As
Filed
with the Securities and Exchange Commission on August 12, 2005
Registration
No. 333-[ ]
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
___________________
FORM
S-3
Registration
Statement
Under
The
Securities Act of 1933
___________________
AIRSPAN
NETWORKS, INC.
(Exact
name of registrant as specified in its charter)
|
Washington
|
75-2743995
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
777
Yamato Road
Suite
105
Boca
Raton, FL 33431
(561)
893-8670
(Address,
including zip code, and telephone number, including area code, of registrant’s
principal executive offices)
Eric
Stonestrom
Chief
Executive Officer
777
Yamato Road
Suite
105
Boca
Raton, FL 33431
(561)
893-8670
(Name,
address, including zip code, and telephone number, including area code, of
agents for service)
___________________
Copy
to:
David
E. Wells, Esq.
Hunton
& Williams LLP
1111
Brickell Avenue, Suite 2500
Miami,
FL 33131
(305)
810-2500
___________________
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. □
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. □
___________________
CALCULATION
OF REGISTRATION FEE
|
Title
of Each Class of
Securities
to Be Registered
|
Amount
to
be
Registered (1)
|
Proposed
Maximum
Offering
Price
Per
Share (2)(3)
|
Proposed
Maximum
Aggregate
Offering
Price (2)(3)
|
Amount
of Registration Fee (2)
|
|
Common
Stock, par value $.0003
per
share
|
7,300,000
|
100%
|
$38,580,500
|
$4540.93
|
| (1) |
Consists
of (a) 7,300,000 shares issuable upon conversion of Series A convertible
preferred stock, par value $.0001 per share, and (b) such indeterminate
number of shares pursuant to Rule 416 under the Securities Act
of 1933, as
amended (the “Securities Act”), as may be issued in respect of stock
splits, stock dividends, recapitilizations and similar
transactions.
|
| (2) |
Estimated
solely for purposes of determining the registration fee pursuant
to Rule
457(c) under the Securities Act, and based upon the average of
the high
and low prices of the registrant's common stock on the Nasdaq National
Market on August 10, 2005.
|
| (3) |
The
aggregate amount of common stock registered hereunder is limited,
with
respect to at the market offerings, to that which is permissible
under
Rule 415(a)(4) under the Securities
Act.
|
___________________
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 said Section 8(a), shall determine.
The
information in this prospectus is not complete and may be changed. The Selling
Shareholder named in this prospectus 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.
Subject
to Completion, Dated August 12, 2005
Prospectus
AIRSPAN
NETWORKS, INC.
COMMON
STOCK, PAR VALUE $.0003 PER SHARE
7,300,000
SHARES
_____________________
This
prospectus is being used in connection with the offering from time to time
by
Oak Investment Partners XI, Limited Partnership (the “Selling Shareholder”) of
up to 7,300,000 shares of common stock, par value $.0003 per share (the
“Shares”) of Airspan Networks, Inc., a Washington corporation (the “Company”).
The Shares offered include shares that are issuable from time to time upon
conversion of shares of our Series A preferred stock, par value $.0001 per
share
(the “Preferred Stock”), issued to the Selling Shareholder in a private
placement transaction on September 13, 2004.
The
Selling Shareholder may offer the Shares from time to time through public
or
private transactions at prevailing market prices, at prices related to
prevailing market prices or at privately negotiated prices. You should read
the
prospectus carefully before you invest.
We
will
not be entitled to any of the proceeds from the sale of the Shares.
Our
common stock is traded on the Nasdaq National Market (“Nasdaq”) under the symbol
“AIRN”. As of August 10, 2005, the market price of the common stock was $5.29
per share. You are urged to obtain current market quotations for the common
stock.
Investing
in the Shares involves risks. See “Risk Factors” beginning on page
5.
_____________________
Neither
the
Securities and Exchange Commission nor any state securities commission has
approved or disapproved of the 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 , 2005
TABLE
OF CONTENTS
|
INCORPORATION
OF DOCUMENTS BY REFERENCE
|
2
|
|
ABOUT
THIS PROSPECTUS
|
2
|
|
AIRSPAN
NETWORKS, INC.
|
3
|
|
SELLING
SHAREHOLDER
|
5
|
|
USE
OF PROCEEDS
|
6
|
|
PLAN
OF DISTRIBUTION
|
6
|
|
RISK
FACTORS
|
6
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|
SPECIAL
NOTE REGARDING FORWARD-LOOKING INFORMATION
|
15
|
|
WHERE
YOU CAN FIND MORE INFORMATION
|
16
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LEGAL
MATTERS
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17
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EXPERTS
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17
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INFORMATION
NOT REQUIRED IN PROSPECTUS
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18
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|
SIGNATURES
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21
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|
INDEX
TO EXHIBITS
|
23
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INCORPORATION
OF DOCUMENTS BY REFERENCE
You
should rely only on the information contained in this prospectus, including
information incorporated by reference as described below. We have not authorized
anyone else to provide you with different information. You should not assume
that the information in this prospectus is accurate as of any date other
than
the date on the front of this prospectus or that any document incorporated
by
reference is accurate as of any date other than its filing date. You should
not
consider this prospectus to be an offer or solicitation relating to the
securities in any jurisdiction in which such an offer or solicitation relating
to the securities is not authorized. Furthermore, you should not consider
this
prospectus to be an offer or solicitation relating to the securities if the
person making the offer or solicitation is not qualified to do so, or if
it is
unlawful for you to receive such an offer or solicitation. References made
to
this prospectus shall include any prospectus supplement subsequently
filed.
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the SEC
utilizing a “shelf” registration process. Under this shelf registration process,
the Shares may be resold by the Selling Shareholder from time to time, in
one or
more offerings. This prospectus provides you with a general description of
the
Shares.
Please
carefully read both this prospectus, together with additional information
referred to in “Where You Can Find More Information,” before investing in the
Shares.
The
Shares are not being offered in any state where the offer is not
permitted.
2
AIRSPAN
NETWORKS, INC.
We
are a
global supplier of Broadband Wireless Access (“BWA”) equipment that allows
communications service providers (often referred to as “local exchange
carriers,” or simply telephone companies), internet service providers (often
referred to as “ISPs”) and other telecommunications users, such as utilities and
enterprises, to cost effectively deliver high-speed data and voice services
using radio frequencies rather than wires. We call this transmission method
“Broadband Wireless”. The primary market for our systems has historically been a
subset of the fixed and broadband wireless access systems market, which is
the
fixed point-to-multipoint market in radio frequencies below 6.0GHz. On March
10,
2005, we announced the introduction of products that also provide BWA to
nomadic
and portable applications.
Each
of
our wireless access systems utilizes digital wireless techniques, which provide
wide area coverage, security and resistance to fading. Our systems can be
deployed rapidly and cost effectively, providing an attractive alternative
or
complement to traditional copper wire, cable, or fiber-optic communications
access networks. Our products also include software tools that optimize
geographic coverage of our systems and provide ongoing network management.
To
facilitate the deployment and operation of our systems, we also offer network
installation, training and support services. A more complete description
of our
various wireless access systems is provided below. Our BWA systems (the “Airspan
BWA Solutions”) have been installed by more than 300 network operators in more
than 90 countries and are being tested by numerous other service
providers.
Our
initial products were developed and sold originally to provide wireless voice
connections between network operators and their end customers. Product
enhancements introduced in 1998 enabled us to offer both voice and data
connectivity over a single wireless link. We have continued to develop the
capabilities and features of the original products, and today we sell them
as
the AS4000 and AS4020 products, in systems capable of delivering high-capacity
broadband data with carrier-quality voice connections to operators
globally.
