e424b3
Filed
pursuant to Rule 424(b)(3)
Registration Statement No. 333-141238
PROSPECTUS
ViaSat, Inc.
437,564 Shares of Common Stock
This prospectus relates to the offer and sale of up to 437,564 shares of our common stock by
the selling stockholders identified in this prospectus. The shares offered by the selling
stockholders in this prospectus were originally issued by us to the selling stockholders in
connection with our acquisition of all of the outstanding capital stock of Intelligent Compression
Technologies, Inc. under the terms of an agreement and plan of merger and reorganization dated
February 16, 2007. The selling stockholders may offer and sell from time to time all or any
portion of such shares in amounts and on terms to be determined at the time of sale. We will not
receive any of the proceeds from the sale of shares of our common stock by the selling
stockholders.
Our common stock is listed on the Nasdaq Global Market under the symbol VSAT.
On
March 21, 2007, the last reported sale price of our common stock on the Nasdaq Global Market
was $34.11 per share.
Before investing in shares of our common stock, please refer to the section in this prospectus
entitled Risk Factors beginning on page 2.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is March 22, 2007.
You should rely only on the information contained or incorporated by reference in this
prospectus. Neither we nor the selling stockholders have authorized any other person to provide
you with different information. If anyone provides you with different or inconsistent
information, you should not rely on it. The selling stockholders are not making an offer to sell
these securities in any jurisdiction where the offer or sale is not permitted. You should assume
that the information appearing in this prospectus is accurate as of the date on the front cover of
this prospectus only. Our business, financial condition, results of operations and prospects may
have subsequently changed.
TABLE OF CONTENTS
|
|
|
|
|
Page |
|
|
1 |
|
|
|
2 |
|
|
|
11 |
|
|
|
11 |
|
|
|
11 |
|
|
|
14 |
|
|
|
16 |
|
|
|
18 |
|
|
|
18 |
|
|
|
18 |
Whenever we refer to ViaSat, we, our or us in this prospectus, we mean ViaSat, Inc. and its
consolidated subsidiaries, unless the context suggests otherwise. When we refer to you or
yours, we mean the persons to whom offers are made hereunder.
i
VIASAT
We are a leading provider of advanced wireless and satellite communications equipment and
services to the government and commercial markets. We are organized principally in two segments:
government and commercial. Our government business encompasses specialized products principally
serving defense customers and includes:
Tactical Data Links. Our Tactical Data Links product line primarily consists of our
multifunction information distribution system (MIDS) product. The MIDS terminal operates as part
of the Link-16 line-of-sight tactical radio system, which enables real time data networking
among ground and airborne military users providing an electronic picture of the entire
battlefield to each user in the network. We are also currently in the development phase of a
MIDS terminal for the U.S. Department of Defenses (DoD) JTRS airborne radio program, referred
to as MIDS-JTRS. We are one of only two current U.S. government certified providers of MIDS
production units.
Tactical Networking and Information Assurance. Tactical Networking and Information
Assurance products include our information security and ViaSat Data Controller (VDC) products.
Our information security products enable military and government communicators to secure
information up to Top Secret levels. Our VDC products provide reliable military tactical
communication channels using innovative error correction technology. Technology from some of
these products are integrated into some of our existing tactical radio products (such as MIDS
and UHF DAMA satellite products) as well as sold on a stand-alone basis.
Government Satellite Communication Systems. We have a 15 year history of leadership in the
UHF satellite communication terminal market. This includes the design and development of modems,
terminals and test and training equipment operating over the military UHF satellite band. These
products are used in manpack satellite communication terminals as well as airborne, ship,
shore and mobile applications. We generally focus on opportunities for high-speed satellite
communications products which operate in higher frequencies.
The commercial segment comprises two business product groups: satellite networks and antenna
systems. Our commercial business comprises an end-to-end capability to provide customers with
satellite communication equipment solutions and includes:
Consumer Broadband. Our consumer products include the development of equipment and
technology across multiple satellite standards, including the development of DOCSIS®
(Data Over Cable Service Interface Specification)-based terminals and gateways.
Mobile Broadband. Our mobile broadband products include the design and development of
airborne, maritime and ground mobile terminals and systems. Existing certified systems in the
in-flight broadband market include SKYLink for ARINC. We are also developing systems for the
maritime and ground mobile markets.
Enterprise VSAT. Our Enterprise VSAT (Very Small Aperture Terminal) satellite
communication products and services comprises a wide range of terminals, hubs, and networks
control systems as well as network management services for customers in North America and
internationally.
Satellite Networking Systems Design and Technology Development. We perform leading-edge
research and development for satellite communications systems and have developed an extensive
portfolio of technologies. Technologies include satellite networking, beam forming modems,
coding, voice and video encoding, IP and ATM via satellite, satellite ground terminals, onboard
processing, advanced satellite design, and antennas.
Integrated Circuit Design and Development. We specialize in the design of integrated
circuits, packaged components, and modules for commercial, military and space applications.
Areas of expertise include high frequency communication technology, MMIC semiconductor design,
high-power transceiver design, high levels of functional integration, high-frequency packaging
and design for low-cost manufacturing.
We were incorporated in California in 1986 and reincorporated in Delaware in 1996. Our
principal executive offices are located at 6155 El Camino Real, Carlsbad, California 92009, and our
telephone number is (760) 476-2200.
1
RISK FACTORS
An investment in the common stock offered by this prospectus involves a high degree of
risk. In addition to the other information in this prospectus, you should carefully consider the
following risks before making an investment decision. The risks and uncertainties described below
are not the only ones we face. Additional risks and uncertainties not presently known to us or that
we currently consider immaterial may also impair our business operations. If any of the following
risks actually occur, our business and financial results could be harmed. In that case, the trading
price of our common stock could decline. You should also refer to the other information set forth
in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the
Securities and Exchange Commission (SEC), including our financial statements and the related notes,
as well as our other filings with the SEC.
A Significant Portion of Our Revenues Is Derived from a Few of Our Contracts
A small number of our contracts account for a significant percentage of our revenues. Our
largest revenue producing contracts are related to our tactical data links (which includes MIDS)
products generating approximately 25% of our revenues in the first nine months of fiscal year 2007,
24% of our revenues in fiscal year 2006 and 22% of our revenues in fiscal year 2005. Our five
largest contracts generated approximately 48% of our revenues in the first nine months of fiscal
year 2007, 44% of our revenues in fiscal year 2006 and 27% of our revenues in fiscal year 2005.
Further, we derived approximately 16% of our revenues in the first nine months of fiscal year 2007,
19% of our revenues in fiscal year 2006 and 26% of our revenues in fiscal year 2005 from sales of
VSAT communications networks. The failure of these customers to place additional orders or to
maintain these contracts with us for any reason, including any downturn in their business or
financial condition, or our inability to renew our contracts with these customers or obtain new
contracts when they expire, could materially harm our business and impair the value of our common
stock.
