As filed with the Securities and Exchange Commission on July 14, 2000
Registration No. 333-________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM S-3
REGISTRATION STATEMENT
Under The Securities Act of 1933
_______________________
COM21, INC.
(Exact name of Registrant as specified in its charter)
_______________________
Delaware 94-3201698
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification Number)
750 Tasman Drive
Milpitas, California 95053
(408) 953-9100
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
_______________________
Peter D. Fenner
President and Chief Executive Officer
Com21, Inc.
750 Tasman Drive
Milpitas, California 95053
(408) 953-9100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
_______________________
Copies to:
Michael S. Dorf, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
One Market
Spear Street Tower
San Francisco, CA 94105
(415) 947-2000
_______________________
Approximate date of commencement of proposed sale to the public: From time to
time after this registration statement becomes effective.
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. [_]
<TABLE>
CALCULATION OF REGISTRATION FEE
_____________________________________________________________________________
<S> <C> <C> <C> <C>
Proposed Proposed
Maximum Maximum
Title of Each Class Amount Offering Aggregate Amount of
of Securities to to be Price Offering Registration
be Registered Registered Per Share Price (1) Fee
_____________________________________________________________________________
Common Stock
$0.001 par value
per share 2,281,720 $28.75 $65,599,450 $17,319
_____________________________________________________________________________
</TABLE>
(1) The price of $28.75, the average of the high and low prices of Com21's
common stock on the Nasdaq Stock Market's National Market on July 10, 2000, is
set forth solely for the purpose of computing the registration fee pursuant to
Rule 457(c).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
=============================================================================
THE INFORMATION CONTAINED IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE
AND MAY BE CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE.
THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED ________, 2000
PRELIMINARY PROSPECTUS
2,281,720 Shares
COM21, INC.
Common Stock
This prospectus relates to the public offering, which is not being
underwritten, of up to 2,281,720 shares of our common stock which is held
by some of our current shareholders. These shareholders acquired these
shares in a private transaction in which we acquired all of the ordinary
shares of GADline, Ltd.
The prices at which such shareholders may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions. We will not receive any of the proceeds from the sale of
the shares.
Our common stock is quoted on the Nasdaq National Market under the symbol
"CMTO." On July 10, 2000, the closing bid price for our common stock was
$30.375.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE THE SECTIONS ENTITLED
"RISK FACTORS" IN THE DOCUMENTS WE FILE WITH THE SECURITIES AND EXCHANGE
COMMISSION THAT ARE INCORPORATED BY REFERENCES IN THIS PROSPECTUS FOR
CERTAIN RISKS AND UNCERTAINTIES THAT YOU SHOULD CONSIDER.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon
the adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.
The date of this prospectus is _______, 2000.
No person has been authorized to give any information or to make any
representations other than those contained in this prospectus in
connection with the offering made hereby, and if given or made, such
information or representations must not be relied upon as having been
authorized by Com21, Inc. (referred to in this prospectus as "Com21" or
the "Registrant"), any selling shareholder or by any other person.
Neither the delivery of this prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that information
herein is correct as of any time subsequent to the date hereof. This
prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any security other than the securities covered by this
prospectus, nor does it constitute an offer to or solicitation of any
person in any jurisdiction in which such offer or solicitation may not
lawfully be made.
THE COMPANY
Com21's principal executive offices are located at 750 Tasman Drive,
Milpitas, California 95053. Com21's telephone number is (408) 953-9100.
RISK FACTORS
You should carefully consider the following risks, as well as the other
information included or incorporated by reference in this prospectus,
before deciding whether you wish to purchase any of the shares offered
hereby.
Com21's operating results in one or more future periods are likely to
fluctuate significantly and may fail to meet or exceed the expectations
of securities analysts or investors.
Com21's operating results are likely to fluctuate significantly in the
future on a quarterly and an annual basis due to a number of factors,
many of which are outside Com21's control. Factors that could cause
Com21's revenues to fluctuate include the following: key component
shortages or failures from Com21's suppliers in providing necessary
materials; delays in introducing standards based products that are
certified as meeting the specifications of various approval
organizations; variations in the timing of orders and shipments of
Com21's products; variations in the size of orders by Com21's customers;
new product introductions by Com21 or by competitors; the timing of
upgrades of cable plants; variations in capital spending budgets of cable
operators; delays in obtaining regulatory approval for commercial
deployment of cable modem systems; and general economic conditions and
economic conditions specific to the cable and electronic data
transmission industries. The amount and timing of Com21's operating
expenses generally will vary from quarter to quarter depending on the
level of actual and anticipated business activities. Research and
development expenses will vary as Com21 develops new products. Com21 has
a limited backlog of orders, and total revenues for any future quarter
are difficult to predict. Supply, manufacturing or testing constraints
could result in delays in the delivery of Com21's products. Any delay in
the product deployment schedule of one or more of Com21's cable operator
customers would likely materially adversely affect Com21's operating
results for a particular period. A variety of factors affect Com21's
gross margin, including the following: the sales mix within a product
group, e.g. proprietary vs. DOCSIS modems; component prices Com21 secures
from its vendors; the average selling prices of Com21's products; the
effectiveness of Com21's cost reduction efforts; the sales mix between
Com21's headend equipment and cable modems; the volume of products
manufactured; and the distribution channel or customer mix. In the past
Com21 has experienced declines in the average selling price of its cable
modems and headend equipment. Com21 expects average sales prices of its
modems and headend equipment will continue to show decreases to meet
competitive pressures, especially those pressures related to the
introduction of DOCSIS and other standard based modems. In addition, the
sales mix between Com21's headend equipment and modems also affects its
gross margin. Sales of Com21's cable modems yield lower gross margins
than do sales of its headend equipment, and sales of its DOCSIS cable
modems currently yield lower margins than do sales of its proprietary
cable modems. Com21 anticipates that its sales mix will continue to be
weighted toward cable modems during 2000 and increasingly toward DOCSIS
cable modems. If the price declines are not offset by a decline in the
costs of manufacturing its cable modems or an increase in sales of higher
margin telephone and office cable modems, Com21's gross margin will be
adversely affected. Because of these factors, Com21's operating results
in one or more future periods may not meet or exceed the expectations of
securities analysts or investors. In that event, the trading price of
Com21's Common Stock would likely decline.