In
October 2002, we strengthened our position in the BWA equipment market with
the
acquisition of the WipLL (Wireless Internet Protocol in the Local Loop) business
from Marconi (“Marconi WipLL”) pursuant to a stock purchase agreement, and
renamed the business Airspan Networks (Israel) Limited (“Airspan Israel”). The
products and services produced by Airspan Israel enable operators in licensed
and unlicensed wireless bands to offer high-speed, low cost, wireless broadband
connections for data and voice over IP. We acquired all of the issued and
outstanding capital stock and debt of Marconi WipLL in exchange for $3 million
of cash.
In
October 2003, we began marketing our AS4030 and AS3030 product range of Airspan
branded high-end point-to-multipoint and point-to-point products suitable
for
operators wishing to deliver service offerings to medium and large businesses
and multi-tenant dwellings that require considerable bandwidth for their
end
users. These products, based on 802.16 Orthogonal Frequency Division
Multiplexing (“OFDM”) technology, can also be used for a wide range of backhaul
applications, for example connecting remote base stations to a central
office.
In
December, 2003, we acquired the fixed wireless access business of Nortel
Networks known as “Proximity” in accordance with the terms and conditions of a
contemporaneously executed and delivered Purchase and Sale Agreement. The
Proximity products enable operators to provide carrier class circuit switched
voice and data services, based on a Time Division Multiple Access (“TDMA”)
technology. We acquired inventory relating to the Proximity business as well
as
existing assets associated with the manufacture, development and support
of the
Proximity product line. We also assumed the product supply obligations
associated with customer contracts and certain other liabilities and obligations
along with the workforce of 26 persons directly employed in the Proximity
business. The final purchase price was $13.1 million.
On
March
9, 2005 we announced the introduction of a new product line known as “AS.MAX”.
AS.MAX is a full portfolio of WiMAX systems, Base Stations and Customer Premise
Equipment (“CPEs”), based on the 802.16 standard. The AS.MAX product range is
designed to serve both:
| · |
our
traditional fixed point-to-multipoint BWA market;
and
|
| · |
new
markets, such as the BWA market for nomadic and portable
applications.
|
On
June
16, 2005, we consummated the acquisition of Arelnet Ltd. “Arelnet” an Israeli
company providing Voice over IP (“VoIP”) network infrastructure equipment and
solutions, including soft switches and gateways supporting major VoIP standards.
The purchase price of $8.7 million, comprised of $4.0 million of cash and
1,001,325 shares of our common stock pursuant to the terms of a Purchase
Agreement between the Company and Arelnet, dated March 29, 2005.
3
4
SELLING
SHAREHOLDER
The
following table provides the name of the Selling Shareholder and the number
of
shares of common stock beneficially owned by the Selling Shareholder as of
July
5, 2005 on an as-converted to common stock basis.
Beneficial
ownership is determined in accordance with the rules of the SEC. Percentage
of
beneficial ownership as of July 5, is based upon 46,535,204 shares of common
stock outstanding on an as-converted to common stock basis.
The
Shares are issuable on conversion of shares of our Series A Preferred Stock
that
the Selling Shareholder purchased in a private placement on September 13,
2004.
For more information related to this transaction, see our Current Reports
on
Form 8-K filed with the Securities and Exchange Commission of September 13,
2004, on September 15, 2004 and on September 27, 2004. The following description
is a summary only, and you should read these 8-Ks and the documents attached
as
exhibits for more complete information.
In
connection with this issuance, we agreed to register the Shares with the
Securities and Exchange Commission. The Selling Shareholder has agreed not
to
sell these Shares until March 13, 2006. Beginning on that date, 1,825,000
Shares
will be released from this contractual lock-up on each of March 13, 2006,
June
13, 2006, September 13, 2006 and December 31, 2006, such that all of the
Shares
will be released from this contractual lock-up on December 31, 2006. However,
all Shares will be released from the lock-up earlier if:
| · |
a
change of control or liquidation of Airspan
occurs;
|
| · |
the
Selling Shareholder sends us notice that it has reasonably concluded
that
we breached the representations and warranties we made to the Selling
Shareholder, if the breach results in a 20% or greater decline in
the
value of the Selling Shareholder’s investment in us;
or
|
| · |
our
stock trades above $12 for any 30-day period that begins after September
30, 2006.
|
The
holders of Series A Preferred Stock are entitled to other rights, such as
a
liquidation preference over our common stock in the event of a change of
control
or liquidation of Airspan and the right to approve corporate actions such
as
amendments to our Articles of Incorporation that adversely affect the Series
A
Preferred Stock, the creation of securities with rights that are senior to
or
parri passu with the rights of the Series A Preferred Stock, incurring debt
in
excess of $10,000,000, payments of dividends or the issuance of more than
2,000,000 shares of our common stock if the price of such issuances is below
$4.00.
Since
the
Selling Shareholder may sell all, some or none of their respective shares,
we
cannot estimate the aggregate number and percentage of shares of common stock
that the Selling Shareholder will offer pursuant to this prospectus or that
the
Selling Shareholder will own upon completion of an offering to which this
prospectus relates.
|
|
|
Shares
Beneficially
Owned
Prior to this
Offering
|
|
|||
|
Stockholder
|
|
Number
|
|
Percent
|
|
|
|
Oak
Investment Partners XI, Limited Partnership (1)
c/o
Oak Management Corporation
One
Gorham Island
Westport,
CT 06880
|
|
7,336,614
|
15.77%
|
|||
(1)
Consists of (i)
7,300,000 shares of common stock issuable on the conversion of the Company’s
Series A Preferred Stock owned by Oak Investment Partners XI, Limited
Partnership, (ii) 35,918 shares of common stock owned by Oak Investment Partners
VIII, Limited Partnership and (iii) 696 shares owned by Oak VIII Affiliates
Fund, Limited Partnership. The names of the parties who share power to vote
and
share power to dispose of the shares held by Oak Investment Partners XI,
Limited
Partnership are Fredric W. Harman, Bandel L. Carano, Ann H. Lamont, Edward
F.
Glassmeyer, Gerald R. Gallagher and David B. Walrod, all of whom are managing
members of Oak Associates XI, LLC, the General Partner of Oak Investment
Partners XI, Limited Partnership. Fredric W. Harman, Bandel L. Carano, Ann
H.
Lamont, Edward F. Glassmeyer, Gerald R. Gallagher and David B. Walrod disclaim
beneficial ownership of the securities held by such partnership in which
Fredric
W. Harman, Bandel L. Carano, Ann H. Lamont, Edward F. Glassmeyer, Gerald
R.
Gallagher and David B. Walrod do not have a pecuniary interest.
5
The
names
of the parties who share the power to vote and share power to dispose of
the
shares held by Oak Investment Partners VIII, Limited Partnership and Oak
VIII
Affiliates Fund, Limited Partnership are Fredric W. Harman, Bandel L. Carano,
Ann H. Lamont, Edward F. Glassmeyer and Gerald R. Gallagher, all of whom
are
managing members of both Oak Associates VIII, LLC, the General Partner of
Oak
Investment Partners VIII, Limited Partnership, and Oak VIII Affiliates, LLC,
the
General Partner of Oak VIII Affiliates Fund, Limited Partnership. Fredric
W.
Harman, Bandel L. Carano, Ann H. Lamont, Edward F. Glassmeyer and Gerald
R.
Gallagher disclaim beneficial ownership of the securities held by such
partnership in which Fredric W. Harman, Bandel L. Carano, Ann H. Lamont,
Edward
F. Glassmeyer and Gerald R. Gallagher do not have a pecuniary
interest.
USE
OF PROCEEDS
The
Shares are being sold by the Selling Shareholder acting as principal for
its own
account. We will not be entitled to any of the proceeds from such
sales.
