<PAGE>
318,096 Shares of Common Stock
Brightpoint, Inc.
This Prospectus relates to an offering by certain persons (the "Selling
Stockholders") of an aggregate of up to 318,096 shares of Common Stock of
Brightpoint, Inc. (the "Company") issuable upon exercise of warrants (the
"Warrants") granted in January 1995. The Company will not receive any of the
proceeds from the sale of Common Stock by the Selling Stockholders.
The Common Stock is traded on the NASDAQ National Market under the symbol
"CELL." On July 9, 1996, the closing sale price of the Common Stock as reported
by NASDAQ was $22.00.
----------------------
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE
A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGE 7.
-------------------------
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.
The date of this Prospectus is July 9, 1996
<PAGE>
AVAILABLE INFORMATION
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 Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission located at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
at 500 West Madison Street, Suite 1400 Chicago, Illinois 60661 and 7 World Trade
Center, New York, New York 10048. Copies of such material can also be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1995;
(b) Quarterly Report on Form 10-Q for the three month period ended
March 31, 1996;
(c) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 after the date of this
Prospectus and prior to the termination of the offering of the Common Stock
offered hereby shall be deemed to be incorporated by reference herein and to be
a part hereof on the date of filing of such documents.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents incorporated herein by reference, except for the
exhibits to such documents. Requests should be directed to Ms. Wendi Bowen,
Brightpoint, Inc., 6402 Corporate Drive, Indianapolis, Indiana 46287, telephone:
(317) 297-6100.
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<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, contained in
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 incorporated by reference in this Prospectus. Prospective investors are
urged to read this Prospectus in its entirety.
The Company
Brightpoint, Inc. (the "Company") is a leading worldwide
distributor of cellular telephones and accessories. The Company offers products
from prominent manufacturers under brand names such as Nokia, Ericsson,
Motorola, Audiovox, NEC and OKI, and has developed a global customer base of
more than 6,000 cellular carriers, agents, resellers, dealers and retailers. The
Company has grown rapidly, with net sales increasing from approximately $169.3
million for the year ended December 31, 1994 to approximately $269.4 million for
the year ended December 31, 1995, and with net income increasing from
approximately $2.8 million on a pro forma basis, to approximately $5.7 million
during the same period.
The market for cellular products and services, a major segment
of the wireless communications industry, has grown substantially and continues
to expand. The number of cellular subscribers in the United States has increased
from approximately 300,000 in 1985 to more than 32 million in 1995, growing by
more than eight million, or approximately 33.3%, in 1995 alone. In addition, the
Company expects that rapid growth in international markets will continue as a
result of low market penetration, economic growth and high population density.
The Company has been successful in expanding its international presence, with
international sales as a percentage of net sales increasing significantly from
approximately 10.0% to 27.1% from the year ended December 31, 1994 to the year
ended December 31, 1995.
The emergence of new wireless communications technologies and
services, such as enhanced specialized mobile radio ("ESMR"), personal
communications services ("PCS") and satellite communications systems, is
expected to increase the wireless communications subscriber base upon widespread
commercial introduction of these services. The Company currently provides
cellular distribution services for many of the leading manufacturers and
carriers which are expected to participate in these new and emerging wireless
communications markets.
The Company focuses on serving as an effective link between
manufacturers and service providers in the wireless communications industry. The
Company's goals include (i) building upon its base of customers by providing a
reliable, timely and cost-effective means of obtaining a broad range of brand
name products and accessories, (ii) meeting the increasing outsourcing demands
of manufacturers and service providers by offering inventory management and
value-added services, (iii) offering an attractive channel of distribution for
its suppliers by providing an efficient, low-cost method of accessing a large
and diverse base of customers worldwide and (iv) expanding sales of accessory
products.
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<PAGE>
The Company was incorporated under the laws of the State of
Indiana in August 1989 under the name Wholesale Cellular USA, Inc. and
reincorporated under the laws of the State of Delaware in March 1994. In
September 1995, the Company changed its name to Brightpoint, Inc. The Company's
principal executive offices are located at 6402 Corporate Drive, Indianapolis,
Indiana 46278, and its telephone number is (317) 297-6100.
