0000912057-01-533008.txt : 20011009
0000912057-01-533008.hdr.sgml : 20011009
ACCESSION NUMBER: 0000912057-01-533008
CONFORMED SUBMISSION TYPE: S-3/A
PUBLIC DOCUMENT COUNT: 2
FILED AS OF DATE: 20010921
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: HYBRID NETWORKS INC
CENTRAL INDEX KEY: 0000900091
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
IRS NUMBER: 770250931
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: S-3/A
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-67872
FILM NUMBER: 1742059
BUSINESS ADDRESS:
STREET 1: 6409 GUADALUPE MINES ROAD
CITY: SAN JOSE
STATE: CA
ZIP: 95120
BUSINESS PHONE: 4083236500
MAIL ADDRESS:
STREET 1: 6409 GUADALUPE MINES ROAD
CITY: SAN JOSE
STATE: CA
ZIP: 95120
S-3/A
1
a2059642zs-3a.txt
S-3/A
As filed with the Securities and Exchange Commission on September 21, 2001
Registration No. 333-67872
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--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
HYBRID NETWORKS, INC.
(Exact name of registrant as specified in its charter)
------------------------------
DELAWARE 77-0250931
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
------------------------
6409 GUADALUPE MINES ROAD
SAN JOSE, CALIFORNIA 95120
(408) 323-6500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
MICHAEL D. GREENBAUM
PRESIDENT AND CHIEF EXECUTIVE OFFICER
HYBRID NETWORKS, INC.
6409 GUADALUPE MINES ROAD
SAN JOSE, CALIFORNIA 95120
(408) 323-6500
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
------------------------------
Copies to:
DANIEL J. WINNIKE, ESQ.
R. PETER MALLARI, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CA 94306
(650) 494-0600
------------------------------
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 of 1933, 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 of 1933, 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. / /
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDER MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
PROSPECTUS (SUBJECT TO COMPLETION, DATED SEPTEMBER 21, 2001)
HYBRID NETWORKS, INC.
12,929,333 SHARES OF COMMON STOCK
----------------
The 12,929,333 shares of common stock covered by this prospectus may be
offered and sold over time by Halifax Fund, L.P., which we refer to in this
prospectus as the selling stockholder, by the pledgees or donees of the selling
stockholder, or by other transferees that receive the shares of common stock in
transfers other than public sales. We will not receive any of the proceeds from
the sale of these shares.
Our common stock trades on the Nasdaq Small Cap Market under the symbol
HYBR. The closing price as reported on the Nasdaq Small Cap Market on
September 20, 2001 was $1.18 per share.
------------------------
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PLEASE SEE
"RISK FACTORS" BEGINNING ON PAGE 4 OF THIS PROSPECTUS.
------------------
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 , 2001
You may rely only on the information contained in this prospectus. We have
not authorized anyone to provide information or to make representations not
contained in this prospectus. This prospectus is neither an offer to sell nor a
solicitation of an offer to buy any securities other than those registered by
this prospectus, nor is it an offer to sell or a solicitation of an offer to buy
securities where an offer or solicitation would be unlawful. Neither the
delivery of this prospectus, nor any sale made under this prospectus, means that
the information contained in this prospectus is correct as of any time after the
date of this prospectus.
TABLE OF CONTENTS
PAGE
--------
Hybrid Networks, Inc................... 3
Recent Development..................... 3
Risk Factors........................... 4
Forward-Looking Statements............. 8
Use of Proceeds........................ 8
PAGE
--------
Selling Stockholder.................... 9
Plan of Distribution................... 13
Legal Matters.......................... 14
Experts................................ 14
Where You Can Find More Information.... 15
2
HYBRID NETWORKS, INC.
We design, develop, manufacture, and market products designed primarily for
wireless systems that provide high-speed access to the Internet for business and
consumers. Our products are designed to remove the bottleneck in the connection
to the end-user, which greatly reduces the time required to access
bandwidth-intensive information on the Internet. Our customers are principally
wireless system operators and national and regional telephone companies. We
offer an alternative to digital subscriber line and cable for high-speed
Internet access for small businesses and residential subscribers.
Our products are an integral part of a wireless system operator's high-speed
Internet access system. Our Series 2000 product line includes head end routers,
network and subscriber management tools, and a line of wireless end-user
routers, or modems.
Our products are used by broadband wireless operators at their base
stations, or head ends, to connect Internet subscribers to the operator's
networks to give the subscribers high-speed Internet access. Our head end
products provide systems that allow the operators to manage their networks.
The subscribers to the wireless operators' networks are typically
single-computer customers or local area networks used by small businesses and
high-end residential customers. The operators use our end-user products to
connect subscribers to the wireless systems networks at the subscribers' sites.
In 2001, major Hybrid systems are used in 75 markets on six continents
including 14 markets for Sprint Corp. We believe the demand for high-speed
Internet access will continue to grow internationally and domestically.
We were incorporated in Delaware in June 1990. Our principal executive
offices are located at 6409 Guadalupe Mines Road, San Jose, California 95120.
Our telephone number is (408) 323-6500.
RECENT DEVELOPMENT
The Nasdaq Listing Qualification Panel has transferred the listing of our
common stock from the Nasdaq National Market to the Nasdaq Small Cap Market
effective Thursday, August 30, 2001, subject to the provision that on or before
September 5, 2001 we were required to submit a filing evidencing a specified
minimum amount of net tangible assets. This filing was made. In addition, our
Form 10-Q for the third quarter of 2001 must evidence our continued compliance
with the $2,000,000 net tangible assets and/or $2,500,000 shareholders' equity
standard. Nasdaq reserves the right to modify, extend or terminate this listing
subsequent to a review of our operating results and balance sheet for the third
quarter of 2001 and will continue to monitor our compliance with all
requirements on the Nasdaq Small Cap Market. We were also notified that the
Nasdaq Listing and Hearing Review Council retains the right to review the Panel
decision on or before October 15, 2001.
3
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW AND ALL OF THE OTHER
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS, BEFORE
YOU DECIDE TO PURCHASE SHARES OF OUR COMMON STOCK. IN THE FUTURE, WE MAY FACE
ADDITIONAL RISKS THAT ARE NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY BELIEVE
ARE NOT MATERIAL TO US. THESE RISKS MAY ALSO HARM OUR BUSINESS. THE TRADING
PRICE OF OUR COMMON STOCK COULD DECLINE DUE TO ANY OF THESE RISKS, AND YOU MAY
LOSE ALL OR PART OF YOUR INVESTMENT.
