As filed with the Securities and Exchange Commission on September 21, 2001
Registration Statement No. 333-67434
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
STOCKERYALE, INC.
(Exact name of Registrant as specified in its charter)
| Massachusetts (State or other jurisdiction of incorporation or organization) | 04-2114473 (I.R.S. Employer Identification Number) |
32 Hampshire Road
Salem, New Hampshire 03079
(603) 893-8778
(Address, including zip code and telephone number, including area code, of Registrant's principal executive offices)
Mark W. Blodgett
Chairman and Chief Executive Officer
StockerYale, Inc.
32 Hampshire Road
Salem, New Hampshire 03079
(603) 893-8778
(Name, address, including zip code, and telephone number, including area code of agent for service)
Copies of all communications should be sent to:
Stuart M. Cable, P.C.
Goodwin Procter LLP
Exchange Place
Boston, Massachusetts 02109-2881
(617) 570-1000
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /x/
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / /
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 Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.
SUBJECT TO COMPLETION, DATED SEPTEMBER 21, 2001
Information contained herein is subject to completion or amendment. A Registration Statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet been declared effective. These securities may not be sold nor may offers to buy be accepted prior to the time the Registration Statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.
PROSPECTUS
1,700,000 Shares
STOCKERYALE, INC.
Common Stock
(par value $0.001 per share)
The selling stockholders identified in this prospectus, and any of their pledgees, donees, transferees or other successors in interest, may offer to sell up to an aggregate of 1,700,000 shares of common stock of StockerYale, Inc. StockerYale is filing the registration statement of which this prospectus is a part at this time to fulfill a contractual obligation to do so, which we undertook at the time of the original issuance of these shares of common stock.
The common stock of StockerYale is traded under the symbol "STKR" on The Nasdaq National Market. On September 10, 2001, the reported closing price for the common stock on The Nasdaq National Market was $10.15 per share.
StockerYale will not receive any of the proceeds from the sale of these shares of common stock. StockerYale has agreed to bear all of the expenses in connection with the registration and sale of these shares of common stock (other than underwriting discounts and selling commissions).
Investing in the common stock involves risks. See "Risk Factors" beginning on page 3.
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 September , 2001
This summary only highlights the more detailed information appearing elsewhere in this prospectus or incorporated by reference in this prospectus. As this is a summary, it may not contain all of the information that is important to you. You should read this entire prospectus carefully before deciding whether to invest in our common stock.
Description of StockerYale
StockerYale was incorporated under the laws of The Commonwealth of Massachusetts in 1951. We are an independent designer and manufacturer of optical communication sub-components, such as phase masks and specialty optical fiber used in the building of optical communication networks, as well as lasers, fluorescent lighting and fiber optic illumination products used in industrial inspection and machine vision applications. We operate in a company-owned facility in Salem, New Hampshire and in four leased spaces: one in Roseville, Michigan, one in Cork, Ireland, one in Saint-Laurent, Quebec and the fourth in Singapore. Our principal executive office is located at 32 Hampshire Road, Salem, New Hampshire 03079. Our telephone number is (603) 893-8778. Our common stock is listed on The Nasdaq National Market under the symbol "STKR."
The Offering
This prospectus relates to 1,700,000 shares of our common stock that may be offered for sale by the selling stockholders. We originally issued these shares of common stock in a private placement on May 31, 2001. In that private placement, we granted registration rights to the selling stockholders. We are registering the common stock covered by this prospectus in order to fulfill our contractual obligations with regards to these registration rights. Registration of the common stock does not necessarily mean that all or any portion of such stock will be offered for sale by the selling stockholders.
We have agreed to bear the expenses of the registration of the common stock under federal and state securities laws but we will not receive any proceeds from the sale of any common stock offered under this prospectus.
Plan of Distribution
The selling stockholders may sell the shares of common stock registered under this prospectus through agents or dealers, directly to one or more individuals, institutions or other purchasers or through any combination of these methods of sale. The distribution of the securities may be effected in one or more transactions at market prices then prevailing at the time of sale, at prices related to such prevailing market prices, or at negotiated prices. See "Plan of Distribution."
