As filed with the Securities and Exchange Commission on August 10, 2005
Registration No. 333-120737
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDMENT NO. 4
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
UNIVERSAL DISPLAY CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 8731 23-2372688
(State or other jurisdiction of (Primary Standard Industrial I.R.S. Employer
incorporation or organization) Classification No.) Identification No.)
375 PHILLIPS BOULEVARD
EWING, NEW JERSEY 08618
(609) 671-0980
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
STEVEN V. ABRAMSON
PRESIDENT AND CHIEF OPERATING OFFICER
UNIVERSAL DISPLAY CORPORATION
375 Phillips Boulevard
Ewing, New Jersey 08618
(609) 671-0980
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications to:
JUSTIN W. CHAIRMAN, ESQ.
MORGAN, LEWIS & BOCKIUS LLP
1701 Market Street
Philadelphia, PA 19103
(215) 963-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable 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 COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
The information in this prospectus is not complete and may change. We 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 10, 2005
PROSPECTUS
560,637 SHARES
UNIVERSAL DISPLAY CORPORATION
COMMON STOCK
The shareholders of Universal Display Corporation identified in this
prospectus under "Selling Shareholders," or their donees, pledgees or other
transferees are offering up to 560,637 shares of our common stock for resale to
the public. The selling shareholders will be selling shares of common stock that
they currently own, or that they can acquire by exercising warrants that they
currently own.
We will not receive any proceeds from the resale of shares of our
common stock by the selling shareholders. We are paying the expenses of this
offering.
The primary market for our common stock is the Nasdaq National Market
System, where it trades under the symbol "PANL." On August 9, 2005, the last
reported sale price of our common stock on the Nasdaq National Market System was
$13.30 per share.
On July 28, 2005, the Securities and Exchange Commission declared effective
under the Securities Act of 1933, as amended, another registration statement on
Form S-3 (Commission File No. 333-124306) registering the resale to the public,
by a selling shareholder identified in that registration statement, of up to
464,939 shares of our common stock. That offering is separate from the offering
described in this prospectus.
AN INVESTMENT IN OUR COMMON STOCK INVOLVES SIGNIFICANT RISKS. YOU
SHOULD CAREFULLY CONSIDER THE RISK FACTORS DESCRIBED BEGINNING ON PAGE 5 BEFORE
INVESTING IN OUR COMMON STOCK.
The securities have not been approved by the Securities and Exchange
Commission or any state securities commission, nor have they determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
THE DATE OF THIS PROSPECTUS IS ________, 2005
TABLE OF CONTENTS
Page
----
Cautionary Statement Concerning Forward-Looking Statements................ 3
Our Company............................................................... 4
Risk Factors.............................................................. 5
The Offering.............................................................. 17
Concurrent Offering ...................................................... 17
Use of Proceeds........................................................... 17
Selling Shareholders...................................................... 18
Plan of Distribution...................................................... 20
About this Prospectus..................................................... 21
Where You Can Find More Information....................................... 21
Legal Opinion............................................................. 22
Experts................................................................... 22
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CAUTIONARY STATEMENT
CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus contain some "forward-looking statements." Forward-looking statements
concern our possible or assumed future results of operations, including
descriptions of our business strategies. These statements often include words
such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek,"
"will," "may" or similar expressions. These statements are based on assumptions
that we have made in light of our experience in the industry, as well as our
perceptions of historical trends, current conditions, expected future
developments and other factors we believe are appropriate in these
circumstances.
As you read and consider this prospectus, you should not place undue
reliance on any forward-looking statements. You should understand that these
statements involve substantial risk and uncertainty and are not guarantees of
future performance or results. They depend on many factors that are discussed
further in the section of this prospectus entitled "Risk Factors," including:
o the outcomes of our ongoing and future research and development
activities, and those of others, relating to organic light emitting
diode (OLED) technologies and materials;
o our ability to access future OLED technology developments of our
academic and commercial research partners;
o the potential commercial applications of and future demand for our OLED
technologies and materials, and of OLED products in general;
o our ability to form and continue strategic relationships with
manufacturers of OLED products;
o successful commercialization of products incorporating our OLED
technologies and materials by OLED manufacturers, and their continued
willingness to utilize our OLED technologies and materials;
o the comparative advantages and disadvantages of our OLED technologies
and materials versus competing technologies and materials currently on
the market;
o the nature and potential advantages of any competing technologies that
may be developed in the future;
o our ability to compete against third parties with resources greater
than ours;
o our ability to maintain and improve our competitive position following
the expiration of our fundamental OLED patents;
o the adequacy of protections afforded to us by the patents that we own
or license and the cost to us of enforcing those protections;
o our ability to obtain, expand and maintain patent protection in the
future, and to protect our unpatentable intellectual property;
o the payments that we expect to receive in the future under our existing
contracts and the terms that we are able to enter into with new OLED
display manufacturers;
o our future capital requirements and our ability to obtain additional
financing if and when needed; and
o our future OLED technology licensing and OLED material sales revenues
and results of operations.
Changes or developments in any of these areas could affect our financial results
or results of operations, and could cause actual results to differ materially
from those contemplated in the forward-looking statements.
All forward-looking statements speak only as of the date of this
prospectus or the documents incorporated by reference, as the case may be.
Except for special circumstances in which a duty to update arises when prior
disclosure becomes materially misleading in light of subsequent events, we do
not intend to update any of these forward-looking statements to reflect events
or circumstances after the date of this prospectus or to reflect the occurrence
of unanticipated events.
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OUR COMPANY
We are a leader in the research, development and commercialization of
organic light emitting diode, or OLED, technologies for use in a variety of flat
panel display and other applications. OLEDs are thin, light-weight and power
efficient devices, highly suitable for use in portable, full-color display
applications. We are focused on licensing our proprietary OLED technologies to
leading display manufacturers on a non-exclusive basis, and on selling our
proprietary OLED materials to these manufacturers. We believe this business
model allows us to concentrate on our core strengths of technology development
and innovation, while providing significant operating leverage. During the
second half of 2003, we recognized our first commercial chemical sales and
license fee revenues, and in the third quarter of 2004 we recognized our first
royalty revenues. We are currently selling one of our proprietary OLED materials
to Tohoku Pioneer Corporation, have established license agreements with Samsung
SDI Co., Ltd. and DuPont Displays, Inc. and have entered into technology
development and evaluation agreements with several flat panel display
manufacturers.
Initial applications for OLED displays are small- and medium-sized flat
panel displays in a wide variety of portable consumer electronics devices,
including mobile phones, personal digital assistants, or PDAs, cameras,
camcorders and electronic games. According to DisplaySearch, an independent
market research firm tracking the flat panel display industry, the market for
flat panel displays, which is currently dominated by liquid crystal displays, or
LCDs, is expected to reach an estimated $90.8 billion in 2008. We believe OLED
displays will capture a share of the growing flat panel display market because
they offer potential advantages over competing technologies with respect to
brightness, power efficiency, viewing angle, video response time and
manufacturing cost. According to DisplaySearch, the OLED display market is
expected to experience significant growth with revenues increasing from an
estimated $316 million in 2004 to an estimated $5.2 billion by 2008. We believe
that larger display applications, such as laptop computers, desktop computer
monitors and televisions, also represent a significant opportunity for OLED
displays given the potential advantages of OLED technologies for these
applications.
Our strategy is to further develop and license our proprietary OLED
technologies to display manufacturers for use in small, medium and large
consumer electronic devices. Our key proprietary technology, phosphorescent
OLEDs, or PHOLEDs, has demonstrated the ability to provide up to four times the
efficiency of other types of OLEDs. We also are conducting research and
development work directed towards both improving our existing PHOLED
technologies and materials and further developing our proprietary OLED
technologies such as transparent OLEDs and flexible OLEDs. Our focus on
next-generation technologies is designed to enable us to continue our position
as a leading provider of OLED technologies.
