AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 17, 2001
REGISTRATION NO. 333-58060
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
DSP GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 94-2683643
(State of incorporation) (I.R.S. Employer Identification Number)
3120 SCOTT BOULEVARD
SANTA CLARA, CALIFORNIA 95054
(408) 986-4300
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ELIYAHU AYALON
CHAIRMAN OF THE BOARD
DSP GROUP, INC.
3120 SCOTT BOULEVARD
SANTA CLARA, CALIFORNIA 95054
(408) 986-4300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
BRUCE MANN, ESQ.
Morrison & Foerster LLP
425 Market Street
San Francisco, California 94105-2482
(415) 268-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please 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: / /
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CALCULATION OF REGISTRATION FEE
===================================================================================================================================
TITLE OF SHARES TO BE AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF REGISTRATION
REGISTERED REGISTERED AGGREGATE PRICE PER SHARE AGGREGATE OFFERING PRICE FEE
---------------------------- ---------------------- --------------------------- ------------------------- -----------------------
Common Stock, $0.001
par value .............. 161,433 shares $16.7(1) $ 2,695,931.1(1) $673.98(2)
------------------------------ ------------------------- --------------------------- --------------------------- ------------------
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) based on the average of the high and low
sales prices of the registrant's Common Stock, as reported on the
Nasdaq National Market on April 12, 2001.
(2) $646.98 previously paid in connection with the initial filing on
March 30, 2001.
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 AN 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.
Not Yet Effective, dated April 17, 2001
PROSPECTUS
161,433 SHARES
DSP GROUP, INC.
COMMON STOCK
This prospectus relates to the sale of up to 161,433 shares of our common
stock offered for the account of individuals who received shares of our common
stock in exchange for an aggregate of 1,210,750 shares of common stock of
VoicePump, Inc, a California corporation, in connection with our recent
acquisition of VoicePump. We refer to these individuals collectively, in this
prospectus as the "selling stockholders." We are registering these shares of
common stock to provide the selling stockholders with freely tradable
securities, but this registration does not necessarily mean that the selling
stockholders will offer or sell the shares.
We are filing the registration statement of which this prospectus is a part
pursuant to the terms of an Investors' Rights Agreement which we entered into
with the selling stockholders and other shareholders of VoicePump. We will not
receive any proceeds from the sale of the shares by the selling stockholders. We
have agreed to pay all registration expenses.
Our common stock is listed on the Nasdaq National Market under the symbol
"DSPG." On March 29, 2001, the last reported sales price of our common stock
was $15.50 per share.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING
ON PAGE 1.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The selling stockholders from time to time may offer and sell the shares of
our common stock which they hold through agents or broker-dealers, or directly
to one or more purchasers, at market prices prevailing at the time of sale or at
prices otherwise negotiated. The selling stockholders reserve the sole right to
accept or reject, in whole or in part, any proposed purchase of the shares of
our common stock to be made directly or through agents.
The selling stockholders and any agents or broker-dealers that participate
with the selling stockholders in the distribution of shares of our common stock
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended. Any commissions paid or any discounts or concessions allowed
to any such persons, and any profit on the resale of the shares of our common
stock, may be deemed to be underwriting commissions or discounts under the
Securities Act. Also, there are certain indemnification arrangements between us
and the selling stockholders.
The date of this prospectus is _________, 2001
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THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
AMENDED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE RELATED REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION OR ANY
APPLICABLE STATE SECURITIES COMMISSION BECOMES EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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TABLE OF CONTENTS
Page
----
Forward Looking Statements.....................................................................................1
Risk Factors...................................................................................................1
Use of Proceeds............................................................................................... 9
The Selling Stockholders.......................................................................................9
Plan of Distribution..........................................................................................11
Experts.......................................................................................................11
Legal Matters.................................................................................................12
Where You Can Find More Information About DSP Group...........................................................12
Incorporation of Certain Documents by Reference...............................................................12
FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS THAT ARE BASED
ON THE BELIEFS OF, AND ESTIMATES MADE BY, AND INFORMATION CURRENTLY AVAILABLE
TO, OUR MANAGEMENT. THESE STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES.
ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THIS PROSPECTUS.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT
LIMITED TO, THOSE DISCUSSED BELOW IN "RISK FACTORS" AND ELSEWHERE IN THIS
PROSPECTUS.