PLAN
OF DISTRIBUTION
The
Shares may be offered and sold from time to time by the Selling Shareholder.
The
Selling Shareholder will act independently of us in making decisions with
respect to the timing, manner and size of each sale. The Selling Shareholder
may
sell the shares being offered hereby on the Nasdaq National Market, or
otherwise, at prices and under terms then prevailing or at prices related
to the
then current market price, at varying prices or at negotiated prices. These
sales
may
be effected at various times in one or more of the following transactions,
or in
other kinds of transactions:
| · |
transactions
on the Nasdaq National Market or any national securities exchange
or U.S.
inter-dealer system of a registered national securities association
on
which our Common Stock may be listed or quoted at the time of
sale;
|
| · |
in
the over-the-counter market;
|
| · |
in
private transactions and transactions otherwise than on these exchanges
or
systems or in the over-the-counter
market;
|
| · |
in
connection with short sales of the
shares;
|
| · |
by
pledge to secure debt and other
obligations;
|
| · |
through
the writing of options, whether the options are listed on an options
exchange or otherwise;
|
| · |
in
connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions
in
standardized or over-the-counter options;
or
|
| · |
through
a combination of any of the above
transactions.
|
The
Selling Shareholder and its donees may sell the Shares directly to purchasers
or
through underwriters, broker-dealers or agents, who may receive compensation
in
the form of discounts, concessions or commissions from the Selling Shareholder
or the purchasers. These discounts, concessions or commissions as to any
particular underwriter, broker-dealer or agent may be in excess of those
customary in the types of transactions involved.
In
addition, any securities covered by this prospectus that qualify for sale
pursuant to Rule 144 of the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus.
6
We
entered into an agreement for the benefit of the Selling Shareholder to register
the Shares under applicable federal and state securities laws. This agreement
provides for cross- indemnification of the Selling Shareholder and us and
our
respective directors, officers and controlling persons against specific
liabilities in connection with the offer and sale of the Shares, including
liabilities under the Securities Act. We will pay substantially all of the
expenses incurred by the Selling Shareholder incident to the offering and
sale
of the Shares.
We
have
advised the Selling Shareholder that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of the Shares
in the
market and to the activities of the Selling Shareholder and its affiliates.
In
addition, we will make copies of this prospectus available to the Selling
Shareholder and have informed it of the need for delivery of copies of this
prospectus to purchasers at or prior to the time of any sale of the Shares
pursuant to the prospectus. The Selling Shareholder may indemnify any
broker-dealer than participates in transactions involving the sale of the
shares
against certain liabilities, including liabilities arising under the Securities
Act.
The
Selling Shareholder may transfer Shares owned by it by gift, and upon any
such
transfer the donee would have the same right of sale as the Selling
Shareholder.
At
the
time a particular offer of Shares is made, if required, a prospectus supplement
will be distributed that will set forth the number of Shares being offered
and
the terms of the offering, including the name of any underwriter, dealer
or
agent, the purchase price paid by any underwriter, any discount, commission
and
other item constituting compensation, any discount, commission or concession
allowed or reallowed or paid to any dealer, and the proposed selling price
to
the public.
RISK
FACTORS
If
we continue to incur substantial losses and negative operating cash flows,
we
may not succeed in achieving or maintaining profitability in the future.
We
have
incurred net losses since we became an independent company, and as of December
31, 2004 we had an accumulated deficit of $188 million. We anticipate that
we
will continue to experience negative cash flows over the next 12 months.
Our
operating losses have been due in part to the commitment of significant
resources to our research and development and sales and marketing organizations.
We expect to continue to devote resources to these areas and, as a result,
we
will need to continue increasing our quarterly revenues to achieve and maintain
profitability. We cannot be certain that we will achieve sufficient revenues
for
profitability. If we do achieve profitability, we cannot be certain that
we can
sustain or increase profitability on a quarterly or annual basis in the future.
The
reduction in expenditures by communications service providers has had, and
could
continue to have a negative impact on our results of operations.
We
believe telecommunications carriers and service providers continue to spend
less
annually on capital investments and network expansions than they did at the
end
of the prior decade. Many new and small service providers and wireless companies
have failed, and existing service providers have been reducing or delaying
expenditures on new equipment and applications. We believe it is possible
that
this reduced level of spending could continue for the foreseeable future.
A
further global long-term decline in capital expenditures may reduce our sales,
increase the need for inventory write-offs and could result in downward pressure
on the price of our products, all of which would have a material adverse
effect
on our results of operations and stock price.
Since
a significant percentage of our expenses are fixed and do not vary with
revenues, our quarterly operating results are volatile and difficult to predict,
and our stock price could decline.
We
believe that period-to-period comparisons of our operating results are not
necessarily meaningful. Since our customers are not typically required to
purchase a specific number of our products in any given quarter, we may not
be
able to accurately forecast our quarterly revenues. Revenues are further
affected if major deployments of our products do not occur in any particular
quarter as we anticipate and/or our customers delay shipments or payments
due to
their inability to obtain licenses or for other reasons. As a result, our
quarterly operating results have fluctuated in the past and will likely vary
in
the future. This could cause the market price of our common stock to decline.
Other factors that may affect our quarterly operating results and our stock
price include the loss of a major customer, our ability to react quickly
to new
competing technologies, products and services which may cause us to lose
our
customers, or if our suppliers and manufacturers are not able to fulfill
our
orders as a result of a shortage of key components that leads to a delay
in
shipping our products. We incur expenses in significant part based on our
expectations of future revenue, and we expect our operating expense, in
particular salaries and lease payments, to be relatively fixed in the short
run.
Accordingly, any unanticipated decline in revenue for a particular quarter
could
have an immediate negative effect on results for that quarter, possibly
resulting in a change in financial estimates or investment recommendations
by
securities analysts, which could result in a fall in our stock price. You
should
not rely on the results of any one quarter as an indication of future
performance.
7
Competition
from alternative communications systems, as well as larger, better-capitalized
or emerging competitors for our products, could result in price reductions,
reduced gross margins and loss of or inhibit growth of market share.
We
compete in a relatively new, rapidly evolving and highly competitive and
fragmented market. We compete with companies that are producing fixed wireless
communications systems, wired DSL, cable networks and occasionally fiber
optic
cable and satellite technologies and other new entrants to this industry,
as
well as traditional communications companies.
Competitors
vary in size and scope, in terms of products and services offered. With respect
to the fixed broadband wireless solutions we offer to serve in licensed and
unlicensed frequencies, we believe we compete directly with Siemens Motorola,
Alvarion, Proxim, SR Telecom, with a number of smaller privately-held companies
and with the divisions of a number of institutional telecommunication equipment
companies. We also believe we compete indirectly with a number of large
telecommunication equipment suppliers such as Alcatel and Harris.
We
believe we encounter, and may increasingly encounter, competition from competing
wireless technologies such as cellular technology. Cellular networks are
now
capable of delivering both voice and limited broadband data connectivity
to
fixed, mobile, nomadic and portable applications. These technologies such
as
1XRTT, a single carrier (1x) technology has the capability of transmitting
data
at ISDN like speeds, up to 144 Kbps. It is our further understanding that
one
technology provides for multiple voice channels and medium rate data services
at
maximum transmission rates of 200 Kbps on the uplink and 2.4 Mbps on the
down
link. In addition, our technology competes with other high-speed solutions,
such
as wired DSL, cable networks, and occasionally fiber optic cable and satellite
technologies. The performance and coverage area of our wireless systems are
dependent on certain factors that are outside of our control, including features
of the environment in which the systems are deployed, such as the amount
of
clutter (natural terrain features and man-made obstructions) and the radio
frequency available. Any inability to overcome these obstacles may make our
technology less competitive in comparison with other technologies and make
other
technologies less expensive or more suitable. Our business may also compete
in
the future with products and services based on other wireless technologies
and
other technologies that have yet to be developed.