We believe that our technology leadership and intellectual property
position will enable us to share in the revenues from OLED displays as they
enter the mainstream consumer electronics market. Through our internal research
and development efforts and our relationships with world-class partners such as
Princeton University, the University of Southern California and PPG Industries,
Inc., we have established a significant portfolio of OLED technologies and
associated intellectual property rights. We currently own, exclusively license
or have the sole right to sublicense more than 625 patents issued and pending
worldwide. In addition, our management team has assembled a Scientific Advisory
Board that includes some of the leading researchers in the OLED industry, which
has enhanced our reputation and our competitive profile.
CORPORATE INFORMATION
Our corporation was organized under the laws of the Commonwealth of
Pennsylvania in April 1985. Our current business was commenced in June 1994 by a
New Jersey corporation that has since changed its name to UDC, Inc. UDC, Inc.
now functions as an operating subsidiary of ours and has overlapping officers
and directors. Our principal executive offices are located at 375 Phillips
Boulevard, Ewing, New Jersey 08618 and our telephone number is (609) 671-0980.
Our website is located at www.universaldisplay.com. The information contained on
our website is not a part of this prospectus.
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RISK FACTORS
An investment in our securities involves a high degree of risk. Before
purchasing our common stock, you should carefully consider the risks described
below in this section and the risks described in the documents incorporated by
reference in this prospectus. You should not purchase our securities if you
cannot afford the loss of your entire investment.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
WE HAVE A HISTORY OF LOSSES AND MAY NEVER BE PROFITABLE.
Since inception, we have generated limited revenues while incurring
significant losses. We expect to incur losses for the foreseeable future and
until such time, if ever, as we are able to achieve sufficient levels of revenue
from the commercial exploitation of our OLED technologies and materials to
support our operations. You should note, however, that:
o OLED technologies may never be adopted for broad commercial usage;
o markets for flat panel displays utilizing OLED technologies may be
limited; and
o we may never generate sufficient revenues from the commercial
exploitation of our OLED technologies and materials to become
profitable.
WE MAY REQUIRE ADDITIONAL FUNDING IN THE FUTURE IN ORDER TO CONTINUE OUR
BUSINESS.
Our capital requirements have been and will continue to be significant.
We may require additional funding in the future for the research, development
and commercialization of our OLED technologies and materials, to obtain and
maintain patents and other intellectual property rights in these technologies
and materials, and for working capital and other purposes, the timing and amount
of which are difficult to ascertain. Our cash on hand may not be sufficient to
meet all of our future needs. When we need additional funds, such funds may not
be available on commercially reasonable terms or at all. If we cannot obtain
more money when needed, our business might fail. Additionally, if we attempt to
raise money in an offering of shares of our common stock, preferred stock,
warrants or depositary shares, or if we engage in acquisitions involving the
issuance of such securities, the issuance of these shares will dilute our
then-existing shareholders.
IF OUR OLED TECHNOLOGIES AND MATERIALS ARE NOT FEASIBLE FOR BROAD-BASED PRODUCT
APPLICATIONS, WE MAY NEVER GENERATE REVENUES SUFFICIENT TO SUPPORT ONGOING
OPERATIONS.
Our business strategy is to license our OLED technologies and sell our
OLED materials to display manufacturers for incorporation into the flat panel
display products that they sell. Consequently, our success depends on the
ability and willingness of these manufactures to develop, manufacture and sell
commercial flat panel display products integrating our technologies and
materials.
Before display manufacturers will agree to utilize our OLED
technologies and materials for wide-scale commercial production, they will
likely require us to demonstrate to their satisfaction that our OLED
technologies and materials are feasible for broad-based product applications.
This, in turn, may require additional advances in our research and development
efforts, as well as those of others, for applications in a number of areas,
including:
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o device reliability;
o the development of OLED materials with sufficient lifetimes, brightness
and color coordinates for full color OLED displays; and
o issues related to scalability and cost-effective fabrication
technologies for product applications.
Our research and development efforts remain subject to all of the risks
associated with the development of new products based on emerging and innovative
technologies, including, without limitation, unanticipated technical or other
problems and the possible insufficiency of funds for completing development of
these products. Technical problems may result in delays and cause us to incur
additional expenses that would increase our losses. If we cannot complete
research and development of our OLED technologies and materials successfully, or
if we experience delays in completing research and development of our OLED
technologies and materials for use in potential commercial applications,
particularly after incurring significant expenditures, our business may fail.
EVEN IF OUR OLED TECHNOLOGIES ARE TECHNICALLY FEASIBLE, THEY MAY NOT BE ADOPTED
BY DISPLAY MANUFACTURERS.
The potential size, timing and viability of market opportunities
targeted by us are uncertain at this time. Market acceptance of our OLED
technologies will depend, in part, upon these technologies providing benefits
comparable to cathode ray tube, or CRT, display and liquid crystal display, or
LCD, technologies (the current standard display technologies) at an advantageous
cost to manufacturers, and the adoption of products incorporating these
technologies by consumers. Many potential licensees of our OLED technologies
manufacture flat panel displays utilizing competing technologies, and may,
therefore, be reluctant to redesign their products or manufacturing processes to
incorporate our OLED technologies.
During the entire product development process for a new flat panel
display product, we face the risk that our technology will fail to meet the
manufacturer's technical, performance or cost requirements or will be replaced
by a competing product or alternative technology. For example, we are aware that
some of our licensees and prospective licensees have entered into arrangements
with our competitors regarding the development of competing technologies,
including the potential production of polymer-based OLED displays. Even if we
offer technologies that are satisfactory to a display manufacturer, the
manufacturer may choose to delay or terminate its product development efforts
for reasons unrelated to our technologies.
Mass production of OLED displays will require the availability of
suitable manufacturing equipment, components and materials, many of which are
available only from a limited number of suppliers. In addition, there may be a
number of other technologies that display manufacturers need to utilize to be
used in conjunction with our OLED technologies in order to bring OLED displays
and products containing them to the market. Thus, even if our OLED technologies
are a viable alternative to competing flat panel display technologies, if
display manufacturers are unable to obtain access to this equipment and these
components, materials and other technologies, they may not utilize our OLED
technologies.
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THERE ARE NUMEROUS POTENTIAL ALTERNATIVES TO OLEDS FOR FLAT PANEL DISPLAYS,
WHICH MAY LIMIT OUR ABILITY TO COMMERCIALIZE OUR OLED TECHNOLOGIES AND
MATERIALS.
The flat panel display market is currently, and will likely continue to
be for some time, dominated by displays based on LCD technology. Numerous
companies are making substantial investments in, and conducting research to
improve characteristics of, LCDs. Plasma and other competing flat panel display
technologies have been, or are being, developed. Advances in LCD technology or
any of these other technologies may overcome their current limitations and
permit them to become the leading technologies for flat panel displays, either
of which could limit the potential market for flat panel displays utilizing our
OLED technologies and materials. This, in turn, would cause display
manufacturers to avoid entering into commercial relationships with us, or to
terminate or not renew their existing relationships with us.
OTHER OLED TECHNOLOGIES MAY BE MORE SUCCESSFUL OR COST-EFFECTIVE THAN OURS,
WHICH MAY LIMIT THE COMMERCIAL ADOPTION OF OUR OLED TECHNOLOGIES AND MATERIALS.
