. 333-25173) and incorporated herein by
reference.
4.6 Form of Convertible Subordinated Debenture issued to
the Purchasers under the Securities Purchase Agreement
dated March 4, 1997 filed as Exhibit 4.6 to
Registrant's Form S-3 Registration Statement (No. 333-
25173) and incorporated herein by reference.
4.7 Form of Warrant to Purchase Common Stock issued to the
Purchasers under the Securities Purchase Agreement
dated March 4, 1997 filed as Exhibit 4.7 to
Registrant's Form S-3 Registration Statement (No. 333-
25173) and incorporated herein by reference.
4.8 Form of Warrant to Purchase Common Stock issued to
Neidiger, Tucker, Bruner, Inc. pursuant to the
Securities Purchase Agreement dated March 4, 1997
filed as Exhibit 4.8 to Registrant's Form S-3
Registration Statement (No. 333-25173) and
incorporated herein by reference.
5 Opinion of Gorsuch Kirgis L.L.C.
23.1 Consent of Haugen, Springer & Co.
23.2 Consent of Gorsuch Kirgis L.L.C. contained in its
opinion filed as Exhibit 5
ITEM 17. UNDERTAKINGS.
The undersigned Company hereby undertakes with respect to the
securities being offered and sold in this offering:
(1) File, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to:
(a) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in the volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(c( Include any additional or changed material information on
the plan of distribution;
provided, however, that small business issuers do not need to give the
statements in paragraphs (1)(a) and (1)(b) if the registration statement
is on Form S-3 or Form S-8, and the information required in a post-
effective amendment is incorporated by reference from the periodic reports
filed by the small business issuer pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company 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.
SIGNATURES
Pursuant to the Securities Act of 1933, the Registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Denver, State of Colorado, on September 10, 1997.
VARI-L COMPANY, INC.
By: /s/ David G. Sherman
--------------------------------
David G. Sherman, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
/s/ Joseph H. Kiser Date: September 10, 1997
- ---------------------------------
Joseph H. Kiser, Chairman of the Board,
Chief Scientific Officer and Director
/s/ David G. Sherman Date: September 10, 1997
- ---------------------------------
David G. Sherman, President,
Chief Executive Officer, Principal
Executive Officer, Principal
Financial Officer and Director
/s/ Jon L. Clark Date: September 10, 1997
- ---------------------------------
Jon L. Clark, Vice President
of Finance and Principal
Accounting Officer
/s/ Sarah L. Booher Date: September 10, 1997
- ---------------------------------
Sarah L. Booher, Director
/s/ David A. Lisowski Date: September 10, 1997
- ---------------------------------
David A. Lisowski, Director
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
5 Opinion of Gorsuch Kirgis L.L.C.
23.1 Consent of Haugen, Springer & Co.
GORSUCH KIRGIS L.L.C.
Attorneys at Law
1401 Seventeenth Street, Suite 1100
Denver, Colorado 80202
Telephone (303) 299-8900
Fax (303) 298-0215
September 11, 1997
Vari-L Company, Inc.
11101 E. 51st Avenue
Denver, Colorado 80239
Re: Vari-L Company, Inc.
Registration Statement on Form S-3
Gentlemen:
We are counsel to Vari-L Company, Inc., a Colorado corporation (the
"Company"), in connection with the preparation of a Registration Statement
on Form S-3 filed with the Securities and Exchange Commission on September
11, 1997 (the "Registration Statement"), relating to a proposed offering
by the Selling Shareholders to the public of a maximum of 795,000 shares
of the Company's Common Stock, $.01 par value (the "Common Stock").
In this connection, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of such corporate records,
certificates and written and oral statements of officers, legal counsel
and accountants of the Company and of public officials, and other
documents that we have considered necessary and appropriate for this
opinion, and, based thereon, we advise you that, in our opinion:
1. The Company is a corporation duly organized and validly existing
under the laws of the State of Colorado; and
2. The Common Stock, when sold pursuant to and in accordance with
the Registration Statement, will be validly issued, fully paid and
nonassessable.
We hereby consent to the use of our name beneath the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement
and to the filing of this opinion as Exhibit 5 thereto.
Very truly yours,
GORSUCH KIRGIS L.L.C.
/s/Gorsuch Kirgis L.L.C.
EXHIBIT 23
HAUGEN, SPRINGER & CO.
Certified Public Accountants
9250 East Costilla Avenue Robert S. Haugen, C.P.A.
Suite 150 Charles K. Springer, C.P.A.
Englewood, Colorado 80012
(303) 799-6969
FAX (303) 799-6974
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Vari-L Company, Inc.
We consent to the incorporation by reference in the Registration Statement
on Form S-3 of Vari-L Company, Inc. of our report dated February 5, 1997,
relating to the balance sheets of Vari-L Company, Inc. as of December 31,
1996 and 1995, and the related statements of income, stockholders' equity,
and cash flows for the years then ended, which report appears in the
December 31, 1996 Annual Report on Form 10-KSB of Vari-L Company, Inc.,
incorporated herein by reference.
/s/Haugen, Springer & Co.
HAUGEN, SPRINGER & CO.
September 10, 1997