Many
of
our competitors are substantially larger than we are and have significantly
greater financial, sales and marketing, technical, manufacturing and other
resources and more established distribution channels. These competitors may
be
able to respond more rapidly to new or emerging technologies and changes
in
customer requirements, or to devote greater resources to the development,
promotion, sale and financing of their products than we can. Furthermore,
some
of our competitors have made or may make strategic acquisitions or establish
cooperative relationships among themselves or with third parties to increase
their ability to gain customer market share rapidly. These competitors may
enter
our existing or future markets with systems that may be less expensive, provide
higher performance or contain additional features.
We
expect
our competitors to continue to improve the performance of their current products
and to introduce new products or new technologies that may supplant or provide
lower-cost alternatives to our systems. This or other factors may result
in
changes in the market valuations of our competitors, which have been volatile
recently, and could cause our stock price to fall. To remain competitive,
we
must continue to invest significant resources in research and development,
sales
and marketing and customer support. We cannot be certain that we will have
sufficient resources to make these investments or that we will be able to
make
the technological advances necessary to remain competitive.
8
If
our stock price falls below $1.00 per share, our common stock may be de-listed
from the Nasdaq National Market.
The
National Association of Securities Dealers, Inc. has established certain
standards for the continued listing of a security on the Nasdaq National
Market.
These standards require, among other things, that the minimum bid price for
a
listed security be at least $1.00 per share. Under Nasdaq’s listing maintenance
standards, if the closing bid price of our common stock remains below $1.00
per
share for 30 consecutive trading days, Nasdaq will issue a deficiency notice
to
us. If the closing bid price subsequently does not reach $1.00 per share
or
higher for a minimum of ten consecutive trading days during the 180 calendar
days following the issuance of the deficiency notice from Nasdaq, Nasdaq
may
de-list our common stock from trading on the Nasdaq National Market.
If
our
common stock is to be de-listed from the Nasdaq National Market, we may apply
to
have our common stock listed on the Nasdaq SmallCap Market. In the event
that
such application is accepted, of which there can be no assurance, we anticipate
the change in listings may result in a reduction in some or all of the
following, each of which could have a material adverse effect on our investors:
| • |
the
liquidity of our common stock;
|
| • |
the
market price of our common stock;
|
| • |
the
number of institutional investors that will consider investing
in our
common stock;
|
| • |
the
number of investors in general that will consider investing in
our common
stock;
|
| • |
the
number of market makers in our common stock;
|
| • |
the
availability of information concerning the trading prices and volume
of
our common stock;
|
| • |
the
number of broker-dealers willing to execute trades in shares of
our common
stock; and
|
| • |
our
ability to obtain financing for the continuation of our operations.
|
Should
our application to the Nasdaq SmallCap Market be rejected or if we fail to
continue to satisfy the Nasdaq SmallCap Market’s continued listing requirements,
our common stock could be delisted entirely or relegated to trading on the
over-the-counter-market.
Our
customer contracts vary widely in terms and duration, with a many of our
customers executing only short-term purchase orders, and allow our customers
to
terminate without significant penalties.
Our
contracts and purchase orders are separately negotiated with each of our
customers and the terms vary widely. A majority of our customers may only
execute short-term purchase orders for a single or a few systems at one time
instead of long-term contracts for large-scale deployment of our systems.
These
contracts and purchase orders do not ensure that they will purchase any
additional products beyond that specifically listed in the order.
Moreover,
since we believe that these purchase orders may represent the early portion
of
longer-term customer programs, we expend significant financial, personnel
and
operational resources to fulfill these orders. If our customers fail to purchase
additional products to fulfill their programs as we hope, we may be unable
to
recover the costs we incur and our business could suffer.
In
addition, our general framework contracts are generally non-exclusive and
contain provisions allowing our customers to terminate the agreement without
significant penalties. Our contracts also may specify the achievement of
shipment, delivery and installation commitments. If we fail to meet these
commitments or negotiate extensions in a timely manner, our customers may
choose
to terminate their contracts with us or impose monetary penalties.
9
Changes
in telecommunications regulation or delays in receiving licenses could adversely
affect many of our customers and may lead to lower sales.
Many
of
our customers are subject to extensive regulation as communications service
providers. Changes in legislation or regulation that adversely affect those
existing and potential customers could lead them to delay, reduce or cancel
expenditures on communications access systems, which actions would harm our
business. In the past, we have suffered the postponement of anticipated customer
orders because of regulatory issues. The resolution of those issues can be
lengthy and the outcome can be unpredictable. We have also received orders
in
the past from customers that were contingent upon their receipt of licenses
from
regulators, the timing of which were uncertain. The receipt of licenses by
our
customers may occur a year or more after they initially seek those licenses,
or
even after they place orders with us.
At
present there are few laws or regulations that specifically address our business
of providing communications access equipment. However, future regulation
may
include access or settlement charges or tariffs that could impose economic
burdens on our customers and us. We are unable to predict the impact, if
any,
that future legislation, judicial decisions or regulations will have on our
business.
Our
sales cycle is typically long and unpredictable, making it difficult to
accurately predict inventory requirements, forecast revenues and control
expenses.
Typically
our sales cycle can range from one month to two years and varies by customer.
The length of the sales cycle with a particular customer may be influenced
by a
number of factors, including:
| • |
the
particular communications market that the customer serves;
|
| • |
the
testing requirements imposed by the customer on our systems;
|
| • |
the
customer’s experience with sophisticated communications equipment
including fixed wireless technology; and
|
| • |
the
cost of purchasing our systems, including the cost of converting
to our
products from previously-installed equipment, which may be significant.
|
Before
we
receive orders, our customers typically test and evaluate our products for
a
period that can range from a month to more than a year. In addition, the
emerging and evolving nature of the communication access market may cause
prospective customers to delay their purchase decisions as they evaluate
new
and/or competing technologies or, wait for new products or technologies to
come
to market. As the average order size for our products increases, our customers’
processes for approving purchases may become more complex, leading to a longer
sales cycle. We expect that our sales cycle will continue to be long and
unpredictable. Accordingly, it is difficult for us to anticipate the quarter
in
which particular sales may occur, to determine product shipment schedules
and to
provide our manufacturers and suppliers with accurate lead-time to ensure
that
they have sufficient inventory on hand to meet our orders. In addition, our
sales cycle impairs our ability to forecast revenues and control expenses.
Our
sales in Asia, Latin America and Africa may be difficult and costly as a
result
of the political, economic and regulatory risks in those regions.
Sales
to
customers based outside the U.S. have historically accounted for a substantial
majority of our revenues. In 2004, our international sales (sales to customers
located outside the U.S. which includes a small percentage of U.S. customers
where the final destination of the equipment is outside of the U.S.) accounted
for 97% of our total revenue, with sales to customers in Latin America,
particularly Mexico, accounting for 74% of total revenue, and sales to customers
in Europe, Asia and Africa accounting for 12%, 9% and 2%, respectively, of
total
revenue. As a result of our acquisition of the Proximity business the sales
to
customers in Latin America materially increased in fiscal 2004 over fiscal
2003
primarily as a result of sales to Axtel. Sales in Asia, Latin America and
Africa
in particular expose us to risks associated with international operations
including:
10
| • |
longer
payment cycles and customers seeking extended payment terms, particularly
since our customers in Asia and Latin America have difficulty borrowing
money or receiving lines of credit, especially if there is political
and
economic turmoil in their countries;
|
| • |
tariffs,
duties, price controls or other restrictions on foreign currencies
or
trade barriers imposed by foreign countries may have made or may
make our
systems expensive and uncompetitive for local operators;
|
| • |
import
or export licensing or product-certification requirements;
|
| • |
unexpected
changes in regulatory requirements and delays in receiving licenses
to
operate;
|
| • |
political
and economic instability, including the impact of economic recessions;
|
| • |
our
reluctance to staff and manage foreign operations as a result of
political
unrest even though we have business opportunities in a country;
and
|
| • |
limited
ability to enforce agreements in regions where the judicial systems
may be
less developed.
|
Our
operations in Israel may be disrupted by political and military tensions
in
Israel and the Middle East.