WE EXPECT THAT WE WILL NEED ADDITIONAL CAPITAL TO CONTINUE OUR OPERATIONS.
Although we raised over $35 million in net proceeds from our initial public
offering in November 1997, our capital resources were nearly exhausted by
September 1999. In September 1999, we raised $18.1 million through the issuance
and sale of convertible debentures. In February 2001, we entered an agreement
with the Halifax Fund, L.P., the selling stockholder under this prospectus,
under which we have raised $7.5 million and may raise up to an additional $7.5
million upon the exercise of a warrant issued to Halifax under the agreement. We
believe we have sufficient capital to continue operations through the year 2001.
However, we expect that we will need to raise additional cash in the future to
support further growth in our business. If we engage in research and development
under our agreement with Sprint, we may need additional capital.
Our ability to raise additional capital may be limited by a number of
factors, including:
- Sprint's veto rights, right of first refusal and other substantial rights
and privileges,
- Halifax's substantial rights and privileges,
- our dependence upon Sprint's business and, to a lesser extent, the
business of our other customers,
- uncertainties and concerns resulting from our past financial reporting
difficulties, class action litigation and related issues,
- our need to increase our work force quickly and effectively and to reduce
the cost of our existing products and develop new products,
- uncertainty about our financial condition and results of operations and,
- our history of heavy losses,
We can give no assurance that we will be able to raise the additional
capital we will need in the future. Further, any financing we may be able to
obtain may be on terms that are harmful to our business and our ability to raise
additional capital. We may not have sufficient capital or other resources
necessary to meet the requirements of our equipment purchase agreement with
Sprint or with other large customers in the future.
WE ARE LARGELY DEPENDENT ON SPRINT FOR OUR FUTURE BUSINESS, AND SPRINT HAS A
GREAT DEAL OF INFLUENCE OVER OUR CORPORATE GOVERNANCE.
We expect that a substantial portion of our future business will primarily
come from wireless customers who hold spectrum license rights. Sprint has
acquired a significant portion of the wireless spectrum licenses in the United
States, so our future business will be substantially dependent upon orders from
Sprint. Sprint accounted for 87% of our gross sales in the six months ended
June 30, 2001. Sprint uses our products in its initial offering of wireless
Internet access services. We have only a small number of other customers.
Sprint also has significant control over our corporate governance. For
example, Sprint may designate two directors to serve on our board of directors.
Further, we cannot issue any securities, with
4
limited exceptions, or, in most cases, take important corporate action without
Sprint's approval. Sprint has other rights and privileges, including a right of
first refusal on any proposed change in our control. This right of first refusal
is assignable by Sprint to any third party. Further, if Sprint exercises
warrants it holds, and assuming that no other warrant holders, or other
convertible security holders, exercise or convert, Sprint would beneficially own
as of June 30, 2001, approximately 27.7% of our common stock. Sprint will have a
great deal of influence on us in the future. We cannot be sure that Sprint will
exercise this influence in our best interests, as Sprint's interests are in many
respects different than ours. These share numbers do not give effect to up to
600,000 shares that Sprint may have the right to purchase under warrants granted
in August 2001.
We have entered into an equipment purchase agreement with Sprint that
imposes substantial requirements on us. We must:
- meet Sprint's schedule for the manufacture and shipment of products;
- satisfy commitments for product development;
- satisfy installation and maintenance obligations; and
- license our technology to specified third parties.
Sprint's obligation to purchase our products is subject to extensive testing
and acceptance procedures. If we fail to meet the requirements of the agreement,
we could be subject to heavy penalties, including the obligation to license our
intellectual property rights to Sprint on a royalty-free basis. Sprint may also
gain access to the key source code of our products.
CHANGES IN PLANS OR CIRCUMSTANCES AT OUR LARGEST CUSTOMERS COULD SERIOUSLY HARM
OUR SALES.
In late 2000, Sprint, our largest customer for that year, completed a
reorganization of its operations including the business to which we sell our
products. As part of this reorganization, Sprint announced that it was focusing
its broadband efforts in 14 geographical markets in the residential and small
business areas. In light of these plans, we expect to sell a relatively smaller
amount of our higher margin head end equipment to Sprint as compared to our
earlier plans. This could reduce our sales and gross margins.
In late 2000, Look Communications, our second largest customer for that
year, encountered difficulties in securing additional financing to support the
continued growth of its operations. We believe that Look Communications is
exploring alternatives to obtain additional financing but cannot be sure that it
will succeed. We have not made material sales to Look in 2001.
WE DEPEND ON THE BROADBAND WIRELESS MARKET, WHICH IS A NEWLY DEVELOPING MARKET
THAT IS SUBJECT TO UNCERTAINTIES.
Before 2000, over half our sales were to cable customers. The cable industry
has now developed a standard known as the Data Over Cable System Interface
Specification. Our products do not conform to this standard, and we have
experienced substantially reduced sales to cable customers. We are now focusing
our business on the wireless industry, which is new and subject to
uncertainties.
The wireless industry competes with other technologies, including cable and
digital subscriber lines to provide high-speed Internet access. The cable and
digital subscriber line technologies avoid the principal disadvantage of
wireless, which requires direct line-of-sight between the wireless operator's
antenna and the customer's location. Wireless system operators also face a
number of licensing and regulatory restrictions. Conditions in the wireless
market could change rapidly and significantly from technological changes.
Further, the development and market acceptance of alternative technologies could
decrease the demand for our products or make them obsolete. There can be no
assurance that the wireless industry market will grow or that our products will
be accepted in the emerging market.
5
We expect to face substantial competition in this market, which could limit our
sales and impair our business.
WE FACE SIGNIFICANT COMPETITION, INCLUDING COMPETITION FROM LARGE COMPANIES.