If Our Customers Experience Financial or Other Difficulties, Our Business Could Be Materially
Harmed
A number of our commercial customers have in the past, and may in the future experience
financial difficulties. Many of our commercial customers face risks that are similar to those we
encounter, including risks associated with market growth, product defects, acceptance by the market
of products and services, and the ability to obtain sufficient capital. For example, one of our
customers, Connexion by Boeing®, recently announced its plans to discontinue its
in-flight broadband service business. Further, many of our customers that provide satellite based
services (including WildBlue, Telesat, Intelsat, Shin Satellite, and AIRINC) could be materially
affected by a satellite failure and/or satellite launch failure. We cannot assure you that our
customers will be successful in managing these risks. If our customers do not successfully manage
these types of risks, it could impair our ability to generate revenues, collect amounts due from
these customers and materially harm our business.
Major communications infrastructure programs, such as proposed satellite communications
systems, are important sources of our current and planned future revenues. We also participate in a
number of defense programs. Programs of these types often cannot proceed unless the customer can
raise substantial funds, from either governmental or private sources. As a result, our expected
revenues can be adversely affected by political developments or by conditions in private and public
capital markets. They can also be adversely affected if capital markets are not receptive to a
customers proposed business plans. If our customers are unable to raise adequate funds it could
materially harm our business and impair the value of our common stock.
Our Development Contracts May Be Difficult for Us to Comply With and May Expose Us to Third-Party
Claims for Damages
We are often party to government and commercial contracts involving the development of new
products. We derived approximately 24% of our revenues in the first nine months of fiscal year
2007, 25% of our revenues in fiscal year 2006 and 24% of our revenues in fiscal year 2005 from
these development contracts. These contracts typically contain strict performance obligations and
project milestones. We cannot assure you we will comply with these performance obligations or meet
these project milestones in the future. If we are unable to comply with these performance
obligations or meet these milestones, our customers may terminate these contracts and, under some
circumstances, recover damages or other penalties from us. We are not currently, nor have we always
been, in compliance with all outstanding performance obligations and project milestones. In the
past, when we have not complied with the performance obligations or project milestones in a
contract, generally, the other party has not elected to terminate the contract or seek damages from
us. However, we cannot assure you in the future other parties
will not terminate their contracts or seek damages from us. If other parties elect to terminate
their contracts or seek damages from us, it could materially harm our business and impair the value
of our common stock.
2
We Face Potential Product Liability Claims
We may be exposed to legal claims relating to the products we sell or the services we provide.
Our agreements with our customers generally contain terms designed to limit our exposure to
potential product liability claims. We also maintain a product liability insurance policy for our
business. However, our insurance may not cover all relevant claims or may not provide sufficient
coverage. If our insurance coverage does not cover all costs resulting from future product
liability claims, it could materially harm our business and impair the value of our common stock.
We May Experience Losses from Our Fixed-Price Contracts
Approximately 84% of our revenues for the first nine months of fiscal year 2007, 88% of our
revenues in fiscal year 2006 and 88% of our revenues in fiscal year 2005 were derived from
government and commercial contracts with fixed prices. We assume greater financial risk on
fixed-price contracts than on other types of contracts because if we do not anticipate technical
problems, estimate costs accurately or control costs during performance of a fixed-price contract,
it may significantly reduce our net profit or cause a loss on the contract. In the past, we have
experienced significant cost overruns and losses on fixed price contracts. We believe a high
percentage of our contracts will be at fixed prices in the future. Although we attempt to
accurately estimate costs for fixed-price contracts, we cannot assure you our estimates will be
adequate or that substantial losses on fixed-price contracts will not occur in the future. If we
are unable to address any of the risks described above, it could materially harm our business and
impair the value of our common stock.
Changes in Financial Accounting Standards or Practices or Existing Taxation Rules or Practices May
Cause Adverse Unexpected Fluctuations and Affect Our Reported Results of Operations
Financial accounting standards in the U.S. are constantly under review and may be changed from
time to time. We are required to apply these changes when adopted. Once implemented, these changes
could result in material fluctuations in our financial results of operations on a quarterly or
annual basis and the manner in which such results of operations are reported. Similarly, we are
subject to taxation in the U.S. and a number of foreign jurisdictions. Rates of taxation,
definitions of income, exclusions from income, and other tax policies (i.e. research credits and
manufacturing deductions) are subject to change over time. Changes in tax laws in a jurisdiction in
which we have reporting obligations could have a material impact on our results of operations and
impair the value of our common stock.
Our Reliance on a Limited Number of Third Parties to Manufacture and Supply Our Products Exposes Us
to Various Risks
Our internal manufacturing capacity is limited and we do not intend to expand our capability
in the foreseeable future. We rely on a limited number of contract manufacturers to produce our
products and expect to rely increasingly on these manufacturers in the future. In addition, some
components, subassemblies and services necessary for the manufacture of our products are obtained
from a sole supplier or a limited group of suppliers.
Our reliance on contract manufacturers and on sole suppliers or a limited group of suppliers
involves several risks. We may not be able to obtain an adequate supply of required components, and
our control over the price, timely delivery, reliability and quality of finished products may be
reduced. The process of manufacturing our products and some of our components and subassemblies is
extremely complex. We have in the past experienced and may in the future experience delays in the
delivery of, and quality problems with, products and components and subassemblies from vendors.
Some of the suppliers we rely upon have relatively limited financial and other resources. Some of
our vendors have manufacturing facilities in areas that may be prone to natural disasters and other
natural occurrences that may affect their ability to perform and deliver under our contract. If we
are not able to obtain timely deliveries of components and subassemblies of acceptable quality or
if we are otherwise required to seek alternative sources of supply, or to manufacture our finished
products or components and subassemblies internally, it could delay or prevent us from delivering
our systems promptly and at high quality. This failure could damage relationships with current or
prospective customers, which, in turn, could materially harm our business and impair the value of
our common stock.
3
The Markets We Serve Are Highly Competitive and Our Competitors May Have Greater Resources Than Us
The wireless and satellite communications industry is highly competitive and competition is
increasing. In addition, because the markets in which we operate are constantly evolving and
characterized by rapid technological change, it is difficult for us to predict whether, when and
who may introduce new competing technologies, products or services into our markets. Currently, we
face substantial competition from domestic and international wireless and ground-based
communications service providers in the commercial and government industries. Many of our
competitors and potential competitors have significant competitive advantages, including strong
customer relationships, more experience with regulatory compliance, greater financial and
management resources, and control over central communications networks. In addition, some of our
customers continuously evaluate whether to develop and manufacture their own products and could
elect to compete with us at any time. Increased competition from any of these or other entities
could materially harm our business and impair the value of our common stock.