We
conduct various activities related to the WipLL product in Israel, including:
research and development; design; raw material procurement; and manufacturing
through a manufacturing subcontractor based in Israel. Our operations could
be
negatively affected by the political and military tensions in Israel and
the
Middle East. Israel has been involved in a number of armed conflicts with
its
neighbors since 1948 and a state of hostility, varying in degree and intensity,
has led to security and economic problems in Israel. Since September 2000,
a
continuous armed conflict with the Palestinian Authority has been taking
place.
While these conflicts have had no material adverse effect on our operations
in
the past, conditions in Israel could, in the future, disrupt our development,
manufacture or distribution of WipLL products.
We
may not be able to expand our sales and distribution capabilities, including
establishing relationships with distributors and major system integrators
and
telecommunications equipment OEMs, which would harm our ability to generate
revenue.
We
believe that our future success, particularly with respect to WiMAX, will
depend
upon our ability to expand our direct and indirect sales operations, including
establishing relationships with distributors and major system integrators
and
telecommunications equipment OEMs. While we have been at times successful
in
signing country-specific OEM agreements with major suppliers such as Siemens
and
L.M. Ericsson, we cannot be certain that we will be successful in maintaining
or
expanding these agreements.
We
are dependent on our lines of fixed wireless communications systems and our
future revenue depends on their commercial success and our ability to adapt
to
evolving industry standards and new technologies.
The
market for communications systems has been characterized by rapid technological
developments and evolving industry standards. Our ability to increase revenue
in
the future depends on the commercial success of our lines of fixed wireless
communications systems and our ability to adapt to and to successfully introduce
new standards and technologies, to meet customer preferences in a timely
and
cost-effective manner. To date we have been marketing AS4000, AS4020, WipLL
and
Proximity products. all of which are based on proprietary technologies we
own.
Along with software tools, network management systems and planning and
configuration tools, these are the only products we have shipped to customers,
and we expect that revenue from these products will account for a significant
proportion of our revenue for the next 12 to 24 months. However, with the
expected introduction of our new WiMAX CertifiedTM
AS.MAX
product line in 2005, we expect to begin generating a portion of our revenues
from the new products commencing in the second half of fiscal 2005. In the
course of enhancing our existing products and developing the AS.MAX product
line, we have made assumptions about potential demand for both new and existing
products. If our assumptions are incorrect or new industry standards emerge,
both our existing products and the AS.MAX product range may not sell as
expected. For instance, if the IEEE 802.16 does become the principal standard
for the BWA industry, our existing products, other than our ASMAX products,
could be rendered obsolete in the near future. We cannot assure you that
we will
be successful in developing and introducing the new AS.MAX product range
or
enhancements to existing products or new products to meet evolving standards
in
the future.
11
Our
dependence on key suppliers and contract manufacturers may result in product
delivery delays if they do not have components in stock or terminate their
non-exclusive arrangements with us.
Some
of
the key components of our products are purchased from single vendors, including
printed circuit board assemblies application specific integrated circuits
and
radio frequency filters, for which alternative sources are generally not
readily
available in the short to medium term. If our vendors fail to supply us with
components because they do not have them in stock when we need them, if the
supply of the components in the market is limited, or if our vendors reduce
or
eliminate their manufacturing capacity for these components or enter into
exclusive relationships with other parties which prevent them from selling
to
us, we could experience significant delays in shipping our products while
we
seek other supply sources, which may result in our customers claiming damages
for delays. At times we have been forced to purchase these components from
distributors instead of from the manufacturers, which has significantly
increased our costs. During the third quarter of 2004, as a result of a
temporary shortage of components, we experienced temporary difficulty
manufacturing enough Proximity products to meet existing orders in a timely
manner. We do not have long-term contracts with all of our suppliers. Instead,
we execute purchase orders approximately three to six months in advance of
when
we believe we may need the components. These purchase orders are non-exclusive,
and we are generally not required to purchase any minimum volume of components
from any of these suppliers. In those instances in which we do not have a
long-term contract with a supplier, the supplier may terminate our relationship
upon six months’ prior notice.
In
addition, we generally outsource our manufacturing processes to subcontractors,
primarily Solectron Corporation for our AS4000, AS4020 and Proximity products
and Racamtech Limited for our WipLL products, who rely on our forecasts of
future orders to make purchasing and manufacturing decisions. We provide
them
with forecasts on a regular basis. If a forecast turns out to be inaccurate,
it
may lead either to excess inventory that would increase our costs or a shortage
of components that would delay shipments of our systems. Our contracts with
our
major manufacturing subcontractors are non-exclusive and most contracts may
be
terminated with six months notice by either party without significant penalty.
Other than agreeing to purchase the materials we request in the forecasts,
we do
not have any agreements with them to purchase any minimum volume.
We
currently depend on a few key customers for substantially all of our sales.
A
loss of one or more of those customers could cause a significant decrease
in our
net revenue.
We
currently derive, and expect to continue to derive, a substantial percentage
of
our net sales from fewer than ten customers. In fiscal 2004, 82% of our revenue
was derived from our top ten customers. In fiscal 2004, Axtel accounted for
approximately 70% of our annual revenue and was the only customer that
individually accounted for more than 10% of our annual revenue. It is possible
that in fiscal 2005 one customer, Axtel, may account for greater than 50%
of our
projected annual revenue. We believe that there are certain economies of
scale
inherent in our industry. Accordingly, the loss of Axtel as a customer or
the
loss of any large percentage of our supply contracts could negatively impact
our
gross profit margins, our profitability and efforts to preserve cash resources.
Axtel
has
the right to terminate the Axtel supply agreement if we fail to comply with
the
terms and conditions of the agreement and such breach is not cured. For
instance, if we fail to meet delivery schedules or if we fail to deliver
products and services that meet the contract specifications, Axtel may claim
we
breached the agreement. Even if such failures are solely attributable to
the
acts or failures to act of third parties, Axtel may have the right to terminate
the agreement. Additionally, Axtel itself has a limited operating history
having
only commenced operations in 1999, and is subject to its own competitive
pressures and operating constraints in the Mexican economy. If Axtel should
fail
for any reason, or fail to have access to debt and equity markets for liquidity,
it may not be able to honor its purchase commitments under our supply agreement.
12
The
amount of revenue we derive from a specific customer is likely to vary from
period to period, and a major customer in one period may not produce significant
additional revenue in a subsequent period. We anticipate that our operating
results will continue to depend on sales to a small number of key customers
in
the foreseeable future. In general, our contracts with our customers involve
major deployments that require several months to fulfill, so our results
may
depend on the same major customers for consecutive quarters. Once a contract
is
fulfilled, we cannot assure you that the customer will continue to purchase
upgrades or services from us, or possibly new products. It is necessary
therefore for us to continually seek new customers in order to increase our
revenue. To the extent that any major customer terminates its relationship
with
us, our revenues could decline significantly.
If
we lose Eric Stonestrom or any of our other executive officers, we may encounter
difficulty replacing their expertise, which could impair our ability to
implement our business plan successfully.