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You should carefully consider the following risks before investing in our common stock. You should also refer to and consider all of the information included or incorporated by reference in this prospectus, including the financial statements and related notes discussed in the Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000. The risks described below are only those risks we believe to be material. There may be additional risks that we view as not material or of which we are not presently aware.
Because our specialty optical fiber business is new and unproven, our operating history is not indicative of future performance
In early 2000, we made a corporate decision to focus our efforts on our existing specialized illumination product lines and to leverage our experience in manufacturing phase masks to develop and sell other optical communication sub-components. In particular, within the past year, we have been focusing on expanding our product line to include specialty optical fiber for use in wavelength amplifiers and other components of the all-optical communications network. Because we have not yet fully implemented our new business strategy, we do not have an operating history upon which you can evaluate our prospects, and you should not rely upon our past performance to predict our future performance. In order to focus our resources on the lines of business that we believe will ultimately be the most profitable for the company, we have also discontinued certain of our historical lines of business, including our Stilson machine tool and accessories division, which we are in the process of selling to a third party, our compass business, which was sold in September 1999, our watch business, which was sold in August 2000, and our printer and recorder product line, which we announced that we were discontinuing in December 2000. Accordingly, our operating history is not indicative of our future performance.
Our stock price has been volatile; we may be subject to litigation due to the volatility of our stock price
Our stock has experienced significant price and volume fluctuations recently. After adjusting for our two-for-one stock split, our stock price reached a low of approximately $0.39 per share on December 30, 1999, but rose sharply in the early part of 2000. On September 8, 2000, our common stock reached $48.375 per share, which is the 52-week high, and, on August 10, 2001, our common stock closed at $11.94 per share. These fluctuations often have no direct relationship to our operating performance and there is no assurance that our stock will continue to trade at the current price level. The market price for our common stock may continue to be subject to wide fluctuations in response to a variety of factors, some of which are beyond our control.
In the past, some companies that have experienced volatility in the market price of their stock have been the subject of securities class action litigation. In light of the fluctuations in our stock price, it is possible that we may be the subject of a securities class action litigation in the future. Such litigation often results in substantial costs and a diversion of management's attention and resources and could harm our business, prospects, results of operations, or financial condition.
Our quarterly results are likely to be volatile
The implementation of our new business strategy and the emerging nature of our marketplace make prediction of future revenues difficult. We believe that our ability to accurately forecast revenues from sales of our products is also limited because of the sales cycle involved in selling our products. This makes it difficult to predict the quarter in which sales will occur. Our expense levels are based, in part, on our expectations regarding future revenues, and our expenses are generally fixed, particularly in the short term. We may be unable to adjust spending in a timely manner to compensate for any
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unexpected revenue shortfall. Any significant shortfall of revenues in relation to our expectations could cause significant declines in our quarterly operating results.
Our operating results have varied on a quarterly basis during our operating history and are likely to fluctuate significantly in the future. Our operating results may be below the expectations of our investors as a result of a variety of factors, many of which are outside of our control. Accordingly, we believe that quarter-to-quarter comparisons of our operating results are not necessarily meaningful. You should not rely on the results of one quarter as an indication of our future performance.
Our history of losses and the uncertainty of our future profitability makes our common stock a highly speculative investment
We have experienced operating losses during each of the years ending December 31, 1997, 1998, 1999 and 2000 and the six-month period ended June 30, 2001, and we may continue to incur losses. We cannot predict the size or duration of any future losses. Even if we do achieve profitability, we may be unable to sustain or increase our profitability in the future.