We Depend on a Limited Number of Key Employees Who Would Be Difficult to Replace
We depend on a limited number of key technical, marketing and management personnel to manage
and operate our business. In particular, we believe our success depends to a significant degree on
our ability to attract and retain highly skilled personnel, including our Chairman and Chief
Executive Officer, Mark D. Dankberg, and those highly skilled design, process and test engineers
involved in the manufacture of existing products and the development of new products and processes.
The competition for these types of personnel is intense, and the loss of key employees could
materially harm our business and impair the value of our common stock. We do not have employment
agreements with any of our officers.
Because We Conduct Business Internationally, We Face Additional Risks Related to Global Political
and Economic Conditions and Currency Fluctuations
Approximately 15% of our revenues for the first nine months of fiscal year 2007, 18% of our
revenues in fiscal year 2006 and 27% of our revenues in fiscal year 2005 were derived from
international sales. We anticipate international sales will account for an increasing percentage of
our revenues over the next several years. Many of these international sales may be denominated in
foreign currencies. Because we do not currently engage in nor do we anticipate engaging in material
foreign currency hedging transactions related to international sales, a decrease in the value of
foreign currencies relative to the U.S. dollar could result in losses from transactions denominated
in foreign currencies. This decrease in value could also make our products less price-competitive.
There are additional risks in conducting business internationally, including:
|
|
|
unexpected changes in regulatory requirements, |
|
|
|
|
increased cost of localizing systems in foreign countries, |
|
|
|
|
increased sales and marketing and research and development expenses, |
|
|
|
|
availability of suitable export financing, |
|
|
|
|
timing and availability of export licenses, |
|
|
|
|
tariffs and other trade barriers, |
|
|
|
|
political and economic instability, |
|
|
|
|
challenges in staffing and managing foreign operations, |
|
|
|
|
difficulties in managing distributors, |
|
|
|
|
potentially adverse tax consequences, |
|
|
|
|
potential difficulty in making adequate payment arrangements, and |
|
|
|
|
potential difficulty in collecting accounts receivable. |
4
In addition, some of our customer purchase agreements are governed by foreign laws, which may
differ significantly from U.S. laws. We may be limited in our ability to enforce our rights under
these agreements and to collect damages, if awarded. If we are unable to address any of the risks
described above, it could materially harm our business and impair the value of our common stock.
Our Operating Results Have Varied Significantly from Quarter to Quarter in the Past and, if They
Continue to do so, the Market Price of Our Common Stock Could Be Impaired
Our operating results have varied significantly from quarter to quarter in the past and may
continue to do so in the future. The factors that cause our quarter-to-quarter operating results to
be unpredictable include:
|
|
|
a complex and lengthy procurement process for most of our customers or potential customers, |
|
|
|
|
changes in the levels of research and development spending, including the effects of associated tax credits, |
|
|
|
|
cost overruns on fixed price development contracts, |
|
|
|
|
the difficulty in estimating costs over the life of a contract, which may require adjustment in future
periods, |
|
|
|
|
the timing, quantity and mix of products and services sold, |
|
|
|
|
price discounts given to some customers, |
|
|
|
|
market acceptance and the timing of availability of our new products, |
|
|
|
|
the timing of customer payments for significant contracts, |
|
|
|
|
one time charges to operating income arising from items such as acquisition expenses and
write-offs of assets related to customer non-payments or obsolescence, |
|
|
|
|
the failure to receive an expected order or a deferral of an order to a later period, and |
|
|
|
|
general economic and political conditions. |
As a result, we believe period-to-period comparisons of our operating results are not
necessarily meaningful and you should not rely upon them as indicators of future performance. If we
are unable to address any of the risks described above, it could materially impair the value of our
common stock. In addition, it is likely that in one or more future quarters our results may fall
below the expectations of analysts and investors. In this event, the trading price of our common
stock would likely decrease.
Our Reliance on U.S. Government Contracts Exposes Us to Significant Risks
Our government segment revenues were approximately 53% of our revenues in the first nine
months of fiscal year 2007, 49% of our revenues in fiscal year 2006 and 51% of our revenues in
fiscal year 2005, and were derived from U.S. government applications. Our U.S. government business
will continue to represent a significant portion of our revenues for the foreseeable future. U.S.
government business exposes us to various risks, including:
|
|
|
unexpected contract or project terminations or suspensions, |
|
|
|
|
unpredictable order placements, reductions or cancellations, |
|
|
|
|
reductions in government funds available for our projects due
to government policy changes, budget cuts and contract
adjustments, |
|
|
|
|
the ability of competitors to protest contractual awards, |
|
|
|
|
penalties arising from post-award contract audits, |
5
|
|
|
cost audits in which the value of our contracts may be reduced, |
|
|
|
|
higher-than-expected final costs, particularly relating to
software and hardware development, for work performed under
contracts where we commit to specified deliveries for a fixed
price, |
|
|
|
|
limited profitability from cost-reimbursement contracts under
which the amount of profit is limited to a specified amount,
and |
|
|
|
|
unpredictable cash collections of unbilled receivables that
may be subject to acceptance of contract deliverables by the
customer and contract close-out procedures, including
government approval of final indirect rates. |
In addition, substantially all of our U.S. government backlog scheduled for delivery can be
terminated at the convenience of the U.S. government because our contracts with the U.S. government
typically provide that orders may be terminated with limited or no penalties. If we are unable to
address any of the risks described above, it could materially harm our business and impair the
value of our common stock.
Our Credit Facility Contains Restrictions that Could Limit Our Ability to Implement Our Business
Plan
The restrictions contained in our line of credit may limit our ability to implement our
business plan, finance future operations, respond to changing business and economic conditions,
secure additional financing, and engage in opportunistic transactions, such as strategic
acquisitions. In addition, if we fail to meet the covenants contained in our line of credit, our
ability to borrow under our line of credit may be restricted. The line of credit, among other
things, restricts our ability to do the following:
|
|
|
incur additional indebtedness, |
|
|
|
|
create liens on our assets, |
|
|
|
|
make certain payments, including payments of dividends in respect of capital stock, |
|
|
|
|
consolidate, merge and sell assets, |
|
|
|
|
engage in certain transactions with affiliates, and |
|
|
|
|
make acquisitions. |
In addition, the line of credit requires us to satisfy the following financial tests:
|
|
|
minimum EBITDA (income from operations plus depreciation and amortization) for the
twelve-month period ending on the last day of any fiscal quarter of $30 million, |
|
|
|
|
minimum tangible net worth as of the last day of any fiscal quarter of $135 million, and |
|
|
|
|
minimum quick ratio (sum of cash and cash equivalents, accounts receivable and
marketable securities, divided by current liabilities) as of the last day of any fiscal
quarter of 1.50 to 1.00. |
In the past we have violated our credit facility covenants and received waivers for these
violations. We cannot assure that we will be able to comply with our financial or other covenants
or that any covenant violations will be
waived in the future. Any violation not waived could result in an event of default, permitting the
lenders to suspend commitments to make any advance, to declare notes and interest thereon due and
payable, and to require any outstanding letters of credit to be collateralized by an interest
bearing cash account, any or all of which could have a material adverse effect on our business,
financial condition and results of operations. In addition, if we fail to comply with our financial
or other covenants, we may need additional financing in order to service or extinguish our
indebtedness. We may not be able to obtain financing or refinancing on terms acceptable to us, if
at all.