Our common stock is listed on the Nasdaq National Market under the symbol
"DSPG." Our executive offices are located at 3120 Scott Boulevard, Santa Clara,
CA 95054, and our telephone number is (408) 986-4300.
RISK FACTORS
YOU SHOULD BE AWARE THAT PURCHASING OR OWNING SHARES OF OUR COMMON STOCK
INVOLVES VARIOUS RISKS, INCLUDING THOSE DESCRIBED BELOW. YOU SHOULD CONSIDER
CAREFULLY THE RISK FACTORS TOGETHER WITH ALL OF THE OTHER INFORMATION INCLUDED
IN THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS SUPPLEMENT BEFORE YOU DECIDE
TO PURCHASE SHARES.
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY.
Our quarterly results of operations may vary significantly in the future for
a variety of reasons, including the following:
o fluctuations in volume and timing of product orders;
o level of per unit royalties;
o changes in demand for our products due to seasonal customer buying
patterns and other factors;
o timing of new product introductions by us or our customers, licensees
or competitors;
o changes in the mix of products sold by us;
o fluctuations in the level of sales by original equipment manufacturers
(OEMs) and other vendors of products incorporating our products; and
o general economic conditions, including the changing economic
conditions in the United States.
Each of the above factors is difficult to forecast and thus could harm our
business, financial condition and results of operations.
1
Through 2001, we expect that revenues from our DSP core designs and
TrueSpeech algorithms will be derived primarily from license fees rather than
per unit royalties. The uncertain timing of these license fees has caused, and
may continue to cause, quarterly fluctuations in our operating results. Our per
unit royalties from licenses are dependent upon the success of our OEM licensees
in introducing products utilizing our technology and the success of those OEM
products in the marketplace. Per unit royalties from TrueSpeech licensees have
not been significant to date.
OUR AVERAGE SELLING PRICES CONTINUE TO DECLINE.
We have experienced a decrease in the average selling prices of our
integrated digital telephony (IDT) speech processors, but have to date been able
to offset this decrease on an annual basis through manufacturing cost reductions
and the introduction of new products with higher performance. However, we cannot
guarantee that our on-going efforts will be successful or that they will keep
pace with the anticipated, continuing decline in average selling prices.
WE DEPEND ON THE IDT MARKET WHICH IS HIGHLY COMPETITIVE.
Sales of IDT products comprise a substantial portion of our product sales.
Any adverse change in the digital IDT market or in our ability to compete and
maintain our position in that market would harm our business, financial
condition and results of operations. The IDT market and the markets for our
products in general are extremely competitive and we expect that competition
will only increase. Our existing and potential competitors in each of our
markets include large and emerging domestic and foreign companies, many of which
have significantly greater financial, technical, manufacturing, marketing, sale
and distribution resources, and management expertise than we do. It is possible
that we may one day be unable to respond to increased price competition for IDT
processors or other products through the introduction of new products or
reductions of manufacturing costs. This inability would have a material adverse
effect on our business. Likewise, any significant delays by us in developing,
manufacturing or shipping new or enhanced products also would have a material
adverse effect on our business.
The 900 Mhz Digital Spread Spectrum RF and Base Band technology
acquired in 1999 from Advances Micro Devises gave us a "cheap entry ticket"
to this market. This technology is not state of the art and we have noticed a
trend of decreasing sales for the product models which are based on this
technology. In the first quarter of 2000 we recorded two unusual expense
items of which the outstanding balance of the capitalized assets were
amortized. We may not succeed in our development of new RF and Base Band
models and those which are going to be developed may not be accepted by the
market. Despite the recent success of development and sales of our DSP Cores,
the market needs extensive R&D efforts in new technologies not currently
owned by us, and we may not succeed in developing such technologies in due
time, which could affect our competitive position.
WE DEPEND ON INDEPENDENT FOUNDRIES TO MANUFACTURE OUR INTEGRATED CIRCUIT
PRODUCTS.
All of our integrated circuit products are manufactured by independent
foundries. While these foundries have been able to adequately meet the demands
of our increasing business, we are and will continue to be dependent upon these
foundries to achieve acceptable manufacturing yields, quality levels and costs,
and to allocate to us a sufficient portion of foundry capacity to meet our needs
in a timely manner. To meet our increased wafer requirements, we have added
additional
2
independent foundries to manufacture our processors. Our revenues could be
harmed should any of these foundries fail to meet our request for products due
to a shortage of production capacity, process difficulties, low yield rates or
financial instability. For example, foundries in Taiwan produce a significant
portion of our wafer supply. As a result, earthquakes, aftershocks or other
natural disasters in Asia, could preclude us from obtaining an adequate supply
of wafers to fill customer orders and could harm our business, financial
condition and results of operations.
