| The Company |
1 |
| |
|
| Risk Factors |
1 |
| |
|
| Forward-Looking
Statements |
9 |
| |
|
| Use of Proceeds |
9 |
| |
|
| Selling
Shareholders |
10 |
| |
|
| Plan of
Distribution |
11 |
| |
|
| Legal Matters |
13 |
| |
|
| Experts |
13 |
| |
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| Where You Can Find More
Information |
13 |
| |
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| Incorporation of Certain Documents by
Reference |
14 |
ABOUT
THIS PROSPECTUS
This
prospectus is a part of the registration statement that we filed with the
Securities and Exchange Commission. The selling shareholders named in this
prospectus may from time to time sell the securities described in the
prospectus. You should read this prospectus together with the more detailed
information regarding our company, our common stock, and our financial
statements and notes to those statements that appear elsewhere in this
prospectus and any applicable prospectus supplement together with the additional
information that we incorporate in this prospectus by reference, which we
describe under the heading “Incorporation of Certain Documents By
Reference.”
You
should rely only on the information contained in, or incorporated by reference
in, this prospectus and in any accompanying prospectus supplement. We have not
authorized anyone to provide you with information different from that contained
in, or incorporated by reference in, this prospectus. The common stock is not
being offered in any jurisdiction where the offer is not permitted. You should
not assume that the information in this prospectus or any prospectus supplement
is accurate as of any date other than the date on the front of the prospectus or
prospectus supplement, as applicable.
THE
COMPANY
We
design, develop, market and support portable, software-driven, 3-D measurement
systems that are used in a broad range of manufacturing and industrial
applications. Our principal products are the Faro Arm, FARO Scan Arm and Faro
Gage articulated measuring devices, the Faro Laser Tracker, and their companion
CAM2 software, which provide for computer-aided design (CAD)-based inspection
and/or factory-level statistical process control. Together, these products
integrate the measurement and quality inspection function with CAD software to
improve productivity, enhance product quality and decrease rework and scrap in
the manufacturing process. We use the acronym “CAM2” for this process, which
stands for the computer-aided measurement market. Our products bring precision
measurement, quality inspection and specification conformance capabilities,
integrated with leading CAD software, to the factory floor. We are a pioneer in
the development, marketing and manufacturing of 3-D measurement technology in
manufacturing and industrial applications. Our products have been purchased by
approximately 3,800 customers worldwide, ranging from small machine shops to
such large manufacturing and industrial companies as Audi, Bell Helicopter,
Boeing, British Aerospace, Caterpillar, Daimler Chrysler, General Electric,
General Motors, Honda, Johnson Controls, Komatsu Dresser, Lockheed Martin,
Nissan, Siemens, Volkswagen among many others.
Our
principal executive offices are located at 125 Technology Park, Lake Mary,
Florida 32746, and our telephone number at that address is (407) 333-9911. Our
website address is www.faro.com.
Information on our website does not constitute part of this
prospectus.
RISK
FACTORS
Before
you invest in our securities, you should be aware that the occurrence of any of
the events described in this Risk Factors section and elsewhere in this
prospectus or in a supplement to this prospectus could have a material adverse
effect on our business, financial condition and results of operations. You
should carefully consider these risk factors and the specific risks set forth
under the caption “Risk Factors” in any supplement to this prospectus, together
with all of the other information included in this prospectus or in a supplement
to this prospectus and in documents we incorporate by reference before you
decide to purchase our securities. You can obtain the information incorporated
by reference into this prospectus without charge by following the instructions
in the “Where You Can Find More Information” section of this
prospectus.
Risks
Related to Our Operations
Our
customers' buying process for our products is highly decentralized, and
therefore, it typically requires significant time and expense for us to further
penetrate the potential market of a specific customer, which may delay our
ability to generate additional revenue.
Our
success will depend, in part, on our ability to further penetrate our customer
base. During 2004, 52.7% of our revenue was attributable to sales to our
existing customers, compared to 54.6% in 2003. If we are not able to continue to
penetrate our existing customer base, our sales growth will be impaired. Most of
our customers have a decentralized buying process for measurement devices. Thus,
we must spend significant time and resources to increase revenues from a
specific customer. For example, we may provide products to only one of our
customers manufacturing facilities or for a specific product line within a
manufacturing facility. We cannot be certain that we will be able to
maintain or increase the amount of sales to our existing customers.
Others
may develop products that make our products obsolete or less competitive.
The CAM2
market is emerging and could be characterized by rapid technological change.
Others may develop new or improved products, processes or technologies that may
make our products obsolete or less competitive. We cannot assure you that we
will be able to adapt to evolving markets and technologies or maintain our
technological advantage.
Our
success will depend, in part, on our ability to maintain our technological
advantage by developing new products and applications and enhancing our existing
products. Developing new products and applications and enhancing our existing
products can be complex and time-consuming and will require substantial
investment by us. Significant delays in new product releases or difficulties in
developing new products could adversely affect our revenues and results of
operations. Because our customers are concentrated in a few industries, a
reduction in sales to any one of these industries could cause a significant
decline in our revenues.