6
Our Success Depends on the Development of New Satellite and Other Wireless Communications Products
and Our Ability to Gain Acceptance of These Products
The wireless and satellite communications markets are subject to rapid technological change,
frequent new and enhanced product introductions, product obsolescence and changes in user
requirements. Our ability to compete successfully in these markets depends on our success in
applying our expertise and technology to existing and emerging satellite and other wireless
communications markets. Our ability to compete in these markets also depends in large part on our
ability to successfully develop, introduce and sell new products and enhancements on a timely and
cost-effective basis that respond to ever-changing customer requirements. Our ability to
successfully introduce new products depends on several factors, including:
|
|
|
successful integration of various elements of our complex technologies and system architectures, |
|
|
|
|
timely completion and introduction of new product designs, |
|
|
|
|
achievement of acceptable product costs, |
|
|
|
|
timely and efficient implementation of our manufacturing and assembly processes and cost
reduction efforts, |
|
|
|
|
establishment of close working relationships with major customers for the design of their new
wireless communications systems incorporating our products, |
|
|
|
|
development of competitive products and technologies by competitors, |
|
|
|
|
marketing and pricing strategies of our competitors with respect to competitive products, and |
|
|
|
|
market acceptance of our new products. |
We cannot assure you our product or technology development efforts for communications products
will be successful or any new products and technologies we develop, including
ArcLight®, KG-250, MIDS-JTRS, Surfbeam® (our
DOCSIS®-based consumer broadband product), DVB-S2 and
LinkStar®, will achieve sufficient market acceptance. We may experience
difficulties that could delay or prevent us from successfully selecting, developing, manufacturing
or marketing new products or enhancements. In addition, defects may be found in our products after
we begin deliveries that could result in the delay or loss of market acceptance. If we are unable
to design, manufacture, integrate and market profitable new products for existing or emerging
communications markets, it could materially harm our business and impair the value of our common
stock.
We Expect to Continue to Incur Research and Development Costs, Which Could Significantly Reduce Our
Profitability
Our future growth depends on penetrating new markets, adapting existing communications
products to new applications, and introducing new communications products that achieve market
acceptance. Accordingly, we are actively applying our communications expertise to design and
develop new hardware and software products and enhance existing products. We spent $15.2 million in
the first nine months of fiscal year 2007, $15.8 million in fiscal year 2006 and $8.1 million in
fiscal year 2005 in research and development activities. We expect to continue to spend
discretionary funds on research and development in the near future. The amount of funds spent on
research and development projects is dependent on the amount and mix of customer funded
development, the types of technology being developed and the affordability of the technology being
developed. Because we account for research and development as an operating expense, these
expenditures will adversely affect our earnings in the near
future. Our research and development program may not produce successful results, which could
materially harm our business and impair the value of our common stock.
Our Ability to Protect Our Proprietary Technology is Limited and Infringement Claims Against Us
Could Restrict Our Ability to Conduct Business
Our success depends significantly on our ability to protect our proprietary rights to the
technologies we use in our products and services. If we are unable to protect our proprietary
rights adequately, our competitors could use the intellectual property we have developed to enhance
their own products and services, which could materially harm our business and impair the value of
our common stock. We currently rely on a combination of patents, trade secret laws, copyrights,
trademarks, service marks and contractual rights to protect our intellectual property. We cannot
assure you the steps we have taken to protect our proprietary rights are adequate. Also, we cannot
assure you our issued patents will remain valid or that any pending patent applications will be
issued. Additionally, the laws of some foreign countries in which our products are or may be sold
do not protect our intellectual property rights to the same extent as do the laws of the United
States.
7
Litigation may often be necessary to protect our intellectual property rights and trade
secrets, to determine the validity and scope of the proprietary rights of others or to defend
against claims of infringement or invalidity. We believe infringement, invalidity, right to use or
ownership claims by third parties or claims for indemnification resulting from infringement claims
will likely be asserted against us in the future. If any claims or actions are asserted against us,
we may seek to obtain a license under a third partys intellectual property rights. We cannot
assure you, however, that a license will be available under reasonable terms or at all. Litigation
of intellectual property claims could be extremely expensive and time consuming, which could
materially harm our business, regardless of the outcome of the litigation. If our products are
found to infringe upon the rights of third parties, we may be forced to incur substantial costs to
develop alternative products. We cannot assure you we would be able to develop alternative products
or, if these alternative products were developed, they would perform as required or be accepted in
the applicable markets. Also, we have delivered certain technical data and information to the U.S.
government under procurement contracts, and it may have unlimited rights to use that technical data
and information. There can be no assurance that the U.S. government will not authorize others to
use that data and information to compete with us. If we are unable to address any of the risks
described above relating to the protection of our proprietary rights or the U.S. governments
rights with respect to certain technical data and information, it could materially harm our
business and impair the value of our common stock.
Compliance with Changing Regulation of Corporate Governance and Public Disclosure May Result in
Additional Expenses
Changing laws, regulations and standards relating to corporate governance and public
disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and Nasdaq Stock Market
rules, are creating uncertainty for companies such as ours. These new or changed laws, regulations
and standards are subject to varying interpretations in many cases due to their lack of
specificity, and as a result, their application in practice may evolve over time as new guidance is
provided by regulatory and governing bodies, which could result in continuing uncertainty regarding
compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance
practices. We are committed to maintaining high standards of corporate governance and public
disclosure. As a result, our efforts to comply with evolving laws, regulations and standards have
resulted in, and are likely to continue to result in, increased general and administrative expenses
and a diversion of management time and attention from revenue-generating activities to compliance
activities. In particular, our efforts to comply with Section 404 of the Sarbanes-Oxley Act of 2002
and the related regulations regarding our required assessment of our internal control over
financial reporting and our independent registered public accounting firms audit of that
assessment has required, and is likely to continue to require, the commitment of significant
financial and managerial resources, which could materially harm our business and impair the value
of our common stock.