WE MAY NEED TO INCREASE OUR RESEARCH AND DEVELOPMENT EFFORTS TO REMAIN
COMPETITIVE.
The DSP Cores market is experiencing extensive efforts by some of our
competitors to use new technologies to manipulate the chip design programming to
increase the parallel processing of the chip. One such technology used is
VeryLong Instruction Word (VLIW), which some of our competitors possess elements
of, but which we do not possess at the present time. If such technology
continues to improve the programming processing of these chips, then we may need
to further our research and development to obtain such technology or our failure
to remain competitive could have an adverse effect on our results of operation.
WE DEPEND ON INTERNATIONAL OPERATIONS.
We are dependent on sales to customers outside the United States. We expect
that international sales will continue to account for a significant portion of
our net product and license sales for the foreseeable future. As a result, the
occurrence of any negative international, political, economic or geographic
events could result in significant revenue shortfalls. These shortfalls could
cause our business to be harmed. Some of the risks of doing business
internationally include:
o unexpected changes in regulatory requirements;
o fluctuations in the exchange rate for the United States dollar;
o imposition of tariffs and other barriers and restrictions;
o burdens of complying with a variety of foreign laws;
o political and economic instability; and
o changes in diplomatic and trade relationships.
WE FACE RISK FROM OPERATING IN ISRAEL.
Our principal research and development facilities are located in the
State of Israel and, as a result, at March 26, 2001, 156 of our 203 employees
were located in Israel, including 102 out of 125 of our research and development
personnel. In addition, although DSP Group is incorporated in Delaware, a
majority of our directors and executive officers are residents of Israel.
Although substantially all of our sales currently are being made to customers
outside Israel, we are nonetheless directly influenced by the political,
economic and military conditions affecting Israel. Any major hostilities
involving Israel, or the interruption or curtailment of trade
3
between Israel and its present trading partners, could significantly harm our
business, operating results and financial condition.
Israel's economy has been subject to numerous destabilizing factors,
including a period of rampant inflation in the early to mid-1980's, low foreign
exchange reserves, fluctuations in world commodity prices, military conflicts
and civil unrest. In addition, Israel and companies doing business with Israel
have been the subject of an economic boycott by the Arab countries since
Israel's establishment. Although they have not done so to date, these
restrictive laws and policies may have an adverse impact on our operating
results, financial condition or expansion of our business.
Since the establishment of the State of Israel in 1948, a state of
hostility has existed, varying in degree and intensity, between Israel and the
Arab countries. Although Israel has entered into various agreements with certain
Arab countries and the Palestinian Authority, and various declarations have been
signed in connection with efforts to resolve some of the economic and political
problems in the Middle East, we cannot predict whether or in what manner these
problems will be resolved. Our results of operations may be negatively affected
by the obligation of key personnel to perform military service. In addition,
certain of our officers and employees are currently obligated to perform annual
reserve duty in the Israel Defense Forces and are subject to being called for
active military duty at any time. Although we have operated effectively under
these requirements since our inception, we cannot predict the effect of these
obligations on the Company in the future. Our operations could be disrupted by
the absence, for a significant period, of one or more of our officers or key
employees due to military service.
Moreover, part of our expenses in Israel are paid in Israeli currency
which subjects us to the risks of foreign currency fluctuations and to economic
pressures resulting from Israel's general rate of inflation. While substantially
all of our sales and expenses are denominated in United States dollars, a
portion of our expenses are denominated in Israeli shekels. Our primary expenses
paid in Israeli currency are employee salaries and lease payments on our Israeli
facilities. As a result, an increase in the value of Israeli currency in
comparison to the United States dollar could increase the cost of technology
development, research and development expenses and general and administrative
expenses. We cannot provide assurance that currency fluctuations, changes in the
rate of inflation in Israel or any of the other factors mentioned above will not
have a material adverse effect on our business, financial condition and results
of operations.