Recent Developments
In December 1995, the Company entered into a letter of intent
with Technology Resources International Ltd. ("TRI"), an international
distributor of wireless communications equipment based in the United Kingdom,
which contemplates the formation of Brightpoint International Ltd. ("Brightpoint
International"), a company to be owned equally by the Company and TRI. The
Company anticipates that Brightpoint International will conduct all of the
Company's sales and marketing activities outside of North and South America.
This transaction is subject to the execution and delivery by the parties of a
definitive agreement and approval by the Board of Directors of the Company.
On June 7, 1996, the Company consummated a merger pursuant to
an Agreement and Plan of Merger dated March 14, 1996 and as amended on April 29,
1996 (the "Merger Agreement"), by and among the Company, Brightpoint
Acquisition, Inc. (the "Subsidiary"), a wholly-owned subsidiary of the Company,
Allied Communications, Inc., Allied Communications of Florida, Inc., Allied
Communications of Georgia, Inc., Allied Communications of Illinois, Inc., Allied
Communications of Puerto Rico, Inc. (collectively, the "Allied Companies"),
Robert Picow and Joseph Forer (together, the "Allied Stockholders"), pursuant to
which, upon the terms and conditions of the Merger Agreement, the Allied
Companies were merged with and into the Subsidiary and all of the outstanding
shares of common stock of each of the Allied Companies was converted into an
aggregate of 2,025,000 shares (the "Allied Stockholders' Shares") of Common
Stock of the Company (the "Merger"). Upon the consummation of the Merger,
Messrs. Picow and Forer owned 1,741,500 shares and 283,500 shares, respectively,
of the Company's Common Stock, representing approximately 16.4% and 2.7%,
respectively, of the shares outstanding. The Allied Companies distribute
wireless communications products throughout the United States and Latin America.
Pursuant to the terms of the Merger Agreement, the Company
simultaneously with the Merger, appointed Robert Picow as a director of the
Company to serve for a term of three years in the same Class as Robert J.
Laikin, Chairman of the Board, President and Chief Executive Officer of the
Company, and appointed Joseph Forer as a director of the Company to serve for a
term of two years in the same Class as J. Mark Howell, Executive Vice President,
Chief Operating Officer and Chief Financial Officer of the Company. The Company
has also entered into employment agreements with the Allied Stockholders. In
addition, the Company has agreed that for a period of eighteen months,
commencing six months following the consummation of the Merger, at the request
of the Allied Stockholders, to register 750,000 shares of the Allied
Stockholders' Shares under the Act. The Company anticipates that the Allied
Stockholders will request such registration.
-4-
<PAGE>
The Offering
<TABLE>
<CAPTION>
<S> <C>
Securities offered ........................... 318,096 shares
Common Stock outstanding ..................... 10,728,459 shares (1)
Risk Factors ................................. Prospective investors should
consider carefully certain Risk
Factors relating to an investment in
the Company. See "Risk Factors."
Use of Proceeds .............................. Any proceeds received by the
Company from time to time
upon exercise of the Warrants
will be used for working capital
and general corporate purposes.
The Company will not receive any
proceeds from any sales of Common
Stock by the Selling Stockholders.
See "Use of Proceeds."
NASDAQ Symbol ................................ CELL
</TABLE>
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(1) Based on shares outstanding on July 8, 1996.
-6-
<PAGE>
RISK FACTORS
In addition to the other information contained or incorporated
by reference in this Prospectus, prospective investors should consider carefully
the following risk factors in evaluating an investment in the Company and its
business before purchasing any shares of the Common Stock offered hereby.
Uncertainty of Future Operating Results. The Company's business
operates on a high-volume, low-margin basis. The Company's operating expenses
have increased significantly and can be expected to continue to increase
significantly in connection with the Company's expansion activities (which will
require the Company to make substantial up-front expenditures in connection with
increased levels of inventories and its new warehouse facilities and management
information system). Accordingly, the Company's future profitability will depend
upon corresponding increases in revenues from operations. Future events,
including unanticipated expenses, increased price competition, unfavorable
general economic conditions, product returns and recalls and uncollectible
accounts, could have an adverse effect on the Company's operating results. There
can be no assurance that the Company's rate of revenue growth will continue in
the future or that the Company's future operations will be profitable.