Com21 may not be able to produce sufficient quantities of its products
because it obtains certain components from, and depends on, certain key
sole suppliers.
Certain parts, components and equipment used in Com21's products are
obtained from sole sources of supply. Com21's cable modems include sole-
sourced chipsets, filters and other materials. Additional sole-sourced
components may be incorporated into Com21's equipment in the future.
Com21 is currently experiencing shortages of certain key components for
its modems and headend equipment. In order to fulfill demand for its
products Com21 has made purchases of these components on the spot market
at a price that is higher than it has experienced in the past. If Com21
is unable to purchase these key components at a high enough volume to
meet demand, it will be unable to produce enough cable modems and headend
equipment to meet its production and delivery schedules. Com21 does not
have any long term supply contracts to ensure sources of supply. If it
fails to obtain components in sufficient quantities when required, its
business could be harmed. Com21's suppliers may enter into exclusive
arrangements with its competitors, stop selling their products or
components to Com21 at commercially reasonable prices or refuse to sell
their products or components to Com21 at any price. Com21's inability to
obtain sufficient quantities of sole-sourced components, or to develop
alternative sources for components and/or products would materially
adversely affect its business. Additionally, Com21 currently has
relationships with third parties to OEM certain cable modem products. If
these relationships are not maintained or are terminated and the supply
of these OEM products is halted, its business may be adversely affected.
If any manufacturers or other sole source suppliers delay or halt
production of any of their components, Com21's business, operating
results and financial condition could be materially adversely affected.
Competition for qualified personnel in the cable networking equipment and
telecommunications industries is intense, and Com 21 may not be
successful in attracting and retaining these personnel.
Com21's future success will depend, to a significant extent, on the
ability of its management to operate effectively, both individually and
as a group. Com21 is dependent on its ability to retain and motivate high
caliber personnel, in addition to attracting new personnel. Competition
for qualified personnel in the cable networking equipment and
telecommunications industries is extremely intense, especially in the San
Francisco Bay Area, and Com21 may not be successful in attracting and
retaining such personnel. Com21 expects to add additional personnel in
the near future. There may be only a limited number of people with the
requisite skills to serve in those positions and it may become
increasingly difficult to hire these people. Com21 is actively searching
for research and development engineers, who are in short supply. Com21's
business will suffer if it encounters delays in hiring additional
engineers. In response to the intense competition for qualified personnel
in the San Francisco Bay Area, Com21 has opened up a research facility in
Ireland and a customer service center in The Netherlands and may set up
additional centers in remote locations. If it is unable to effectively
manage and coordinate these development and customer service activities
in these widely dispersed areas its business may be adversely affected.
Competitors and others have in the past and may in the future attempt to
recruit Com21's employees. Com21 does not have employment contracts with
any of its key personnel. It does not maintain key person life insurance
on its key personnel. The loss of the services of any of its key
personnel, the inability to attract or retain qualified personnel in the
future or delays in hiring required personnel, particularly engineers,
could negatively affect Com21's business.
Com21 has a short operating history, has incurred net losses since its
inception and expects to incur losses in the future.
Com21 did not commence product shipments until April 1997. As a result,
it has only a limited operating history upon which you may evaluate its
prospects. Com21 has incurred net losses since inception and expects to
continue to operate at a loss through at least fiscal 2000. To achieve
profitable operations in the future, Com21 must successfully design,
develop, test, manufacture, introduce, market and distribute its products
on a broad commercial basis. Com21's ability to generate future revenues
will depend on a number of factors, many of which are beyond its control.
These factors include the following: the rate at which cable operators
upgrade their cable plants; Com21's ability and the ability of cable
operators to coordinate timely and effective marketing campaigns with the
availability of upgrades; cable operators' success in marketing data-
over-cable services and Com21's modems to subscribers; cable operators'
success in setting prices for data transmission installation service; and
cable operators' success and timeliness in the installation of subscriber
site equipment. Due to these factors, Com21 cannot forecast with any
degree of accuracy what its revenues will be or how quickly cable
operators will adopt its systems. Therefore, Com21 may not achieve, or be
able to sustain, profitability.
Com21 may not be able to produce sufficient quantities of its products
because Com21 depends on third-party manufacturers, their suppliers and
OEM suppliers and has limited manufacturing experience.
Com21 contracts for the manufacture of cable modems and integrated
circuit boards on a turnkey basis. Its future success will depend, in
significant part, on its ability to have others manufacture its products
cost-effectively, in sufficient volumes and to meet production and
delivery schedules. A number of risks are associated with Com21's
dependence on third-party manufacturers including: failure to meet
Com21's delivery schedules; quality assurance; manufacturing yields and
costs; the potential lack of adequate capacity during periods of excess
demand; difficulty in planning mix of units to be produced by
manufacturer; increases in prices and the potential misappropriation of
Com21's intellectual property. Any manufacturing disruption could impair
Com21's ability to fulfill orders. Com21 has no long-term contracts or
arrangements with any of its vendors that guarantee product availability,
the continuation of particular payment terms or the extension of credit
limits. Com21 may experience manufacturing or supply problems in the
future. Com21 is dependent on its manufacturers to secure components at
favorable prices, but Com21 may not be able to obtain additional volume
purchase or manufacturing arrangements on terms that it considers
acceptable, if at all. Any such difficulties could harm Com21's
relationships with customers.
Both Com21's proprietary products and its standards based products are
subject to evolving industry standards. If its products do not comply
with any standard that achieves market acceptance, customers may refuse
to purchase its products.