An
economic slowdown in manufacturing will affect our growth and profitability.
Approximately
75% of our sales are to manufacturers in the automotive, aerospace and heavy
equipment industries. We are dependent upon the continued growth, viability and
financial stability of our customers in these industries, which are highly
cyclical and dependent upon the general health of the economy and consumer
spending. The cyclical nature of these industries may exert significant
influence on our revenues and results of operations. In addition, the volume of
orders from our customers and the prices of our products may be adversely
impacted by decreases in capital spending by a significant portion of our
customers during recessionary periods. In addition, we generate significant
accounts receivable in connection with providing products and services to our
customers. If one or more of our significant customers were to become insolvent
or otherwise were unable to pay for the products provided by us, our operating
results and financial condition would be adversely affected.
The
potential size and growth of the CAM2 market could be less than we anticipate.
Because
the CAM2 market is emerging, the potential size and growth of the CAM2 market is
uncertain and difficult to quantify. If the CAM2 market does not continue to
expand or does not expand at least as quickly as we anticipate, we will not be
able to continue our sales growth, which will affect our
profitability.
Our
inability to protect our patents and proprietary rights in the United States and
foreign countries could adversely affect our revenues.
Our
success depends in large part on our ability to obtain and maintain patent and
other proprietary right protection for our processes and products in the United
States and other countries. We also rely upon trade secrets, technical know-how
and continuing inventions to maintain our competitive position. We seek to
protect our technology and trade secrets, in part, by confidentiality agreements
with our employees and contractors. Our employees may breach these agreements or
our trade secrets may otherwise become known or be independently discovered by
inventors. If we are unable to obtain or maintain protection of our patents,
trade secrets and other proprietary rights, we may not be able to prevent third
parties from using our proprietary rights.
Our
patent protection involves complex legal and technical questions. Our patents
may be challenged, narrowed, invalidated or circumvented. We may be able to
protect our proprietary rights from infringement by third parties only to the
extent that our proprietary processes and products are covered by valid and
enforceable patents or are effectively maintained as trade secrets. Furthermore,
others may independently develop similar or alternative technologies or design
around our patented technologies. Litigation or other proceedings to defend or
enforce our intellectual property rights could require us to spend significant
time and money and could otherwise adversely affect our business.
Claims
from others that we infringe their intellectual property rights may adversely
affect our operations.
From time
to time we receive notices from others claiming we infringe their intellectual
property rights. The number of these claims may grow. Responding to these claims
may require us to enter into royalty and licensing agreements on unfavorable
terms, require us to stop selling or to redesign affected products or require us
to pay damages. Any litigation or interference proceedings, regardless of their
outcome, may be costly and may require significant time and attention of our
management and technical personnel.
Our
operating results may fluctuate due to a number of factors, many of which are
beyond our control.
Our
annual and quarterly operating results have varied significantly in the past and
likely will vary significantly in the future as a result of:
| ·
|
the
size and timing of customer orders, many of which are received towards the
end of the quarter; |
| ·
|
sales
promotions and sales of demonstration
equipment; |
| ·
|
geographic
expansion in the Asia/Pacific region and other
regions; |
| ·
|
training
and ramp-up time for new sales people; |
| ·
|
investments
in technologies and new products; |
| ·
|
our
inability to successfully identify and acquire target companies or achieve
expected benefits from acquisitions that are consummated, such as
iQvolution; |
| ·
|
the
effects of increased competition as a result of recent consolidation in
the CAM2 market; |
| ·
|
our
effective tax rate; |
| ·
|
the
amount of time that it takes to fulfill orders and ship our products;
|
| ·
|
the
length of our sales cycle to new customers and the time and expense
incurred in further penetrating our existing customer base;
|
| ·
|
increases
in operating expenses for product development and new product marketing;
|
| ·
|
costs
associated with new product introductions, such as assembly line start-up
costs and low introductory period production volumes;
|
| ·
|
the
timing and market acceptance of new products and product enhancements;
|
| ·
|
customer
order deferrals in anticipation of new products and product enhancements;
|
| ·
|
our
success in expanding our sales and marketing programs;
|
| ·
|
start-up
costs and ramp-up time associated with opening new sales offices outside
of the United States; |
| ·
|
fluctuations
in revenue without proportionate adjustments in fixed costs;
|
| ·
|
the
efficiencies achieved in managing inventories and fixed assets; and
|
| ·
|
adverse
changes in the manufacturing industry and general economic conditions.
|
Any one
or a combination of these factors could adversely affect our annual and
quarterly operating results in the future.
The
CAM2 market is an emerging market and our growth depends on the ability of our
products to attain broad market acceptance.
The CAM2
market is in an early stage of adoption. The market for traditional fixed-base
CMMs, check fixtures, and other handheld measurement tools is mature. Part of
our strategy is to continue to displace these traditional measurement devices.
Displacing traditional measurement devices and achieving broad market acceptance
of our products requires significant effort to convince manufacturers to
reevaluate their historical measurement procedures and methodologies.