We may be unable to fund the initiatives required to achieve our new business strategy
We have implemented a program of strategic initiatives to shift our business focus to our specialty optical fiber, optical sub-component and specialized illumination products. Our initiatives include short-term funding commitments, such as the expansion of manufacturing capacity through new construction, the acquisition of specialized manufacturing equipment, the expansion of our research and development capabilities including joint ventures and long-term (i.e., greater than 12 months) funding commitments, such as our joint venture arrangements. We are presently funding these activities with available cash and financing from outside sources, such as our credit facilities. While we currently believe that we have sufficient resources to fund our foreseeable operating losses, joint venture obligations, and capital expenditure obligations for the next 12 months, we cannot guarantee that we will have sufficient capital available or be able to obtain financing on satisfactory terms at such future times as these initiatives require funding.
We depend on a limited number of suppliers and may not be able to ship products on time if we are unable to obtain an adequate supply of raw materials and equipment on a timely basis
We depend on a limited number of suppliers of raw materials and equipment used to manufacture our products. We typically do not have long-term agreements with our suppliers and, therefore, our suppliers generally may stop supplying materials and equipment to us at any time. The reliance on a sole or limited number of suppliers could result in delivery problems and reduced control over product pricing and quality.
A small number of affiliated stockholders control a significant portion of our stock
As of the date hereof, our executive officers and directors as a group beneficially own or control approximately forty percent (40%) of our common stock. Accordingly, these persons will have the ability to significantly influence our Board of Directors and, therefore, the business, policies, executive compensation, and affairs of the Company. Furthermore, such influence could preclude any unsolicited acquisition of the Company and, consequently, adversely affect the market price of our common stock.
The loss of our key personnel or the inability to recruit additional personnel may harm our business
We are highly dependent on our senior and middle management as well as our technical and research personnel. In particular, the loss of either Mark W. Blodgett, our Chairman and Chief Executive Officer, or Alain Beauregard, our President and Chief Technology Officer, could harm us significantly. The loss of key management personnel or an inability to attract and retain sufficient
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numbers of qualified management personnel could materially and adversely affect our business, results of operations, financial condition or future prospects.
The shares eligible for future sale may have negative impact on the stock price
Sales of substantial amounts of common stock in the public market following the sale of the 1,700,000 shares offered hereby could have an adverse effect on the market price of the common stock. In addition to the 1,700,000 shares offered hereby, 8,878,236 previously issued and outstanding shares of common stock are currently eligible for sale subject to the provisions of applicable securities laws. We have granted options to purchase 2,282,674 shares of common stock pursuant to our stock option plans, which are covered by registration statements on file with the Securities and Exchange Commission and options and warrants to purchase 79,957 shares of common stock outside of any plan. In addition, a subsidiary of StockerYale, Lasiris Holdings, Inc., has 700,150 shares of capital stock outstanding that are exchangeable into shares of our common stock on a one-for-one basis at the option of the holders. Lasiris Holdings is the entity through which StockerYale acquired and continues to own StockerYale Canada (formerly, known as Lasiris, Inc.).
We do not plan to pay dividends on our common stock
We have not and do not expect to declare or pay any cash dividends in the foreseeable future. We intend to retain all earnings, if any, in order to expand our operations.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under "Risk Factors" and elsewhere in this prospectus constitute forward-looking statements. Forward-looking statements include, for example, statements relating to business strategy and prospects, future capital expenditures, sources and availability of capital, governmental regulations and their effect on us and competition. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "could", "expects", "plans", "anticipates", "believes", "estimates", "predicts", or "potential", or the negative of such terms or other comparable terminology.
You should exercise caution in interpreting and relying on forward-looking statements since these statements involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and could materially affect our actual results, performance or achievements. Some of the factors that could cause the Company's actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the matters discussed under the caption "Risk Factors."
We caution you that, while forward looking statements reflect the Company's good faith beliefs, these statements are not guarantees of future performance. In addition, we disclaim any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
StockerYale will not receive any proceeds from the sale of the shares of our common stock by the selling stockholders.
The following is a summary of the material terms and provisions of the registration rights which we granted to the selling stockholders in connection with the May 2001 private placement. It may not contain all of the information that is important to you. You can access complete information by
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referring to the form of stock purchase agreement dated May 31, 2001 which was filed as an exhibit to the registration statement of which this prospectus is a part.