The DOCSIS standard has achieved substantial market acceptance in North
America. Conformance with the DOCSIS standard is being determined through
certification tests performed by CableLabs. As Com21 continues to
enhance current DOCSIS products and develop new products and as the
evolution of the DOCSIS standard continues Com21 may incur additional
costs associated with making its cable modems compliant with various
versions of the DOCSIS standard. Additionally, Com21 cannot assure you
that future enhancements or new DOCSIS product offerings will be
CableLabs certified according to Com21's anticipated schedule, or that if
certified, will meet with market acceptance. The emergence or evolution
of industry standards, either through adoption by official standards
committees or widespread use by cable operators or telephone companies
could require Com21 to redesign current products. There is movement by
some cable operators in Europe towards either a DVB or EuroDOCSIS
standard. Com21 currently has DVB products that it OEMs from a third
party supplier, but it cannot assure you that its DVB products will meet
the evolving DVB specifications. Additionally, Com21 cannot assure you
that if a EuroDOCSIS standard obtains widespread acceptance, Com21 will
be able to design and produce a EuroDOCSIS modem that meets EuroDOCSIS
specifications. The widespread adoption of DOCSIS, DVB, EuroDOCSIS or
other standards outside North America could cause aggressive competition
in the cable modem market and result in lower sales of Com21's
proprietary headend products and lower revenues from licensing of its
network management software. Any of these events would adversely affect
Com21's gross margin and its operating results. The development of new
competing technologies and standards increases the risk that current or
new competitors could develop products that would reduce the
competitiveness of Com21's products. If any of these new technologies or
standards achieve widespread market acceptance, any failure by Com21 to
develop new products or enhancements, or to address these new
technologies or standards, would harm its business.
Com21's future success will depend in part upon its ability to enhance
its existing products and to develop and introduce, on a timely basis,
new products and features that meet changing customer requirements and
emerging industry standards.
The market for cable modem systems and products is characterized by
rapidly changing technologies and short product life cycles. Com21's
future success will depend in large part upon its ability to: identify
and respond to emerging technological trends in the market; develop and
maintain competitive products; enhance its products by adding innovative
features that differentiate its products from those of its competitors;
bring products to market on a timely basis at competitive prices; and
respond effectively to new technological changes or new product
announcements by others. If Com21's product development and enhancements
take longer than planned, the availability of products would be delayed.
Com21's future success will depend in part upon its ability to enhance
its existing products and to develop and introduce, on a timely basis,
new products and features that meet changing customer requirements and
evolving and emerging industry standards. The technical innovations
required for Com21 to remain competitive are inherently complex, require
long development cycles, are dependent in some cases on sole source
suppliers and require Com21, in some cases, to license technology from
others. Com21 must continue to invest in research and development to
attempt to maintain and enhance its existing technologies and products,
but it may not have the funds available to do so. Even if Com21 has
sufficient funds, these investments may not serve the needs of customers
or be compatible with changing technological requirements or standards.
Most expenses must be incurred before the technical feasibility or
commercial viability can be ascertained. Revenues from future products or
product enhancements may not be sufficient to recover the development
costs associated with the products or enhancements.
Com21 relies on indirect distribution channels for its products and needs
to develop additional distribution channels.
Today, cable operators and systems integrators purchase cable modems from
vendors through direct and indirect sales channels. In North America, due
to the DOCSIS standard achieving widespread market acceptance, Com21
anticipates that the North American cable modem market will shift to a
consumer purchase model. If this occurs, Com21 will sell more of our
cable modems directly through consumer sales channels. Com21's success
will be dependent on its ability to market effectively to end users, to
establish brand awareness, to set up the required channels of
distribution and to have cable operator's reference sell its products.
Consequently, Com21 has begun to establish new distribution channels for
its cable modems. Com21 may not have the capital required or the
necessary personnel, or expertise to develop these distribution channels,
which could materially adversely affect its business, operating results
and financial condition. To the extent that large consumer electronics
companies enter the cable modem market, their well-established retail
distribution capabilities would provide them with a significant
competitive advantage.
The market in which Com21 sells its products is characterized by many
competing technologies, and the technology on which its product is based
may not compete effectively against other technologies.
The market for high-speed data transmission services has several
competing technologies which offer alternative solutions. Technologies
which compete with Com21's solution are: (i) telephone company-related
wireline technologies such as: dial-up (analog modems); digital
subscriber line, known as DSL, ADSL, among others; and integrated
services digital network, known as ISDN; (ii) wireless technologies such
as: local multipoint distribution service, known as LMDS; multi-channel
multipoint distribution service, commonly known as MMDS; and direct
satellite; and (iii) fiber optic technologies such as: fiber to a
residence; and fiber to a multi-dwelling unit. Because of the widespread
reach of telephone networks and the financial resources of telephone
companies, competition from telephone company-related solutions is
expected to be intense. Cable modem technology may not be able to compete
effectively against wireline or wireless technologies. In addition, one
of Com21's competitors has developed a commercially available alternative
modulation technology. Significant market acceptance of alternative
solutions for high-speed data transmission could decrease the demand for
Com21's products if these alternatives are viewed as providing faster
access, greater reliability, increased cost-effectiveness or other
advantages.
Com21's market is highly competitive and has many more established
competitors.
The market for Com21's products is intensely competitive, rapidly
evolving and subject to rapid technological change. Many of its current
and potential competitors have been operating longer, have better name
recognition, more established business relationships and significantly
greater financial, technical, marketing and distribution resources than
Com21 does. These competitors may undertake more extensive marketing
campaigns, adopt more aggressive pricing policies and devote
substantially more resources to developing new or enhanced products than
Com21 does.
The sales cycle for Com21's products is lengthy.
The sales cycle associated with Com21's products is typically lengthy,
generally lasting from three to six months. Its customers, typically,
conduct significant technical evaluations of competing technologies prior
to the commitment of capital and other resources. In addition, purchasing
decisions may be delayed because of Com21's customers' internal budget
approval procedures. Sales are generally subject to customer trials,
which typically last three months. Because of the lengthy sales cycle and
the large size of customers' orders, if orders forecasted for a specific
customer for a particular quarter do not occur in that quarter, Com21's
operating results for that quarter could suffer.