We market
four closely interdependent products (Faro Arm, Scan Arm, Faro Laser Tracker and
Faro Gage) and related software for use in measurement and inspection
applications. Substantially all our revenues are currently derived from sales of
these products and software and we plan to continue our business strategy of
focusing on the portable software-driven, 3-D measurement and inspection market.
Consequently, our financial performance will depend in large part on portable,
computer-based measurement and inspection products achieving broad market
acceptance. If our products cannot attain broad market acceptance, we will not
grow as anticipated and may be required to make increased
expenditures
on research and development for new applications or new products.
We
compete with manufacturers of portable measurement systems and traditional
measurement devices, many of which have more resources than us and may develop
products or technologies that will directly compete with us.
Our
portable measurement systems compete in the broad market for measurement devices
for manufacturing and industrial applications, which, in addition to portable
articulated arms and laser tracker products, consists of fixed-base CMMs, check
fixtures, and handheld measurement tools. The broad market for measurement
devices is highly competitive. In the Faro Gage product line, manufacturers of
handheld measurement tools and fixed-base CMMs include a significant number of
well-established companies that are substantially larger and possess
substantially greater financial, technical and marketing resources than we
possess. In the Faro Arm product line, we compete with Hexagon Metrology, a
division of Hexagon. Hexagon is significantly larger than us. In the Faro Laser
Tracker product line, we compete primarily with Leica Geosystems, a division of
Leica. Leica is significantly larger than us. We will be required to make
continued investments in technology and product development to maintain our
technological advantage over our competition. We cannot assure you that we will
have sufficient resources to make additional investments in technology and
product development or that our product development efforts will allow us to
successfully compete as the industry evolves.
Our
competitors may develop products or technologies that directly compete with us.
For example, fixed-base CMM manufacturers are introducing CAD-based inspection
software in response to the trend toward CAD-based factory floor metrology. In
addition, some fixed-base CMM manufacturers are miniaturizing and increasing the
mobility of their conventional CMMs. These companies may continue to alter their
products and devote resources to the development and marketing of additional
products that compete with ours.
We
derive a substantial part of our revenues from our international operations,
which are subject to greater volatility and often require more management time
and expense to achieve profitability than our domestic operations.
Since
2000, we have derived approximately 50% of our sales from international
operations. We opened a manufacturing facility in Schaffhausen, Switzerland in
2003 and have regional sales offices in Germany, France, Spain, Italy, Japan,
China, India, South Korea and the United Kingdom. Should trade relations between
the United States and China deteriorate, our ability to transfer products
between China and other regions of the world, including the United States, Asia
and Europe could be significantly impaired and our results of operations would
suffer. In our experience, entry into new international markets requires
considerable management time as well as start-up expenses for market
development, hiring and establishing office facilities before any significant
revenues are generated. As a result, initial operations in a new market may
operate at low margins or may be unprofitable. Our international operations may
be subject to a number of risks including:
| ·
|
difficulties
in staffing and managing foreign operations;
|
| ·
|
political
and economic instability; |
| ·
|
unexpected
changes in regulatory requirements and laws;
|
| ·
|
longer
customer payment cycles and difficulty collecting accounts receivable;
|
| ·
|
export
duties, import controls and trade barriers;
|
| ·
|
governmental
restrictions on the transfer of funds to us from our operations outside
the United States; |
| ·
|
burdens
of complying with a wide variety of foreign laws and labor practices;
and |
| ·
|
fluctuations
in currency exchange rates, which could affect local payroll utility and
other expenses. |
Several
of the countries where we operate have emerging or developing economies, which
may be subject to greater currency volatility, negative growth, high inflation,
limited availability of foreign exchange and other risks. These factors may harm
our results of operations and any measures that we may implement to reduce the
effect of volatile currencies and other risks of our international operations
may not be effective. In addition, during 1997 and 1998 several Asian countries,
including Japan, experienced severe currency fluctuation and economic deflation.
If such situations reoccur or occur in other regions where we operate, it may
negatively impact our sales and our ability to collect payments from customers
in these regions.
We
rely to a large extent on the experience and management ability of our senior
executive officers.
Our
success will depend, in part, on the services of our founders, Simon Raab, our
Chief Executive Officer, and Gregory Fraser, our Executive Vice President,
Secretary and Treasurer, and Jay Freeland, our President and Chief Operating
Officer, who was hired in November 2004, and our Chief Financial Officer,
Barbara Smith, who was hired in February 2005. The loss or interruption of the
continued full-time services of these executives could have a material adverse
effect on us. We do not have employment agreements with these executives.
We
may not be able to identify, consummate or achieve expected benefits from
acquisitions.
We have
completed three significant acquisitions since our initial public offering in
1997. The most recent of these acquisitions was iQvolution, headquartered in
Ludwigsburg, Germany, a manufacturer and supplier of three-dimensional laser
scanning products and services. We intend to pursue access to additional
technologies, complementary product lines and sales channels through selective
acquisitions and strategic investments. We may not be able to identify and
successfully negotiate suitable acquisitions, obtain financing for future
acquisitions on satisfactory terms or otherwise complete acquisitions in the
future. In the past we have used our stock as consideration for acquisitions.