We
believe that our ability to implement our business strategy and our future
success depends on the continued employment of our senior management team,
in
particular our president and chief executive officer, Eric Stonestrom. Our
senior management team, who have extensive experience in our industry and
are
vital to maintaining some of our major customer relationships, may be difficult
to replace. The loss of the technical knowledge and management and industry
expertise of these key employees could make it difficult for us to execute
our
business plan effectively, could result in delays in new products being
developed, lost customers and diversion of resources while we seek replacements.
If
we are not able to implement a program to reduce costs over time, introduce
new
products or increase sales volume to respond to declines in the average selling
prices of our products, our gross margin may decline.
We
expect
the average selling prices of our products to decline due to a number of
factors, including competitive pricing pressures, rapid technological change,
industry standardization and volume sales discounts. Accordingly, to maintain
or
increase our gross margin, we must develop and introduce new products or
product
enhancements with higher gross margins and implement cost reductions. If
our
average selling prices continue to decline and we are not able to maintain
or
increase our gross margin, our results of operations could be harmed.
If
we are not able to implement a program to conform our products to industry
standards or to successfully market and sell our standards-based products,
our
revenues may decline
We
have
developed and continue to develop certain of our products in accordance with
existing, emerging and anticipated wireless-industry standards. In particular,
we develop products and product features that are designed to conform to
IEEE
802.16-2004 and IEEE 802.16e standards. If our products fail to comply with
these standards, we may not be able to sell them. Industry standards are
subject
to change from time to time by their regulatory bodies. If, as a result of
any
changes, the products we have developed fail to meet industry standards,
as
revised, we may not be able to sell such products.
Our
future success depends in part on the successful adoption by our customers
of
products that meet these industry standards. If the wireless broadband market
does not adopt these standards or if our customers are unable to successfully
deploy products based on these standards, we will not be successful selling
these products.
In
developing products that conform to defined wireless-industry standards,
we
recognize that, by diminishing product differentiation, standardization may
lower the barriers to entry by other manufacturers in the markets in which
we
seek to sell our products. If companies with greater resources than us choose
to
manufacture any standards-based products to compete with us, this may cause
competition to be based on criteria such as the relative size, resources,
marketing skills and financial incentives provided by our competitors, where
we
may be weaker than if competition is based on product differentiation
alone.
We
may not have adequate protection for our intellectual property, which may
make
it easier for others to misappropriate our technology and enable our competitors
to sell competing products at lower prices and harm our business.
Our
success depends in part on proprietary technology. We rely on a combination
of
patent, copyright, trademark and trade secret laws and contractual restrictions
on disclosure to protect our intellectual property rights. Despite our efforts
to protect our proprietary rights, we cannot be certain that the steps we
have
taken will prevent misappropriation of our technology, and we may not be
able to
detect unauthorized use or take appropriate steps to enforce our intellectual
property rights. The laws of some foreign countries, particularly in Asia,
do
not protect our proprietary rights to the same extent as the laws of the
U.S.
and the U.K., and we may encounter substantial infringement problems in those
countries. In addition, we do not file for patent protection in every country
where we conduct business. In instances where we have licensed intellectual
property from third parties, we may have limited rights to institute actions
against third parties for infringement of the licensed intellectual property
or
to defend any suit that challenges the validity of the licensed intellectual
property. If we fail to adequately protect our intellectual property rights,
or
fail to do so under applicable law, it would be easier for our competitors
to
copy our products and sell competing products at lower prices, which would
harm
our business.
13
Our
products may infringe on the intellectual property rights of third parties,
which may result in lawsuits that could be costly to defend and prohibit
us from
selling our products.
Third
parties could assert exclusive patent, copyright, trademark and other
intellectual property infringement claims against the technologies that are
important to us. If any inquiry from a third party relating to patents or
trademarks leads to a proceeding against us and we are unable to defend
ourselves successfully, our ability to sell our products may be adversely
affected and our business would be harmed. In addition, third parties may
assert
claims, or initiate litigation against us, or our manufacturers, suppliers
or
customers with respect to existing or future products, trademarks or other
proprietary rights. There is a substantial risk of litigation regarding
intellectual property rights in our industry. Any claims against us, or
customers that we indemnify against intellectual property claims, with or
without merit, may:
| • |
be
time-consuming, costly to defend and harm our reputation;
|
| • |
divert
management’s attention and resources;
|
| • |
cause
delays in the delivery of our products;
|
| • |
require
the payment of monetary damages;
|
| • |
result
in an injunction, which would prohibit us from using these technologies
and require us to stop shipping our systems until they could be
redesigned, if possible; and
|
| • |
require
us to enter into license or royalty agreements, which may not be
available
on acceptable terms or require payment of substantial sums.
|
Since
we incur most of our expenses and a portion of our cost of goods sold in
foreign
currencies, fluctuations in the values of foreign currencies could have a
negative impact on our profitability.
Although
96% of our sales in 2004 and a majority of our cost of goods sold were
denominated in U.S. dollars, we incur most of our operating expenses in British
pounds and, to a lesser extent, Israeli shekels for the WipLL business. We
expect these percentages to fluctuate over time. Fluctuations in the value
of
foreign currencies could have a negative impact on the profitability of our
global operations and our business and our currency hedging activities may
not
limit these risks. The value of foreign currencies may also make our products
more expensive than local products.
A
material defect in our products that either delays the commencement of services
or affects customer networks could seriously harm our credibility and our
business, and we may not have sufficient insurance to cover any potential
liability.
Fixed
wireless devices are highly complex and frequently contain undetected software
or hardware errors when first introduced or as new versions are released.
We
have detected and are likely to continue to detect errors and product defects
in
connection with new product releases and product upgrades. In the past, some
of
our products have contained defects that delayed the commencement of service
by
our customers.
14
If
our
hardware or software contains undetected errors, we could experience:
| • |
delayed
or lost revenues and reduced market share due to adverse customer
reactions;
|
| • |
higher
costs and expenses due to the need to provide additional products
and
services to a customer at a reduced charge or at no charge;
|
| • |
claims
for substantial damages against us, regardless of our responsibility
for
any failure, which may lead to increased insurance costs;
|
| • |
negative
publicity regarding us and our products, which could adversely
affect our
ability to attract new customers; and
|
| • |
diversion
of management and development time and resources.
|
Our
general liability insurance coverage may not continue to be available on
reasonable terms or in sufficient amounts to cover one or more large claims
or
our insurer may disclaim coverage as to any future claim. The successful
assertion of any large claim against us could adversely affect our business.
Our
failure to manage future acquisitions and joint ventures effectively may
divert
management attention from our core business and cause us to incur additional
debt, liabilities, or costs.
Our
strategy of expanding our business through, among other things, acquisitions
of
other businesses and technologies and joint ventures presents special risks.
We
expect to continue to expand our business in certain areas through the
acquisition of businesses, technologies, products, and/or services from other
businesses that may complement our product and service offerings. We also
may
consider joint ventures and other collaborative projects. However, we may
not be
able to:
| • |
identify
appropriate acquisition or joint venture candidates;
|
| • |
successfully
negotiate, finance, or integrate any businesses, products, or technologies
that we acquire; and/or
|
| • |
successfully
manage any joint venture or collaboration.
|
Furthermore,
the integration of any acquisition or joint venture may divert management
attention in connection with both negotiating the acquisitions and integrating
the acquired assets. In addition, any acquisition may strain managerial and
operational resources as management tries to oversee larger operations. We
also
face exposure to unforeseen liabilities of acquired companies and run the
increased risk of costly and time-consuming litigation, including stockholder
lawsuits. Moreover, in connection with any acquisition or joint venture,
we may
issue securities that are superior to the right of holders of our common
stock,
or which may have a dilutive effect on the common stockholders and/or we
may
incur additional debt. If we fail to manage these acquisitions or joint ventures
effectively, we may incur debts or other liabilities or costs that could
harm
our operating results or conditions.