Com21 must reduce the cost of its cable modems to remain competitive.
Certain of Com21's competitors' cable modems are priced lower than
Com21's cable modems. As headend equipment becomes more widely deployed,
the price of cable modems and related equipment will continue to decline.
In particular, the adoption of industry standards, such as the DOCSIS
standard in North America, has caused increased price competition for
cable modems. Com21 may not be able to continually reduce the costs of
manufacturing its cable modems sufficiently to enable Com21 to lower its
modem prices and compete effectively with other cable modem suppliers. If
Com21 is unable to reduce the manufacturing costs of its cable modems,
Com21's gross margin and operating results would be harmed.
Com21's failure to adequately protect its proprietary rights may
adversely affect it.
Com21 relies on a combination of patent, copyright and trademark laws,
and on trade secrets and confidentiality provisions and other contractual
provisions to protect its proprietary rights. These measures afford only
limited protection. Com21's means of protecting its proprietary rights in
the U.S. or abroad may not be adequate and competitors may independently
develop similar technologies. Com21's future success will depend in part
on its ability to protect its proprietary rights and the technologies
used in its principal products. Despite Com21's efforts to protect its
proprietary rights, unauthorized parties may attempt to copy aspects of
its products or to obtain and use trade secrets or other information that
Com21 regards as proprietary. In addition, the laws of some foreign
countries do not protect Com21's proprietary rights as fully as do the
laws of the U.S. Issued patents may not preserve Com21's proprietary
position. Even if they do, competitors or others may develop technologies
similar to or superior to those of Com21. If Com21 does not enforce and
protect its intellectual property, its business will be harmed. From time
to time, third parties, including Com21's competitors, have asserted
patent, copyright and other intellectual property rights to technologies
that are important to Com21. Com21 expects that it will increasingly be
subject to infringement claims as the number of products and competitors
in the cable modem market grows and the functionality of products
overlaps. The results of any litigation matter are inherently uncertain.
In the event of an adverse result in any litigation with third parties
that could arise in the future, Com21 could be required to pay
substantial damages, including treble damages if it is held to have
willfully infringed, to halt the manufacture, use and sale of infringing
products, to expend significant resources to develop non-infringing
technology, or to obtain licenses to the infringing technology. Licenses
may not be available from any third party that asserts intellectual
property claims against Com21, on commercially reasonable terms, or at
all. In addition, litigation frequently involves substantial expenditures
and can require significant management attention, even if Com21
ultimately prevails. There can be no assurance that Com21 would be able
to successfully resolve legal disputes in the future.
Com21's failure to manage growth could adversely affect it.
Com21 has rapidly and significantly expanded its operations and
anticipate that further significant expansion will be required to address
potential growth in its customer base and market opportunities. To manage
the anticipated growth of its operations, Com21 will be required to:
improve existing and implement new operational, financial and management
information controls, reporting systems and procedures; hire, train and
manage additional qualified personnel; expand and upgrade its core
technologies; and effectively manage multiple relationships with its
customers, suppliers and other third parties. Com21 competes for skilled
personnel in a labor market where there is a shortage of qualified
personnel and salary demands are above the norm. Com21 must be able to
continue to recruit and retain personnel, and failure to do so would
result in Com21 not meeting its anticipated growth goals. In addition,
Com21's management team may not be able to achieve the rapid execution
necessary to fully exploit the market for its products and services.
Com21 may not be able to install management information and control
systems in an efficient and timely manner, and its current or planned
personnel, systems, procedures and controls may not be adequate to
support its future operations. In the future, Com21 may experience
difficulties meeting the demand for its products and services. The
installation and use of Com21's products requires training. If Com21 is
unable to provide training and support for its products, the
implementation process will be longer and customer satisfaction may be
lower. Com21 cannot assure you that its systems, procedures or controls
will be adequate to support the anticipated growth in its operations. Any
failure to manage growth effectively could materially adversely affect
its business, operating results and financial condition.
Com21 depends on strategic relationships.
Com21's business strategy relies to a significant extent on its strategic
relationships with other companies. These relationships include: software
license arrangements for its network management system; technology
licensing agreements for certain products; development and OEM
arrangements with certain suppliers for advanced products; marketing
arrangements with system integrators, and others; and collaboration
agreements with suppliers of routers and headend equipment to ensure the
interoperability of Com21's cable modems with these suppliers. These
relationships may not be successful because Com21 may not be able to
continue to maintain, develop or replace them in the event any of these
relationships are terminated. In addition, any failure to renew or extend
any licenses between any third party and Com21 may adversely affect
Com21's business.
Com21's customer base is concentrated and the loss of one or more of its
customers could cause its business to suffer.
A relatively small number of customers (which include system integrators)
have accounted for a large part of Com21's revenues to date, and Com21
expects that this trend will continue. Com21 expects that its largest
customers in the future could be different from its largest customers
today due to a variety of factors, including customers' deployment
schedules and budget considerations. In addition, certain of Com21's
system integrators could develop and manufacture products that compete
with Com21 and therefore could no longer distribute its products. Because
a limited number of cable operators account for a majority of Com21's
prospective customers, its future success will depend upon its ability to
establish and maintain relationships with these companies. Com21 may not
be able to retain its current accounts or to obtain additional accounts.
Both in the U.S. and internationally, a substantial majority of
households passed are controlled by a relatively small number of cable
operators. The loss of one or more of Com21's customers or its inability
to successfully develop relationships with other significant cable
operators could cause Com21's business to suffer.
Com21 is subject to risks associated with operating in international
markets.