Our common stock may not remain at a price at which it can be used as
consideration for acquisitions without diluting our existing shareholders, and
potential acquisition candidates may not view our stock attractively.
Realization
of the benefits of the iQvolution acquisition, or any other acquisition,
requires integration of some or all of the acquired companies' sales and
marketing, distribution, manufacturing, engineering, finance and administrative
organizations. The integration of acquisitions demands substantial attention
from senior management and the management of the acquired companies.
Acquisitions in general are subject to a variety of risks and uncertainties,
some of which could include:
| ·
|
the
inability to assimilate effectively the operations, products, technologies
and personnel of the acquired companies (some of which may be located in
diverse geographic regions); |
| ·
|
the
inability to maintain uniform standards, controls, procedures and
policies; |
| ·
|
the
need or obligation to divest portions of the acquired companies; and
|
| ·
|
the
potential impairment of relationships with customers.
|
In
addition to these general risks, the iQvolution acquisition is subject to the
following additional risks:
| ·
|
the
inability to expand sales of laser scanning products and services beyond
engineering
applications to other opportunities, such as law enforcement and the
forensics market, |
| ·
|
the
amount of time that it takes to fulfill orders and ship iQvolution’s
products, |
| ·
|
the
fact that the market potential for the three-dimensional laser scanning
market and the potential adoption rate for iQvolution’s products are
difficult to quantify and predict; |
| ·
|
development
by others of new or improved products, processes or technologies that make
iQvolution’s products and services obsolete or less
competitive; |
| ·
|
our
inability to introduce new products, such
as a phase-based
laser scanner for outdoor use, reduce the cost of the products, or improve
the ease of use of the products; |
| ·
|
a
decline in the overall market opportunity for the products of iQvolution;
and |
| ·
|
the
loss of Dr. Bernd-Dietmar Becker or Dr. Reinhard Becker, the co-founders
of iQvolution, or other key personnel. |
We cannot
assure you that we will be able to integrate successfully the iQvolution
acquisition or any other acquisitions, that iQvolution or any acquired companies
will operate profitably or that we will realize the expected benefits from the
iQvolution acquisition or any other acquisition.
We
may face difficulties managing growth.
Our
growth has placed significant demands on our management and operations and
financial resources. If our business continues to grow rapidly in the future, we
expect it to result in:
| ·
|
increased
responsibility for existing and new management personnel; and
|
| ·
|
incremental
strain on our operations and financial and management systems (both
domestically and internationally). |
Our
success under such conditions will depend to a significant extent on the ability
of our executive officers and other members of senior management to operate
effectively both independently and as a group. If we are not able to manage
future growth, our business, financial condition and operating results may be
harmed.
Our
dependence on suppliers for materials could impair our ability to manufacture
our products.
Outside
vendors provide key components used by us in the manufacture of our products.
Although we believe that alternative sources for these components are available,
any supply interruption in a limited source component would harm our ability to
manufacture our products until a new source of supply is identified. In
addition, an uncorrected defect or supplier's variation in a component, either
known or unknown to us, or incompatible with our manufacturing processes, could
harm our ability to manufacture our products. We may not be able to find a
sufficient alternative supplier in a reasonable period, or on commercially
reasonable terms, if at all. If we fail to obtain a supplier for the manufacture
of components of our potential products, we may experience delays or
interruptions in our operations, which would adversely affect our results of
operations and financial condition.
Risks
Related to Our Common Stock
Future
sales of our common stock could depress our stock price.
We cannot
predict the effect that future sales of our common stock will have on the market
price of our common stock. Shares that we issued in the iQvolution acquisition
or other shares of our common stock that we issue in the future may become
available for resale in the public market from time to time. Sales of
substantial amounts of our common stock, or the perception that such sales may
occur, could adversely affect the market price of our common stock or our
ability to raise capital by offering equity securities.
We
may experience volatility in our stock price.
The price
of our common stock has been, and may continue to be, highly volatile in
response to various factors, many of which are beyond our control, including:
| ·
|
developments
in the industries in which we operate; |
| ·
|
actual
or anticipated variations in quarterly or annual operating results;
|
| ·
|
speculation
in the press or investment community; and |
| ·
|
announcements
of technological innovations or new products by us or our competitors.
|
Our
common stock's market price may also be affected by our inability to meet
analyst and investor expectations and failure to achieve projected financial
results, including those set forth in this prospectus. Any failure to meet such
expectations or projected financial results, even if minor, could cause the
market price of our common stock to decline. Volatility in our stock price may
result in your inability to sell your shares at or above the price at which you
purchased them.