ANY FUTURE PROFITABILITY MAY BE DIMINISHED IF TAX BENEFITS FROM THE STATE OF
ISRAEL ARE REDUCED OR WITHHELD.
DSP Group receives certain tax benefits in Israel, particularly as a
result of the "Approved Enterprise" status of our facilities and programs. To be
eligible for tax benefits, DSP Group must meet certain conditions, relating
principally to adherence to the investment program filed with the Investment
Center of the Israeli Ministry of Industry and Trade and to periodic reporting
obligations. DSP Group believes that it will be able to meet such conditions.
Should we fail to meet such conditions in the future, however, it would be
subject to corporate tax in Israel at the standard rate of 36%, and could be
required to refund tax benefits already received.
4
There can be no assurance that such grants and tax benefits will be continued in
the future at their current levels or otherwise. The termination or reduction of
certain programs and tax benefits (particularly benefits available to us as a
result of the Approved Enterprise status of the company's facilities and
programs) or a requirement to refund tax benefits already received may have a
material adverse effect on our operating results and financial condition.
5
PROPOSED ISRAELI TAX REFORM COULD HARM OUR FINANCIAL RESULTS.
On May 4, 2000, a committee chaired by the Director General of the
Israeli Ministry of Finance, Avi Ben-Bassat, issued a report recommending a
sweeping reform in the Israeli system of taxation. The proposed reform would
significantly alter the taxation of individuals, and would also affect corporate
taxation. In particular, the proposed reform would reduce, but not eliminate,
the tax benefits available to approved enterprises such as ours. The proposed
reform would also impose a capital gains tax on individuals on the sale of
shares, unless the selling shareholder is entitled to benefits under a tax
treaty. The Israeli cabinet has approved the recommendations in principle, but
implementation of the reform requires legislation by Israel's Knesset. DSP Group
cannot be certain whether the proposed reform will be adopted, when it will be
adopted or what form any reform will ultimately take. The elimination of our
approved status could have negative tax consequences discussed above and could
have a material adverse effect on our business.
WE DEPEND ON OEMS AND THEIR SUPPLIERS TO OBTAIN REQUIRED COMPLEMENTARY
COMPONENTS.
Some of the raw materials, components and subassemblies included in the
products manufactured by our OEM customers, which also incorporate our products,
are obtained from a limited group of suppliers. Supply disruptions, shortages or
termination of any of these sources could have an adverse effect on our business
and results of operations due to the delay or discontinuance of orders for our
products by customers until those necessary components are available.
WE DEPEND UPON THE ADOPTION OF INDUSTRY STANDARDS BASED ON TRUESPEECH
TECHNOLOGY.
Our prospects are partially dependent upon the establishment of industry
standards for digital speech compression based on TrueSpeech algorithms in the
computer telephony and Voice over IP markets. The development of industry
standards utilizing TrueSpeech algorithms would create an opportunity for us to
develop and market speech co-processors that provide TrueSpeech solutions and
enhance the performance and functionality of products incorporating these
co-processors.
In February 1995, the International Telecommunications Union established
G.723.1, which is predominately composed of a TrueSpeech algorithm, as the
standard speech compression technology for use in video conferencing over public
telephone lines. In March 1997, the International Multimedia Teleconferencing
Consortium, a nonprofit industry group, recommended the use of G.723.1 as the
default audio coder for all voice transmissions over the Internet or for IP
applications for H.323 conferencing products. If TrueSpeech algorithms are not
adopted as the standard speech compression technology for different
applications, the sales of our TrueSpeech products may not achieve anticipated
levels.
THERE ARE RISKS ASSOCIATED WITH OUR ACQUISITION STRATEGY.
DSP Group has pursued, and will continue to pursue, growth opportunities
through internal development and acquisition of complementary businesses,
products and technologies. We are unable to predict whether or when any
prospective acquisition will be completed. The process of
6
integrating an acquired business may be prolonged due to unforeseen difficulties
and may require a disproportionate amount of our resources and management's
attention. We cannot provide assurance that we will be able to successfully
identify suitable acquisition candidates, complete acquisitions, integrate
acquired businesses into our operations or expand into new markets.
Once integrated, acquisitions may not achieve comparable levels of revenues,
profitability or productivity as the existing business of DSP Group or otherwise
perform as expected. The occurrence of any of these events could harm our
business, financial condition or results of operations. Future acquisitions may
require substantial capital resources, which may require us to seek additional
debt or equity financing.