Our market is intensely competitive, and we expect even more competition in
the future. Several of our competitors are substantially larger and have greater
financial, technical, marketing, distribution, customer support, greater name
recognition and access to customers, than we have. One of our principal
competitors, Cisco, has announced that it has a competitive wireless technology
that will offer cost effective performance and will operate successfully in
environments in which it is difficult to obtain a line-of-sight between the
customer's location and the wireless operators' antennae. Cisco's system may
provide benefits superior to ours. We believe that other companies also have
similar products under development. Further, our product development may be
harmed by our lack of engineering resources. There can be no assurance that we
will be able to compete successfully in the future.
We have agreed with Sprint that in the future we will allow third parties to
license our technology. These third parties may offer products that compete with
ours, using our technology. This could create significant new competitive
challenges for us. Our business depends upon the technical success and working
relationships of companies that produce other parts of our system. These
companies may decide to compete with us in the future, which could limit our
growth and harm our business.
MARKET PRESSURE TO REDUCE THE PRICE OF OUR PRODUCTS HAS HURT OUR BUSINESS, AND
THE PRESSURE IS LIKELY TO INCREASE.
We have experienced pressure from our customers, including Sprint, to lower
prices for our products, and we expect that this pressure to lower the prices of
our products will continue and increase. Market acceptance of our products, and
our future success, will depend in part on reductions in the unit cost of our
products. Our ability to reduce our prices has been limited by several factors,
including our reliance on one manufacturer of our modems and on limited sources
for other components of our products. Our research and development efforts seek
to reduce the cost of our products through design and engineering changes. We
have no assurance that we will be able to redesign our products to achieve
substantial cost reductions or that we will otherwise be able to reduce our
manufacturing and other costs. Any reductions in cost may not be sufficient to
improve our gross margins, which must substantially improve for us to operate
profitably.
WE RELY ON A SINGLE MANUFACTURER FOR OUR END-USER PRODUCTS AND ON LIMITED
SOURCES FOR OUR COMPONENTS, SOME OF WHICH ARE BECOMING OBSOLETE.
We outsource manufacturing of our Series 2000 modem products to a single
manufacturer, Sharp Corporation, while maintaining only a limited manufacturing
capability for pre-production assembly and testing. Since we have only one
manufacturing source for our modems, our ability to reduce our manufacturing
costs may be limited.
We are dependent upon key suppliers for a number of components within our
Series 2000 products, including Texas Instruments, Hitachi, and Intel. There can
be no assurance that these and other single-source components will continue to
be available to us, or that deliveries to us will not be interrupted or delayed
due to shortages. Having single-source components also makes it more difficult
for us to reduce our costs for these components and makes us vulnerable to price
increases by the component manufacturer. Any significant interruption or delay
in the supply of components for our products or any increase in our costs for
components could seriously harm our business.
6
WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY.
We rely on a combination of patent, trade secret, copyright and trademark
laws and contractual restrictions to establish and protect our intellectual
property rights. We cannot assure that our patents will cover all the aspects of
our technology that require patent protection or that our patents will not be
challenged or invalidated, or that the claims allowed in our patents may not be
of sufficient scope or strength to provide meaningful protection or commercial
advantage to us. We initiated one patent infringement lawsuit to enforce our
rights, which resulted in a settlement. We do not know whether we will need to
bring litigation in the future to assert our patent rights, or whether other
companies will bring litigation challenging our patents. This litigation could
be time consuming and costly and could result in our patents being held invalid
or unenforceable. Even if the patents are upheld or are not challenged, third
parties might be able to develop other technologies or products without
infringing any of these patents.
We have entered into confidentiality and invention assignment agreements
with our employees, and we enter into non-disclosure agreements with some of our
suppliers, distributors, and customers, to limit access to and disclosure of our
proprietary information. These contractual arrangements or the other steps we
take to protect our intellectual property may not be sufficient to prevent
misappropriation of our technology or deter independent third-party development
of similar technologies. The laws of foreign countries may not protect our
products or intellectual property rights to the same extent, as the laws of the
United States.
We have in the past received, and may in the future receive, notices from
persons claiming that our products, software or asserted proprietary rights
infringe the proprietary rights of these persons. We expect that developers of
wireless technologies will be increasingly subject to infringement claims as the
number of products and competitors as our market grows. While we are not subject
to any infringement claims, any future claim, with or without merit, could be
time consuming, result in costly litigation, cause product shipment delays or
require us to enter into royalty or licensing agreements. Royalty or licensing
agreements might not be available on terms acceptable to us or at all.
DEFECTS IN OUR PRODUCTS COULD CAUSE PRODUCT RETURNS AND PRODUCT LIABILITY.
Products as complex as ours frequently contain undetected errors, defects or
failures, especially when introduced or when new versions are released. In the
past, our products have contained these errors, and there can be no assurance
that errors will not be found in our current and future products. The occurrence
of errors, defects or failures could result in product returns and other losses.
They could also result in the loss of or delay in market acceptance of our
products. These might also subject us to claims for product liability.
IF WE ARE DE-LISTED FROM THE NASDAQ SMALL CAP MARKET, THE PRICE OF OUR COMMON
STOCK COULD DROP, AND IT MAY BE MORE DIFFICULT TO TRADE OUR COMMON STOCK.
The Nasdaq Listing Qualification Panel has transferred the listing of our
common stock from the Nasdaq National Market to the Nasdaq Small Cap Market
effective Thursday, August 30, 2001. In order to maintain the Nasdaq Small Cap
Market listing, our Form 10-Q for the third quarter of 2001 must evidence our
continued compliance with the $2,000,000 net tangible assets and/or $2,500,000
shareholders' equity standard. Nasdaq reserves the right to modify, extend or
terminate this listing subsequent to a review of our operating results and
balance sheet for the third quarter of 2001 and will continue to monitor our
compliance with all requirements on the Nasdaq Small Cap Market. We were also
notified that the Nasdaq Listing and Hearing Review Council retains the right to
review the Panel decision on or before October 15, 2001.
Our shares may not continue to be eligible for listing on the Nasdaq Small
Cap Market. De-listing of our common stock could reduce our stockholders'
ability to buy or sell shares as quickly and as
7
inexpensively as they have done historically. This reduced liquidity would make
it more difficult for us to raise capital in the future. The trading price of
our common stock could decline due to the change in liquidity and reduced
publicity resulting from being de-listed from the Nasdaq Small Cap Market.