In
addition, stock markets have generally experienced a high level of price and
volume volatility, and the market prices of equity securities of many companies
have experienced wide price fluctuations not necessarily related to the
operating performance of such companies. These broad market fluctuations may
adversely affect our common stock's market price. In the past, securities class
action lawsuits frequently have been instituted against such companies following
periods of volatility in the market price of such companies' securities. If any
such litigation is instigated against us, it could result in substantial costs
and a diversion of management's attention and resources, which could have a
material adverse effect on our business, results of operations and financial
condition.
Our
executive officers and directors control a significant percentage of our common
stock and these shareholders may take actions that are adverse to your
interests.
Our two
co-founders, Simon Raab and Gregory Fraser, beneficially own approximately 17%
of our common stock. As a result, these shareholders, acting together, can
significantly influence all matters requiring shareholder approval, including
the election and removal of directors and approval of significant corporate
transactions such as mergers, consolidations and sales of assets. They also
could dictate the management of our business and affairs. This concentration of
ownership could have the effect of delaying, deferring or preventing a change in
control or impeding a merger or consolidation, takeover or other business
combination, which could cause the market price of our common stock to fall or
prevent you from receiving a premium in such a transaction.
Anti-takeover
provisions in our articles of incorporation, our bylaws and provisions of
Florida law could delay or prevent a change of control that you may favor.
Our
articles of incorporation, our bylaws and provisions of Florida law could make
it more difficult for a third party to acquire us, even if doing so would be
beneficial to you. These provisions could discourage potential takeover attempts
and could adversely affect the market price of our shares. Because of these
provisions, you might not be able to receive a premium on your investment. These
provisions include:
| ·
|
a
limitation on shareholders' ability to call a special meeting of our
shareholders; |
| ·
|
advance
notice requirements to nominate directors for election to our board of
directors or to propose matters that can be acted on by shareholders at
shareholder meetings; |
| ·
|
our
classified board of directors, which means that approximately one-third of
our directors are elected each year; and |
| ·
|
the
authority of the board of directors to issue, without shareholder
approval, preferred stock with such terms as the board of directors may
determine. |
The
provisions described above could delay or make more difficult transactions
involving a change in control of us, or our management.
FORWARD-LOOKING
STATEMENTS
This
prospectus contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements, other than
statements of historical fact, about our plans, beliefs, goals, intentions,
objectives, projections, expectations, assumptions, strategies, and future
events are forward-looking statements.
Words
such as “may,” “will,” “believe,” “plan,” “should,” “could,” “seek,” “expect,”
“anticipate,” “intend,” “estimate,” “goal,” “objective” and similar words, or
discussions of our strategy or other intentions identify forward-looking
statements. Forward-looking statements are subject to a number of known and
unknown risks, uncertainties, and other factors that could cause actual results
to differ materially from those contemplated by such forward-looking statements.
Consequently, you should not place undue reliance on these forward-looking
statements. We do not intend to update any forward-looking statements, whether
as a result of new information, future events, or otherwise.
Important
factors that could cause a material difference in the actual results from those
contemplated in such forward-looking statements include among others those under
“Risk Factors” in this prospectus or in any supplement to this prospectus,
together with all of the other information included in this prospectus or in a
supplement to this prospectus and in documents we incorporate by reference. You
can obtain the information incorporated by reference into this prospectus
without charge by following the instructions in the “Where You Can Find More
Information” section of this prospectus.
USE
OF PROCEEDS
The
selling shareholders will receive all of the proceeds from the sale of the
common stock offered by this prospectus. We will not receive any of the proceeds
from the sale of the common stock offered by the selling shareholders under this
prospectus, but we have agreed to pay the expenses of preparing this prospectus
and the related registration statement.
SELLING
SHAREHOLDERS
We are
registering all 314,736 shares covered by this prospectus on behalf of the
selling shareholders named in the table below. We issued these shares of common
stock to the selling shareholders in connection with our acquisition of
iQvolution AG. That issuance was exempt from the registration requirements of
the Securities Act of 1933, as amended. We are registering these shares to
permit the selling shareholders to offer and sell these shares for resale from
time to time. The selling shareholders may sell all, some, or none of the shares
covered by this prospectus. All information with respect to beneficial ownership
has been furnished to us by the respective selling shareholders. For more
information, see “Plan of Distribution.” None of the selling shareholders has
had any material relationship with us within the past three years other than
(i) as a result of the ownership of these shares, (ii)
each selling shareholder other than cubixx GmbH and Dr. Wilfried Sihn has
been employed by one of our subsidiaries since our acquisition of iQuolution AG,
and (iii) each of the shareholders of cubixx GmbH has been employed by one of
our subsidiaries since our acquisition of iQuolution AG.
The table
below lists the selling shareholders and information regarding their ownership
of our common stock:
|
Selling
Shareholder |
Shares
Owned Prior To
This Offering |
Shares
Being Offered Hereby
|
Shares
Owned After Offering(1)
|
| |
|
|
Number |
Percentage(2) |
|
cubixx
GmbH |
|
297,432 |
0 |
0 |
| |
|
|
|
|
|
Jurgen
Gittinger |
|
1,573 |
0 |
0 |
| |
|
|
|
|
|
Dr.