SPECIAL
NOTE REGARDING FORWARD-LOOKING INFORMATION
This
prospectus, any prospectus supplement and the documents we incorporate by
reference in this prospectus contain 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. All statements, other than statements of
historical facts, included in this prospectus or in any prospectus supplement
or
incorporated by reference in this prospectus, including statements regarding
our
strategy, future operations, financial position, future revenues, projected
costs, prospects, plans and objectives of management, may be deemed to be
forward-looking statements. The words "anticipates," "believes," "estimates,"
"expects," "intends," "may," "plans," "projects," "will," "would" and similar
expressions are intended to identify forward-looking statements, although
not
all forward-looking statements contain these identifying words.
15
We
may
not actually achieve the plans, intentions or expectations disclosed in our
forward-looking statements and you should not place undue reliance on our
forward-looking statements. There are a number of important factors that
could
cause actual results or events to differ materially from the plans, intentions
and expectations disclosed in the forward-looking statements we make. These
important factors include the factors that we identify in the documents we
incorporate by reference in this prospectus, particularly the factors referenced
under the heading "Risk Factors." You should read these factors and other
cautionary statements made in this prospectus and in the documents we
incorporate by reference as being applicable to all related forward-looking
statements wherever they appear in the prospectus, in any prospectus supplement
and in the documents we incorporate by reference in this prospectus. We do
not
assume any obligation to update any forward-looking statements.
WHERE
YOU CAN FIND MORE INFORMATION
We
file
annual, quarterly and special reports and other information with the SEC.
Our
SEC filings are available to the public over the Internet on our website
at
www.airspan.com. This information can also be examined without charge at
the
public reference facilities of the SEC located at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies of this material can be obtained from
the SEC
at prescribed rates. You may obtain information about the public reference
facilities by calling the SEC at (800) SEC-0330. In addition, the SEC maintains
a web site www.sec.gov that contains the reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC, including the Company.
Our
Shares are traded on Nasdaq under the symbol “AIRN,” and you may inspect copies
of any documents we file with the SEC at the offices of The National Association
of Securities Dealers, Inc. located at 1735 K Street, NW, Washington, DC
20006.
The
SEC
allows us to "incorporate" into this prospectus information that we file
with
the SEC in other documents. This means that we can disclose important
information to you by referring to other documents that contain that
information. Any information that we incorporate by reference is considered
part
of this prospectus. The documents and reports that we list below are
incorporated by reference into this prospectus. In addition, all documents
and
reports which we file pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act after the date of this prospectus are incorporated
by
reference in this prospectus as of the respective filing dates of these
documents and reports. Statements contained in documents that we file with
the
SEC and that are incorporated by reference in this prospectus will automatically
update and supersede information contained in this prospectus, including
information in previously filed documents or reports that have been incorporated
by reference in this prospectus, to the extent the new information differs
from
or is inconsistent with the old information.
We
have
filed the following documents with the SEC. These documents are incorporated
herein by reference as of their respective dates of filing:
| (1) |
Our
Annual Report on Form 10-K for the year ended December 31, 2004,
as filed
with the SEC on March 16, 2005;
|
| (2) |
Amendment
No. 1 to our Annual Report on Form 10-K/A for the year ended December
31,
2004, as filed with the SEC on April 27,
2005;
|
| (3) |
Our
Quarterly Reports on Form 10-Q for the quarters ended April 3,
2005 and
July 2, 2005, as filed with the SEC on May 13, 2005 and August
12,
2005;
|
| (4) |
Our
Current Reports on Form 8-K, as filed with the SEC on March 29,
2005,
April 27, 2005, June 9, 2005, June 17, 2005, July 1, 2005
and July 6,
2005;
|
| (5) |
All
of our filings pursuant to the Securities Exchange Act after the
date of
filing the initial registration statement and prior to effectiveness
of
the registration statement; and
|
| (6) |
A
description of our Common Stock contained in our registration statement
on
Form S-1 filed with the SEC on July 18, 2000.
|
Certain
Current Reports on Form 8-K dated both prior to and after the date
of this
prospectus are or will be furnished to the SEC and shall not be deemed “filed”
with the Securities and Exchange Commission and will not be incorporated
by
reference into this prospectus. However, all other reports and documents
filed
by us after the date of this prospectus under Sections 13(a), 14 and
15(d)
of the Securities Exchange Act of 1934 prior to the termination of the offering
of the Common Stock covered by this prospectus are also incorporated by
reference in this prospectus and are considered to be part of this prospectus
from the date those documents are filed.
16
You
may
request a copy of this prospectus and any document incorporated by reference
herein at no cost, by writing, calling or e-mailing us at the following
address:
Airspan
Networks, Inc.
777
Yamato Road, Suite 105
Boca
Raton, FL 33431
Attention:
Airspan Shareholder Services
Telephone:
(561) 893-8670
Email:
paronstam@airspan.com
You
should rely only on the information contained or incorporated by reference
in
this prospectus and the applicable prospectus supplement. We have not authorized
anyone else to provide you with different information
LEGAL
MATTERS
Legal
matters with respect to the Common Stock offered by this prospectus will
be
passed upon for us by Hunton & Williams LLP.
EXPERTS
The
consolidated financial statements of Airspan Networks, Inc. appearing Airspan
Networks, Inc.’s Annual Report (Form 10-K/A) for the year ended December 31,
2004 and Airspan Networks, Inc. management's assessment of the effectiveness
of
internal control over financial reporting as of December 31, 2004 included
therein, have been audited by Ernst & Young LLP, independent registered
public accounting firm, as set forth in their reports thereon included therein,
and incorporated herein by reference. Such financial statements and management's
assessment have been incorporated herein by reference in reliance upon such
reports given on the authority of such firm as experts in accounting and
auditing.
17
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
expenses in connection with the issuance and distribution of the securities,
other than underwriting discounts and agency fees or commissions, are set
forth
in the following table. All amounts except the SEC registration fee are
estimated. None of these expenses will be borne by the Selling
Stockholder.
|
SEC
registration fee
|
$
|
4540.93
|
||
|
Nasdaq
National Market listing fees
|
$
|
0
|
||
|
Accounting
fees and expenses
|
$
|
18,000
|
||
|
Printing
expenses
|
$
|
1,000
|
||
|
Legal
fees and expenses
|
$
|
25,000
|
||
|
Miscellaneous
|
$
|
0
|
||
|
Total
|
$
|
48,540.93
|
Item
15. Indemnification of Directors and Officers.
Section
23B.08.510 of the Washington Business Corporation Act authorizes Washington
corporations to indemnify their officers and directors under certain
circumstances against expenses and liabilities incurred in legal proceedings
involving such persons because of their being or having been an officer or
director. The Company’s Amended and Restated Articles of Incorporation require
indemnification of the Company’s officers and directors to the fullest extent
permitted by Washington law. The Company also maintains directors’ and officers’
liability insurance.
The
Company’s Amended and Restated Articles of Incorporation provide that the
Company shall, to the full extent permitted by the Washington Business
Corporation Act of the State of Washington, as amended from time to time,
indemnify all directors and officers of the Company and advance expenses
to each
of our currently acting and former directors, subject to certain exceptions
in
the By-laws. In addition, the Company’s Amended and Restated Articles of
Incorporation contain a provision eliminating the personal liability of
directors to the Company or its shareholders for monetary damages arising
out of
a breach of fiduciary duty. Under Washington law, this provision eliminates
the
liability of a director for breach of fiduciary duty but does not eliminate
the
personal liability of any director for (i) acts or omissions of a director
that
involve intentional misconduct or a knowing violation of law, (ii) conduct
in
violation of Section 23B.08.310 of the Washington Business Corporation Act
(which section relates to unlawful distributions) or (iii) any transaction
from
which a director personally received a benefit in money, property or services
to
which the director was not legally entitled.