FORWARD-LOOKING STATEMENTS
This prospectus includes 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. When used in this prospectus, the words anticipate,
believe, estimate, will, may, intend and expect and similar expressions identify
some of these forward-looking statements. Although we believe that our plans,
intentions and expectations reflected in these forward-looking statements are
reasonable, we cannot assure you that we will achieve our plans, intentions or
expectations. Actual results, performance or achievements could differ
materially from those contemplated, expressed or implied by the forward-looking
statements contained in this prospectus. Important factors that could cause
actual results to differ materially from our forward-looking statements are
described in this prospectus, including in the "Risk Factors." Except if
required by law, we will not update any forward-looking statement, based on new
information, future events or other developments.
USE OF PROCEEDS
We will not receive any proceeds from the sale of our common stock by the
selling stockholder under this prospectus.
8
SELLING STOCKHOLDER
PRIOR ISSUANCE
Under a securities purchase agreement between us and the selling
stockholder, we issued and sold to the selling stockholder on February 16, 2001,
a convertible debenture and warrants. Some of the key features of these
securities are described below:
CONVERTIBLE DEBENTURE. We sold to the selling stockholder a $7.5 million
principal amount 6% convertible debenture due February 16, 2003. This debenture
was to convert automatically into shares of our common stock after the
registration statement for the resale of the shares underlying the debenture
became effective.
COMMON STOCK PURCHASE WARRANT. We also issued to the selling stockholder a
warrant to purchase 833,333 shares of our common stock. This warrant is
exercisable by the selling stockholder to purchase shares at $9.00 per share and
if specified conditions are satisfied we may require the holder to exercise this
warrant, which is further described below.
ADJUSTMENT WARRANT. We also issued to the selling stockholder a warrant
that was to become exercisable for a variable number of shares for no additional
consideration after the debenture had been converted. The number of shares
issuable under this warrant was equal to the product of $8.625 million divided
by an adjustment price, less the number of shares previously issued under the
debenture. The adjustment price was to be determined by calculating the daily
average sales prices of our common stock, weighted based on the number of shares
traded, over a 65 trading day period following the time that the registration
statement for the resale of the shares underlying the debenture and warrants
became effective. The daily average sale prices of our common stock, weighted
based on the number of shares traded, is referred to in this description as the
volume weighted average price.
In consideration for these securities, the selling stockholder paid
$7.5 million, and also received rights of first refusal, preemptive rights and
other rights. We also entered into a registration rights agreement with the
selling stockholder and agreed to register for resale all shares of common stock
issuable upon conversion of the debentures and upon exercise of the purchase
warrant and adjustment warrant.
EXCHANGE
In August 2001, we entered into an exchange agreement with the selling
stockholder by which we exchanged shares of our new series k cumulative
convertible preferred stock for the debenture and the adjustment warrant, which
were cancelled in the exchange. The purchase warrant remained outstanding and
was modified, primarily affecting our ability to require its exercise. The
selling stockholder did not pay any additional consideration in this exchange.
Some of the key features of the preferred stock and purchase warrant are
described below:
SERIES K CUMULATIVE CONVERTIBLE PREFERRED STOCK. In the exchange we issued
7,650 shares of our newly established series k cumulative convertible preferred
stock. Each share of the preferred stock has an initial liquidation value of
$1,000 and accretes additional value at the annual rate of 6% on June 30 and
December 31 of each year. If any shares of preferred stock are still outstanding
in February 2006, we are required to redeem those shares of preferred stock at
their liquidation value in February 2006, although the holders of the preferred
stock have the right to delay the redemption for up to 12 months. The redemption
price is to be paid in cash or, at our election, in common stock valued at 95%
of its volume weighted average prices during a pricing period centered on the
redemption date.
The preferred stock is convertible into our common stock. The preferred
shares convert into a number of shares of common stock equal to the accreted
liquidation value divided by the conversion price. For the first 1,875 shares of
preferred stock the conversion price is $1.25 per share, provided
9
these preferred shares are converted prior to the end of the first pricing
period. The first pricing period will end on a date to be determined, based on
the release date of our 2001 fiscal year results, between February 15, 2002 and
April 1, 2002. Thus each of the first 1,875 shares will convert into 800 shares
of common stock, before giving effect to the 6% accretion to the liquidation
value, or a total of 1.5 million shares. The conversion price for the remaining
shares of preferred stock is equal to the then applicable floor price plus
one-half of the amount by which the volume weighted average price of our common
stock for the trading day preceding the conversion exceeds the floor price. The
floor price is initially equal to $1.25, provided that if we satisfy specific
conditions, which include this registration statement becoming effective by
October 16, 2001 and the listing of our common stock on an agreed upon market,
then at the end of the first pricing period the floor price will adjust to an
amount equal to the average of the daily volume weighted average price of our
common stock for a period of 15 consecutive trading days immediately following
the end of the first pricing period. The floor price cannot be less than $1.25
or greater than $5.00.
We cannot predict the future trading prices or future volume weighted
average prices of our common stock and thus cannot predict the number of shares
into which all of the shares of preferred stock will convert. As an example of
conversion rates for preferred shares converted after the conversion of the
initial 1,875 preferred shares, the following table shows, for information
purposes only, the number of shares of common stock issuable on conversion of a
share of preferred stock at assumed floor prices and volume weighted average
prices.
SHARES OF COMMON STOCK ISSUABLE
ON CONVERSION OF ONE SHARE OF
PREFERRED STOCK IF THE VOLUME
WEIGHTED AVERAGE PRICE ON THE DAY
BEFORE CONVERSION IS
--------------------------------------------------
ASSUMED FLOOR PRICE $1.25 $2.00 $4.00 $6.00
------------------- -------- -------- -------- --------
$1.25.................................... 800 615 381 276
$2.50.................................... * * 308 235
$5.00.................................... * * * 182
------------------------
* assumes no conversion as conversion price exceeds market price.
The maximum number of shares of common stock issuable upon conversion of all
of the preferred stock, before giving effect to the 6% annual accretion to the
liquidation value, is 6,048,000, which would be the number of shares issued if
the conversion price for all shares is $1.25. The exchange documents do provide
for certain penalties, including reduction of the conversion price to then
current market value, if we do not satisfy covenants and conditions contained in
the exchange documents.