Risks Associated with Rapid Expansion. The Company has achieved rapid
and substantial growth which has placed and is expected to continue to place a
significant strain on its management, administrative, operational, financial and
other resources. The Company's success will be largely dependent upon its
ability to hire additional highly qualified personnel to augment the Company's
efforts in successfully managing such growth (including monitoring operations,
controlling costs and maintaining effective management, inventory and credit
controls). The Company has limited experience in effectuating rapid expansion
and in managing a broader range of new services and operations which are
geographically dispersed. There can be no assurance that the Company will be
able to continue to successfully manage its operations (both in the U.S. and
internationally) or that any inability to do so will not adversely affect its
business, financial condition or results of operations.
Risks Associated with Future Growth and Acquisitions. The Company's
continued expansion will be largely dependent upon, among other things, the
Company's ability to secure an adequate supply of competitive products on a
timely basis and on commercially reasonable terms; continually turn its
inventories and collect its accounts receivable; hire and retain skilled
management, marketing, sales and other personnel; and continue to successfully
develop and maintain key relationships with carriers and leading manufacturers
and dealers of cellular products. The Company's growth prospects could be
adversely affected by a decline in the wireless communications industry
generally or in particular geographic markets, which could result in reduction
-7-
<PAGE>
or deferral of expenditures by prospective customers. The Company's ultimate
success may be significantly affected by the Company's ability to commercialize
its new inventory management and value-added services and its branded accessory
products. Demand and market acceptance for newly introduced products and
services are subject to a high degree of uncertainty. The Company may also seek
to expand its operations both in the U.S. and international markets through
acquisitions of businesses or the establishment of strategic alliances which the
Company believes are compatible with its business. The Company has consummated
the Merger with the Allied Companies. There can be no assurance that the Company
will be able to successfully integrate the operations of the Allied Companies
into its operations. Any inability to do so, particularly in instances in which
the Company has made significant capital investments, could have a material
adverse effect on the Company.
Foreign Trade Risks. Sales of cellular products to customers in foreign
markets, primarily in Latin America and the Middle East, have accounted for an
increasing portion of the Company's net sales. For the years ended December 31,
1994 and 1995 and the three months ended March 31, 1996, sales of cellular
products to customers in foreign markets accounted for approximately 10%, 27.1%
and 38.7%, respectively, of the Company's net sales. The Company is seeking to
continue to increase product sales in foreign markets and believes that such
markets present significant opportunities. There can be no assurance, however,
that the Company will be able to do so or that any such markets will ultimately
prove to be viable. To the extent that the Company is able to continue to
successfully increase its foreign sales, it will become increasingly subject to
risks inherent in foreign trade, including increased credit risk, customs duties
and import quotas and other trade restrictions, fluctuations in foreign currency
exchange rates, shipping delays, failure or material interruption of cellular
systems and services and international political, regulatory and economic
developments, all of which, particularly in light of the historical and
political instability of many countries in Latin America and the Middle East,
could have a material adverse effect on the Company. In addition, to the extent
that the Company establishes operations in foreign countries, there can be no
assurance that political, regulatory, economic or military developments, over
which the Company will have no control, will not subject the Company to
increased risk of loss of revenues and property due to, among other things,
expropriation, nationalization, inflation, currency devaluation, international
hostilities, confiscatory taxation, limitations on repatriation and currency
controls. Although all foreign sales are currently made in U.S. dollars and the
Company currently does not intend to engage in foreign currency transactions, an
increase in the value of the dollar in relation to foreign currencies may
nevertheless have an adverse effect on potential demand for the Company's
products.
-8-
<PAGE>
Dependence on Third-Party Suppliers. The Company is dependent on
third-party equipment manufacturers, distributors and dealers for all of its
supply of cellular telephones and accessories. For the years ended December 31,
1994 and 1995 and the three months ended March 31, 1996, the Company's four
largest suppliers in the aggregate accounted for approximately 53.9%, 58.1% and
75.8%, respectively, of product purchases. For the year ended December 31, 1995,
the Company's four largest suppliers, Nokia Mobile Phones, Inc. ("Nokia"),
BellSouth Cellular Corp., Motorola and AT&T Wireless Services, accounted for
approximately 30.0%, 15.1%, 8.6% and 4.4%, respectively, of product purchases.
As is typical in the industry, the Company does not have exclusive or long-term
agreements with any of its suppliers and generally purchases products pursuant
to purchase orders placed from time to time in the ordinary course of business.