We May Identify Material Weaknesses in the Future
In the past we have identified a material weakness in internal control over financial
reporting. From time to time, we have also experienced deficiencies in internal control over
financial reporting that have not risen to the level of a material weakness. Although we have been
able to remediate the material weakness and certain internal control deficiencies in the past, we
cannot assure you in the future that a material weakness will not exist. If this would be the case,
and we cannot timely remediate such material weakness, management may conclude that our internal
control over financial reporting is not operating effectively or our independent registered public
accounting firm
may be required to issue an adverse opinion on our internal control over financial reporting, which
could in either case adversely affect investor confidence and impair the value of our common stock.
Changes in Financial Accounting Standards Related to Stock Option Expenses Are Expected to Have a
Significant Effect on Our Reported Results
The Financial Accounting Standards Board (FASB) issued a revised standard that required that
we record compensation expense in the statement of operations for employee stock options using the
fair value method beginning on April 1, 2006. The adoption of the new standard has had and is
expected to continue to have a significant effect on our reported earnings and could adversely
impact our ability to provide accurate guidance on our future reported financial results due to the
variability of the factors used to establish the value of stock options. As a result, the impact of
the new standard in fiscal year 2007 could impair the value of our common stock and result in
greater stock price volatility.
8
Any Failure to Successfully Integrate Strategic Acquisitions Could Adversely Affect Our Business
In order to position ourselves to take advantage of growth opportunities, we have made, and
may continue to make, strategic acquisitions that involve significant risks and uncertainties.
These risks and uncertainties include:
|
|
|
the difficulty in integrating newly-acquired businesses and operations in an efficient and effective manner, |
|
|
|
|
the challenges in achieving strategic objectives, cost savings and other benefits expected from acquisitions, |
|
|
|
|
the risk our markets do not evolve as anticipated and the technologies acquired do not prove to be those
needed to be successful in those markets, |
|
|
|
|
the potential loss of key employees of the acquired businesses, |
|
|
|
|
the risk of diverting the attention of senior management from the operations of our business, |
|
|
|
|
the risks of entering markets in which we have less experience, and |
|
|
|
|
the risks of potential disputes concerning indemnities and other obligations that could result in
substantial costs and further divert managements attention and resources. |
Any failure to successfully integrate strategic acquisitions could harm our business and
impair the value of our common stock. Furthermore, to complete future acquisitions we may issue
equity securities, incur debt, assume contingent liabilities or have amortization expenses and
write-downs of acquired assets, which could cause our earnings per share to decline.
Exports of Our Defense Products are Subject to the International Traffic in Arms Regulations and
Require a License from the U.S. Department of State Prior to Shipment
We must comply with the United States Export Administration Regulations and the International
Traffic in Arms Regulations, or ITAR. Our products that have military or strategic applications are
on the munitions list of the ITAR and require an individual validated license in order to be
exported to certain jurisdictions. Any changes in export regulations may further restrict the
export of our products, and we may cease to be able to procure export licenses for our products
under existing regulations. The length of time required by the licensing process can vary,
potentially delaying the shipment of products and the recognition of the corresponding revenue. Any
restriction on the export of a significant product line or a significant amount of our products
could cause a significant reduction in net sales.
Adverse Regulatory Changes Could Impair Our Ability to Sell Products
Our products are incorporated into wireless communications systems that must comply with
various government regulations, including those of the Federal Communications Commission (FCC). In
addition, we operate and provide services to customers through the use of several satellite earth
hub stations, which are licensed by the FCC.
Regulatory changes, including changes in the allocation of available frequency spectrum and in the
military standards and specifications that define the current satellite networking environment,
could materially harm our business by (1) restricting development efforts by us and our customers,
(2) making our current products less attractive or obsolete, or (3) increasing the opportunity for
additional competition. Changes in, or our failure to comply with, applicable regulations could
materially harm our business and impair the value of our common stock. In addition, the increasing
demand for wireless communications has exerted pressure on regulatory bodies worldwide to adopt new
standards for these products and services, generally following extensive investigation of and
deliberation over competing technologies. The delays inherent in this government approval process
have caused and may continue to cause our customers to cancel, postpone or reschedule their
installation of communications systems. This, in turn, may have a material adverse effect on our
sales of products to our customers.
Our Executive Officers and Directors Own a Large Percentage of Our Common Stock and Exert
Significant Influence Over Matters Requiring Stockholder Approval
As of March 7, 2007, our executive officers and directors and their affiliates beneficially
owned an aggregate of approximately 17% of our common stock. Accordingly, these stockholders may
be able to significantly influence the outcome of corporate actions requiring stockholder approval,
such as mergers and acquisitions. These stockholders may exercise this ability in a manner that
advances their best interests and not necessarily those of other stockholders. This ownership
interest could also have the effect of delaying or preventing a change in control.
9
We Have Implemented Anti-Takeover Provisions That Could Prevent an Acquisition of Our Business at a
Premium Price
Some of the provisions of our certificate of incorporation and bylaws could discourage, delay
or prevent an acquisition of our business at a premium price. These provisions:
|
|
|
permit the Board of Directors to increase its own size and fill the resulting vacancies, |
|
|
|
|
provide for a Board comprised of three classes of directors with each class serving a
staggered three-year term, |
|
|
|
|
authorize the issuance of preferred stock in one or more series, and |
|
|
|
|
prohibit stockholder action by written consent. |
In addition, Section 203 of the Delaware General Corporation Law imposes restrictions on
mergers and other business combinations between us and any holder of 15% or more of our common
stock.
Risks Related to Our Common Stock
Future Sales of Our Common Stock in the Public Market Could Lower the Stock Price
We may, in the future, sell additional shares of common stock in subsequent public offerings.
We may also issue additional shares of common stock to finance future acquisitions, including
acquisitions larger than those we have done in the past, through the use of equity. Additionally,
a substantial number of shares of our common stock are available for future sale pursuant to stock
options and warrants. We cannot predict the size of future issuances of our common stock or the
effect, if any, that future sales and issuances of shares of our common stock will have on the
market price of our common stock. Sales of substantial amounts of our common stock (including
shares issued upon the exercise of stock options and warrants or in connection with acquisition
financing), or the perception that such sales could occur, may adversely affect prevailing market
prices for our common stock.