Com21 expects that a significant portion of its sales will continue to be
in international markets for the foreseeable future. Com21 intends to
expand operations in its existing international markets and to enter new
international markets, which will demand management attention and
financial commitment. In addition, a successful expansion of its
international operations and sales in certain markets will require Com21
to develop relationships with international systems integrators and
distributors. Com21 may not be able to identify, attract or retain
suitable international systems integrators or distributors. Com21 may not
be able to successfully expand its international operations. Furthermore,
to increase revenues in international markets, Com21 will need to
continue to establish foreign operations, to hire additional personnel to
run these operations and to maintain good relations with its foreign
systems integrators and distributors. To the extent that Com21 is unable
to successfully do so, its growth in international sales will be limited
and its operating results could be adversely affected. Com21's
international sales to date have been denominated in U.S. dollars. Com21
does not currently engage in any foreign currency hedging transactions. A
decrease in the value of foreign currencies relative to the U.S. dollar
could make Com21's products more expensive in international markets. In
addition to currency fluctuation risks, international operations involve
a number of risks not typically present in domestic operations,
including: changes in regulatory requirements; costs and risks of
deploying systems in foreign countries; licenses, tariffs and other trade
barriers; political and economic instability; difficulties in staffing
and managing foreign operations; potentially adverse tax consequences;
difficulties in obtaining governmental approvals for products; the burden
of complying with a wide variety of complex foreign laws and treaties;
and the possibility of difficult accounts receivable collections. Com21
is also subject to the risks associated with the imposition of
legislation and regulations relating to the import or export of high
technology products. Com21 cannot predict whether charges or restrictions
upon the importation or exportation of its products will be implemented
by the U.S. or other countries. Future international activity may result
in sales denominated in foreign currencies. Gains and losses on the
conversion to U.S. dollars of accounts receivable, accounts payable and
other monetary assets and liabilities arising from international
operations may contribute to fluctuations in Com21's operating results.
Any of these factors could materially and adversely affect its business,
operating results and financial condition.
Com21 may be subject to risks associated with acquisitions.
Com21 continually evaluates strategic acquisitions of other businesses.
If Com21 were to consummate an acquisition, it would be subject to a
number of risks, including: difficulty in assimilating the acquired
operations and personnel; limits on its ability to retain the acquired
subscribers; risks of entering markets in which Com21 has no or limited
direct prior experience and where competitors in such markets have
stronger market positions; disruption of Com21's ongoing business; and
limits on Com21's ability to successfully incorporate acquired technology
and rights into its service offerings and maintain uniform standards,
controls, procedures, and policies. Com21 may not be able to successfully
overcome problems encountered with potential acquisitions. In addition,
an acquisition could materially adversely affect its operating results by
diluting its stockholders' equity, causing Com21 to incur additional
debt, or requiring it to amortize acquisition expenses and acquired
assets.
Com21 faces risks from the uncertainties of the Internet.
There are currently few laws or regulations that apply directly to access
or commerce on the Internet. Com21 could be materially adversely affected
by regulation in any country where it operates, on such technology as
voice over the Internet, encryption technology and access charges for
Internet service providers. The adoption of such measures could decrease
demand for Com21's products, and at the same time increase its cost of
selling its products. Changes in laws or regulations governing the
Internet and Internet commerce could have a material adverse effect on
Com21's business, operating results and financial condition.
The industry in which Com21 competes is subject to consolidation.
There has been a trend toward industry consolidation for several years.
Com21 expects this trend toward industry consolidation to continue as
companies attempt to strengthen or hold their market positions in an
evolving industry. Com21 believes that industry consolidation may provide
increasingly stronger competitors that are better able to compete as
sole-source vendors for customers. This could lead to more variability in
operating results as Com21 competes to be a single vendor solution and
could have a material adverse effect on its business, operating results
and financial condition. Additionally Com21 believes that industry
consolidation may lead to fewer potential customers. If Com21 is unable
to maintain its current customers or secure additional customers its
business could be adversely affected.
Com21 may be subject to product returns and product liability claims due
to defects in its products.
Com21's products are complex and may contain undetected defects, errors
or failures. These errors have occurred in its products in the past and
additional errors may be expected to occur in its products in the future.
The occurrence of any defects, errors, or failures could result in delays
in installation, product returns and other losses to Com21 or to its
cable operators or end-users. Any of these occurrences could also result
in the loss of or delay in market acceptance of its products, which could
have a material adverse effect on its business, operating results and
financial condition. Com21 would have limited experience with the
problems that could arise with any new products that it introduces.
Although Com21 has not experienced any product liability claims to date,
the sale and support of its products entail the risk of these claims. A
successful product liability claim brought against Com21 could have a
material adverse effect on its business, operating results and financial
condition.
The location of Com21's facilities subjects it to the risk of earthquakes
and other natural disasters.
Com21's corporate headquarters, including most of its research and
development operations and its in-house manufacturing facilities, are
located in the Silicon Valley area of Northern California, a region known
for seismic activity. A significant natural disaster in the Silicon
Valley, such as an earthquake, could have a material adverse impact on
Com21's business, financial condition and operating results.
Com21's stock price is highly volatile and broad market fluctuations may
adversely affect the market price of its Common Stock.
The trading price of Com21's Common Stock has fluctuated significantly
since its initial public offering in May 1998. In addition, the trading
price of its Common Stock could be subject to wide fluctuations in
response to quarterly variations in operating results, announcements of
technological innovations or new products by Com21 or its competitors,
announcements by certification and standards bodies, developments with
respect to patents or proprietary rights, changes in financial estimates
by securities analysts and other events or factors. In addition, the
stock market has experienced volatility that has particularly affected
the market prices of equity securities of many high technology companies
and that often has been unrelated or disproportionate to the operating
performance of these companies. These broad market fluctuations may
adversely affect the market price of Com21 Common Stock. Additionally,
Com21 may choose to structure acquisitions or other transactions by
issuing additional Com21 Common Stock that would have a dilutive affect
on the Common Stock currently outstanding. Although Com21 anticipates
these types of transactions will increase the overall value of Com21,
Inc., they may have an adverse affect on the market price of its Common
Stock.