We are filing this registration statement pursuant to the terms of the registration rights granted in connection with the May 2001 private placement. Under the registration rights granted in that private placement, we must use our commercially reasonable efforts to cause the registration statement to be declared effective by the Securities and Exchange Commission, and we must keep the registration statement continuously effective until the earlier of:
Any shares of common stock sold by the selling stockholders pursuant to this prospectus will no longer be entitled to the benefits of the registration rights agreement. We have agreed to bear the expenses of registering the sale of the shares of common stock by the selling stockholders.
Pursuant to the registration rights, we have agreed to indemnify the selling stockholders against all losses, claims, damages, liabilities, costs and expenses arising under the securities laws in connection with the registration statement or this prospectus, subject to limitations specified in the registration rights.
In addition, the selling stockholders have agreed to indemnify us, our officers, directors, and any person who controls our company against all losses, claims, damages, actions, liabilities, costs and expenses arising under the securities laws which result from:
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The following table sets forth the number of shares of common stock beneficially owned by the selling stockholders as of May 31, 2001, the number of shares of common stock covered by this prospectus and the total number of shares of common stock which the selling stockholders will beneficially own upon completion of this offering. This table assumes that the selling stockholders will offer for sale all of their shares of common stock.
The common stock offered by this prospectus may be offered from time to time by the selling stockholders named below, or by any of their pledgees, donees, transferees or other successors in interest. The amounts set forth below are based upon information provided to us by representatives of the selling stockholders, or on our records, as of May 31, 2001 and are accurate to the best of our knowledge. It is possible, however, that the selling stockholders may acquire or dispose of additional shares of common stock from time to time after the date of this prospectus.
| | | | Shares of Common Stock Owned After the Offering (1) | |||||
|---|---|---|---|---|---|---|---|---|
| | Shares of Common Stock Owned as of May 31, 2001 | | ||||||
| Selling Stockholder | Shares of Common Stock Offered Hereby | |||||||
| Number | Percent | |||||||
| Van Wagoner Funds(2) | 845,000 | 845,000 | 0 | * | ||||
| Van Wagoner Crossover Fund, L.P.(3) | 151,278 | 151,278 | 0 | * | ||||
| Van Wagoner Capital Partners, L.P.(3) | 3,722 | 3,722 | 0 | * | ||||
| Cranshire Capital, L.P.(4) | 265,000 | 265,000 | 0 | * | ||||
| Lagunitas Partners, L.P.(5) | 69,700 | 30,000 | 39,700 | * | ||||
| Gruber & McBaine International(5) | 18,000 | 10,000 | 8,000 | * | ||||
| Jon D. Gruber(5) | 15,000 | 10,000 | 5,000 | * | ||||
| Michel Amsalem | 10,000 | 10,000 | 0 | * | ||||
| Ohio Carpenters' Pension Plan(6)(7) | 25,000 | 25,000 | 0 | * | ||||
| New York State Nurses Association Pension Plan(8)(9) | 30,000 | 30,000 | 0 | * | ||||
| Laborers' District Council & Contractors' of Ohio(8)(10) | 17,000 | 17,000 | 0 | * | ||||
| Oregon Investment Council(8)(11) | 104,000 | 104,000 | 0 | * | ||||
| Dow Chemical Retirement Plan Emerging Companies(8)(12) | 40,000 | 40,000 | 0 | * | ||||
| WTC-CIF Emerging Company Non-Technology Portfolio(8)(13) | 50,000 | 50,000 | 0 | * | ||||
| WTC-CTF Emerging Companies Portfolio(8)(14) | 70,000 | 70,000 | 0 | * | ||||
| JB Were Global Small Companies Fund(6)(15) | 20,000 | 20,000 | 0 | * | ||||
| NZ Funds Global Small Companies Trust(8)(15) | 14,000 | 14,000 | 0 | * | ||||
| WMP (Dublin) Global Smaller Companies Equity(8)(16) | 5,000 | 5,000 | 0 | * | ||||
| TOTALS | 1,752,700 | 1,700,000 | 52,700 | * | ||||
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The selling stockholders, or their pledgees, donees, transferees, or any of their successors in interest, may sell the securities from time to time on any stock exchange or automated interdealer quotation system on which the securities are listed, in the over-the-counter market, in privately negotiated transactions or otherwise, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at prices otherwise negotiated. The selling stockholders may sell the securities by one or more of the following methods, without limitation:
The selling stockholders may also transfer the securities by gift. We do not know of any arrangements by the selling stockholders for the sale of any of the securities.