We Expect Our Stock Price to Be Volatile
The market price of our common stock has been volatile in the past. For example, since April
2, 2001, the market price of our common stock has ranged from $3.91 to $36.00. Trading prices may
continue to fluctuate in response to a number of events and factors, including the following:
|
|
|
quarterly variations in operating results and announcements of innovations, |
|
|
|
|
new products, services and strategic developments by us or our competitors, |
|
|
|
|
developments in our relationships with our customers, distributors and suppliers, |
|
|
|
|
regulatory developments, |
|
|
|
|
changes in our revenues, expense levels or profitability, |
|
|
|
|
changes in financial estimates and recommendations by securities analysts, |
|
|
|
|
failure to meet the expectations of securities analysts, |
|
|
|
|
changes in the wireless communications industry, and |
|
|
|
|
changes in the economy. |
10
Any of these events may cause the market price of our common stock to fall. In addition, the
stock market in general and the market prices for technology companies in particular have
experienced significant volatility that often has been unrelated to the operating performance of
these companies. These broad market and industry fluctuations may adversely affect the market price
of our common stock, regardless of our operating performance.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains and incorporates by reference forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. These forward-looking statements include, but are not limited to, statements about our
plans, objectives, expectations and intentions and other statements contained in this prospectus
that are not historical facts. When used in this prospectus, the words expects, anticipates,
intends, plans, believes, seeks, estimates, could, should, may, will and similar
expressions are generally intended to identify forward-looking statements. These forward-looking
statements are subject to a number of risks, uncertainties and assumptions about us, including,
among other things:
|
|
|
the ability to successfully grow our commercial business, while maintaining our
significant government business, |
|
|
|
|
the ability to successfully develop, introduce and sell new satellite and other wireless
communications products, |
|
|
|
|
the ability to successfully develop technologies according to anticipated schedules that
meet performance expectations, |
|
|
|
|
the ability to successfully integrate strategic acquisitions, |
|
|
|
|
changes in product supply, pricing and customer demand, |
|
|
|
|
changes in relationships with key suppliers, and |
|
|
|
|
increased competition and other factors affecting the telecommunications market generally. |
We have described other risks concerning us under the caption entitled Risk Factors. We
undertake no obligation to publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. In light of these risks and uncertainties,
the forward-looking events and circumstances discussed in this prospectus may not occur and actual
results could differ materially from those anticipated or implied in the forward-looking
statements.
USE OF PROCEEDS
We will not receive any proceeds from the sale by the selling stockholders of the common stock
offered by this prospectus.
SELLING STOCKHOLDERS
Merger Agreement. Under the terms of an agreement and plan of merger and reorganization dated
February 16, 2007, we acquired all of the outstanding capital stock of Intelligent Compression
Technologies, Inc. (ICT). ICT is now our wholly owned subsidiary. As part of the aggregate
purchase price, we issued to the selling stockholders an aggregate of 416,727 shares of our common
stock. We also agreed to register for resale the 437,564 shares of our common stock offered by the
selling stockholders in this prospectus (of which 20,837 shares are only transferable to the
selling stockholders under the make whole provision described below).
Make Whole. To the extent that the value of the shares of our common stock as of the date of
this prospectus is less than 95% of the value of the shares when issued to the selling
stockholders, we have agreed to transfer to the selling stockholders additional shares of our
common stock to cover such difference, or at our sole discretion, an equivalent amount in cash.
Likewise, to the extent the value of the shares of our common stock as of the date of this
prospectus is greater than 105% of the value of the shares when issued to the selling stockholders,
the selling stockholders have agreed to return to us for cancellation
the number of shares of our
common stock to cover such difference.
11
The following table sets forth information with respect to the shares beneficially owned by
the selling stockholders. The information regarding shares owned after the offering assumes the
sale of all shares offered by the selling stockholders. Other than as described above or in the
footnotes to the table below, none of the selling stockholders has held a position or office or had
a material relationship with us or any of our affiliates within the past three years other than as
a result of the ownership of our common stock. The address of each of the selling stockholders is
c/o Intelligent Compression Technologies, Inc., 1400 Hancock Street, Quincy, MA 02169.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
|
|
|
|
|
|
|
Beneficially |
|
|
|
|
|
|
Shares Beneficially Owned After |
Name of |
|
Owned Prior to |
|
|
Number of Shares |
|
|
Offering |
Selling Stockholder |
|
the Offering |
|
|
Being Offered |
|
|
Number |
|
Percentage |
William B. Sebastian (1) |
|
|
105,048 |
|
|
|
105,048 |
(2) |
|
0 |
|
* |
Matthew D. Pieniazek and
Shauna M. Pieniazek |
|
|
93,331 |
|
|
|
93,331 |
(3) |
|
0 |
|
* |
P. Michael Slygh (1) |
|
|
64,073 |
|
|
|
64,073 |
(4) |
|
0 |
|
* |
Robert E.L. Eastwood (1) |
|
|
34,907 |
|
|
|
34,907 |
(5) |
|
0 |
|
* |
James D. Brown |
|
|
29,385 |
|
|
|
29,385 |
(6) |
|
0 |
|
* |
George C. Wilson (1) |
|
|
25,921 |
|
|
|
25,921 |
(7) |
|
0 |
|
* |
Dennis Rosenfeld |
|
|
21,286 |
|
|
|
21,286 |
(8) |
|
0 |
|
* |
James D. Brown III |
|
|
20,028 |
|
|
|
20,028 |
(9) |
|
0 |
|
* |
David W. Hood and Ellen
Hood |
|
|
17,474 |
|
|
|
17,474 |
(10) |
|
0 |
|
* |
Stuart D. Brown |
|
|
6,742 |
|
|
|
6,742 |
(11) |
|
0 |
|
* |
Peter Lepeska (1) |
|
|
5,505 |
|
|
|
5,505 |
(12) |
|
0 |
|
* |
Karin A. Brown |
|
|
4,527 |
|
|
|
4,527 |
(13) |
|
0 |
|
* |
David C. Pieniazek and Lori
M. Pieniazek |
|
|
4,495 |
|
|
|
4,495 |
(14) |
|
0 |
|
* |
Andrew Hall |
|
|
2,797 |
|
|
|
2,797 |
(15) |
|
0 |
|
* |
Stephen D. Brinkmann |
|
|
2,045 |
|
|
|
2,045 |
(16) |
|
0 |
|
* |
|
|
|
* |
|
Less than 1.0% |
|
(1) |
|
The selling stockholder is currently an officer or employee of ICT, a wholly owned subsidiary
of ViaSat. |
|
(2) |
|
The shares being offered include 5,002 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(3) |
|
The shares being offered include 4,445 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
12
|
|
|
(4) |
|
The shares being offered include 3,051 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(5) |
|
The shares being offered include 1,662 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(6) |
|
The shares being offered include 1,319 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(7) |
|
The shares being offered include 1,235 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(8) |
|
The shares being offered include 1,014 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(9) |
|
The shares being offered include 954 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(10) |
|
The shares being offered include 832 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(11) |
|
The shares being offered include 321 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(12) |
|
The shares being offered include 262 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(13) |
|
The shares being offered include 216 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(14) |
|
The shares being offered include 214 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(15) |
|
The shares being offered include 133 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
|
(16) |
|
The shares being offered include 97 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
The selling stockholders listed in the above table may have sold or transferred, in
transactions pursuant to this prospectus or exempt from the registration requirements of the
Securities Act, some or all of their shares since the date as of which the information is presented
in the above table. Information concerning the selling stockholders may change from time to time
and any such changed information will be set forth in supplements to this prospectus or amendments
to the registration statement of which this prospectus is a part if and when necessary.