Our competitors have developed OLED technologies that differ from or
compete with our OLED technologies. In particular, Eastman Kodak Company's
competing fluorescent OLED technology, which entered the marketplace prior to
ours, may become entrenched in the flat panel industry before our OLED
technologies have a chance to become widely utilized. Moreover, our competitors
may succeed in developing new OLED technologies that are more cost-effective or
have fewer display limitations than our OLED technologies. If our OLED
technologies, and particularly our phosphorescent OLED technology, are unable to
capture a substantial portion of the OLED display market, our business strategy
may fail.
MANY OF OUR COMPETITORS HAVE GREATER RESOURCES, WHICH MAY MAKE IT DIFFICULT FOR
US TO COMPETE SUCCESSFULLY AGAINST THEM.
The flat panel display industry is characterized by intense
competition. Many of our competitors have better name recognition and greater
financial, technical, marketing, personnel and research capabilities than us.
Because of these differences, we may never be able to compete successfully in
the OLED display market.
THE FLAT PANEL DISPLAY INDUSTRY HAS HISTORICALLY EXPERIENCED SIGNIFICANT
DOWNTURNS, WHICH MAY ADVERSELY AFFECT THE DEMAND FOR AND PRICING OF OUR OLED
TECHNOLOGIES AND MATERIALS.
Because we do not sell any display products to consumers, our success
depends upon the ability and continuing willingness of our display manufacturer
licensees to market commercial products integrating our technologies and
materials, and the widespread acceptance of those products. Any slowdown in the
demand for our licensees' products would adversely affect our royalty revenues
and thus our business. The markets for our display manufacturer licensees'
products are highly competitive, with pressure on prices and profit margins due
largely to additional and growing capacity from flat panel display industry
competitors. Success in the market for end-user products that may integrate our
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OLED technologies and materials also depends on factors beyond the control of
our licensees and us, including the cyclical and seasonal nature of the end-user
markets that our licensees serve, as well as industry and general economic
conditions.
The flat panel display industry has experienced significant periodic
downturns, often in connection with, or in anticipation of, declines in general
economic conditions. These downturns have been characterized by lower product
demand, production overcapacity and erosion of average selling prices. Our
business strategy is dependent on display manufacturers building and selling
displays that incorporate our OLED technologies and materials. Industry-wide
fluctuations and downturns in the demand for flat panel displays, and OLED
displays in particular, could cause significant harm to our business.
IF OUR RESEARCH PARTNERS FAIL TO MAKE ADVANCES IN THEIR RESEARCH, OR IF THEY
TERMINATE OR ELECT NOT TO RENEW THEIR RELATIONSHIPS WITH US, WE MIGHT NOT
SUCCEED IN COMMERCIALIZING OUR OLED TECHNOLOGIES AND MATERIALS.
Further advances in our OLED technologies and materials depend, in
part, on the success of the research and development work conducted by our
research partners. We cannot be certain that our research partners will make
additional advances in the research and development of these technologies and
materials. Moreover, although we fund OLED technology research, the scope of and
technical aspects of this research and the resources and efforts directed to
this research are in large part subject to the control of our research partners.
Our most significant research and development relationships are with
Princeton University and the University of Southern California. Our Research
Agreement with Princeton University expires in July 2007 and both this agreement
and our Amended License Agreement with Princeton University and the University
of Southern California (the agreement under which we license our key OLED
technology patents) can be terminated for various reasons. For example, the
Research Agreement provides that if Dr. Stephen R. Forrest, the principal
investigator for our research program with Princeton University, is unavailable
to continue to serve in this capacity, because he is no longer associated with
Princeton University or for any other reason, and a successor acceptable to both
us and Princeton University is not available, Princeton University has the right
to terminate the Research Agreement without impacting the Amended License
Agreement. Termination of the Research Agreement would negatively affect our
ability to research, develop and commercialize our OLED technologies and
materials.
IF WE CANNOT FORM AND MAINTAIN LASTING BUSINESS RELATIONSHIPS WITH OLED DISPLAY
MANUFACTURERS, OUR BUSINESS STRATEGY WILL FAIL.
Our business strategy ultimately depends upon our development and
maintenance of commercial licensing and material supply relationships with
high-volume manufacturers of OLED displays. As of July 31, 2005, we had entered
into only three such relationships, one with Samsung SDI Co., Ltd., one with
Dupont Displays, Inc. and one with Tohoku Pioneer Corporation. All of our other
relationships with display manufacturers currently are limited to technology
development and the evaluation of our OLED technologies and materials for
possible use in commercial
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production. Some or all of these relationships may not succeed or, even if they
are successful, may not result in the display manufacturers entering into
commercial licensing and material supply relationships with us.
Under our existing technology development and evaluation agreements, we
are working with display manufacturers to incorporate our technologies into
their products for the commercial production of OLED displays. However, these
technology development and evaluation agreements typically last for limited
periods of time, such that our relationships with the display manufacturers will
expire unless they continually are renewed. The display manufacturers may not
agree to renew their relationships with us on a continuing basis. In addition,
we regularly continue working with display manufacturers evaluating our OLED
technologies and materials after our existing agreements with them have expired
while we are attempting to negotiate contract extensions or new agreements with
them. Should our relationships with the display manufacturers not continue or be
renewed, our business would suffer.
Our ability to enter into additional commercial licensing and material
supply relationships, or to maintain our existing technology development and
evaluation relationships, may require us to make financial or other commitments.
We might not be able, for financial or other reasons, to enter into or continue
these relationships on commercially acceptable terms, or at all. Failure to do
so may cause our business strategy to fail.
CONFLICTS MAY ARISE WITH OUR LICENSEES OR JOINT DEVELOPMENT PARTNERS, RESULTING
IN RENEGOTIATION OR TERMINATION OF, OR LITIGATION RELATED TO, OUR AGREEMENTS
WITH THEM. THIS WOULD ADVERSELY AFFECT OUR REVENUES.
Conflicts could arise between us and our licensees or joint development
partners as to royalty rates, milestone payments or other commercial terms.
Similarly, we may disagree with our licensees or joint development partners as
to which party owns or has the right to commercialize intellectual property that
is developed during the course of the relationship or as to other non-commercial
terms. If such a conflict were to arise, a licensee or joint development partner
might attempt to compel renegotiation of certain terms of their agreement or
terminate their agreement entirely, and we might lose the royalty revenues and
other benefits of the agreement. Either we or the licensee or joint development
partner might initiate litigation to determine commercial obligations, establish
intellectual property rights or resolve other disputes under the agreement. Such
litigation could be costly to us and require substantial attention of
management. If we were unsuccessful in such litigation, we could lose the
commercial benefits of the agreement, be liable for other financial damages and
suffer losses of intellectual property or other rights that are the subject of
dispute. Any of these adverse outcomes could cause our business strategy to
fail.
WE RELY SOLELY ON PPG INDUSTRIES TO MANUFACTURE THE OLED MATERIALS WE USE AND
SELL TO DISPLAY MANUFACTURERS.
Our business prospects depend significantly on our ability to obtain
proprietary OLED materials for our own use and for sale to display
manufacturers. Our Development and License Agreement with PPG Industries, Inc.
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provides us with a source for these materials for research, development and
evaluation purposes, and our Supply Agreement with PPG Industries provides us
with a source for these materials for commercial purposes. We have recently
entered into an OLED Materials Supply and Service Agreement with PPG Industries,
Inc. This agreement is effective as of January 1, 2006, and extends the term of
our existing relationship with PPG Industries through December 31, 2008. Our
inability to continue obtaining these OLED materials from PPG Industries or
another source would have a material adverse effect on our revenues from sales
of these materials, as well as on our ability to perform research and
development work and to support those display manufacturers currently evaluating
our OLED technologies and materials for possible commercial use.