The selling stockholders may engage brokers and dealers, and any brokers or dealers may arrange for other brokers or dealers to participate in effecting sales of the securities. These brokers, dealers or underwriters may act as principals, or as an agent of a selling stockholder. Broker-dealers may agree with a selling stockholder to sell a specified number of the securities at a stipulated price per security. If the broker-dealer is unable to sell securities acting as agent for a selling stockholder, it may purchase as principal any unsold securities at the stipulated price. Broker-dealers who acquire securities as principals may thereafter resell the securities from time to time in transactions in any stock exchange or automated interdealer quotation system on which the securities are then listed, at prices and on terms then prevailing at the time of sale, at prices related to the then-current market price or in negotiated transactions. Broker-dealers may use block transactions and sales to and through broker-dealers, including transactions of the nature described above. The selling stockholders may also sell the securities in accordance with Rule 144 under the Securities Act, rather than pursuant to this prospectus, regardless of whether the securities are covered by this prospectus.
From time to time, one ore more of the selling stockholders may pledge, hypothecate or grant a security interest in some or all of the securities owned by them. The pledgees, secured parties or persons to whom the securities have been hypothecated will, upon foreclosure in the event of default, be deemed to be selling stockholders. The number of selling stockholder's securities offered under this prospectus will decrease as and when it takes such actions. The plan of distribution for that selling stockholder's securities will otherwise remain unchanged. In addition, a selling stockholder may, from time to time, sell the securities short, and, in those instances, this prospectus may be delivered in
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connection with the short sales and the securities offered under this prospectus may be used to cover short sales.
To the extent required under the Securities Act, the aggregate amount of selling stockholders' securities being offered and the terms of the offering, the names of any agents, brokers, dealers or underwriters and any applicable commission with respect to a particular offer will be set forth in an accompanying prospectus supplement. Any underwriters, dealers, brokers or agents participating in the distribution of the securities may receive compensation in the form of underwriting discounts, concessions, commissions or fees from a selling stockholder and/or purchasers of selling stockholders' securities, for whom they may act (which compensation as to a particular broker-dealer might be in excess of customary commissions).
The selling stockholders and any underwriters, brokers, dealers or agents that participate in the distribution of the securities may be deemed to be "underwriters" within the meaning of the Securities Act, and any discounts, concessions, commissions or fees received by them and any profit on the resale of the securities sold by them may be deemed to be underwriting discounts and commissions.
A selling stockholder may enter into hedging transactions with broker-dealers and the broker-dealers may engage in short sales of the securities in the course of hedging the positions they assume with that selling stockholder, including, without limitation, in connection with distributions of the securities by those broker-dealers. A selling stockholder may enter into option or other transactions with broker-dealers that involve the delivery of the securities offered hereby to the broker-dealers, who may then resell or otherwise transfer those securities. A selling stockholder may also loan or pledge the securities offered hereby to a broker-dealer and the broker-dealer may sell the securities offered hereby so loaned or upon a default may sell or otherwise transfer the pledged securities offered hereby.
The selling stockholders and other persons participating in the sale or distribution of the securities will be subject to applicable provisions of the Exchange Act, as amended, and the rules and regulations thereunder, including Regulation M. This regulation may limit the timing of purchases and sales of any of the securities by the selling stockholders and any other person. The anti-manipulation rules under the Exchange Act may apply to sales of securities in the market and to the activities of the selling stockholders and their affiliates. Furthermore, Regulation M may restrict the ability of any person engaged in the distribution of the securities to engage in market-making activities with respect to the particular securities being distributed for a period of up to five year business days before the distribution. These restrictions may affect the marketability of the securities and the ability of any person or entity to engage in market-making activities with respect to the securities.