13
PLAN OF DISTRIBUTION
The selling stockholders, which as used herein includes donees, pledgees, transferees or other
successorsininterest selling shares received after the date of this prospectus from a selling
stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time,
sell, transfer or otherwise dispose of any or all of their shares on any stock exchange, market or
trading facility on which the shares are traded or in private transactions. These dispositions may
be at fixed prices, at prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.
The selling stockholders may use any one or more of the following methods when disposing of
shares:
|
|
|
ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers; |
|
|
|
|
block trades in which the broker-dealer 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 the broker-dealer for its account; |
|
|
|
|
an exchange distribution in accordance with the rules of the applicable exchange; |
|
|
|
|
privately negotiated transactions; |
|
|
|
|
short sales effected after the date the registration statement of which this
prospectus is a part is declared effective by the SEC; |
|
|
|
|
through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise; |
|
|
|
|
broker-dealers may agree with the selling stockholders to sell a specified number
of such shares at a stipulated price per share; |
|
|
|
|
a combination of any such methods of sale; or |
|
|
|
|
any other method permitted pursuant to applicable law. |
The selling stockholders may also sell shares under Rule 144 under the Securities Act, if
available, rather than under this prospectus. The selling stockholders are not obligated to, and
there is no assurance that the selling stockholders will, sell all or any of the shares we are
registering. The selling stockholders may transfer, devise or gift such shares by other means not
described in this prospectus.
In connection with the sale of our shares, the selling stockholders may enter into hedging
transactions with broker-dealers or other financial institutions, which may in turn engage in short
sales of the common stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of our common stock short and deliver these securities to close
out their short positions, or loan or pledge the common stock to broker-dealers that in turn may
sell these securities. The selling stockholders may also enter into option or other transactions
with broker-dealers or other financial institutions or the creation of one or more derivative
securities which require the delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The aggregate proceeds to the selling stockholders from the sale of the common stock offered
by them will be the purchase price of the common stock less discounts or commissions, if any. Each
of the selling stockholders reserves the right to accept and, together with their agents from time
to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly
or through agents. We will not receive any of the proceeds from this offering. We are required to
pay certain fees and expenses incurred by us incident to the registration of the shares.
14
Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the selling
stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions
and discounts to exceed what is customary in the types of transactions involved. Any profits on
the resale of shares by a broker-dealer acting as principal might be deemed to be underwriting
discounts or commissions under the Securities Act. Discounts, concessions, commissions and similar
selling expenses, if any, attributable to the sale of shares will be borne by a selling
stockholder. The selling stockholders may agree to indemnify any agent, dealer or broker-dealer
that participates in transactions involving sales of the shares if liabilities are imposed on that
person under the Securities Act.
The selling stockholders, broker-dealers or agents that participate in the sale of the common
stock may be underwriters within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the shares may be
underwriting discounts and commissions under the Securities Act. Selling stockholders who are
underwriters within the meaning of Section 2(11) of the Securities Act will be subject to the
prospectus delivery requirements of the Securities Act. There is no underwriter or coordinating
broker acting in connection with the proposed sale of the resale shares by the selling
stockholders.
The selling stockholders may from time to time pledge or grant a security interest in some or
all of the shares owned by them and, if they default in the performance of any of their secured
obligations, the pledgees or secured parties may offer and sell the shares from time to time under
this prospectus as it may be supplemented from time to time, or under an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the
list of selling stockholders to include the pledgee, transferee or other successors in interest as
selling stockholders under this prospectus.
To the extent required, the shares to be sold, the names of the selling stockholders, the
respective purchase prices and public offering prices, the names of any agents, dealer or
underwriter, any applicable commissions or discounts with respect to a particular offer will be set
forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to
the registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if applicable, the common stock
may be sold in these jurisdictions only through registered or licensed brokers or dealers. In
addition, in some states the common stock may not be sold unless it has been registered or
qualified for sale or an exemption from registration or qualification requirements is available and
is complied with.
The anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of
shares in the market and to the activities of the selling stockholders and their affiliates. In
addition, we will make copies of this prospectus (as it may be supplemented or amended from time to
time) available to the selling stockholders for the purpose of satisfying the prospectus delivery
requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
We have agreed with the selling stockholders to keep the registration statement of which this
prospectus constitutes a part effective until the sale of all the shares registered thereby or
until all of such shares may be continuously sold by each selling stockholder within a 90-day
period under Rule 144 of the Securities Act.
15
DESCRIPTION OF CAPITAL STOCK
General
This prospectus describes the general terms of our capital stock. For a more
detailed description of these securities, you should read the applicable provisions of Delaware law
and our certificate of incorporation and bylaws.
Under our certificate of incorporation, the total number of shares of all
classes of stock that we have authority to issue is 105,000,000, consisting of 5,000,000 shares of
preferred stock, par value $.0001 per share, and 100,000,000 shares of common stock, par value
$.0001 per share.
Common Stock
As of March 7, 2007, we had 29,706,770 shares of common stock outstanding. The holders of
our common stock are entitled to one vote for each share on all matters voted on by stockholders.
The holders of our common stock do not have cumulative voting rights, which mean that holders of
more than one-half of the shares voting for the election of directors can elect all of the
directors then being elected. Subject to the preferences of any of our outstanding preferred stock,
the holders of our common stock are entitled to a proportional distribution of any dividends that
may be declared by the board of directors. In the event of our liquidation or dissolution, the
holders of our common stock are entitled to share equally in all assets remaining after payment of
liabilities and any payments due to holders of any outstanding shares of our preferred stock. The
outstanding shares of our common stock are fully paid and nonassessable. The rights, preferences
and privileges of holders of our common stock are subject to, and may be adversely affected by, the
rights of the holders of shares of any of our outstanding preferred stock.