FORWARD-LOOKING STATEMENTS
Com21 has made forward-looking statements in this document and the
documents incorporated by reference herein that are subject to risks and
uncertainties. These statements are based on management's beliefs and
assumptions, based on information currently available to management.
Forward-looking statements include, but are not limited to, information
concerning possible future results of operations of Com21 set forth under
the section entitled "Risk Factors." Statements in this document and the
documents incorporated herein by reference preceded by, followed by or
that include the words "believes," "expects," "anticipates," "intends,"
"plans," "estimates," "should" or similar expressions identify forward-
looking statements.
Forward-looking statements are not guarantees of performance. They
involve risks, uncertainties and assumptions. The future results and
shareholder values of Com21 may differ materially from those expressed in
these forward-looking statements. Many of the factors that will
determine these results and values are beyond Com21's ability to control
or predict. Shareholders are cautioned not to put undue reliance on any
forward-looking statements. In addition, Com21 does not have any
intention or obligation to update forward-looking statements after the
date of this prospectus even if new information, future events or other
circumstances have made them incorrect or misleading. For those
statements, Com21 claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995.
In evaluating the exchange, you should carefully consider the discussion
of risks and uncertainties in the section entitled "Risk Factors" in this
prospectus and in the documents incorporated by reference herein.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at
the SEC's Public Reference Room 15 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the Public Reference Room. Our SEC
filings are also available to the public from our web site at
sttp://www.Com21.com or at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus, and later
information filed with the SEC will update and supersede this
information. We incorporate by reference the documents listed below and
any future filings made with the SEC under Section 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934 until our offering is
completed.
(a) Com21's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 filed March 24, 2000, including certain information
in Com21's Definitive Proxy Statement in connection with Com21's 2000
Annual Meeting of Shareholders;
(b) Com21's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2000 filed May 15, 2000;
(c) COM21's Current Report on Form 8-K filed April 24,
2000; and
(d) The description of Com21 Common Stock contained in its
registration statement on Form 8-A filed April 8, 1998, including any
amendments or reports filed for the purpose of updating such
descriptions.
You may request a copy of these filings, at no cost, by writing to
telephoning us at the following address:
David Robertson
Chief Financial Officer
Com21, Inc.
750 Tasman Drive
Milpitas, CA 95053
(408) 953-9100
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have
authorized no one to provide you with different information. We are
not making an offer of these securities in any state where the offer is
not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date
other than the date on the front of the document.
USE OF PROCEEDS
Com21 will not receive any of the net proceeds from the sale of the
shares of Com21 common stock offered hereby, all of which proceeds will
be received by the selling shareholders.
PLAN OF DISTRIBUTION
Com21 is registering all 2,281,720 shares on behalf of certain selling
shareholders. All of the shares were issued by us in connection with our
acquisition of GADline, Ltd. Com21 acquired all of the outstanding
ordinary shares of GADline, and GADline is now a wholly-owned subsidiary
of Com21. Com21 will receive no proceeds from this offering. The
selling shareholders named in the table below or pledgees, donees,
transferees or other successors-in-interest selling shares received from
a named selling shareholder as a gift, partnership distribution or other
non-sale-related transfer after the date of this prospectus
(collectively, the "Selling Shareholders") may sell the shares from time
to time. The Selling Shareholders will act independently of Com21 in
making decisions with respect to the timing, manner and size of each
sale. The sales may be made on one or more exchanges or in the over-the-
counter market or otherwise, at prices and at terms then prevailing or at
prices related to the then current market price, or in negotiated
transactions. The Selling Shareholders may effect such transactions by
selling the shares to or through broker-dealers. The shares may be sold
by one or more of, or a combination of, the following:
- a block trade in which the broker-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,
- purchases by a broker-dealer as principal and resale by
such broker-dealer for its account pursuant to this prospectus,
- an exchange distribution in accordance with the rules of
such exchange,
- ordinary brokerage transactions and transactions in which
the broker solicits purchasers, and
- in privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented
from time to time to describe a specific plan of distribution. In
effecting sales, broker-dealers engaged by the Selling Shareholders may
arrange for other broker-dealers to participate in the resales.
The Selling Shareholders may enter into hedging transactions with broker-
dealers in connection with distributions of the shares or otherwise. In
such transactions, broker-dealers may engage in short sales of the shares
in the course of hedging the positions they assume with Selling
Shareholders. The Selling Shareholders also may sell shares short and
redeliver the shares to close out such short positions. The Selling
Shareholders may enter into option or other transactions with broker-
dealers which require the delivery to the broker-dealer of the shares.
The broker-dealer may then resell or otherwise transfer such shares
pursuant to this prospectus. The Selling Shareholders also may loan or
pledge the shares to a broker-dealer. The broker-dealer may sell the
shares so loaned, or upon a default the broker-dealer may sell the
pledged shares pursuant to this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Shareholders. Broker-
dealers or agents may also receive compensation from the purchasers of
the shares for whom they act as agents or to whom they sell as
principals, or both. Compensation as to a particular broker-dealer might
be in excess of customary commissions and will be in amounts to be
negotiated in connection with the sale. Broker-dealers or agents and any
other participating broker-dealers or the Selling Shareholders may be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act in connection with sales of the shares. Accordingly, any
such commission, discount or concession received by them and any profit
on the resale of the shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act. Because
Selling Shareholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, the Selling Shareholders
will be subject to the prospectus delivery requirements of the Securities
Act. In addition, any securities covered by this prospectus which
qualify for sale pursuant to Rule 144 promulgated under the Securities
Act may be sold under Rule 144 rather than pursuant to this prospectus.