IF WE CANNOT OBTAIN AND MAINTAIN APPROPRIATE PATENT AND OTHER INTELLECTUAL
PROPERTY RIGHTS PROTECTION FOR OUR OLED TECHNOLOGIES AND MATERIALS, OUR BUSINESS
WILL SUFFER.
The value of our OLED technologies and materials is dependent on our
ability to secure and maintain appropriate patent and other intellectual
property rights protection. Although we own or license many patents respecting
our OLED technologies and materials that have already been issued, there can be
no assurance that additional patents applied for will be obtained, or that any
of these patents, once issued, will afford commercially significant protection
for our OLED technologies and materials, or will be found valid if challenged.
Moreover, we have not obtained patent protection for some of our OLED
technologies and materials in all foreign countries in which OLED displays or
materials might be manufactured or sold. In any event, the patent laws of other
countries may differ from those of the United States as to the patentability of
our OLED technologies and materials and the degree of protection afforded.
The strength of our current intellectual property position results
primarily from the essential nature of our fundamental patents covering
phosphorescent OLED devices and certain materials utilized in these devices.
These patents begin expiring in 2017. While we hold a wide range of additional
patents and patent applications whose expiration dates extend (and in the case
of patent applications, will extend) beyond 2017, many of which are also of key
importance in the OLED industry, none are of an equally essential nature as our
fundamental patents, and therefore our competitive position after 2017 may be
less certain.
We may become engaged in litigation to protect or enforce our patent
and other intellectual property rights, or in International Trade Commission
proceedings to abate the importation of goods that would compete unfairly with
those of our licensees. In addition, we may have to participate in interference
or reexamination proceedings before the U.S. Patent and Trademark Office, or in
opposition, nullity or other proceedings before foreign patent offices, with
respect to our patents or patent applications. All of these actions would place
our patents and other intellectual property rights at risk and may result in
substantial costs to us as well as a diversion of management attention.
Moreover, if successful, these actions could result in the loss of patent or
other intellectual property rights protection for the key OLED technologies and
materials on which our business depends.
In addition, we rely in part on unpatented proprietary technology, and
others may independently develop the same or similar technology or otherwise
obtain access to our unpatented technology. To protect our trade secrets,
know-how and other proprietary information, we require employees, consultants,
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financial advisors and strategic partners to enter into confidentiality
agreements. These agreements may not ultimately provide meaningful protection
for our trade secrets, know-how or other proprietary information in the event of
any unauthorized use, misappropriation or disclosure of those trade secrets,
know-how or other proprietary information. In particular, we may not be able to
fully or adequately protect our proprietary information as we conduct
discussions with potential strategic partners. If we are unable to protect the
proprietary nature of our technology, it will harm our business.
WE OR OUR LICENSEES MAY INCUR SUBSTANTIAL COSTS OR LOSE IMPORTANT RIGHTS AS A
RESULT OF LITIGATION OR OTHER PROCEEDINGS RELATING TO OUR PATENT AND OTHER
INTELLECTUAL PROPERTY RIGHTS.
There are a number of other companies and organizations that have been
issued patents and are filing patent applications relating to OLED technologies
and materials, including Eastman Kodak Company, Cambridge Display Technology,
Fuji Film Co., Ltd., Canon, Inc., Pioneer Corporation, Semiconductor Energy
Laboratories Co. and Mitsubishi Chemical Corporation. As a result, there may be
issued patents or pending patent applications of third parties that would be
infringed by the use of our OLED technologies or materials, thus subjecting our
licensees to possible suits for patent infringement in the future. Such lawsuits
could result in our licensees being liable for damages or require our licensees
to obtain additional licenses that could increase the cost of their products,
which might have an adverse affect on their sales and thus our royalties or
cause them to seek to renegotiate our royalty rates.
In addition, in the future we may assert our intellectual property
rights by instituting legal proceedings against others. We cannot assure you
that we will be successful in enforcing our patents in any lawsuits we may
commence. Defendants in any litigation we may commence to enforce our patents
may attempt to establish that our patents are invalid or are unenforceable.
Thus, any patent litigation we commence could lead to a determination that one
or more of our patents are invalid or unenforceable. If a third party succeeds
in invalidating one or more of our patents, that party and others could compete
more effectively against us. Our ability to derive licensing revenues from
products or technologies covered by these patents could also be adversely
affected.
Whether our licensees are defending the assertion of third-party
intellectual property rights against their businesses arising as a result of the
use of our technology, or we are asserting our own intellectual property rights
against others, such litigation can be complex, costly, protracted and highly
disruptive to our or our licensees' business operations by diverting the
attention and energies of management and key technical personnel. As a result,
the pendency or adverse outcome of any intellectual property litigation to which
we or our licensees are subject could disrupt business operations, require the
incurrence of substantial costs and subject us or our licensees to significant
liabilities, each of which could severely harm our business.
Plaintiffs in intellectual property cases often seek injunctive relief
in addition to money damages. Any intellectual property litigation commenced
against our licensees could force them to take actions that could be harmful to
their business and thus to our royalties, including the following:
-11-
o stop selling their products that incorporate or otherwise use
technology that contains our allegedly infringing intellectual
property;
o attempt to obtain a license to the relevant third-party intellectual
property, which may not be available on reasonable terms or at all; or
o attempt to redesign their products to remove our allegedly infringing
intellectual property to avoid infringement of the third-party
intellectual property.
If our licensees are forced to take any of the foregoing actions, they
may be unable to manufacture and sell their products that incorporate our
technology at a profit or at all. Furthermore, the measure of damages in
intellectual property litigation can be complex, and is often subjective or
uncertain. If our licensees were to be found liable for infringement of
proprietary rights of a third party, the amount of damages they might have to
pay could be substantial and is difficult to predict. Decreased sales of our
licensees' products incorporating our technology would have an adverse effect on
our royalty revenues under existing licenses. Any necessity to procure rights to
the third-party technology might cause our existing licensees to renegotiate the
royalty terms of their license with us to compensate for this increase in their
cost of production or, in certain cases, to terminate their license with us
entirely. Were this renegotiation to occur, it would likely harm our ability to
compete for new licensees and have an adverse effect on the terms of the royalty
arrangements we could enter into with any new licensees.
As is commonplace in technology companies, we employ individuals who
were previously employed at other technology companies. To the extent our
employees are involved in research areas that are similar to those areas in
which they were involved at their former employers, we may be subject to claims
that such employees or we have, inadvertently or otherwise, used or disclosed
the alleged trade secrets or other proprietary information of the former
employers. Litigation may be necessary to defend against such claims. The costs
associated with these actions or the loss of rights critical to our or our
licensees' business could negatively impact our revenues or cause our business
to fail.
THE U.S. GOVERNMENT HAS RIGHTS TO OUR OLED TECHNOLOGIES THAT MIGHT PREVENT US
FROM REALIZING THE BENEFITS OF THESE TECHNOLOGIES.
The U.S. government, through various government agencies, has provided
and continues to provide funding to us, Princeton University and the University
of Southern California for research activities related to certain aspects of our
OLED technologies. Because we have been provided with this funding, the
government has rights to these OLED technologies that could restrict our ability
to market them to the government for military and other applications, or to
third parties for commercial applications. Moreover, if the government
determines that we have not taken effective steps to achieve practical
application of these OLED technologies in any field of use in a reasonable time,
the government could require us to grant licenses to other parties in that field
of use. Any of these occurrences would limit our ability to obtain the full
benefits of our OLED technologies.
-12-
IF WE CANNOT KEEP OUR KEY EMPLOYEES OR HIRE OTHER TALENTED PERSONS AS WE GROW,
OUR BUSINESS MIGHT NOT SUCCEED.