PROTECTION OF OUR INTELLECTUAL PROPERTY IS LIMITED; RISKS OF INFRINGEMENT OF
RIGHTS OF OTHERS.
As is typical in the semiconductor industry, we have been and may from time
to time be notified of claims that we may be infringing patents or intellectual
property rights owned by third parties. For example, AT&T has asserted that
G.723.1, which is primarily composed of a TrueSpeech algorithm, includes certain
elements covered by patents held by AT&T and has requested that video
conferencing manufacturers license the technology from AT&T. Other
organizations, including Lucent Microelectronics, NTT and VoiceCraft have raised
public claims that they also have patents related to the G.723.1 technology.
If it appears necessary or desirable, we may try to obtain licenses for
those patents or intellectual property rights that we are allegedly infringing.
Although holders of these types of intellectual property rights commonly offer
these licenses, we cannot assure you that licenses will be offered or that terms
of any offered licenses will be acceptable to us. Our failure to obtain a
license for key intellectual property rights from a third party for technology
used by us could cause us to incur substantial liabilities and to suspend the
manufacturing of products utilizing the technology. We believe that the ultimate
resolution of these matters will not harm our financial position, results of
operations, or cash flows.
OUR STOCK PRICE MAY BE VOLATILE.
Announcements of developments related to our business, announcements by
competitors, quarterly fluctuations in our financial results, changes in the
general conditions of the highly dynamic industry in which we compete or the
national economies in which we do business, and other factors could cause the
price of our common stock to fluctuate, perhaps substantially. In addition, in
recent years the stock market has experienced extreme price fluctuations, which
have often been unrelated to the operating performance of affected companies.
These factors and fluctuations could have a material adverse effect on the
market price of our common stock.
7
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares by the
selling stockholders but have agreed to bear all expenses of registration of the
shares under federal and state securities laws. See "Plan of Distribution."
THE SELLING STOCKHOLDERS
All of the shares of common stock offered under this prospectus are
being offered and sold by the selling stockholders listed in the table below.
The selling stockholders may offer only those shares of common stock listed
below under "Maximum Number of Shares Being Offered" pursuant to this
prospectus.
The shares of common stock reflected below in the column entitled
"Maximum Number of Shares Being Offered" were issued to the selling stockholders
under a Stock Purchase Agreement dated as of March 22, 2000 entered into by and
among DSP Group and certain stockholders of VoicePump whereby we acquired (1)
approximately 1,960,250 shares of common stock of VoicePump from certain
stockholders in exchange for approximately 261,000 shares of our common stock
and a nominal amount of cash (to pay for fractional shares) and (2)
approximately 1,027,397 shares of VoicePump common stock directly from VoicePump
together with warrants to purchase up to 1,027,397 shares of common stock of
VoicePump at an exercise price of $4.866 per share within two years (of the
issuance of the warrant) and up to 1,027,397 additional shares at an exercise
price of $4.866 per share within three years (of the issuance of the warrant)
for $5,000,000. Pursuant to the Stock Purchase Agreement, DSP Group was also
given the option to purchase additional shares of common stock of VoicePump from
each of the selling stockholders.
In connection with the Stock Purchase Agreement described above, we
entered into an Investors' Rights Agreement dated as of March 27, 2000 with
certain stockholders of VoicePump. The following summary of the Investors'
Rights Agreement does not purport to be complete and is qualified in its
entirety by reference to that agreement, a copy of which is filed as an Exhibit
to this prospectus.
Under the Investors' Rights Agreement, we agreed, if requested by any
of the stockholders of VoicePump that acquired our shares to file a registration
statement under the Securities Act to provide for the resale of the shares of
common stock acquired by the stockholders of VoicePump. In addition, if DSP
Group exercised the option to purchase from the selling stockholders additional
shares of common stock of VoicePump, we agreed to make an additional
registration covering solely the shares issued to the selling stockholders
pursuant to such option which is the basis of the registration statement filed
in connection with this prospectus.
We agreed to bear the expenses of satisfying the registration
requirements resulting from the Investors' Rights Agreement, including without
limitation, all federal and blue sky registration and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for DSP Group.
These expenses, however, will not include any underwriters' or brokers'
8
fees, discounts and commissions. Registration of such shares does not
necessarily mean that any of such shares will be offered and sold by the selling
stockholders.