The Selling Shareholders have advised Com21 that they have not entered
into any agreements, understandings or arrangements with any underwriters
or broker-dealers regarding the sale of their securities. There is no
underwriter or coordinating broker acting in connection with the proposed
sale of shares by Selling Shareholders.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition,
in certain states the shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is
complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares may not simultaneously engage
in market making activities with respect to our common stock for a period
of two business days prior to the commencement of such distribution. In
addition, each Selling Shareholder will be subject to applicable
provisions of the Exchange Act and the associated rules and regulations
under the Exchange Act, including Regulation M, which provisions may
limit the timing of purchases and sales of shares of our common stock by
the Selling Shareholders. Com21 will make copies of this prospectus
available to the Selling Shareholders and has informed them of the need
for delivery of copies of this prospectus to purchasers at or prior to
the time of any sale of the shares.
Com21 will file a supplement to this prospectus, if required, pursuant to
Rule 424(b) under the Securities Act upon being notified by a Selling
Shareholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares through a block trade, special
offering, exchange distribution or secondary distribution or a purchase
by a broker or dealer. Such supplement will disclose:
- the name of each such Selling Shareholder and of the
participating broker-dealer(s),
- the number of shares involved,
- the price at which such shares were sold,
- the commissions paid or discounts or concessions allowed
to such broker-dealer(s), where applicable,
- that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated
by reference in this prospectus, and
- other facts material to the transaction.
Com21 will bear all costs, expenses and fees in connection with the
registration of the shares. The Selling Shareholders will bear all
commissions and discounts, if any, attributable to the sales of the
shares. The Selling Shareholders may agree to indemnify any broker-
dealer or agent that participates in transactions involving sales of the
shares against certain liabilities, including liabilities arising under
the Securities Act.
SELLING SHAREHOLDERS
The following table sets forth the number of shares owned by each of the
Selling Shareholders. None of the Selling Shareholders has had a
material relationship with Com21 within the past three years other than
as a result of the ownership of the shares or other securities of Com21
or as a result of their employment with Com21 as of the date of the
closing of the acquisition of GADline. No estimate can be given as to
the amount of shares that will be held by the Selling Shareholders after
completion of this offering because the Selling Shareholders may offer
all or some of the shares and because there currently are no agreements,
arrangements or understandings with respect to the sale of any of the
shares. The shares offered by this prospectus may be offered from time
to time by the Selling Shareholders named below.
<TABLE>
<S> <C> <C> <C>
Number of
Percent of Shares
Number of Shares Outstanding Registered for
Name of Selling Shareholder Beneficially Owned Shares (1) Sale Hereby (2)
___________________________ __________________ ____________ _______________
Gidon Tahan 443,353 1.83% 443,353
David Cohen 443,353 1.83% 443,353
William C. Mattison, Jr. 19,758 * 19,758
Bear Stearns Securities
Corporation as Custodian
for William C. Mattison,
Jr. IRA R/O 6,585 * 6,585
Mattison Family Trust 19,758 * 19,758
The Mattison Foundation, Inc. 6,585 * 6,585
Emanuel Gerard 43,907 * 43,907
Eric Singer 2,304 * 2,304
Bank of America FBO
Eric Singer IRA 2,304 * 2,304
Charles L. Ughetta IRA 2,194 * 2,194
Charles F. &
Kathryn D. Ughetta 2,194 * 2,194
Vincent John Kenney 1,645 * 1,645
Nathan Schipper 657 * 657
Richard C. Mekenzie, Jr. 21,953 * 21,953
Issac & Ruth Vidomlanski 3,951 * 3,951
Abraham & Myra Selesny 1,316 * 1,316
Nathan Low 43,738 * 43,738
Merich Ozada 43,738 * 43,738
Israel Emerging Growth Fund, L.P. 4,938 * 4,938
Adrian Davis 987 * 987
Joshua Ellenhorn 1,975 * 1,975
Leonard Beder 987 * 987
Steve Aaronson 987 * 987
Warren & Chana Fermaglich 23,835 * 23,835
Dena Levenson 940 * 940
Elizabeth Korda 6,585 * 6,585
Robert Korda 19,758 * 19,758
Philip J. Hempleman 104,982 * 104,982
Leonard Rauner 19,090 * 19,090
Wayne Wilkey 7,634 * 7,634
Alexander Greenberg 7,634 * 7,634
Joel Ackerman 3,816 * 3,816
David D. May 5,725 * 5,725
Sanford B. Prater 5,725 * 5,725
Kirk Balzer 3,816 * 3,816
Green Cay Latin American Fund LDC 66,905 * 66,905
Green Cay Emerging Market Fund LDC 33,452 * 33,452
Ashline, Ltd. 175,636 * 175,636
Charles Benchabat 422 * 422
A.U.K. Investments 1,244 * 1,244
Avraham Fischer 25,162 * 25,162
Courses Investment in
Technology Ltd. 193,638 * 193,638
Telrad Holdings LTD. 290,094 1.20% 290,094
Julie Lynn Selesny 657 * 657
Tamar Aderet Selesny 164 * 164
Adena R. Selesny 164 * 164
Chaim David Selesny 164 * 164
Yaacov Eliezer Selesny 164 * 164
Equity Trade Finance Ltd. 8,781 * 8,781
Robert Harow 1,316 * 1,316
Private Equity Bridge Invest Ltd. 155,050 * 155,050
___________________
</TABLE>
* Represents beneficial ownership of less than one percent.
(1) Based on the number of shares outstanding on July 5, 2000.
(2) Assumes the sale of all shares of Com21 common stock offered by
the Selling Shareholders. This registration statement also shall
cover any additional shares of common stock which become issuable in
connection with the shares registered for sale hereby by reason of
any stock divided, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which
results in an increase in the number of Com21's outstanding shares
of common stock.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
Com21 by Wilson Sonsini Goodrich & Rosati, Professional Corporation, San
Francisco, California.
EXPERTS
The consolidated financial statements and the related consolidated
financial statement schedule incorporated in this prospectus by reference
from Com21's annual report on Form 10-K for the year ended December 31,
1999 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports, which are incorporated herein by reference, and
have been so incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
================================== ==================================
We have not authorized any person
to make a statement that differs
from what is in this prospectus.