We also have the right to compel conversion of the preferred shares if
specific conditions are met, including that this registration statement is
effective, restrictions on the selling stockholder's ownership of common stock
are met and we have not entered into or announced a change of control
transaction. If the closing bid price for our common stock is above $6.3212 for
at least 20 out of 30 trading days, we can require the holders to convert the
preferred shares, provided that the volume weighted average price of our common
stock is equal to or greater than the conversion price on the day that we give
notice of the required conversion through the date of conversion. Further, if
the closing bid price for our common stock is equal to or greater than 120% of
the conversion price on a given day, we can require the conversion of preferred
shares, up to the forced conversion limit, during the 10 trading day period
following the day we give notice of the required conversion. The forced
conversion limit is a number of shares of common stock equal to 10% of the total
number of shares of common stock traded during the 10 day period following our
giving this notice, excluding from this total specified block trades,
transactions that are not bona fide transactions between unaffiliated parties
and any shares traded on a day when there is a trading price less than 120% on
the conversion price in effect on that day.
10
We also have the right to redeem the preferred shares for cash. The
redemption price is equal to the greater of 120% of the liquidation value of the
preferred shares, or 120% of the then current market value of the common stock
into which the preferred stock is then convertible. If more than 2.5 million
common shares have then been issued on conversion of the preferred stock, the
redemption price is equal to the liquidation value.
COMMON STOCK PURCHASE WARRANT. This warrant is exercisable by the selling
stockholder to purchase 833,333 shares of our common stock. If the closing bid
price of our common stock is at least $3.50 per share, we may require the
selling stockholder to exercise the warrant, provided that specified conditions
are satisfied, including that all preferred shares have either been converted or
redeemed. The exercise price of the warrant would then be the lower of $9.00 per
share or 94% of the volume weighted average price of our common stock, during
the 20 consecutive trading days before the exercise of the warrant.
Under the exchange agreement we granted the selling stockholder rights of
first refusal, preemptive rights and other rights. We also entered into a new
registration rights agreement, in replacement of the previous registration
rights agreement, with the selling stockholder and agreed to register for resale
all shares of common stock issuable upon conversion of the preferred stock and
upon exercise of the purchase warrant.
As part of this private financing, the selling stockholder is prohibited
from beneficially owning more than an aggregate of 9.9% of our common stock. The
selling stockholder disclaims beneficial ownership of any shares in excess of
9.9% of our common stock. Neither the selling stockholder nor any of its
affiliates, officers, directors or principal equity holders have held any
position or office or has had any material relationship with us within the past
three years.
Beneficial ownership is determined under the rules of the Securities and
Exchange Commission that consider shares to be beneficially owned by any person
who has voting or investment power over the shares. Common stock issuable upon
conversion of the preferred stock or exercise of the purchase warrant that are
convertible or exercisable within 60 days, are considered to be outstanding and
to be beneficially owned by the person holding the preferred stock and warrants
for the purpose of computing percentage ownership. Based on the 22,379,780
shares of common stock outstanding as of June 30, 2001 and assuming that the
selling stockholder sells all of the shares offered under this prospectus, the
selling stockholder will beneficially own less than one percent of our
outstanding shares of common stock after the completion of this offering.
The table below presents information about the selling stockholder and the
shares that it may offer and sell under this prospectus. The table assumes that
the selling stockholder sells all of the shares offered under this prospectus.
However, because the selling stockholder may offer all or some of its shares at
any time under this prospectus, or in another permitted manner, the actual
number of shares that will be sold by the selling stockholder or that will be
held by the selling stockholder after completion of the sales may differ from
that presented in the table below. Information concerning the selling
stockholder may change over time and any changed information will be presented
in a supplement to this prospectus if and when necessary.
NUMBER OF
SHARES NUMBER OF
BENEFICIALLY SHARES
OWNED BEFORE NUMBER OF SHARES OWNED
NAME OFFERING OFFERED AFTER OFFERING
---- ------------ ---------------- --------------
Halifax Fund, L.P.(1)............................... 6,881,333 12,929,333 --
------------------------
(1) The sole general partner of Halifax Fund, L.P. is Yarmouth Investments Ltd.,
a Cayman Islands exempted company. The investment advisor of Halifax Fund,
L.P. is The Palladin Group, L.P., a
11
Texas limited partnership, whose sole general partner is Palladin Capital
Management, LLC, a Delaware limited liability company. Because its
beneficial ownership arises solely from its status as the investment advisor
of Halifax Fund, L.P., The Palladin Group expressly disclaims equitable
ownership of and pecuniary interest in any shares of Common Stock. Palladin
Capital and Yarmouth are controlled by Jeffrey Devers.
The number of shares of common stock listed above as beneficially owned by
the selling stockholder before the offering includes:
- 6,048,000 shares of common stock, the maximum number issuable upon
conversion of the preferred stock. This assumes no accretion of
liquidation value or adjustments for stock splits, stock dividends and
similar events, and does not give effect to any additional shares that
could be issuable if we breach covenants we have made to the selling
stockholder, the number of shares that could be issuable at the mandatory
redemption date, or to a limitation imposed in the preferred stock
exchange agreements that limit the holder's ownership of our common stock
at one time to 9.9% of our outstanding common stock.
- 833,333 shares of common stock issuable upon exercise of the common stock
purchase warrant.
Under the registration rights agreement with the selling stockholder, we are
registering for resale an amount of shares, as described above, equal to the sum
of:
- 200% of the number of shares issuable upon conversion of the preferred
stock at the minimum floor price, 12,096,000 shares; and
- 100% of the number of shares issuable upon exercise of the purchase
warrant, 833,333 shares.
12
PLAN OF DISTRIBUTION
The selling stockholder will be offering and selling all shares offered and
sold under this prospectus. We will not receive any of the proceeds of the sales
of these shares. Offers and sales of shares made under this prospectus must
comply with the terms of the registration rights agreement we entered into with
the selling stockholder.
WHO MAY SELL AND APPLICABLE RESTRICTIONS. Shares may be offered and sold
directly by the selling stockholder and those persons, pledgees, donees,
transferees or other successors in interest. The selling stockholder could
transfer, devise or gift shares by other means. The selling stockholder may also
resell all or a portion of its shares in open market transactions in reliance
upon available exemptions under the Securities Act, provided it meets the
requirements of these exemptions.