The
Company’s Amended and Restated Articles of Incorporation further provides that
the indemnification provided therein is not exclusive, and provides that
in the
event that the Washington Business Corporation Act is amended to expand the
indemnification permitted to directors or officers the Company must indemnify
those persons to the full extent permitted by such law as so amended.
Directors
and officers of the Company are insured, at the expense of the Company, against
certain liabilities which might arise out of their employment and which might
not be indemnified or indemnifiable under the By-Laws. The primary coverage
is
provided by a Directors and Officers Liability Insurance Policy in customary
form. No deductibles or retentions apply to individual directors or officers.
II-1
Item
16. Exhibits.
|
Exhibit
No.
|
Description
|
||
|
4.1
|
Amended
and Restated Articles of Incorporation of the Registrant (1)
|
||
|
4.2
|
Articles
of Amendment to the Articles of Incorporation (2)
|
||
|
4.3
|
Amended
and Restated By-Laws of the Registrant (3)
|
||
|
4.4
|
Form
of Registrant’s Common Stock Certificate (4)
|
||
|
4.5
|
Preferred
Stock Purchase Agreement, dated as of September 10, 2004 among
Airspan
Networks, Inc. and Oak Investment Partners XI, Limited Partnership
(5)
|
||
|
4.6
|
Amendment
to Preferred Stock Purchase Agreement (6)
|
||
|
5.1
|
Opinion
of Hunton & Williams LLP*
|
||
|
23.1
|
Consent
of Ernst & Young LLP*
|
||
|
23.2
|
Consent
of Hunton & Williams LLP(included in Exhibit 5.1)*
|
||
|
24.1
|
Power
of Attorney (Included on the Signature Page hereto)
|
||
| (1) |
Incorporated
by reference to Airspan’s Form 10-Q for the three months ended April 4,
2004
|
| (2) |
Incorporated
by reference to the Company’s report on Form 8-K filed on September 15,
2004.
|
| (3) |
Incorporated
by reference to Airspan’s Form 10-K for year ended December 31,
2003.
|
| (4) |
Incorporated
by reference to Airspan’s Registration Statement on Form S-1 (333-34514)
filed July 18, 2000.
|
| (5) |
Incorporated
by reference to the Company’s report on Form 8-K filed on September 13,
2004.
|
| (6) |
Incorporated
by reference to the Company’s report on Form 8-K filed on September 27,
2004.
|
Item
17. Undertakings.
| (a) |
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
of 1933;
|
| (ii) |
To
reflect in the prospectus any facts or events arising after the
effective
date of the registration statement
(or the most recent post-effective amendment thereof) which, individually
or in the aggregate,
represent a fundamental change in the information set forth in
the
registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective 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 paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this registration
statement.
II-2
| (2) |
That,
for the purpose of determining any liability under the Securities
Act of
1933, each such post-effective amendment shall be deemed to be
a new
registration statement relating to the securities offered therein,
and the
offering of such securities at that time shall be deemed to be
the initial
bona fide offering thereof.
|
| (3) |
To
remove from registration by means of a post-effective amendment
any of the
securities being registered which remain unsold at the termination
of the
offering.
|
(b) The
undersigned Registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act of 1933, each filing of the Registrant’s
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 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.
(c) Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions referred to in 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 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 Act and will be governed by the final adjudication
of
such issue.
II-3
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 Boca
Raton, State of Florida, on this 12th day of August, 2005.
| AIRSPAN NETWORKS, INC. | ||
| |
|
|
| By: | /s/Eric D. Stonestrom | |
|
Name:
Eric D. Stonestrom
|
||
| Title: President and Chief Executive Officer | ||
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.
Each
person whose signature appears below constitutes and appoints Eric D. Stonestrom
and Matthew J. Desch, and each of them, his or her true and lawful
attorney-in-fact and agent, 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 pre-effective and post-effective amendments to this Registration Statement,
including any filings pursuant to Rule 462(b) under the Securities Act of
1933,
as amended, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto such 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
might or could do in person, hereby ratifying all that such attorneys-in-fact
and agents, or any of them or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
|
Signature
|
Title
|
Date
|
|
|
|
|
|
/s/
Eric D. Stonestrom
|
President
and Chief Executive Officer and Director (Principal Executive
Officer)
|
August
12, 2005
|
|
Eric
D. Stonestrom
|
|
|
|
|
|
|
|
/s/
Peter Aronstam
|
Senior
Vice President, Finance and Chief Financial Officer (Principal
Financial
Officer and Principal Accounting Officer)
|
August
12, 2005
|
|
Peter
Aronstam
|
|
|
|
|
|
|
|
/s/
Matthew J. Desch
|
Chairman
of the Board and Director
|
August
12, 2005
|
|
Matthew
J. Desch
|
|
|
|
|
|
|
|
/s/
H. Berry Cash
|
Director
|
August
12, 2005
|
|
H.
Berry Cash
|
|
|
|
|
|
|
|
/s/
Guillermo Heredia
|
Director
|
August
12, 2005
|
|
Guillermo
Heredia
|
|
|
|
|
|
|
|
./s/
Thomas S. Huseby
|
Director
|
August
12, 2005
|
|
Thomas
S. Huseby
|
|
|
|
|
|
|
|
/s/
David Twyver
|
Director
|
August
12, 2005
|
|
David
Twyver
|
|
|
|
|
|
|
|
/s/
Michael T. Flynn
|
Director
|
August
12, 2005
|
|
Michael
T. Flynn
|
|
|
|
|
|
|
|
/s/
Randall E. Curran
|
Director
|
August
12, 2005
|
| Randall E. Curran |
II-4
INDEX
TO EXHIBITS
|
Exhibit
No.
|
Description
|
||
|
4.1
|
Amended
and Restated Articles of Incorporation of the Registrant (1)
|
||
|
4.2
|
Articles
of Amendment to the Articles of Incorporation (2)
|
||
|
4.3
|
Amended
and Restated By-Laws of the Registrant (3)
|
||
|
4.4
|
Form
of Registrant’s Common Stock Certificate (4)
|
||
|
4.5
|
Preferred
Stock Purchase Agreement, dated as of September 10, 2004 among
Airspan
Networks, Inc. and Oak Investment Partners XI, Limited Partnership
(5)
|
||
|
4.6
|
Amendment
to Preferred Stock Purchase Agreement (6)
|
||
|
5.1
|
Opinion
of Hunton & Williams LLP*
|
||
|
23.1
|
Consent
of Ernst & Young LLP*
|
||
|
23.2
|
Consent
of Hunton & Williams LLP(included in Exhibit 5.1)*
|
||
|
24.1
|
Power
of Attorney (Included on the Signature Page hereto)
|
||
| (1) |
Incorporated
by reference to Airspan’s Form 10-Q for the three months ended April 4,
2004
|
| (2) |
Incorporated
by reference to the Company’s report on Form 8-K filed on September 15,
2004.
|
| (3) |
Incorporated
by reference to Airspan’s Form 10-K for year ended December 31,
2003.
|
| (4) |
Incorporated
by reference to Airspan’s Registration Statement on Form S-1 (333-34514)
filed July 18, 2000.
|
| (5) |
Incorporated
by reference to the Company’s report on Form 8-K filed on September 13,
2004.
|
| (6) |
Incorporated
by reference to the Company’s report on Form 8-K filed on September 27,
2004.
|
II-5