Our performance is substantially dependent on the continued services of
senior management and other key personnel, and on our ability to offer
competitive salaries and benefits to our employees. We do not have employment
agreements with any of our management or other key personnel. Additionally,
competition for highly skilled technical, managerial and other personnel is
intense. We might not be able to attract, hire, train, retain and motivate the
highly skilled managers and employees we need to be successful. If we fail to
attract and retain the necessary technical and managerial personnel, our
business will suffer and might fail.
RISKS RELATING TO THIS OFFERING
WE CAN ISSUE SHARES OF PREFERRED STOCK THAT MAY ADVERSELY AFFECT THE RIGHTS OF
SHAREHOLDERS OF OUR COMMON STOCK.
Our Articles of Incorporation authorize us to issue up to 5,000,000
shares of preferred stock with designations, rights and preferences determined
from time-to-time by our Board of Directors. Accordingly, our Board of Directors
is empowered, without shareholder approval, to issue preferred stock with
dividend, liquidation, conversion, voting or other rights superior to those of
shareholders of our common stock. For example, an issuance of shares of
preferred stock could:
o adversely affect the voting power of the shareholders of our common
stock;
o make it more difficult for a third party to gain control of us;
o discourage bids for our common stock at a premium; or
o otherwise adversely affect the market price of our common stock.
As of July 31, 2005, we have issued and outstanding 200,000 shares of
Series A Nonconvertible Preferred Stock, all of which are held by an entity
controlled by members of the family of Sherwin I. Seligsohn, our Chairman of the
Board and Chief Executive Officer. Our Board of Directors has authorized and
issued other shares of preferred stock in the past, none of which are currently
outstanding, and may do so again at any time in the future.
IF THE PRICE OF OUR COMMON STOCK GOES DOWN, WE MAY HAVE TO ISSUE MORE SHARES
THAN ARE PRESENTLY ANTICIPATED TO BE ISSUED UNDER OUR AGREEMENT WITH PPG
INDUSTRIES.
Under our agreements with PPG Industries, we are required to issue to
PPG Industries shares of our common stock for services rendered by it, though
under limited circumstances we are required to compensate PPG Industries fully
in cash in lieu of any common stock. The number of shares of common stock that
we are required to deliver to PPG is determined based on a formula requiring
that the lower the price of our common stock at and around the time of issuance,
the greater the number of shares that we would be required to issue to PPG
Industries. Lower
-13-
than anticipated market prices for our common stock, and correspondingly greater
numbers of shares issuable to PPG Industries, with a resulting increase in the
number of shares available for public sale, could cause people to sell our
common stock, including in short sales, which could drive down the price of our
common stock, thus reducing its value and perhaps hindering our ability to raise
additional funds in the future. In addition, such an increase in the number of
outstanding shares of our common stock would further dilute existing holders of
this stock.
OUR EXECUTIVE OFFICERS AND DIRECTORS OWN A LARGE PERCENTAGE OF OUR COMMON STOCK
AND COULD EXERT SIGNIFICANT INFLUENCE OVER MATTERS REQUIRING SHAREHOLDER
APPROVAL, INCLUDING TAKEOVER ATTEMPTS.
Our executive officers and directors, their respective affiliates and
the adult children of Sherwin Seligsohn, our Chairman of the Board and Chief
Executive Officer, beneficially own, as of July 31, 2005, approximately 17.7% of
the outstanding shares of our common stock. Moreover, Pine Ridge Financial Inc.
and First Investors Holding Co., Inc., as successor to Strong River Investments,
Inc., assigned to our management their rights to vote the shares of our common
stock they received or are entitled to receive upon conversion of warrants,
notes and preferred stock issued in an August 2001 private placement
transaction, of which warrants to purchase 744,452 shares remain outstanding as
of July 31, 2005. Accordingly, these shareholders and members of management may,
as a practical matter, be able to exert significant influence over matters
requiring approval by our shareholders, including the election of directors and
the approval of mergers or other business combinations. This concentration also
could have the effect of delaying or preventing a change in control of us.
BECAUSE THE VAST MAJORITY OF OLED DISPLAY MANUFACTURERS ARE LOCATED IN THE
ASIA-PACIFIC REGION, WE ARE SUBJECT TO INTERNATIONAL OPERATIONAL, FINANCIAL,
LEGAL AND POLITICAL RISKS WHICH MAY NEGATIVELY IMPACT OUR OPERATIONS.
Many of our licensees and prospective licensees have a majority of
their operations in countries other than the United States, particularly in the
Asia-Pacific region. Risks associated with our doing business outside of the
United States include:
o compliance with a wide variety of foreign laws and regulations;
o legal uncertainties regarding taxes, tariffs, quotas, export controls,
export licenses and other trade barriers;
o economic instability in the countries of our licensees, causing delays
or reductions in orders for their products and therefore our royalties;
o political instability in the countries in which our licensees operate,
particularly in South Korea relating to its disputes with North Korea
and in Taiwan relating to its disputes with China;
-14-
o difficulties in collecting accounts receivable and longer accounts
receivable payment cycles; and
o potentially adverse tax consequences.
Any of these factors could impair our ability to license our OLED
technologies and sell our OLED materials, thereby harming our business.
THE MARKET PRICE OF OUR COMMON STOCK MIGHT BE HIGHLY VOLATILE.
The market price of our common stock might be highly volatile, as has
been the case with our common stock in the past as well as the securities of
many companies, particularly other small and emerging-growth companies. Factors
such as the following may have a significant impact on the market price of our
common stock in the future:
o our expenses and operating results;
o announcements by us or our competitors of technological developments,
new product applications or license arrangements; and
o other factors affecting the flat panel display and related industries
in general.
OUR OPERATING RESULTS MAY HAVE SIGNIFICANT PERIOD-TO-PERIOD FLUCTUATIONS, WHICH
WOULD MAKE IT DIFFICULT TO PREDICT OUR FUTURE PERFORMANCE.
Due to the current stage of commercialization of our OLED technologies
and the significant development and manufacturing objectives that we and our
licensees must achieve to be successful, our quarterly operating results will be
difficult to predict and may vary significantly from quarter to quarter.
We believe that period-to-period comparisons of our operating results
are not a reliable indicator of our future performance at this time. Among other
factors affecting our period-to-period results, our license and technology
development fees often consist of large one-time or annual payments, resulting
in significant fluctuations in our revenues. If, in some future period, our
operating results or business outlook fall below the expectations of securities
analysts or investors, our stock price would be likely to decline and investors
in our common stock may not be able to resell their shares at or above the
initial public offering price. Broad market, industry and global economic
factors may also materially reduce the market price of our common stock,
regardless of our operating performance.
THE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK COULD DRIVE DOWN THE PRICE
OF OUR STOCK.
The price of our common stock can be expected to decrease if:
-15-
o other shares of our common stock that are currently subject to
restriction on sale become freely salable, whether through an effective
registration statement or based on Rule 144 under the Securities Act of
1933, as amended; or
o we issue additional shares of our common stock that might be or become
freely salable, including shares that would be issued upon conversion
of our preferred stock or the exercise of outstanding warrants and
options.
BECAUSE WE DO NOT INTEND TO PAY DIVIDENDS, SHAREHOLDERS WILL BENEFIT FROM AN
INVESTMENT IN OUR COMMON STOCK ONLY IF IT APPRECIATES IN VALUE.
We have never declared or paid any cash dividends on our common stock.
We currently intend to retain our future earnings, if any, to finance further
research and development and do not expect to pay any cash dividends in the
foreseeable future. As a result, the success of an investment in our common
stock will depend upon any future appreciation in its value. There is no
guarantee that our common stock will appreciate in value or even maintain the
price at which shareholders have purchased their shares.