On April 25, 2000, we filed a registration statement on Form S-3
registering 134,679 shares of our common stock issued to the stockholders of
VoicePump (including 123,416 shares of our common stock to the selling
stockholders).
On February 14, 2001 DSP Group exercised the option to purchase
additional shares of VoicePump common stock from the selling stockholders and
issued them an aggregate of 161,433 shares of our common stock as follows: (i)
133,100 shares of common stock of DSP Group to Cole Erskine in exchange for
998,250 shares of common stock of VoicePump and (ii) 28,333 shares of common
stock of DSP Group to Desa Bubnovich in exchange for 212,500 shares of common
stock of VoicePump. All of the 161,433 shares of common stock of DSP Group
issued in connection with the above transaction are being registered under the
registration statement filed in connection with this prospectus.
When issued, the shares of common stock reflected below in the column
entitled "Maximum Number of Shares Being Offered" were restricted securities
within the meaning of Rule 144 of the Securities Act of 1933 because they were
issued in private placement transactions exempt from the registration
requirements of the Securities Act. These 161,433 shares of our common stock may
be offered for sale from time to time by the selling stockholders after the
effective date of this registration statement. As the selling stockholders may
sell all, or some or none of the 161,433 shares, no estimate can be made of the
aggregate number of shares of common stock that are to be offered or that will
be owned by the selling stockholders upon completion of this offering.
The information in the table reflects information as of March 26, 2001
with respect to the selling stockholders. No selling stockholder has held any
position, office or other material relationship with us or our affiliates during
the past three years. Each of the selling stockholders is currently employed by
VoicePump. Prior to March 26, 2001 the selling stockholders collectively owned
123,416 shares of common stock of DSP Group. As of March 26, 2001, the selling
stockholders beneficially own an aggregate of 284,849 shares of our common
stock, which represents approximately 1.07% of our outstanding common stock
as of March 26, 2001.
We prepared the table based on the information supplied to us by the
selling stockholders named in the table.
------------------------------- ---------------------------- ---------------------------- ----------------------------
Name of Selling Stockholder Number of Shares Maximum Number of Shares Number of Shares to Be
Beneficially Owned Prior Being Offered Beneficially Owned after
to the Offering Offering, Assuming all
Shares Offered Are
Distributed
------------------------------- ---------------------------- ---------------------------- ----------------------------
Cole Erskine 244,016 133,100 110,916
------------------------------- ---------------------------- ---------------------------- ----------------------------
Desa Bubnovich 40,833 28,333 12,500
------------------------------- ---------------------------- ---------------------------- ----------------------------
9
PLAN OF DISTRIBUTION
This prospectus relates to the offer and sale from time to time by the
selling stockholders of up to 161,433 shares of our common stock.
The selling stockholders will act independently of DSP Group in making
decisions with respect to their sale of such shares.
The selling stockholders may sell or distribute some or all of the 161,433
shares from time to time through underwriters or dealers or brokers or other
agents or directly to one or more purchasers, in transactions, which may involve
block transactions, on Nasdaq, privately negotiated transactions or in the
over-the-counter market, or in a combination of such transactions. Such
transactions may be effected by the selling stockholders at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be changed. Brokers,
dealers, agents or underwriters participating in such transactions as agent may
receive compensation in the form of discounts, concessions or commissions from
the selling stockholders, and if they act as agent for the purchaser of such
shares, from such purchaser. Usual and customary or specifically negotiated
brokerage fees or commissions may be paid by the selling stockholders in
connection with such sales.
The selling stockholders and any such underwriters, brokers, dealers or
agents that participate in such distribution may be deemed to be "underwriters"
within the meaning of the Securities Act, and any discounts, commissions or
concessions received by any such underwriters, brokers, dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities Act.
Neither DSP Group nor the selling stockholders can presently estimate the amount
of such compensation. We know of no existing arrangements between the selling
stockholders and any underwriter, broker, dealer or other agent relating to the
sale or distribution of the 161,433 shares.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of any of the 161,433 shares may not simultaneously
engage in market activities with respect to our common stock for a period of
nine business days prior to the commencement of such distribution. In addition
and without limiting the foregoing, the selling stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including without limitation Rules 10b-5, 10b-6 and 10b-7 which
provisions may limit the timing of purchases and sales of any of such shares by
the selling stockholders. All of the foregoing may affect the marketability of
our common stock.