Although the Company believes that its relationships with its suppliers are
satisfactory, the loss of certain of the Company's principal suppliers or
substantial price increases imposed by any such suppliers, in the absence of
readily available alternative sources of supply, would have a material adverse
effect on the Company. The Company is dependent on the ability of its suppliers
to provide adequate inventories of currently popular brand name products on a
timely basis and on favorable pricing terms. There can be no assurance that
suppliers will continue to offer competitive products to the Company, that the
Company will be able to obtain accessory products on favorable terms or that the
Company will not be subject to the risk of price fluctuations and periodic
delays. Failure or delay by suppliers in supplying competitive products to the
Company on favorable terms would adversely affect the Company's operating
margins and the Company's ability to obtain and deliver products on a timely and
competitive basis.
Intense Industry Competition. The markets for cellular telephones and
accessories are characterized by intense price competition and significant price
erosion over the life of a product. The Company competes with numerous
well-established wholesale distributors and manufacturers of cellular equipment,
including the Company's suppliers, as well as with providers of cellular
services, many of which possess greater financial and other resources than the
Company and have established reputations for success in the sale and service of
cellular products. Certain of these competitors may also market the same or
similar products directly to the Company's customers and have the financial
resources necessary to enable them to withstand substantial price competition
and implement extensive advertising and promotional programs, both generally and
in response to efforts by additional competitors to enter into new markets or
introduce new products. The cellular distribution industry is also characterized
by low barriers to entry and frequent introduction of new products. The
Company's ability to continue to compete successfully will be largely dependent
on its ability to maintain its current vendor relationships and anticipate and
respond to various competitive factors affecting the cellular industry,
including new products which may be introduced, changes in consumer preferences,
demographic trends, international, national, regional and local economic
-9-
<PAGE>
conditions and discount pricing and promotion strategies by competitors. There
can be no assurance that the Company will be able to continue to compete
successfully, particularly as domestic cellular markets mature and the Company
seeks to enter into new markets and market new products.
Inventory Obsolescence and Technological Change. The markets for
wireless communications products are characterized by rapidly changing
technology and evolving industry standards, often resulting in product
obsolescence or short product life cycles. Accordingly, the Company's success is
dependent upon its ability to anticipate technological changes in the industry
and to continually identify, obtain and successfully market new products that
satisfy evolving industry and customer requirements. In connection with the
Company's expansion, the Company has made increased commitments of capital to
purchase product inventories. Additional concentrations of capital in inventory
increase the risk of loss from possible inventory obsolescence. There can be no
assurance that competitors or manufacturers of cellular products will not market
products which have perceived advantages over the Company's products or which
render the products currently sold by the Company obsolete or less marketable.
In addition, the use of alternative wireless communications technologies,
including ESMR, PCS and satellite communications systems, with the potential to
compete with cellular systems, may reduce demand for existing cellular products.
The Company expects that companies which have developed or are developing new
technologies or products in related market segments will commercialize
technologies which would compete with existing cellular technology. Certain of
such technologies, upon widespread commercial introduction, could materially
change the types of products sold by the Company and its suppliers and result in
significant price competition. There can be no assurance that the Company's
existing customers or consumers will be willing, for financial or other reasons,
to purchase new equipment necessary to utilize these new technologies or that
product obsolescence will not result in significantly increased inventories of
unsold products. Moreover, complex hardware and software contained in new
cellular phones could contain defects which become apparent subsequent to
widespread commercial use, resulting in product recalls and returns.
Increasing Sales Concentration and Accounts Receivable; Collection and
Credit Risks. An increasing portion of the Company's net sales has been derived
from a concentrated customer base. For the years ended December 31, 1994 and
1995 and the three months ended March 31, 1996, sales of cellular products to
the Company's five largest customers accounted for approximately 28.6%, 26.7%
and 26.7%, respectively, of the Company's net sales. For the year ended December
31, 1995, sales of cellular products to CellCom Israel Ltd. ("CellCom")
accounted for approximately 7.9% of the Company's net sales. The loss of this
customer or other principal customers could have a material adverse effect on
the Company's financial condition and results of operations. The Company's
accounts receivable, less allowance for doubtful accounts, at March 31, 1996
were approximately $52.1 million, as compared to approximately $35.8 million, at
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<PAGE>
December 31, 1995. Of the Company's accounts receivable at March 31, 1996,
approximately $6.4 million was due from TRI. At March 31, 1996, the Company's
allowance for doubtful accounts was $500,000, which the Company believes is
currently adequate for the size and nature of its receivables. Nevertheless,
delays in collection or uncollectibility of accounts receivable could have a
material adverse effect on the Company's liquidity and working capital position.