We have agreed to indemnify in certain circumstances the selling stockholders and any brokers, dealers and agents who may be deemed to be underwriters, if any, of the securities covered by the registration statement, against certain liabilities, including liabilities under the Securities Act. The selling stockholders have agreed to indemnify us in certain circumstances against certain liabilities, including liabilities under the Securities Act.
The securities offered hereby were originally issued to the selling stockholders pursuant to an exemption from the registration requirements of the Securities Act. We agreed to register the securities under the Securities Act, and to keep the registration statement of which this prospectus is a part effective until the earlier of the date on which the selling stockholders may sell the securities without registration under the Securities Act, the date on which the selling stockholders have sold all of the securities or two years after the effective date of the registration statement. We have agreed to pay all expenses in connection with this offering, including the fees and expenses of counsel or other advisors to the selling stockholders, but not including underwriting discounts, concessions, commissions or fees of the selling stockholders or any fees and expenses of counsel or other advisors to the selling stockholders.
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We will not receive any proceeds from sales of any securities by the selling stockholders.
We can not assure you that the selling stockholders will sell all or any of the securities offered for sale under this prospectus.
We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and we are required to file reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any reports or other information we file at the public reference facilities maintained by the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. You may also inspect our filings at the following regional offices of the Securities and Exchange Commission: Seven World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661. You may also request copies of our filings at the prescribed duplication rates by writing to the Securities and Exchange Commission's Public Reference Room. You may obtain information regarding the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission also maintains an Internet site at http://www.sec.gov containing reports, proxy and information statements and other information regarding registrants, including the Company, that are filed electronically with the Securities and Exchange Commission. Reports, proxy statements and other information concerning the Company may also be inspected at the offices of the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to incorporate by reference information that we file with them. Incorporation by reference means that we can disclose important information to you by referring you to other documents that are legally considered to be part of this prospectus or any prospectus supplement. Information that we later file with the Securities and Exchange Commission will automatically update and supersede the information in this prospectus, any prospectus supplement and the documents listed below.
The following documents previously filed by us with the Securities and Exchange Commission are incorporated in, and made a part of, this prospectus by reference as of their respective dates:
All future filings we make with the Securities and Exchange Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the sale of all of the shares of common stock offered pursuant to this prospectus shall be deemed to be incorporated by reference in this prospectus and shall be a part of this prospectus from the date of filing of such document.
We have not authorized any person to give any information or to make any representation not contained or incorporated by reference in this prospectus or, if applicable, any accompanying
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prospectus supplement and, if given or made, such information or representation must not be relied upon as having been authorized by us or any underwriter, dealer or agent.
You may request a copy of any or all of the documents that have been incorporated by reference in this prospectus except exhibits to such documents, at no cost, by writing or telephoning the office of Mr. Fred Pilon, Investor Relations, at the following address and telephone number:
StockerYale, Inc.
32 Hampshire Road
Salem, New Hampshire 03079
(603) 870-8229
The consolidated financial statements as of December 31, 2000 and 1999 and for the years then ended incorporated by reference in this prospectus to the extent and for the periods indicated in their report, have been audited by Arthur Andersen LLP, independent public accountants, and are included herein in reliance upon the authority of said firm as experts in giving said report.
The validity of the issuance of the shares offered hereby will be passed upon for the Company by its counsel, Goodwin Procter LLP, Boston, Massachusetts.
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No dealer, sales representative or any other person has been authorized to give any information or to make any representations in connection with this offering other than those contained in this prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or any other person. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the shares of common stock to which it relates or an offer to, or a solicitation of, any person in any jurisdiction where such an offer or solicitation would be unlawful. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company or that information contained herein is correct as of any time subsequent to the date hereof.
| | Page | |
|---|---|---|
| Prospectus Summary | 2 | |
| Risk Factors | 3 | |
| Special Note Regarding Forward-Looking Statements | 5 | |
| Use of Proceeds | 5 | |
| Registration Rights | 5 | |
| Selling Stockholders | 7 | |
| Plan of Distribution | 9 | |
| Available Information | 11 | |
| Incorporation of Certain Documents by Reference | 11 | |
| Experts | 12 | |
| Legal Matters | 12 |
1,700,000 Shares
STOCKERYALE, INC.