Martin Ossig |
|
1,573 |
0 |
0 |
| |
|
|
|
|
|
Regis
Derimay |
|
1,573 |
0 |
0 |
| |
|
|
|
|
|
Steffen
Gehring |
|
1,573 |
0 |
0 |
| |
|
|
|
|
|
Rainer
Simon |
|
3,147 |
0 |
0 |
| |
|
|
|
|
|
Dr.
Hansjorg Volz |
|
1,573 |
0 |
0 |
| |
|
|
|
|
|
Bernard
Broutechoux |
|
1,573 |
0 |
0 |
| |
|
|
|
|
|
Rick
Ruitermann |
|
1,573 |
0 |
0 |
| |
|
|
|
|
|
Dr.
Wilfried Sihn |
|
1,573 |
0 |
0 |
| |
|
|
|
|
|
Advanced
Technical Solutions |
|
1,573 |
0 |
0 |
| |
|
|
|
|
|
(1)
|
Assumes
that the shareholders dispose of all the shares of common stock covered by
this prospectus and do not acquire or dispose of any additional shares of
common stock. The selling shareholders are not representing, however, that
any of the shares covered by this prospectus will be offered for sale, and
the selling shareholders reserve the right to accept or reject, in whole
or in part, any proposed sale of shares. |
|
(2) |
The
percentage of common stock beneficially owned is based on 14,051,707
shares of common stock outstanding on March 9,
2005. |
The
selling shareholders may resell or redistribute the shares being offered by this
prospectus from time to time in one or more transactions on the Nasdaq National
Market or otherwise, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to prevailing market prices or
at negotiated prices. Selling shareholders may sell the shares by one or more of
the following methods, without limitation:
| |
|
block
trades (which may include cross trades) in which the broker or dealer so
engaged will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction;
|
| |
|
|
| |
|
purchases
by a broker or dealer as principal and resale by the broker or dealer for
its own account; |
| |
|
|
| |
|
an
exchange distribution or secondary distribution in accordance with the
rules of any stock exchange or market on which the shares are
listed; |
| |
|
|
| |
|
ordinary
brokerage transactions and transactions in which the broker solicits
purchases; |
| |
|
|
| |
|
an
offering at other than a fixed price on or through the facilities of any
stock exchange or market on which the shares are listed or to or through a
market maker other than on that stock exchange or
market; |
| |
|
|
| |
|
privately
negotiated transactions, directly or through agents; |
| |
|
|
| |
|
through
the distribution of the shares by any selling shareholder to its
shareholders; |
| |
|
|
| |
|
agreements
between a broker or dealer and one or more of the selling shareholders to
sell a specified number of the securities at a stipulated price per share;
and |
| |
|
|
| |
|
any
combination of any of these methods of sale or distribution, or any other
method permitted by applicable law. |
We do not
know of any current arrangements by the selling shareholders for the sale or
distribution of any of the securities. The selling shareholders have advised us
that they have acquired their shares in the ordinary course of business and they
have not entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their shares of common
stock, nor is there an underwriter or coordinating broker acting in connection
with a proposed sale of shares of common stock by any selling shareholder. If we
are notified by any selling shareholder that any material arrangement has been
entered into with a broker-dealer for the sale of shares of common stock, if
required, we will file a supplement to this prospectus.
The
selling shareholders may engage brokers and dealers, and any brokers or dealers
may arrange for other brokers or dealers to participate in effecting sales of
the securities. These brokers, dealers, or underwriters may act as principals,
or as an agent of a selling shareholder. Broker-dealers may agree with a selling
shareholder to sell a specified number of the securities at a stipulated price
per security. If the broker-dealer is unable to sell securities acting as agent
for a selling shareholder, it may purchase as principal any unsold securities at
the stipulated price. Broker-dealers who acquire the shares as principals may
thereafter resell the shares from time to time in transactions in any stock
exchange or automated interdealer quotation system on which the securities are
then listed, at prices and on terms then prevailing at the time of sale, at
prices related to the then-current market price or in negotiated transactions.
Broker-dealers may use block transactions and sales to and through
broker-dealers, including transactions of the nature described above. The
selling shareholders may also sell the securities in accordance with Rule 144
under the Securities Act rather than pursuant to this prospectus, regardless of
whether the securities are covered by this prospectus.
The
selling shareholders and any underwriters, brokers, dealers, or agents that
participate in the distribution of the shares may be deemed to be “underwriters”
within the meaning of the Securities Act, and any discounts, concessions,
commissions, or fees received by them and any profit on the resale of the shares
sold by them may be deemed to be underwriting discounts and
commissions.
The
selling shareholders and other persons participating in the sale or distribution
of the shares will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the related rules and regulations adopted
by the SEC, including Regulation M. This regulation may limit the timing of
purchases and sales of any of the shares by the selling shareholders and any
other person. The anti-manipulation rules under the Exchange Act may apply to
sales of shares in the market and to the activities of the selling shareholders
and their affiliates. Furthermore, Regulation M may restrict the ability of any
person engaged in the distribution of the shares to engage in market-making
activities with respect to the particular shares being distributed for a period
of up to five business days before the distribution. These restrictions may
affect the marketability of the shares and the ability of any person or entity
to engage in market-making activities with respect to the shares.