Alternatively, the selling stockholder may offer shares through brokers,
dealers or agents. Brokers, dealers, agents or underwriters participating in
transactions may receive compensation in the form of discounts, concessions or
commissions from the selling stockholder, and, if they act as agent for the
purchaser of the shares, from that purchaser. The discounts, concessions or
commissions might be in excess of those customary in the type of transaction
involved.
The selling stockholder and any brokers, dealers or agents who participate
in the distribution of the shares may be considered underwriters, and any
profits on the sale of shares by them and any discounts, commissions or
concessions received by any broker, dealer or agent might be considered
underwriting discounts and commissions under the Securities Act. If the selling
stockholder may be considered an underwriter, the selling stockholder may be
subject to statutory liabilities, including sections 11, 12 and 17 of the
Securities Act and Rule 10b-5 under the Securities Exchange Act.
To comply with applicable state securities laws, the shares will be sold in
jurisdictions only through registered or licensed brokers or dealers where
required. In some states, the shares may not be sold unless the shares have been
registered or qualified for sale in that state or an exemption from registration
or qualification is available and is complied with.
MANNER OF SALES. The selling stockholder will act independently of us in
making decisions about the timing, manner and size of each sale. The shares may
be sold at then-prevailing market prices, at prices related to prevailing market
prices, at fixed prices or at other negotiated prices. The shares may be sold
according to one or more of the following methods:
- a block trade in which the broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by the broker or
dealer for its account as allowed under this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- pledges of shares to a broker-dealer or other person, who may, after a
default, purchase or sell the pledged shares;
- an exchange distribution under the rules of the exchange;
- in private transactions between sellers and purchasers without a
broker-dealer;
- by writing options; and
- any combination of the above, or any other available means allowable under
law.
13
HEDGING OR SHORT TRANSACTIONS. The selling stockholder may enter into
option, derivative, hedging or short transactions, and any related offers or
sales of shares may be made under this prospectus. For example, the selling
stockholder may:
- enter into transactions involving short sales of the shares by
broker-dealers in the course of hedging the positions they assume with the
selling stockholder;
- sell shares short itself and deliver the shares registered under this
prospectus to settle the short sales or to close out stock loans incurred
with its short positions;
- write call options, put options or other derivative instruments, including
exchange-traded options or privately negotiated options, on the shares, or
which it settles through delivery of the shares;
- enter into option transactions or other types of transactions that require
the selling stockholder to deliver shares to a broker, dealer or other
financial institution, who may then resell or transfer the shares under
this prospectus; or
- loan the shares to a broker, dealer or other financial institution, who
may sell the loaned shares.
These option, derivative, hedging and short transactions may require the
delivery to a broker, dealer or other financial institution of shares offered
under this prospectus, and that broker, dealer or other financial institution
may resell those shares under this prospectus.
EXPENSES OF REGISTRATION. We have agreed to pay the expenses of registering
the shares under the Securities Act, including registration and filing fees,
printing expenses, administrative expenses, legal fees and accounting fees. If
the shares are sold through underwriters or broker-dealers, the selling
stockholder will be responsible for underwriting discounts, underwriting
commissions and agent commissions.
INDEMNIFICATION AND CONTRIBUTION. In the registration rights agreement that
we entered into with the selling stockholder, we and the selling stockholder
agreed to indemnify or provide contribution to each other and indemnified
persons against some liabilities resulting from the offering of the shares,
including liabilities arising under the Securities Act. The selling stockholder
may also agree to indemnify any broker-dealer or agent that participates in
transactions involving sales of the shares against some liabilities, including
liabilities arising under the Securities Act.
SUSPENSION OF THIS OFFERING. We may suspend the use of this prospectus if
we learn of any event that causes this prospectus to include an untrue statement
of material fact or omit to state a material fact required to be stated in the
prospectus or necessary to make the statements in the prospectus not misleading
in light of the circumstances then existing. If this type of event occurs, a
prospectus supplement or post-effective amendment, if required, will be
distributed to the selling stockholder.
LEGAL MATTERS
Fenwick & West LLP, Palo Alto, California, will provide us with a legal
opinion on the validity of the shares of common stock offered under this
prospectus.
EXPERTS
Our consolidated financial statements contained in our annual report on
Form 10-K including amendments for the fiscal year ended December 31, 2000, are
incorporated by reference into this prospectus in reliance on the report of Hein
+ Associates LLP and upon the authority of Hein + Associates LLP as experts in
auditing and accounting.
14
WHERE YOU CAN FIND MORE INFORMATION
The documents listed below, which we have filed with the Securities and
Exchange Commission, are incorporated into this prospectus by reference:
- our annual report on Form 10-K for the fiscal year ended December 31,
2000, filed on March 30, 2001 and amended on September 21, 2001;
- our quarterly reports on Form 10-Q for the quarters ended March 31, 2001,
filed April 27, 2001 and amended on September 21, 2001, and June 30, 2001,
filed August 14, 2001;
- our current report on Form 8-K filed on September 5, 2001;
- the description of our common stock contained in our registration
statement on Form 8-A, filed on October 30, 1997 under section 12(g) of
the Exchange Act, including any amendment or report filed for the purpose
of updating that description; and
- all documents subsequently filed by us under sections 13(a), 13(c), 14 and
15(d) of the Exchange Act after the date of this prospectus and before the
termination of this offering.
If any statement in this prospectus is inconsistent with any statement that
is incorporated by reference, the statement in this prospectus shall control.
The incorporated statement shall not be considered, except as modified or
superseded, to constitute a part of this prospectus or the registration
statement of which this prospectus forms a part.
Because we are subject to the informational requirements of the Exchange
Act, we file reports and other information with the Commission. Reports,
registration statements, proxy and information statements and other information
that we have filed can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain copies of this material from the public
reference section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at rates set by the Commission. The public may obtain information on the
operation of the public reference room by calling the Commission at
1-800-SEC-0330. The Commission also maintains a web site that contains reports,
proxy and information statements and other information that is filed
electronically with the Commission. This web site can be accessed at
http://www.sec.gov.