In connection with the Company's expansion, the Company intends to offer open
account terms to additional customers, which will subject the Company to
increased credit risk, particularly in the event that any such receivables
represent sales to a limited number of customers or are concentrated in foreign
markets, and could require the Company to continually increase its allowance for
doubtful accounts.
Possible Fluctuations in Operating Results; Seasonality. The Company's
operating results may vary from period to period as a result of purchasing
patterns of potential customers, the timing of introduction of new products by
the Company's suppliers and competitors, variations in sales by distribution
channels, product availability and pricing and the seasonal nature of the
Company's business. Sales of the Company's products are seasonal, with peak
product shipments, primarily in the U.S., occurring in the third and fourth
quarters. Unanticipated events, including delays in securing adequate
inventories of competitive products at the time of peak sales, or significant
decreases in sales during such periods, could have a material adverse effect on
the Company. There can be no assurance that the foregoing factors will not
result in significant fluctuations in operating results in the future.
Significant Outstanding Indebtedness; Loan Covenants and Security
Interests. In order to finance the Company's expanded operations, in June 1995,
the Company entered into a loan agreement (as amended) with Bank One,
Indianapolis, N.A., acting as agent for a group of banks (the "Bank"), which
provides for borrowings under a line of credit of up to $50 million. At March
31, 1996, the Company had approximately $9.6 million outstanding under its
agreement with the Bank. All of the Company's inventory and receivables are
pledged to the Bank as collateral, and the Company is prohibited from incurring
additional indebtedness, which could, under certain circumstances, limit the
Company's ability to implement its expansion. In addition to certain net worth
and other financial covenants, among other things, the Company's loan agreement
with the Bank limits or prohibits the Company, subject to certain exceptions,
from declaring or paying cash dividends, making capital distributions or other
payments to stockholders, merging or consolidating with another corporation or
selling all or substantially all of its assets. In the event of a violation by
the Company of any of its loan covenants or other default by the Company on its
obligations, the Bank could declare the Company's indebtedness to be immediately
due and payable and foreclose on the Company's assets. At March 31, 1996, the
Company was in compliance with the terms of its line of credit with the Bank.
There can be no assurance that the Company will be able to comply with the terms
of its loan agreement with the Bank in the future.
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<PAGE>
Management Information System. The Company's success is dependent on
the accuracy and proper utilization of its management information system. The
Company's ability to integrate its customer service, inventory management,
accounts receivable collections and product pricing information depends on the
quality and utilization of the information generated by such system. In an
effort to improve the availability and utility of the information provided to
management, the Company is in the process of installing and fully integrating a
customized management information system. The Company's expansion plans are
dependent to a significant extent on its ability to successfully implement and
integrate a new management information system in a timely manner and on a cost
effective basis and on the successful implementation of new software
applications. There can be no assurance that the Company will be able to
successfully implement and integrate such system or that such system will
provide management with satisfactory customer and inventory information. Failure
to implement, integrate, operate and maintain such system could severely limit
the Company's ability to continue to successfully expand its operations.
Dependence on Key Personnel. The success of the Company is largely
dependent on the personal efforts of Robert J. Laikin, its Chairman of the
Board, Chief Executive Officer and President; J. Mark Howell, its Executive Vice
President, Chief Operating Officer and Chief Financial Officer; T. Scott
Housefield, its Executive Vice President, Marketing, Sales and Development; John
R. Sullivan, its Executive Vice President, Operations; and other key personnel.
Although the Company has entered into employment agreements with each of Messrs.
Laikin, Howell, Housefield and Sullivan, the loss or interruption of the
services of such individuals or other key employees could have a material
adverse effect on the Company's business and prospects. The success of the
Company will also be dependent upon its ability to hire and retain additional
qualified sales, marketing and other personnel. Competition for qualified
personnel in the cellular industry is intense, and there can be no assurance
that the Company will be able to hire or retain additional qualified personnel.
Possible Medical Risks Associated with Portable Cellular Telephones.