COMMON STOCK
PROSPECTUS
, 2001
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Set forth below is an estimate of the approximate amount of the fees and expenses (other than underwriting commissions and discounts) anticipated to be paid by the Company in connection with the issuance and distribution of the Securities.
| SEC Registration Fee | $ | 5,177 | ||
| Legal Fees and Expenses | 125,000 | |||
| Accounting Fees and Expenses | 2,500 | |||
| Transfer and Agency Fees | 3,000 | |||
| Miscellaneous | 50,000 | |||
| Total | $ | 185,677 | ||
Item 15. Indemnification of Directors and Officers.
INDEMNIFICATION
We are a Massachusetts corporation. Massachusetts General Laws Chapter 156B, Section 67 provides that a corporation may, subject to certain limitations, indemnify its directors, officers, employees and other agents, and persons who serve at its request as directors, officers, employees or other agents of another organization, or who serve at its request in any capacity with respect to any employee benefit plan, to the extent specified or authorized by the corporation's articles of organization, a by-law adopted by the stockholders, or a vote adopted by the holders of a majority of the shares of stock entitled to vote on the election of directors.
Section 67 also provides that a corporation may purchase and maintain insurance against liability incurred by an officer, director, employee or other agent of the corporation, or who serve at its request in any capacity with respect to any employee benefit plan, in his capacity as or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability.
Our By-laws provide that directors and officers of our company shall be indemnified by us against liabilities and expenses arising out of service as a director or officer of our Company. Our By-laws provide that such indemnification shall not be provided if (i) it is determined that the action giving rise to the liability was not taken in good faith and in the reasonable belief that the action was in the best interests of our Company or (ii) in a criminal matter, it is adjudicated or determined that the director or officer had reasonable cause to believe his conduct was unlawful. No indemnification shall be provided for any director or officer with respect to any proceeding by or in the right of our Company or alleging that a director or officer received an improper personal benefit if he is adjudged liable to us in such proceeding. The By-laws provide that the indemnification provision in the By-laws does not limit any other right to indemnification existing independently of the By-laws. The By-laws also provide that the right of directors and officers to indemnification is a contract right.
Under our By-laws, indemnification shall include payment by us of expenses incurred in defending a civil or criminal action or proceeding in advance of the final disposition of such action or proceeding, upon receipt of any undertaking by the person indemnified to repay such payment if he shall be adjudicated or determined to be not entitled to such indemnification under the By-laws, which undertaking may be accepted without reference to the financial ability of such person to make repayment. Any such indemnification may be provided even if the person to be indemnified is no longer an officer, director, or employee of our Company.
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The By-laws provide that we shall not indemnify a director or officer in connection with any action, suit, proceeding or investigation initiated by the director or officer unless such initiation was approved by our Board of Directors.
The By-laws provide that we are authorized to purchase and maintain liability insurance on behalf of any of our directors, officers, employees or agents, whether or not we would have power to indemnify him against such liability or cost.
LIMITATION OF LIABILITY
Massachusetts General Laws Chapter 156B, Section 13 enables a corporation in its original articles of organization or an amendment thereto to eliminate or limit the personal liability of a director for monetary damages for violations of the director's fiduciary duty, except (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 which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Sections 61 and 62 of Chapter 156B (providing for liability of directors for authorizing illegal distributions and for making loans to directors, officers and certain shareholders) or (iv) for any transaction from which a director derived an improper personal benefit.
Our Amended and Restated Articles of Organization provide that no director of the Company shall be personally liable to the Company or its stockholders for monetary damages for breach of the director's fiduciary duties. This limitation of liability does not limit any director's 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 which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Sections 61 and 62 of Chapter 156B (providing for liability of directors for authorizing illegal distributions and for making loans to directors, officers and certain shareholders) or (iv) for any transaction from which the director derived an improper personal benefit.