We will pay all of the expenses incident to this offering of the 161,433
shares by the selling stockholders to the public, other than commissions and
discounts of underwriters, brokers, dealers or agents.
EXPERTS
Kost, Forer & Gabbay, a member of Ernst & Young International, independent
auditors, have audited our consolidated financial statements and schedule
incorporated by reference into our
10
Annual Report on Form 10-K for the year ended December 31, 2000, as set forth in
their report, which is incorporated by reference in this prospectus and
elsewhere in the registration statement. Our financial statements and schedule
are incorporated by reference in reliance on Kost, Forer & Gabbay's report,
given on their authority as experts in accounting and auditing.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered pursuant
to this prospectus will be passed upon for DSP Group by Morrison & Foerster LLP,
San Francisco, California.
WHERE YOU CAN FIND MORE INFORMATION ABOUT DSP GROUP
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file with the Securities and Exchange Commission at the its
public reference rooms at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Securities and Exchange Commission's regional
offices at Seven World Trade Center, 13th Floor, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Please call the Securities and Exchange Commission at (800) SEC-0330 for further
information on the public reference rooms. The Securities and Exchange
Commission also maintains a Web site at WWW.SEC.GOV that contains reports, proxy
and information statements, and other information regarding registrants that
file electronically with the Securities and Exchange Commission.
Our common stock is listed on the Nasdaq National Market under the symbol
"DSPG," and our filings with the Securities and Exchange Commission also can be
read and obtained at the following Nasdaq address:
The Nasdaq Stock Market
Reports Section
1735 K Street, N.W.
Washington, D.C. 20006
We have filed a registration statement on form S-3 of which this prospectus
is a part and related exhibits and schedules with the Securities and Exchange
Commission under the Securities Act. The registration statement contains
additional information about us and the common stock being offered. You may view
the registration statement and exhibits on the Securities and Exchange
Commission's Web site. Also, you may inspect the registration statement,
including the exhibits and schedules, without charge at the office of the
Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, and you may obtain copies from the Securities and Exchange Commission at
prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with it, which means that we can disclose
important information to you by
11
referring to those documents. The information incorporated by reference is an
important part of this prospectus. Any statement contained in a document which
is incorporated by reference in this prospectus is automatically updated and
superseded if information contained in this prospectus, or information that we
later file with the Securities and Exchange Commission, modifies or replaces
that information.
The documents listed below have been filed by us under the Securities
Exchange Act of 1934, as amended, with the Securities and Exchange Commission
and are incorporated by reference in this prospectus:
a. Our annual report on Form 10-K for the year ended December 31, 2000
filed with the Securities and Exchange Commission on April 2, 2001;
b. The description of our common stock contained in our registration
statement on Form S-3 filed with the Securities and Exchange
Commission on April 25, 2000 (file no. 333-35566).
In addition, we incorporate by reference all documents filed by us with the
Securities and Exchange Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus.
To receive a free copy of any of the documents incorporated by reference in
this prospectus, other than exhibits, unless they are specifically incorporated
by reference in the documents, call or write to the Secretary, Moshe Zelnik, DSP
Group, Inc., 3120 Scott Boulevard, Santa Clara, CA 95054, telephone number (408)
986-4300.
You should rely only on the information incorporated by reference or
contained in this prospectus. 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 dates on the front of these
documents.
12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an estimate, subject to future contingencies, of the
expenses to be incurred by the registrant in connection with the issuance and
distribution of the securities being registered:
Securities and Exchange Commission Filing Fee $673.98
Legal Fees and Expenses*....................................................... 15,000
Accounting Fees and Expenses*.................................................. 10,000
Printing and Engraving Fees*................................................... 2,000
Miscellaneous*................................................................. 10,000
Total.......................................................................... $37,673.98
*Estimated pursuant to instruction to Item 511 of Regulation S-K.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the Delaware General Corporation Law (the "DGCL") provides
in relevant part that "a corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful." With respect to
derivative actions, Section 145(b) of the DGCL provides in relevant part that
"[a] corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor. . . . [by
reason of his service in one of the capacities specified in the preceding
sentence] against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interest of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper."