-16-
THE OFFERING
Of the 560,637 shares of our common stock being offered by the selling
shareholders, 118,916 of the shares are being offered by Motorola, Inc. We
issued these shares to Motorola on October 6, 2004, based on the automatic
conversion into common stock of all outstanding shares of our Series B
Convertible Preferred Stock in accordance with the terms of the Series B. As a
result of this conversion, all outstanding shares of the Series B have been
converted into 418,916 shares of our common stock, 300,000 of which shares were
previously registered for resale under the Securities Act of 1933, as amended,
on the Registration Statement on Form S-3 of the Company (Commission File No.
333-48810).
The remaining 450,338 shares are being offered by Sherwin I. Seligsohn,
our Chairman of the Board and Chief Executive Officer, Scott Seligsohn, who is
Sherwin I. Seligsohn's son and an employee of our Company, and the other
shareholders named in the "Selling Shareholders" section of this prospectus. The
shares registered for resale by Messrs. Sherwin I. Seligsohn and Scott Seligsohn
are issuable to those individuals upon the exercise of certain warrants to
purchase shares of our common stock, and the shares registered for resale by the
other selling shareholders are issuable to those individuals upon the exercise
of certain warrants to purchase shares of our common stock pursuant to the
operation of anti-dilution provisions contained in the operative warrant
agreements. The resale of the shares of common stock issuable upon exercise of
those warrants prior to the operation of the anti-dilution provisions was
previously registered by the Company under the Securities Act of 1933, as
amended.
The selling shareholders pursuant to this prospectus may sell the
shares of common stock offered for resale in a secondary offering. Under the
terms of the transactions described above, we are contractually required to
register all of the shares of common stock that are described above.
CONCURRENT OFFERING
On July 28, 2005, the SEC declared effective under the Securities Act
of 1933, as amended, another registration statement on Form S-3 registering the
resale to the public, by a selling shareholder identified in that registration
statement, of up to 464,939 shares of our common stock. That selling shareholder
will be selling shares of common stock that it currently owns, or that it can
acquire by exercising warrants that it currently owns.
As with the resale of shares described in this prospectus, we will not
receive any proceeds from the resale of shares of our common stock by the
selling shareholder listed in the other registration statement. We are paying
the expenses of that offering, as we are the expenses of this offering.
USE OF PROCEEDS
The selling shareholders will receive the proceeds from the resale of
the shares of common stock. We will not receive any proceeds from the resale of
the shares of common stock by the selling shareholders.
-17-
SELLING SHAREHOLDERS
The following table sets forth information regarding the beneficial
ownership of shares of common stock by the selling shareholders as of July 31,
2005, and the number of shares of common stock covered by this prospectus.
The shares being offered by Messrs. Sherwin I. Seligsohn and Scott
Seligsohn are issuable upon the exercise by those individuals of warrants to
purchase shares of our common stock at an exercise price of $4.125 per share.
These warrants were issued to Messrs. Seligsohn in April 1996 as compensation
for service to the Company, and are exercisable at any time prior to April 25,
2006. The agreements pursuant to which these warrants were issued entitle
Messrs. Seligsohn to have the resale of the shares of common stock underlying
the warrants registered by the Company, which registration is occurring on this
registration statement. Sherwin I. Seligsohn is the Company's Chairman and Chief
Executive Officer and Scott Seligsohn is an employee of the Company and the son
of Sherwin I. Seligsohn.
The shares being offered by the other Selling Shareholders, except for
Dillon Capital, LLC, which owns its shares outright, are issuable upon the
exercise by those individuals of warrants to purchase shares of our common
stock. The per share exercise prices of these warrants, which are fixed, are:
$12.39 for the warrants held by Dr. Forrest and Dr. Thompson; and $17.13 for the
warrant held by the Sheldon Drobny Retirement Plan. All of these shares are
issuable to the other Selling Shareholders, except for Dillon Capital, LLC, upon
the exercise of the warrants pursuant to the operation of anti-dilution
provisions contained in the operative warrant agreements. The resale of the
shares of common stock issuable upon exercise of those warrants prior to the
operation of the anti-dilution provisions was previously registered by the
Company under the Securities Act of 1933, as amended.
All shares being offered by Dillon Capital and warrants issued to the
Sheldon Drobny Retirement Plan were issued to such persons or entities as
compensation for the performance of investment banking or similar services. All
of these warrants are exercisable for seven years following the date of
issuance, and entitle the holder to anti-dilution protection upon the occurrence
of various events, including issuances of common stock or related securities at
prices below the exercise price of the warrants.
The warrants issued to Dr. Forrest and Dr. Thompson were issued in
February 2000 in recognition of their service on the Company's Scientific
Advisory Board, are exercisable for 10 years following the date of issuance.
These warrants entitle the holders to anti-dilution protection upon the
occurrence of various events, including issuances of common stock or related
securities at prices below the exercise price of the warrants.
Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities. The shares of common stock subject to options or warrants currently
exercisable or exercisable within 60 days after July 31, 2005, are deemed
outstanding and to be beneficially owned by the Selling Shareholders holding
such options or warrants.
BENEFICIAL OWNERSHIP
NUMBER OF MAXIMUM AFTER RESALE OF SHARES
SHARES NUMBER OF ---------------------------
NAME OF BENEFICIALLY SHARES BEING NUMBER
SELLING SHAREHOLDER OWNED OFFERED OF SHARES(1) PERCENT(2)
------------------------ ------------ ------------ ------------ ----------
Motorola, Inc.(3)(4) 812,432 118,916 693,516 2.4%
Sherwin I. Seligsohn(5) 754,350 174,500 579,850 2.0%
Scott Seligsohn(6) 3,549,371 200,000 3,349,371 11.7%
Stephen R. Forrest(7) 440,101 13,994 426,107 1.5%
Mark E. Thompson(8) 453,494 13,994 439,500 1.6%
Dillon Capital, LLC(9) 5,434 101 5,333 *
Sheldon Drobny Retirement Plan(10)(11) 189,132 39,132 150,000 *
TOTALS 6,048,314 560,637 5,487,677 18.3%
_____________
*Less than 1%.
(1) Assumes the sale of all shares being offered by this prospectus.
(2) The percentage ownership for each beneficial owner listed above is based
on 28,539,047 shares of common stock outstanding as of July 31, 2005. In
accordance with SEC rules, options to purchase shares of common stock
that are exercisable as of July 31, 2005, or will become exercisable
within 60 days thereafter, are deemed to be outstanding and beneficially
owned by the person holding such options for the purpose of computing
such person's percentage ownership, but are not deemed to be outstanding
for the purpose of computing the percentage ownership of any other
person. The numbers of shares indicated in the table includes the
following number of shares issuable upon the exercise of warrants or
options: Motorola, Inc. - 150,000; Sherwin I. Seligsohn - 280,500; Scott
Seligsohn - 65,500; Stephen R. Forrest - 402,412; Mark E. Thompson -
422,500; Dillon Capital, LLC - 5,333; the Sheldon Drobny Retirement Plan
- 150,000.
-18-
(3) This Selling Shareholder is a reporting company under Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended. As such, we
are omitting information regarding the natural persons who exercise
voting and dispositive power with respect to these shares.
(4) Includes:
o 662,432 shares of common stock owned by Motorola, Inc.; and
o 150,000 shares of common stock that may be acquired by Motorola, Inc.
upon the exercise of warrants that are currently exercisable.
We issued the 118,916 shares registered for resale by Motorola on this
registration statement on October 6, 2004, based on the automatic
conversion into common stock of all outstanding shares of our Series B
Convertible Preferred Stock in accordance with the terms of the Series B.
(5) Includes:
o 123,350 shares of common stock owned by Mr. Seligsohn;
o 176,000 shares of common stock owned by American Biomimetics
Corporation, of which Mr. Seligsohn is the sole Director, Chairman,
President and Secretary (These shares are also shown as beneficially
owned by Scott Seligsohn); and
o 455,000 shares of common stock that may be acquired by Mr. Seligsohn
upon the exercise of options and warrants that are currently
exercisable.