We will
indemnify the selling shareholders against liabilities, including some
liabilities under the Securities Act, in accordance with the registration rights
agreement, or the selling shareholders will be entitled to contribution. We may
be indemnified by a selling shareholder against civil liabilities, including
liabilities under the Securities Act, that may arise from any written
information furnished to us by the selling shareholder specifically for use in
this prospectus, in accordance with the registration rights agreement, or we may
be entitled to contribution. The selling shareholders may agree to indemnify any
brokers, dealers, or agents who participate in transactions involving sales of
the shares against specified liabilities arising under the federal securities
laws in connection with the offering and sale of the shares.
The
shares offered under this prospectus were originally issued to the selling
shareholders pursuant to an exemption from the registration requirements of the
Securities Act. We agreed to register the shares under the Securities Act and to
keep the registration statement of which this prospectus is a part effective
until the earlier of (a) the date on which all the shares of common stock
subject to this registration statement have been sold under this registration
statement or pursuant to Rule 144 of the Securities Act or otherwise or (b) the
date on which all the shares of common stock subject to this registration
statement are eligible to be sold pursuant to Rule 144(k) of the Securities Act.
We have agreed to pay all expenses in connection with this offering, but not
including underwriting discounts, concessions, commissions, or fees (legal or
otherwise) of the selling shareholders.
We will
not receive any proceeds from sales of any shares by the selling shareholders.
We cannot assure you that the selling shareholders will sell all or any portion
of the shares offered under this prospectus.
LEGAL
MATTERS
The
validity of the shares of common stock offered by this prospectus will be passed
on for us by Foley & Lardner LLP, Tampa, Florida.
EXPERTS
The
consolidated financial statements of FARO Technologies, Inc. appearing in FARO
Technologies, Inc.’s Annual Report on Form 10-K for the year ended December 31,
2004 have been audited by Grant Thornton LLP, independent registered public
accountants, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We are
subject to the informational reporting requirements of the Exchange Act. In
accordance with the Exchange Act, we file reports, proxy statements, and other
information with the Securities and Exchange Commission. You can inspect and
copy these reports, proxy statements, and other information at the Public
Reference Room of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. Please call the Securities
and Exchange Commission at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. Our Securities and Exchange Commission
filings are also available on the Securities and Exchange Commission’s web site.
The address of this site is http://www.sec.gov.
We have
filed with the Securities and Exchange Commission a registration statement
(which term includes all amendments, exhibits, and schedules thereto) on Form
S-3 under the Securities Act with respect to the shares offered by this
prospectus. This prospectus does not contain all the information set forth in
the registration statement because certain information has been incorporated
into the registration statement by reference in accordance with the rules and
regulations of the Securities and Exchange Commission. Please review the
documents incorporated by reference for a more complete description of the
matters to which such documents relate. The registration statement may be
inspected at the public reference facilities maintained by the Securities and
Exchange Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and is available to you on the Securities and Exchange
Commission’s web site.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The
Securities and Exchange Commission allows us to incorporate by reference into
this prospectus the information we file with the Securities and Exchange
Commission, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information we file later with the
Securities and Exchange Commission will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made by us with the Securities and Exchange Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until the sale of all of
the shares of common stock that are part of this offering. The documents we are
incorporating by reference are as follows:
- our
Annual Report on Form 10-K for the fiscal year ended December 31,
2004;
- our
Current Report on Form 8-K as filed with the SEC on March 30, 2005;
- our
Current Report on Form 8-K as filed with the SEC on April 1, 2005;
- the
description of our common stock contained in our Registration Statement on Form
8-A filed on September 15, 1997 and any amendments or reports filed for the
purpose of updating such description; and
All
documents that we file with the Securities and Exchange Commission pursuant to
Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act subsequent to the date
of this registration statement and prior to the filing of a post-effective
amendment to this registration statement that indicates that all securities
offered under this prospectus have been sold, or that deregisters all securities
then remaining unsold, will be deemed to be incorporated in this registration
statement by reference and to be a part hereof from the date of filing of such
documents.
Any
statement contained in a document we incorporate by reference will be modified
or superseded for all purposes to the extent that a statement contained in this
prospectus (or in any other document that is subsequently filed with the
Securities and Exchange Commission and incorporated by reference) modifies or is
contrary to that previous statement. Any statement so modified or superseded
will not be deemed a part of this prospectus except as so modified or
superseded.
You may
request a copy of these filings at no cost (other than exhibits unless such
exhibits are specifically incorporated by reference) by writing or telephoning
us at the following address and telephone number:
FARO
Technologies, Inc.
125
Technology Park
Lake
Mary, Florida 32746
(407)
333-9911
Attention:
Gregory A. Fraser
314,736
SHARES
FARO
TECHNOLOGIES, INC.