Recent lawsuits have been filed against manufacturers of cellular telephones
alleging possible medical risks, including brain cancer, associated with
electromagnetic fields emitted by portable hand-held cellular telephones. To
date, there has been only limited research in this area, and such research has
not been conclusive as to what effects, if any, exposure to electromagnetic
fields emitted by portable cellular telephones has on human cells. The Company
recognizes, however, that the perception that health risks may exist could
adversely affect the Company's ability to market portable cellular telephone
products. Inasmuch as a substantial portion of the Company's revenues is derived
from sales of portable cellular telephones, future studies confirming possible
health risks associated with the use of such products could have a material
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<PAGE>
adverse effect on the cellular communications industry and the Company. As a
distributor of cellular telephones, the Company may be subject to lawsuits filed
by plaintiffs alleging health risks. A successful claim against the Company
could have a material adverse effect on the Company.
Classified Board of Directors; Authorization and Discretionary Issuance
of Preferred Stock. The Company's By-laws divide the Board of Directors into
three classes serving staggered three-year terms. The staggered Board of
Directors may make it more difficult for a third party to acquire, or may
discourage acquisition bids for, the Company. In addition, the Company's
Certificate of Incorporation authorizes the issuance of "blank check" preferred
stock with such designations, rights and preferences as may be determined from
time to time by the Board of Directors. Accordingly, the Board of Directors is
empowered, without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of the Company's Common Stock. In
the event of issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company.
No Cash Dividends. The Company has not paid any cash dividends on its
Common Stock (other than S corporation distributions made prior to its initial
public offering) and does not expect to declare or pay any cash dividends in the
foreseeable future. The payment of cash dividends is restricted under the terms
of the Company's loan agreement with the Bank.
Shares Eligible for Future Sale. As of the date of this Prospectus, the
Company has outstanding 8,594,685 shares of Common Stock, of which 7,881,180
shares of Common Stock are freely tradeable without restriction under the
Securities Act of 1933, as amended (the "Securities Act"). All of the remaining
713,505 shares outstanding are "restricted securities" (as that term is defined
under Rule 144 promulgated under the Securities Act). Of such restricted shares,
451,005 shares are eligible for sale under such rule. In addition, the Company
has outstanding options and warrants to purchase 1,020,467 shares of Common
Stock. No prediction can be made as to the effect, if any, that sales of shares
of Common Stock or the availability of such shares for sale will have on the
market prices prevailing from time to time. Nevertheless, the possibility that
substantial amounts of Common Stock may be sold in the public market may
adversely affect prevailing market prices for the Common Stock and could impair
the Company's ability to raise capital through the sale of its equity
securities.
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<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common
Stock by the Selling Stockholders. In the event that the shares of Common Stock
offered hereby are issued pursuant to the terms of the Warrants, of which there
can be no assurance, the Company would realize up to approximately $4.1 million
in net proceeds. Any net proceeds of such issuances will be used by the Company
for working capital and general corporate purposes. The Company has agreed to
pay certain expenses in connection with this offering, currently estimated to be
$20,000. In addition, pursuant to a separate agreement between HSN Direct, Inc.
("HSN"), one of the Selling Stockholders, and the Company, HSN has agreed to
reimburse the Company for certain expenses incurred in connection with a
marketing and distribution agreement. The amount of such reimbursement will be
based, in part, on the amount of proceeds realized by HSN in connection with the
sale of the shares offered hereby.
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION
An aggregate of up to 318,096 shares of Common Stock issuable upon
exercise of the Warrants may be sold pursuant to this Prospectus by the Selling
Stockholders. The Warrants are exercisable at a price of $13.05 per share at any
time until January 13, 2000. None of the Selling Stockholders has ever held any
executive position or office with the Company or had any other material
relationship with the Company. The Company will not receive any of the proceeds
from the sale of shares of Common Stock by the Selling Stockholders.
The following table sets forth certain information with respect to the
Selling Stockholders:
<TABLE>
<CAPTION>
Beneficial Ownership of
Shares of Common Stock Shares to be Sold Shares Owned After Percentage of Shares
Selling Stockholder Prior to Sale in the Offering the Offering Owned After the Offering
- ------------------- ----------------------- ------------------ ------------------ ------------------------
<S> <C> <C> <C> <C>
HSN Direct, Inc. 274,346 274,346 -- --
Ivan Rothstein 31,250 31,250 -- --
Eric Lefkowitz 12,500 12,500 -- --
</TABLE>
The Common Stock will be offered and sold from time to time as market
conditions permit in the over-the-counter market, or otherwise, at prices and
terms then prevailing or at prices related to the then-current market price, or
in negotiated transactions. The shares offered hereby may be sold by one or more
of the following methods, without limitation: (a) a block trade in which a
broker or dealer so engaged will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this Prospectus; (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
and (d) face-to-face transactions between sellers and purchasers without a
broker-dealer. In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate. Such
broker or dealers may receive commissions or discounts from Selling Stockholders
in amounts to be negotiated. Such brokers and dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Act, in connection with such sales.