We have filed with the Commission a registration statement on Form S-3 under
the Securities Act covering the common stock offered under this prospectus. This
prospectus does not contain all of the information in the registration
statement, parts of which we have omitted, as allowed under the rules and
regulations of the Commission. You should refer to the registration statement
for further information about us and our common stock. We believe that the
descriptions in this prospectus of contracts and other documents cover the
material terms of these agreements. However, these descriptions may not contain
all of the information that is important to you. These agreements are filed as
exhibits to the registration statement of which this prospectus is a part. We
encourage you to read these agreements in their entirety. Copies of the
registration statement, including exhibits, may be inspected without charge at
the Commission's principal office in Washington, D.C., and you may obtain copies
from this office upon payment of the fees set by the Commission.
We will furnish without charge to each person to whom a copy of this
prospectus is delivered, upon written or oral request, a copy of the information
that has been incorporated by reference into this prospectus, except exhibits,
unless they are specifically incorporated by reference into this prospectus. You
should direct any requests for copies to Hybrid Networks, Inc., 6409 Guadalupe
Mines Road, San Jose, California 95120, Attention: Tracy Ireland, Investor
Relations Manager, telephone: (408) 323-6252.
15
HYBRID NETWORKS, INC.
12,929,333 SHARES OF COMMON STOCK
PROSPECTUS
______, 2001
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses payable by the
Registrant in connection with the sale and distribution of the securities being
registered hereby. Normal commission expenses and brokerage fees are payable
individually by the selling stockholder. All amounts are estimated except the
Securities and Exchange Commission registration fee.
Securities and Exchange Commission registration fee......... $ 5,171.75
Accounting fees and expenses................................ 10,000.00
Legal fees and expenses..................................... 25,000.00
Printing and engraving expenses............................. 5,000.00
Miscellaneous............................................... 4,828.25
----------
Total..................................................... $50,000.00
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Section 145 of the Delaware General Corporation Law, the
Registrant's Restated Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit. In addition, as
permitted by Section 145 of the Delaware General Corporation Law, the Bylaws of
the Registrant provide that: (i) the Registrant is required to indemnify its
directors and executive officers to the fullest extent permitted by the Delaware
General Corporation Law; (ii) the Registrant may, in its discretion, indemnify
other officers, employees and agents as set forth in the Delaware General
Corporation Law; (iii) upon receipt of an undertaking to repay such advances if
indemnification is determined to be unavailable, the Registrant is required to
advance expenses, as incurred, to its directors and executive officers to the
fullest extent permitted by the Delaware General Corporation Law in connection
with a proceeding (except if a determination is reasonably and promptly made by
the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to the proceeding or, in certain circumstances, by
independent legal counsel in a written opinion that the facts known to the
decision-making party demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in, or
not opposed to, the best interests of the corporation); (iv) the rights
conferred in the Bylaws are not exclusive and the Registrant is authorized to
enter into indemnification agreements with its directors, officers and employees
and agents; (v) the Registrant may not retroactively amend the Bylaw provisions
relating to indemnity; and (vi) to the fullest extent permitted by the Delaware
General Corporation Law, a director or executive officer will be deemed to have
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the Registrant and, with respect to any
criminal action or proceeding, to have had no reasonable cause to believe that
his or her conduct was unlawful if his or her action is based on the records or
books of account of the corporation or on information supplied to him or her by
officers of the corporation in the course of their duties or on the advice of
legal counsel for the corporation or on information or records given or reports
made to the corporation by independent certified public accountants or
appraisers or other experts.
The Registrant's policy is to enter into indemnification agreements with
each of its directors and executive officers. The indemnification agreements
provide that directors and executive officers will be
II-1
indemnified and held harmless to the fullest possible extent permitted by law
including against all expenses (including attorneys' fees), judgments, fines and
settlement amounts paid or reasonably incurred by them in any action, suit or
proceeding, including any derivative action by or in the right of the
Registrant, on account of their services as directors, officers, employees or
agents of the Registrant or as directors, officers, employees or agents of any
other company or enterprise when they are serving in such capacities at the
request of the Registrant. The Registrant will not be obligated pursuant to the
agreements to indemnify or advance expenses to an indemnified party with respect
to proceedings or claims (i) initiated or brought voluntarily by the indemnified
party and not by way of defense, except with respect to a proceeding to
establish or enforce a right to indemnification under the indemnification
agreements or any other agreement or insurance policy or under the Registrant's
Certificate of Incorporation or Bylaws now or hereafter in effect relating to
indemnification, or authorized by the Board of Directors or as otherwise
required under Delaware statute or law, regardless of whether the indemnified
party is ultimately determined to be entitled to such indemnification, (ii) for
expenses and the payment of profits arising from the purchase and sale by the
indemnified party of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934 or any similar successor statute or (iii) if a final
decision by a court having jurisdiction in the matter shall determine that such
indemnification is not lawful.
The indemnification agreement also provides for contribution in certain
situations in which the Registrant and a director or executive officer are
jointly liable for indemnification is unavailable, such contribution to be based
on the relative benefits received and the relative fault of the Registrant and
the director or executive officer. No contribution is allowed to a person found
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) from any person who was not found guilty of such fraudulent
misrepresentation.
The indemnification agreement requires a director or executive officer to
reimburse the Registrant for all expenses advanced only to the extent it is
ultimately determined that the director or executive officer is not entitled,
under Delaware law, the Bylaws, the indemnification agreement or otherwise, to
be indemnified for such expenses. The indemnification agreement provides that it
is not exclusive of any rights a director or executive officer may have under
the Certificate of Incorporation, Bylaws, other agreements, any
majority-in-interest vote of the stockholders or vote of disinterested
directors, Delaware law or otherwise.
The indemnification provision in the Bylaws, and the form of indemnification
agreements entered into between the Registrant and its directors and executive
officers, may be sufficiently broad to permit indemnification of the
Registrant's executive officers and directors for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act").
As authorized by the Registrant's Bylaws, the Registrant, with approval by
the Board, maintains director and officer liability insurance.
II-2
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference
herein:
INCORPORATED BY REFERENCE
-----------------------------------------
EXHIBIT FILING EXHIBIT FILED
NO. EXHIBIT FORM FILE NO. DATE NO. HEREWITH
--- ------- -------- --------- -------- ------- --------
4.01 Amended and Restated Certificate of S-1 333-36001 11-11-97 3.03
Incorporation of Registrant.