The registrant's Restated Certificate of Incorporation provides that each
person who is or was or who had agreed to become a director or officer of the
registrant or who had agreed at the
II-1
request of the registrant's Board of Directors or an officer of the registrant
to serve as an employee or agent of the registrant or as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, shall be indemnified by the registrant to the full extent
permitted by the DGCL or any other applicable laws. Such Restated Certificate of
Incorporation also provides that the registrant may enter into one or more
agreements with any person which provide for indemnification greater than or
different from that provided in such Certificate, and that no amendment or
repeal of such Certificate shall apply to or have any effect on the right to
indemnification permitted or authorized thereunder for or with respect to claims
asserted before or after such amendment or repeal arising from acts or omissions
occurring in whole or in part before the effective date of such amendment or
repeal.
The registrant's Bylaws provide that the registrant shall indemnify to the
full extent authorized by law any person made or threatened to be made a party
to an action or a proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he, his testator or intestate was or
is a director, officer or employee of the registrant or any predecessor of the
registrant or serves or served any other enterprise as a director, officer or
employee at the request of the registrant or any predecessor of the registrant.
The registrant has entered into indemnification agreements with its
directors and certain of its officers. In addition, the Investors' Rights
Agreement between the registrant and the selling stockholders provides for cross
indemnification for certain liabilities under the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, or other federal or
state law.
The registrant has purchased and maintains insurance on behalf of any person
who is or was a director or officer against loss arising from any claim asserted
against him and incurred by him in any such capacity, subject to certain
exclusions.
See also the undertakings set out in response to Item 17 herein.
ITEM 16. EXHIBITS
Exhibit
No. Exhibit
--- -------
4.1 Specimen of Common Stock Certificate of DSP Group (filed as
Exhibit 4.1 to Registrants Registration Statement on Form S-1,
File Number 33-73482, as declared effective on February 11, 1994
and incorporated herein by reference)
4.2* Investors' Rights Agreement dated as of March 27, 2000 between DSP
Group, Inc. and certain stockholders of VoicePump, Inc.
5.1* Opinion of Morrison & Foerster LLP
23.1 Consent of Kost, Forer & Gabbay, a member of Ernst & Young
International, independent auditors
II-2
23.2 Consent of Morrison & Foerster LLP (included in Exhibit 5.1)
24.1* Power of Attorney
* Previously filed as an Exhibit to Registrant's Registration Statement
on Form S-3, File Number 333-58060, as filed on March 30, 2001 and
incorporated herein by reference.
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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 end 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;
(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 registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(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.
II-4
(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 foregoing provisions, 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 Securities Act and will be governed by the final
adjudication of such issue.
(d) The undersigned registrant hereby undertakes that for the purpose of
determining any liability under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus 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.
[SIGNATURE PAGE FOLLOWS]
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company 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 Tel Aviv, Israel, on April 16, 2001.
DSP GROUP, INC.
By: /s/ Moshe Zelnik
--------------------------
Moshe Zelnik
Vice President of Finance,
Chief Financial Officer and
Secretary
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the registration statement has been signed by the
following persons in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
** Chairman of the Board and Chief Executive Officer April 16, 2001
---------------------------- (Principal Executive Officer)
Eliyahu Ayalon
** Vice President of Finance, Chief Financial Officer April 16, 2001
---------------------------- and Secretary (Principal Financial Officer and
Moshe Zelnik Principal Accounting Officer)
** Director April 16, 2001
----------------------------
Zvi Limon
** Director April 16, 2001
----------------------------
Yair Shamir
** Director April 16, 2001
----------------------------
Saul Shani
** Director April 16, 2001
----------------------------
Patrick Tanguy
** /s/ Moshe Zelnik
----------------------------
Moshe Zelnik
Attorney-in-fact
II-6
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
----------------- ----------------------------------------------------------------
4.1 Specimen of Common Stock Certificate (Filed as Exhibit 4.1 to
Registrant's Registration Statement or Form S-1, File
Number 333-73842, as declared effective on February 11, 1994 and
incorporated herein by reference)
4.2* Investors' Rights Agreement
5.1* Opinion of Morrison & Foerster LLP
23.1 Consent of Kost, Forer & Gabbay, a member of Ernst & Young
International, independent auditors
23.2 Consent of Morrison & Foerster LLP (included in Exhibit 5.1)
24.1* Power of Attorney
* Previously filed as an Exhibit to Registrant's Registration Statement on
Form S-3, File Number 333-58060, as filed on March 30, 2001 and incorporated
herein by reference.