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<PAGE>
INDEMNIFICATION
Section 145 of the General Corporation Law of the State of Delaware
provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorized Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director.
Section 102(b) of the Delaware Corporation Law permits a corporation, by
so providing in its certificate of incorporation, to eliminate or limit
director's liability to the corporation and its stockholders for monetary
damages arising out of certain alleged breaches of their fiduciary duty. Section
102(b)(7) provides that no such limitation of liability may affect a director's
liability with respect to any of the following: (i) breaches of the director's
duty of loyalty to the corporation or its stockholders; (ii) acts or omissions
not made in good faith or which involve intentional misconduct of knowing
violations of law; (iii) liability for dividends paid or stock repurchased or
redeemed in violation of the Delaware General Corporation Law; or (iv) any
transaction from with the director derived an improper personal benefit. Section
102(b)(7) does not authorize any limitation on the ability of the corporation or
its stockholders to obtain injunctive relief, specific performance or other
equitable relief against directors.
Article Nine of the Company's Certificate of Incorporation and the
Company's By-Laws provide that all persons who the Company is empowered to
indemnify pursuant to the provisions of Section 145 of the General Corporation
Law of the State of Delaware (or any similar provision or provisions of
applicable law at the time in effect), shall be indemnified by the Company to
the full extent permitted thereby. The foregoing right of indemnification shall
not be deemed to be exclusive of any other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors, or otherwise.
Article Ten of the Company's Certificate of Incorporation provides that no
director of the Company shall be personally liable to the Company or its
stockholders for any monetary damages for breaches of fiduciary duty of loyalty
to the Company or its stockholders (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law; (iii)
under Section 174 of the General Corporation Law of the State of Delaware; or
(iv) for any transaction from which the director derived an improper personal
benefit.
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Insofar as indemnification for liabilities under the Act 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
Commission, such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon for
the Company by Tenzer Greenblatt LLP, New York, New York.
EXPERTS
The financial statements and schedule of the Company at December 31, 1995
and 1994, and for the years then ended, incorporated by reference herein in this
Prospectus and Registration Statement, have been audited by Ernst & Young LLP,
independent auditors, and at December 31, 1993, and for the year then ended by
BDO Seidman LLP, independent auditors, as set forth in their respective reports
thereon incorporated by reference herein, and are included in reliance upon such
reports given upon the authority of such firms as experts in accounting and
auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission
("Commission") a Registration Statement with respect to the Securities offered
by this Prospectus. This Prospectus omits certain information contained in the
Registration Statement as permitted by the Rules and Regulations of the
Securities and Exchange Commission. For further information, reference is made
to the Registration Statement and to the Exhibits filed therewith, which may be
examined without charge at the Commission's principal office in Washington, D.C.
or its regional office in New York City, and copies of all or any part thereof
may be obtained from the Commission upon payment of certain fees prescribed by
the Commission. Statements contained in this Prospectus as to the contents of
any contract or other document referred to are not complete and where such
contract or other document is an exhibit to the Registration Statement, each
such statement is deemed to be qualified in all respects by the provisions of
the exhibit.
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No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and if given or made, such information or representations must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or the solicitation of an offer to buy any
security other than the shares offered by this Prospectus, or an offer to sell
or a solicitation of an offer to buy any security by any person in any
jurisdiction in which such offer or solicitation would be unlawful. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, imply that the information in this Prospectus is correct as of
any time subsequent to the date of this Prospectus.
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TABLE OF CONTENTS
Page
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Available Information...................................... 2
Information Incorporated by Reference..................... 2
Prospectus Summary......................................... 3
Risk Factors............................................... 7
Use of Proceeds............................................ 14
Selling Stockholders and Plan of
Distribution............................................. 14
Indemnification............................................ 15
Legal Matters.............................................. 16
Experts.................................................... 16
Additional Information..................................... 16
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318,096 Shares of
Common Stock
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BRIGHTPOINT, INC.
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PROSPECTUS
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July 9, 1996
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