4.02 Certificate of Designation of Series J Non- 8-K 000-23289 09-24-99 3.1
Convertible Preferred Stock of Registrant.
4.03 Certificate of Designations of Series K 10-Q 000-23289 08-14-01 3.01
Cumulative Convertible Preferred Stock of
Registrant.
4.04 Amended and Restated Bylaws of Registrant, as 10-K 000-23289 03-30-01 3.03
amended as of March 22, 2001
4.05 Form of Specimen Stock Certificate for Common S-1 333-36001 10-22-97 4.01
Stock of Registrant.
4.06 Amended and Restated Investor Rights S-1 333-36001 11-11-97 10.01
Agreement, dated September 18, 1997, between
Registrant and certain other investors, as
amended October 12, 1997, and November 6,
1997.
4.07 Exchange Agreement, dated August 13, 2001, 10-Q 000-23289 08-14-01 4.01
between Registrant and Halifax Fund, L.P.
4.08 Registration Rights Agreement, dated 10-Q 000-23289 08-14-01 4.02
August 13, 2001, between Registrant and
Halifax Fund, L.P.
4.09 Form of Common Stock Purchase Warrant, dated 8-K 000-23289 02-22-01 4.03
February 16, 2001, between Registrant and
the Halifax Fund, L.P.
5.01 Opinion of Fenwick & West LLP. X
23.01 Consent of Fenwick & West LLP (included in X
Exhibit 5.01).
23.02 Consent of Hein + Associates LLP, independent X
auditors.
24.01 Power of Attorney (see page II-5) X
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 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; PROVIDED, HOWEVER, that (i) and (ii) do not apply
if the information required to be included in a post-effective amendment
thereby is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the
II-3
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.
(4) 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 that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
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 provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Jose, State of California, on this 21st day of
September, 2001.
HYBRID NETWORKS, INC.
By: /s/ JUDSON W. GOLDSMITH
---------------------------------------
Judson W. Goldsmith
Executive Vice President, Finance and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature
appears below constitutes and appoints Michael D. Greenbaum and Judson W.
Goldsmith, and each of them, his or her true and lawful attorneys-in-fact and
agents with full power of substitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement on
Form S-3, and to sign any registration statement for the same offering covered
by this Registration Statement that is to be effective upon filing pursuant to
Rule 415 promulgated under the Securities Act of 1933, and all post-effective
amendments thereto, and to file the same with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or his,
her or their substitute or substitutes, may lawfully do or cause to be done or
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----------------------
Principal Executive Officer:
/s/ MICHAEL D. GREENBAUM President, Chief Executive Officer September 21, 2001
---------------------------------- and Director
Michael D. Greenbaum
Principal Financial Officer and
Principal Accounting Officer:
/s/ JUDSON W. GOLDSMITH Executive Vice President, Finance September 21, 2001
---------------------------------- and Chief Financial Officer
Judson W. Goldsmith
II-5
NAME TITLE DATE
---- ----- ----------------------
Additional Directors:
Chairman of the Board of Directors
----------------------------------
James R. Flach
/s/ GARY M. LAUDER Director September 21, 2001
----------------------------------
Gary M. Lauder
/s/ ANAND KHOKHA Director September 21, 2001
----------------------------------
Anand Khokha
Director
----------------------------------
A. Allan Kurtze
Director
----------------------------------
Phillip J. Kushner
/s/ CAMERON M. REJALI Director September 21, 2001
----------------------------------
Cameron M. Rejali
II-6
EXHIBIT INDEX
INCORPORATED BY REFERENCE
-----------------------------------------
EXHIBIT FILING EXHIBIT FILED
NO. EXHIBIT FORM FILE NO. DATE NO. HEREWITH
--------------------- ------------------------------------- -------- --------- -------- ------- --------
4.01 Amended and Restated Certificate of S-1 333-36001 11-11-97 3.03
Incorporation of Registrant.
4.02 Certificate of Designation of 8-K 000-23289 09-24-99 3.1
Series J Non-Convertible Preferred
Stock of Registrant.
4.03 Certificate of Designations of 10-Q 000-23289 08-14-01 3.01
Series K Cumulative Convertible
Preferred Stock of Registrant.
4.04 Amended and Restated Bylaws of 10-K 000-23289 03-30-01 3.03
Registrant, as amended as of
March 22, 2001
4.05 Form of Specimen Stock Certificate S-1 333-36001 10-22-97 4.01
for Common Stock of Registrant.
4.06 Amended and Restated Investor Rights S-1 333-36001 11-11-97 10.01
Agreement, dated September 18, 1997,
between Registrant and certain other
investors, as amended October 12,
1997, and November 6, 1997.
4.07 Exchange Agreement, dated August 13, 10-Q 000-23289 08-14-01 4.01
2001, between Registrant and Halifax
Fund, L.P.
4.08 Registration Rights Agreement, dated 10-Q 000-23289 08-14-01 4.02
August 13, 2001, between Registrant
and Halifax Fund, L.P.
4.09 Form of Common Stock Purchase 8-K 000-23289 02-22-01 4.03
Warrant, dated February 16, 2001,
between Registrant and the Halifax
Fund, L.P.
5.01 Opinion of Fenwick & West LLP. X
23.01 Consent of Fenwick & West LLP X
(included in Exhibit 5.01).
23.02 Consent of Hein + Associates LLP, X
independent auditors.
24.01 Power of Attorney (see page II-5) X
EX-23.02
3
a2057309zex-23_02.txt
EXHIBIT 23.02
EXHIBIT 23.02
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of Hybrid Networks, Inc., of our report dated February 16, 2001,
relating to the balance sheets as of December 31, 2000 and 1999 and the related
statements of operations, stockholders' equity (deficit), and cash flows for
each of the years in the three year period ended December 31, 2000, which report
appears in the December 31, 2000 annual report on Form 10-K including amendments
of Hybrid Networks, Inc.
We also consent to the reference to our firm under the heading "Experts" in the
Prospectus.
/s/ HEIN + ASSOCIATES LLP
HEIN + ASSOCIATES LLP
Certified Public Accountants
Orange, California
September 21, 2001