The Company and its officers and directors do not currently carry liability insurance.
Item 16. Exhibits.
| Exhibit No. | Description | |
|---|---|---|
| **4.1 | Form of Stock Purchase Agreement dated as of May 31, 2001, between the Company and the selling stockholders | |
| 4.2 | Amended and Restated Articles of Organization of StockerYale, Inc., incorporated by reference to Exhibit 3.1 of StockerYale's Form 10-KSB for the year ended December 31, 2000 | |
| 4.3 | Amendment to the Amended and Restated Articles of Organization of StockerYale, Inc., incorporated by reference to Exhibit 3.1 of StockerYale's Form 10-QSB for the quarter ended June 30, 2001. | |
| 4.4 | Amended and Restated Bylaws of StockerYale, Inc., incorporated by reference to Exhibit 3.2 of StockerYale, Inc.'s Form 10-SB, as amended, filed on November 2, 1995. | |
| *5.1 | Opinion of Goodwin Procter LLP | |
| *23.1 | Consent of Arthur Andersen LLP | |
| 23.2 | Consent of Goodwin Procter LLP (included in Exhibit 5.1) | |
| **24.1 | Power of Attorney (included on signature page) |
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Item 17. Undertakings.
A. The undersigned small business issuer hereby undertakes to:
provided, however, that small business issuers do not need to give the statements in paragraphs (a)(1)(i) and (a)(1)(ii) of this item if the information required in a post-effective amendment by those paragraphs is incorporated by reference from periodic reports filed with the Securities and Exchange Commission by the small business issuer under the Exchange Act.
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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 Amendment No. 1 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Salem, State of New Hampshire, on September 21, 2001.
| STOCKERYALE, INC. | |||
By: | /s/ MARK W. BLODGETT Mark W. Blodgett Chairman and Chief Executive Officer | ||
Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the registration statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | Title | Date | ||
|---|---|---|---|---|
| /s/ MARK W. BLODGETT Mark W. Blodgett | Chairman of the Board of Directors and Chief Executive Officer | September 21, 2001 | ||
* Alain Beauregard | President and Director | September 21, 2001 | ||
Lawrence W. Blodgett | Director | |||
* Clifford L. Abbey | Director | September 21, 2001 | ||
* Steven E. Karol | Director | September 21, 2001 | ||
* Dr. Herbert Cordt | Director | September 21, 2001 | ||
* Raymond J. Oglethorpe | Director | September 21, 2001 |
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/s/ GARY B. GODIN Gary B. Godin | Chief Financial Officer, Treasurer and Clerk (Principal Financial and Principal Accounting Officer) | September 21, 2001 |
| *By: | /s/ MARK W. BLODGETT Mark W. Blodgett Attorney-in-Fact |
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| Exhibit Number | Description | |
|---|---|---|
| **4.1 | Form of Stock Purchase Agreement dated as of May 31, 2001, between the Company and each of the selling stockholders | |
| 4.2 | Amended and Restated Articles of Organization of StockerYale, Inc., incorporated by reference to Exhibit 3.1 of StockerYale's Form 10-KSB for the year ended December 31, 2000 | |
| 4.3 | Amendment to the Amended and Restated Articles of Organization of StockerYale, Inc., incorporated by reference to Exhibit 3.1 of StockerYale's Form 10-QSB for the quarter ended June 30, 2001. | |
| 4.4 | Amended and Restated Bylaws of StockerYale, Inc., incorporated by reference to Exhibit 3.2 of StockerYale, Inc.'s Form 10-SB, as amended, filed on November 2, 1995. | |
| *5.1 | Opinion of Goodwin Procter LLP | |
| *23.1 | Consent of Arthur Andersen LLP | |
| 23.2 | Consent of Goodwin Procter LLP (included in Exhibit 5.1) | |
| **24.1 | Power of Attorney (included on signature page) |