(6) Includes:
o 107,871 shares of common stock owned by Mr. Seligsohn;
o 1,500,000 shares of common stock owned by the Sherwin I. Seligsohn
Irrevocable Indenture of Trust dated 7/29/93 FBO Lori S. Rubenstein
(the "Rubenstein Trust"), of which Lori S. Rubenstein, Scott
Seligsohn and Clifford D. Schlesinger are co-trustees;
o 1,500,000 shares of common stock owned by the Sherwin I. Seligsohn
Irrevocable Indenture of Trust dated 7/29/93 FBO Scott Seligsohn (the
"Seligsohn Trust"), of which Lori S. Rubenstein, Scott Seligsohn and
Clifford D. Schlesinger are co-trustees;
o 176,000 shares of common stock owned by American Biomimetics
Corporation, of which the Rubenstein Trust and the Seligsohn Trust
are the principal shareholders (These shares are also shown as
beneficially owned by Sherwin Seligsohn); and
o 265,500 shares of common stock that may be acquired by Mr. Seligsohn
upon the exercise of options and warrants that are currently
exercisable.
(7) Includes:
o 23,695 shares of common stock owned by Dr. Forrest; and
o 416,406 shares of common stock that may be acquired by Dr. Forrest
upon the exercise of options and warrants that are currently
exercisable.
(8) Includes:
o 17,000 shares of common stock owned by Dr. Thompson; and
o 436,494 shares of common stock that may be acquired by Dr. Thompson
upon the exercise of options and warrants that are currently
exercisable.
(9) Includes:
o 101 shares of common stock owned by Dillon Capital, LLC
o 5,333 shares of common stock that may be acquired by Dillon Capital,
LLC upon the exercise of a warrrant that is currently exercisable.
Voting and dispositive power with respect to these shares is exercised
by Stewart Flink. Dillon Capital, LLC is affiliated with a registered
broker-dealer, and acquired the warrants as to which these shares are
issuable in 2000 as compensation for the performance of investment
banking or similar services. At the time it acquired the warrant and
shares, Dillon Capital, LLC had no agreements, plants or understandings,
directly or indirectly, with any person to distribute the warrant or the
shares issuable upon the exercise thereof.
(10) Consists of shares of common stock that may be acquired by this
Selling Shareholder upon the exercise of warrants that are currently
exercisable.
(11) These shares were transferred to the Sheldon Drobny Retirement Plan by
Paradigm Group II, LLC. Voting and dispositive power with respect to
these shares is exercised by Sheldon Drobny.
-19-
PLAN OF DISTRIBUTION
The selling shareholders, including any donees, pledgees or other
transferees who receive shares from the selling shareholders, may, from time to
time, sell all or a portion of the shares of common stock on any market upon
which the common stock my be quoted, 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 such market prices or at negotiated
prices. The selling shareholders may sell the shares of common stock by various
methods, including one or more of the following:
o block trades in which the broker or dealer so engaged by the selling
shareholders will attempt to sell the shares of common stock as agent,
but may purchase and resell a portion of the block as principal to
facilitate the transaction;
o purchases by the broker or dealer as principal and resale by the broker
or dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of the exchange;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o negotiated transactions or otherwise, including an underwritten
offering;
o market sales (both long and short to the extent permitted under the
federal securities laws);
o in connection with short sales of the shares of common stock;
o 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, if permitted under the
securities laws, and
o a combination of any of these methods of sale.
In effecting sales, brokers and dealers engaged by the selling
shareholders may arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions or discounts from the selling shareholders or,
if any such broker-dealer acts as agent for the purchaser of such shares, from
such purchaser, in amounts to be negotiated. These commissions or discounts may
exceed those customary in the types of transactions involved. Broker-dealers may
agree with the selling shareholders to sell a specified number of shares of
common stock at a stipulated price per share, and, to the extent such
broker-dealer is unable to do so acting as agent for the selling shareholders,
to purchase as principal any unsold shares of common stock at the price required
to fulfill the broker dealer commitment to the selling shareholders.
Broker-dealers who acquire shares of common stock as principal may thereafter
resell such shares of common stock form time to time in transactions (which may
involve block transactions and sales to and through other broker-dealers,
including transactions of the nature described above) at prices and on terms
then prevailing at the time of sale, at prices then related to then-current
market price or in negotiated transactions. In connection with such resales,
broker-dealers may pay to or receive from the purchasers of shares of common
stock commissions as described above. The selling shareholders may also sell the
shares of common stock in accordance with Rule 144 under the Securities Act of
1933, as amended, rather than pursuant to this prospectus.
The selling shareholders and any other person selling shares of common
stock pursuant to this registration statement will be subject to the Securities
Exchange Act of 1934, as amended. The Securities Exchange Act of 1934 rules
include, without limitation, Regulation M, which may limit the timing of
purchases and sales of the shares of common stock by the selling shareholders.
In addition, Regulation M may restrict the ability of any person engaged in the
distribution of the shares of common stock to engage in market-making activities
with respect to the shares of common stock being distributed for a period of up
to five business days prior to the commencement of the distribution. This may
affect the marketability of the shares of common stock and the ability of the
selling shareholders and any other person or entity selling shares of common
stock pursuant to this registration statement to engage in market-making
activities with respect to the shares of common stock.
The selling shareholders and any broker-dealers or agents that
participate with the selling shareholders in sales of the shares of common stock
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended, in connection with those sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares of common stock purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933, as amended.
From time to time, the selling shareholders may pledge their shares of
common stock pursuant to the margin provisions of their customer agreements with
their brokers. Upon default by a selling shareholder, the broker may offer and
sell such pledged shares of common stock from time to time. Upon a sale of the
shares of common stock, the selling shareholders intend to comply with the
prospectus delivery requirements under the Securities Act of 1933, as amended,
by delivering a prospectus to each purchaser in the transaction. We intend to
file any amendments or other necessary documents in compliance with the
Securities Act of 1933, as amended, that may be required in the event a selling
shareholder defaults under any customer agreement with a broker.
-20-
We are required to pay all fees and expenses incident to the
registration of the shares of common stock. We have agreed to indemnify certain
of the selling shareholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act of 1933, as amended.
Brokerage commissions and similar selling expenses, if any, attributable to the
sale of shares by the selling shareholders will be borne by the selling
shareholders. The selling shareholders may agree to indemnify brokers, dealers
or agents that participate in sales by the selling shareholders against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act of 1933, as amended.
ABOUT THIS PROSPECTUS
You should only rely on the information contained in this prospectus.
We have not authorized anyone to provide you with information different from
that contained in this prospectus. The information contained in this prospectus
is accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common stock.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended. Therefore, we file reports, proxy statements
and other information with, and furnish other reports to, the SEC. You can read
and copy all of these documents at the SEC's public reference facilities in
Washington, D.C., New York, New York and Chicago, Illinois. You may obtain
information on the operation of the SEC's public reference facilities by calling
the SEC at 1-800-SEC-0330. You can also read and copy all of the
above-referenced documents at the offices of the Nasdaq Stock Market, 1735 K
Street N.W., Washington, D.C. 20006. You also may obtain the documents we file
with the SEC from the SEC's Web site on the Internet that is located at
http://www.sec.gov.
We "incorporate by reference" in this prospectus the information we
file with the SEC, which means that we can disclose important information to you
by referring you to another document we file with the SEC. The information
incorporated by reference in this prospectus is an important part of this
prospectus, and information that we file later with the SEC will automatically
update and supersede this information. We incorporate by reference in this
prospectus the documents listed below and any future filings we make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended, including filings made (i) after the date of the initial
registration statement and prior to effectiveness of the registration statement
and (ii) after the date of this prospectus but before the end of this offering.