If any person does make a statement
that differs from what is in this
prospectus, you should not rely on
it. This prospectus is not an
offer to sell, nor is it seeking an
offer to buy, these securities in
any state in which the offer or
sale is not permitted. The
information in this prospectus is
complete and accurate as of its
date, but the information may
change after that date.
TABLE OF CONTENTS
Page COM21, INC.
The Company 1
Risk Factors 1
Forward-Looking Statements 9
Where You Can Find More
Information 9 2,281,720 Shares
of Common Stock
Use of Proceeds 10
Plan of Distribution 15
Selling Shareholders 18 ________________
Legal Matters 19 PROSPECTUS
Experts 19 ________________
______,2000
================================== ==================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by Com21 in connection
with the sale of common stock being registered. All amounts are
estimates except the SEC registration fee.
SEC Registration Fee $17,319
Legal Fees and Expenses 15,000
Accounting Fees and Expenses 10,000
Printing Fees 5,000
Transfer Agent Fees 5,000
Miscellaneous 10,000
___________
Total $62,319
___________
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law
provides that directors of a corporation will not be personally liable
for monetary damages for breach of their fiduciary duties as directors,
except for liability for (i) any breach of their duty of loyalty to the
corporation or its stockholders, (ii) acts or omissions not in good faith
or that involve intentional misconduct or a knowing violation of law,
(iii) unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General
Corporation Law, or (iv) any transaction from which the director derives
an improper personal benefit.
The Registrant's Bylaws provide that the Registrant shall indemnify its
directors and may indemnify its officers, employees and other agents to
the fullest extent permitted by law. The Registrant believes that
indemnification under its Bylaws covers at least negligence and gross
negligence on the part of an indemnified party in connection with the
defense of any action or proceeding arising out of such party's status or
service as a director, officer, employee or other agent of the Company
upon an undertaking by such party to repay such advances if it is
ultimately determined that such party is not entitled to indemnification.
The Registrant has entered into Indemnification Agreements with its
officers and directors. The Indemnification Agreements provide the
Registrant's officers and directors with further indemnification to the
maximum extent permitted by the Delaware General Corporation Law.
ITEM 16. EXHIBITS
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
23.1 Independent Auditors' Consent
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in its opinion filed as Exhibit 5.1)
24.1 Power of Attorney (included on Page II-3 of this registration statement)
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act; (ii) to reflect in the prospectus any facts or
events arising after the effective date of the registration
statement, or the most recent post-effective amendment thereof,
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement;
and (iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions or otherwise, the
registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities
Act and therefore is unenforceable. In the event that a claim for
indemnification against such liabilities, other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act, and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act, that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Milpitas, State of
California, on this 13th day of July, 2000.
COM21, Inc.
By: /s/PETER D. FENNER
__________________________
Peter D. Fenner
President, Chief Executive
Officer and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David L. Robertson as his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, and to file same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act
and thing requisite and necessary to be done in connection therewith, as
fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following
persons on behalf of Com21 and in the capacities and on the dates
indicated:
Signature Title Date
/s/ PETER D. FENNER President, Chief Executive Officer July 13, 2000
_____________________ and Director (Principal Executive
Peter D. Fenner Officer)
/s/ DAVID L. ROBERTSON Vice President, Finance and Chief July 13, 2000
_____________________ Financial Officer (Principal
David L. Robertson Financial and Accounting Officer)
/s/ PAUL BARAN Director July 13, 2000
_____________________
Paul Baran
/s/ C. RICHARD KRAMLICH Director July 13, 2000
_____________________
C. Richard Kramlich
/s/ ROBERT C. HAWK Director July 13, 2000
_____________________
Robert C. Hawk
/s/ JERALD L. KENT Director July 13, 2000
_____________________
Jerald L. Kent
/s/ ROBERT W. WILMOT Director July 13, 2000
_____________________
Robert W. Wilmot
/s/ DANIEL J. PIKE Director July 13, 2000
_____________________
Daniel J. Pike
INDEX TO EXHIBITS
Exhibit Number Exhibit Title
_______________ ____________________________________________________________
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
23.1 Independent Auditors' Consent
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in its opinion filed as Exhibit 5.1)
24.1 Power of Attorney (included on Page II-3 of this registration
statement)
Exhibit 5.1
OPINION OF WILSON SONSINI GOODRICH & ROSATI
July 13, 2000
Com21, Inc.
750 Tasman Drive
Milpitas, California 95053
Re: Com21, Inc. Registration Statement on Form S-3 for Resale
of 446,886 Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to Com21, Inc., a Delaware corporation (the
"Company"), in connection with the registration for resale of 2,281,720
shares of Common Stock (the "Shares"), as described in the Company's
Registration Statement on Form S-3 ("Registration Statement") filed with
the Securities and Exchange Commission under the Securities Act of 1933,
as amended (the "Act").
This opinion is being furnished in accordance with the requirements of
Item 16 of Form S-3 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents, the corporate
proceedings taken by the Company in connection with the original issuance
and sale of the Shares and a certificate of a Company officer regarding
(among other things) the Company's receipt of consideration upon the
original issuance and sale of the Shares. Based on such review, we are
of the opinion that the Shares are duly authorized, validly issued, fully
paid and nonassessable.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus which is part of the
Registration Statement. In giving this consent, we do not thereby admit
that we are within the category of persons whose consent is required
under Section 7 of the Act, the rules and regulations of the Securities
and Exchange Commission promulgated thereunder or Item 509 of
Regulation S-K.
This opinion letter is rendered as of the date first written above and we
disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which
may alter, affect or modify the opinion expressed herein. Our opinion is
expressly limited to the matters set forth above and we render no
opinion, whether by implication or otherwise, as to any other matters
relating to the Company or the Shares.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
/s/ WILSON SONSINI GOODRICH & ROSATI
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Com21, Inc. on Form S-3 of our reports dated March 21, 2000,
appearing in the Annual Report on Form 10-K of Com21, Inc. for the year
ended December 31, 1999, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
San Jose, California
July 13, 2000