COMMON
STOCK
April
___, 2005
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other
Expenses of Issuance and Distribution.
|
Securities
and Exchange Commission filing fee |
|
$ |
941.60 |
|
|
Nasdaq
National Market listing fee |
|
$ |
315.00 |
|
|
Accounting
fees and expenses |
|
$ |
6,000.00 |
|
|
Legal
fees and expenses |
|
$ |
15,000.00 |
|
|
Miscellaneous |
|
$ |
2,743.40 |
|
|
Total
expenses |
|
$ |
25,000.00 |
|
All of
the above fees and expenses will be paid by the Registrant. Other than the
Securities and Exchange Commission filing fee, all fees and expenses are
estimated.
Item
15. Indemnification
of Directors and Officers.
The
Florida Business Corporation Act (the “Florida Act”) permits a Florida
corporation to indemnify a present or former director or officer of the
corporation (and certain other persons serving at the request of the corporation
in related capacities) for liabilities, including legal expenses, arising by
reason of service in such capacity if such person shall have acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and in any criminal proceeding if such person had
no reasonable cause to believe his conduct was unlawful. However, in the case of
actions brought by or in the right of the corporation, no indemnification may be
made with respect to any matter as to which such director or officer shall have
been adjudged liable, except in certain limited circumstances. The Company's
Articles of Incorporation and Bylaws provide that the Company shall indemnify
directors and executive officers to the fullest extent now or hereafter
permitted by the Florida Act. In addition, the Company may enter into
Indemnification Agreements with its directors and executive officers in which
the Registrant has agreed to indemnify such persons to the fullest extent now or
hereafter permitted by the Florida Act. The indemnification provided by the
Florida Act and the Company's Bylaws is not exclusive of any other rights to
which a director or officer may be entitled. The general effect of the foregoing
provisions may be to reduce the circumstances which an officer or director may
be required to bear the economic burden of the foregoing liabilities and
expense. The Company may obtain a liability insurance policy for its directors
and officers as permitted by the Florida Act which may extend to, among other
things, liability arising under the Securities Act.
Item
16. Exhibits.
The
exhibits listed in the accompanying Exhibit Index are filed or incorporated by
reference as part of this Registration Statement.
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% 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 by the Registrant pursuant to
Section 13 or Section 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. |
| |
(c) |
Insofar
as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions set forth or described in Item
15 of this Registration Statement, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities
Act of 1933 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 of 1933 and will be
governed by the final adjudication of such
issue. |
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the Registrant has duly
caused this Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Lake Mary, and State of Florida, on this 12th
day of April, 2005.
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FARO
TECHNOLOGIES, INC. |
|
|
|
|
By: |
/s/ Simon
Raab
|
| |
|
| |
Chairman of the Board of
Directors, President, |
| |
Chief Executive Officer, and
Director |
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated. Each person whose signature appears below constitutes and appoints
Simon Raab and Gregory A. Fraser, and each of them individually, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him in his name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective amendments) to this
Registration Statement and any Rule 462(b) Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his or her substitute
or substitutes, may lawfully do or cause to be done by virtue
hereof.
Signature
|
Title
|
Date
|
|
/s/
Simon
Raab
Simon
Raab |
Chairman
of the Board of Directors, President, Chief Executive Officer, and
Director |
April
12, 2005
|
|
/s/
Gregory A. Fraser
Gregory
A. Fraser |
Director,
Executive Vice President, Secretary and Treasurer (the principal financial
officer and principal accounting officer) |
April
12, 2005
|
|
/s/
Hubert d’Amours
Hubert
d’Amours |
Director
|
April
12, 2005
|
|
/s/
Stephen R.
Cole
Stephen
R. Cole |
Director
|
April
12, 2005
|
|
/s/
Norman H. Schipper
Norman
H. Schipper |
Director
|
April
12, 2005
|
|
/s/
Andre
Julien
Andre
Julien |
Director
|
April
12, 2005
|
|
/s/
John
Caldwell
John
Caldwell |
Director
|
April
12, 2005
|
EXHIBIT
INDEX
|
Exhibit
Number
|
Document
Description
|
|
3.1
|
Articles
of Incorporation, as amended (Filed
as Exhibit 3.1 to Registrant’s Registration Statement on Form S-1, No.
333-32983, and incorporated herein by reference).
|
|
3.2
|
Bylaws,
as amended (Filed
as Exhibit 3.2 to Registrant’s Registration Statement on Form S-1, No.
333-32983, and incorporated herein by reference).
|
|
4
|
Registration
Rights Agreement, dated March 29, 2005, by and among FARO Technologies,
Inc. and the shareholders named on the signature pages thereto
(filed
herewith).
|
|
5
|
Opinion
of Foley & Lardner LLP (including consent of counsel) (filed
herewith).
|
|
23.1
|
Consent
of Grant Thornton LLP (filed
herewith).
|
|
23.2
|
Consent
of Foley & Lardner LLP (filed
as part of Exhibit 5).
|
|
24
|
Power
of Attorney relating to subsequent amendments (included
on the signature page to this Registration Statement).
|