The documents that we are incorporating by reference are:
o Our Annual Report on Form 10-K for the year ended December 31, 2004;
o Our Quarterly Reports on Form 10-Q for the quarters ended March 31 and
June 30, 2005;
o Our Current Reports on Form 8-K filed with the SEC on April 4, April 20
and August 5, 2005; and
o The description of our common stock that is contained in our
Registration Statement on Form 8-A filed with the SEC on August 6,
1996.
You should read the information relating to us in this prospectus,
together with the information in the documents incorporated by reference in this
prospectus.
Any statement contained in a document incorporated by reference in this
prospectus, unless otherwise indicated in that document, speaks as of the date
of the document. Statements contained in this prospectus may modify or replace
statements contained in the documents incorporated by reference. In addition,
some of the statements contained in one or more of the documents incorporated by
reference may be modified or replaced by statements contained in a document
incorporated by reference that is filed thereafter.
You may request a copy of any or all of these filings, at no cost, by
writing or telephoning us at Universal Display Corporation, 375 Phillips
Boulevard, Ewing, New Jersey 08618, Attention: Corporate Secretary, Telephone:
(609) 671-0980.
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LEGAL OPINION
Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania, will pass on
the validity of the shares of common stock that may be offered by the
prospectus.
EXPERTS
The consolidated financial statements of Universal Display Corporation
and subsidiary as of December 31, 2004 and 2003, and for each of the years in
the three-year period ended December 31, 2004, and management's assessment of
the effectiveness of internal control over financial reporting as of December
31, 2004, have been incorporated by reference herein in reliance upon the
reports of KPMG LLP, independent registered public accounting firm, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
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================================================================================
560,637 Shares
UNIVERSAL DISPLAY CORPORATION
Common Stock
_______________
PROSPECTUS
_______________
__________, 2005
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered are as follows:
SEC Registration fee $ 2,180
Transfer agent and registrar fees 1,000
Printing and engraving fees 1,000
Legal and accounting fees 10,000
Miscellaneous --
-------
TOTAL $14,180
=======
The selling shareholders described in the prospectus included herewith will not
pay any of the expenses of this offering.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Chapter 17, Subchapter D of the Pennsylvania Business Corporation Law
of 1988, as amended (the "PBCL") contains provisions permitting indemnification
of officers and directors of a business corporation in Pennsylvania.
Sections 1741 and 1742 of the PBCL provide that a business corporation
may indemnify directors and officers against liabilities and expenses they may
incur as such in connection with any threatened, pending or completed civil,
administrative or investigative proceeding, provided that the particular person
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the corporation, and, with respect to any
criminal proceeding, had no reasonable cause to believe his or her conduct was
unlawful. In general, the power to indemnify under these sections does not exist
in the case of actions against a director or officer by or in the right of the
corporation if the person otherwise entitled to indemnification shall have been
adjudged to be liable to the corporation unless it is judicially determined
that, despite the adjudication of liability but in view of all the circumstances
of the case, the person is fairly and reasonably entitled to indemnification for
specified expenses.
Section 1743 of the PBCL provides that the corporation is required to
indemnify directors and officers against expenses they may incur in defending
actions against them in such capacities if they are successful on the merits or
otherwise in the defense of such actions.
Section 1746 of the PBCL grants a corporation broad authority to
indemnify its directors and officers for liabilities and expenses incurred in
such capacity, except in circumstances where the act or failure to act giving
rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness.
Section 1747 of the PBCL permits a corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
representative of another corporation or other enterprise, against any liability
asserted against such person and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify the person against such liability under Chapter 17
Subchapter D of the PBCL.
The registrant's Bylaws provide a right to indemnification to the full
extent permitted by law, for expenses (including attorney `s fees), damages,
punitive damages, judgments, penalties, fines and amounts paid in settlement,
actually and reasonably incurred by any director or officer whether or not the
indemnified liability arises or arose from any threatened, pending or completed
proceeding by or in the right of the registrant (a derivative action) by reason
of the fact that such director or officer is or was serving as a director,
officer, employee or agent of the registrant or, at the request of the
registrant, as a director, officer, partner, fiduciary or trustee of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, unless the act or failure to act giving rise to the claim for
indemnification is financially determined by a court to have constituted willful
misconduct or recklessness. The Bylaws provide for the advancement of expenses
to an indemnified party upon receipt of an undertaking by the party to repay
those amounts if it is finally determined that the indemnified party is not
entitled to indemnification.
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The registrant's Bylaws authorize the Registrant to take steps to
ensure that all persons entitled to indemnification are properly indemnified,
including, if the Board of Directors so determines, by purchasing and
maintaining appropriate insurance.
ITEM 16. LIST OF EXHIBITS
The exhibits filed as part of this registration statement are as
follows:
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.1# Warrant Agreement dated as of April 25, 1996 between the
registrant and Sherwin I. Seligsohn (Filed as an Exhibit to
the Annual Report on Form 10K-SB for the year ended December
31, 1996, filed with the SEC on March 31, 1997, and
incorporated by reference herein.)
4.2# Warrant Agreement dated as of April 25, 1996 between the
registrant and Scott Seligsohn.
5.1# Opinion of Morgan, Lewis & Bockius LLP regarding legality of
securities being registered.
10.8# Form of Warrant Agreement issued to Stephen R. Forrest and
Mark E. Thompson.
10.9# Form of Warrant Agreement issued to STAT Holdings, LLC, Dillon
Capital, LLC, LBC Capital Corporation, the Harry Leopold Roth
IRA, James F. Mongiardo and the Sheldon Drobny Retirement
Plan.
23.1# Consent of Morgan, Lewis & Bockius LLP (included in its
opinion filed as Exhibit 5.1 hereto).
23.2+ Consent of KPMG LLP
24.1# Powers of Attorney (included as part of the signature page
hereof).
______________________
+ Filed herewith.
# Previously Filed.
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:
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(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933, as amended;
(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 the 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 end of
the estimated maximum offering range may be reflected in the
form of prospectus filed with the SEC pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(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 SEC by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934, as amended,
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Exchange Act of 1934, as amended, 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, as amended,
each filing of the registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended, 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) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised
that in the opinion of the SEC such indemnification is against public
policy as expressed in the 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.
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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
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 Ewing, state of New Jersey, on August 10, 2005.
UNIVERSAL DISPLAY CORPORATION
By: /s/ Sidney D. Rosenblatt
-------------------------------------------
Sidney D. Rosenblatt
Executive Vice President, Chief Financial
Officer, Treasurer, Secretary and Director
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
* Chief Executive Officer and Chairman of the August 10, 2005
---------------------------------------------- Board (principal executive officer)
Sherwin I. Seligsohn
/s/ Steven V. Abramson President, Chief Operating Officer and Director August 10, 2005
----------------------------------------------
Steven V. Abramson
/s/ Sidney D. Rosenblatt Executive Vice President, Chief Financial August 10, 2005
---------------------------------------------- Officer, Treasurer, Secretary and Director
Sidney D. Rosenblatt (principal financial and accounting officer)
* Director August 10, 2005
----------------------------------------------
Leonard Becker
* Director August 10, 2005
----------------------------------------------
C. Keith Hartley
* Director August 10, 2005
----------------------------------------------
Elizabeth H. Gemmill
* Director August 10, 2005
----------------------------------------------
Lawrence Lacerte
* /s/ Sidney D. Rosenblatt
------------------------
By: Sidney D. Rosenblatt
Attorney-in-Fact
II-4