Preferred Stock
We currently have no outstanding shares of preferred stock. Under our certificate of
incorporation, our board of directors is authorized to issue shares of our preferred stock from
time to time, in one or more classes or series, without stockholder approval. Prior to the issuance
of shares of each series, the board of directors is required by the General Corporation Law of the
State of Delaware, known as the DGCL, and our certificate of incorporation to adopt resolutions and
file a certificate of designation with the Secretary of State of the State of Delaware. The
certificate of designation fixes for each class or series the designations, powers, preferences,
rights, qualifications, limitations and restrictions, including the following:
|
|
|
the number of shares constituting each class or series; |
|
|
|
|
voting rights; |
|
|
|
|
rights and terms of redemption, including sinking fund provisions; |
|
|
|
|
dividend rights and rates; |
|
|
|
|
dissolution; |
|
|
|
|
terms concerning the distribution of assets; |
|
|
|
|
conversion or exchange terms; |
|
|
|
|
redemption prices; and |
|
|
|
|
liquidation preferences. |
16
Anti-Takeover Provisions
As a corporation organized under the laws of the State of Delaware, we are subject to
Section 203 of the DGCL, which restricts our ability to enter into business combinations with an
interested stockholder or a stockholder owning 15% or more of our outstanding voting stock, or that
stockholders affiliates or associates, for a period of three years. These restrictions do not
apply if:
|
|
|
prior to becoming an interested stockholder, our board of directors approves either the
business combination or the transaction in which the stockholder becomes an interested
stockholder; |
|
|
|
|
upon consummation of the transaction in which the stockholder becomes an interested
stockholder, the interested stockholder owns at least 85% of our voting stock outstanding
at the time the transaction commenced, subject to exceptions; or |
|
|
|
|
on or after the date a stockholder becomes an interested stockholder, the business
combination is both approved by our board of directors and authorized at an annual or
special meeting of our stockholders by the affirmative vote of at least two-thirds of the
outstanding voting stock not owned by the interested stockholder. |
Some provisions of our certificate of incorporation and bylaws could also have
anti-takeover effects. These provisions:
|
|
|
permit the board of directors to increase its own size and fill the resulting vacancies; |
|
|
|
|
provide for a board comprised of three classes of directors with each class serving a
staggered three-year term; |
|
|
|
|
authorize the issuance of preferred stock in one or more series; and |
|
|
|
|
prohibit stockholder action by written consent. |
These provisions are intended to enhance the likelihood of continuity and
stability in the composition of the policies formulated by the board of directors. In addition,
these provisions are intended to ensure that the board of directors will have sufficient time to
act in what it believes to be in the best interests of us and our stockholders. These provisions
also are designed to reduce our vulnerability to an unsolicited proposal for a takeover of us that
does not contemplate the acquisition of all of our outstanding shares or an unsolicited proposal
for the restructuring or sale of all or part of us. The provisions are also intended to discourage
some tactics that may be used in proxy fights.
Classified Board of Directors
The certificate of incorporation provides for the board of directors to be divided into
three classes of directors, with each class as nearly equal in number as possible, serving
staggered three-year terms. As a result, approximately one-third of the board of directors will be
elected each year. The classified board provision will help to assure the continuity and stability
of the board of directors and our business strategies and policies as determined by the board of
directors. The classified board provision could have the effect of discouraging a third party from
making a tender offer or attempting to obtain control of us. In addition, the classified board
provision could delay stockholders who do not agree with the policies of the board of directors
from removing a majority of the board of directors for two years.
17
No Stockholder Action by Written Consent; Special Meetings
The certificate of incorporation provides that stockholder action can only be taken at an
annual or special meeting of stockholders and prohibits stockholder action by written consent in
lieu of a meeting.
The certificate of incorporation also provides that special meetings of
stockholders may be called only by the board of directors, its chairman, our president or
secretary. Stockholders are not permitted to call a special meeting of stockholders or to require
that the board of directors call a special meeting.
Number of Directors; Removal; Filling Vacancies
The certificate of incorporation provides that the board of directors will consist of
between four and eleven members, the exact number to be fixed by resolution adopted by affirmative
vote of a majority of the board of directors. The board of directors currently consists of seven
directors. Further, the certificate of incorporation authorizes the board of directors to fill
newly created directorships. Accordingly, this provision could prevent a stockholder from obtaining
majority representation on the board of directors by permitting the board of directors to enlarge
the size of the board and fill the new directorships with its own nominees. A director so elected
by the board of directors holds office until the next election of the class for which the director
has been chosen and until his or her successor is elected and qualified. The certificate of
incorporation also provides that directors may be removed only for cause and only by the
affirmative vote of holders of a majority of the total voting power of all outstanding securities.
The effect of these provisions is to preclude a stockholder from removing incumbent directors
without cause and simultaneously gaining control of the board of directors by filling the
vacancies created by the removal with its own nominees.
Transfer Agent and Registrar
The Transfer Agent and Registrar for our common stock is Computershare Investor Services
LLC.
LEGAL MATTERS
Latham & Watkins LLP, San Diego, California, will pass upon the validity of the securities
being offered by this prospectus.
EXPERTS
The consolidated financial statements and managements assessment of the effectiveness of
internal control over financial reporting (which is included in Managements Report on Internal
Control over Financial Reporting) incorporated in this Prospectus by reference to the Annual Report
on Form 10-K for the year ended March 31, 2006 have been so incorporated in reliance on the report
of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the
authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Exchange Act and file annual,
quarterly and special reports, proxy statements and other information with the SEC. You may read
and copy any reports, proxy statements and other information we file at the SECs public reference
room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. You may also access filed documents at the
SECs web site at www.sec.gov.
We are incorporating by reference some information about us that we file with the SEC. We
are disclosing important information to you by referencing those filed documents. Any information
that we reference this way is considered part of this prospectus. The information in this
prospectus supersedes information incorporated by reference that we have filed with the SEC prior
to the date of this prospectus, while information that we file with the SEC after the date of this
prospectus that is incorporated by reference will automatically update and supersede this
information.
We incorporate by reference the following documents we have filed, or may file, with the SEC:
|
|
|
Our Annual Report on Form 10-K for the fiscal year ended March 31, 2006 filed with the
SEC on June 6, 2006; |
18
|
|
|
Amendment No. 1 to our Annual Report on Form 10-K for the fiscal year ended March 31,
2006 filed with the SEC on July 28, 2006; |
|
|
|
|
Our Quarterly Reports on Form 10-Q filed with the SEC on August 10, 2006, November 7,
2006 and February 7, 2007; |
|
|
|
|
Our Current Reports on Form 8-K filed with the SEC on April 5, 2006, May 8, 2006, June
23, 2006, July 18, 2006, October 10, 2006, October 16, 2006, January 19, 2007, January 29,
2007 and February 20, 2007; |
|
|
|
|
The description of our common stock contained in our Registration Statement on Form 8-A
filed with the SEC on November 20, 1996; and |
|
|
|
|
All documents filed by us with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this prospectus and before the termination of this offering. |
To the extent that any information contained in any Current Report on Form 8-K, or any exhibit
thereto, was furnished to, rather than filed with, the SEC, such information or exhibit is
specifically not incorporated by reference in this prospectus.
You may request a free copy of any of the documents incorporated by reference in this
prospectus by writing or telephoning us at the following address:
ViaSat, Inc.
6155 El Camino Real
Carlsbad, California 92009
(760) 476-2200
19