As filed with the Securities and Exchange Commission on March 23, 2006
Registration No. 333-131671
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT No. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HENRY BROS. ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 421600 22-3690168
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification number) identification number)
280 Midland Avenue
Saddle Brook, New Jersey 07663
(201)794-6500
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
James E. Henry
Chairman and Chief Executive Officer
Henry Bros. Electronics, Inc.
280 Midland Avenue
Saddle Brook, New Jersey 07663
(201) 794-6500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies requested to:
Arnold N. Bressler, Esq.
Milberg Weiss Bershad & Schulman LLP
One Pennsylvania Plaza
New York, New York 10119
(212) 594-5300
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective as determined by
market conditions and other factors.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a registration statement pursuant to General Instruction
I.D. or a post-effective amendment thereto that shall become effective upon
filing with the commission pursuant to Rule 462(e) under the Securities Act,
check the following box. [ ]
If this Form is a post-effective amendment of a registration statement
filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to 413 (b) under the
Securities Act, check the following box. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
-----------------------------------------------------------------------------------------------------------------
Proposed
Title of Each Class Maximum Proposed Maximum
of Securities To Amount To Be Offering Price Aggregate Offering
Be Registered Registered (1)(2) per Security (3) Price (3) Amount of Registration Fee
-----------------------------------------------------------------------------------------------------------------
Common Stock, par value
$0.01 per share 45,996 shares $5.58 $256,658 $30.03 (4)
-----------------------------------------------------------------------------------------------------------------
(1) Includes the registration for resale by the selling stockholders of
45,996 shares of common stock issuable upon exercise of outstanding common stock
purchase options.
(2) In the event of a stock split, stock dividend or similar transaction
involving the common stock of the registrant, in order to prevent dilution, the
number of shares of common stock registered hereby shall be automatically
adjusted in accordance with Rule 416 under the Securities Act of 1933, as
amended to cover the additional shares of common stock issuable upon exercise of
the related outstanding common stock purchase options.
(3) Estimated pursuant to Rule 457(c) under the Securities Act of 1933,
solely for the purposes of calculating the registration fee, upon the basis of
the average high and low prices of our common stock as reported on the American
Stock Exchange on February 6, 2006.
(4) This fee was already paid.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which shall specifically state that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
PROSPECTUS
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
The information in this prospectus is not complete and may be changed. The
Selling Shareholder, defined below, may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities, and is not
soliciting an offer to buy these securities, in any state where the offer or
sale is not permitted.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to completion, dated March 23, 2006
HENRY BROS. ELECTRONICS, INC.
45,996 Shares of Common Stock
This prospectus relates to the offer and sale of up to 45,996 shares of
common stock of Henry Bros. Electronics, Inc., a Delaware corporation, that may
be offered and sold from time to time by the shareholder described in this
prospectus under "Selling Shareholder" or by pledges, donees, transferees,
assignees or other successors-in-interest that receive any of the shares as a
gift, distribution or other non-sale related transfer. As used in this
prospectus, "we," "us," "our" and similar expressions refer to Henry Bros.
Electronics, Inc. and its subsidiaries.
Our principal executive offices are located at 280 Midland Avenue,
Saddlebrook, NJ 07663. Our telephone number is (201) 794-6500.
The Selling Shareholder may offer its shares from time to time through or
to one or more underwriters, brokers or dealers, on the American Stock Exchange
at market prices prevailing at the time of sale, in one or more negotiated
transactions at prices acceptable to the Selling Shareholder or otherwise. In
connection with any sales, the Selling Shareholder and any underwriters, agents,
brokers or dealers participating in such sales may be deemed to be
"underwriters" within the meaning of the Securities Act.
Except for proceeds of up to $321,372 we may receive from the exercise of
the options, we will not receive any of the proceeds of sales by Selling
Shareholder. We will pay the expenses related to the registration of the shares
covered by this prospectus. The Selling Shareholder will pay commissions and
selling expenses, if any, incurred by them.
Our common stock trades on the American Stock Exchange under the symbol
"HBE." On February 6, 2006, the closing price of one share of our common stock
was $5.65.
Investing in our securities involves risks, which we describe in the "Risk
Factors" section beginning on page 5 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is _____ 2006.
i
Important Notice about the Information Presented in this Prospectus
You should rely only on the information contained or incorporated by
reference in this prospectus and any prospectus supplement. We have not
authorized anyone to provide you with different information. We are not making
an offer to sell these securities in any state where the offer is not permitted.
You should not assume that the information contained in this prospectus or any
prospectus supplement or information incorporated in such documents is accurate
as of any date other than the date of such documents. Our business, financial
condition, results of operations and prospects may have changed since that date.
TABLE OF CONTENTS
Page
About This Prospectus ............................................... ii
Prospectus Summary .................................................. 1
The Company ......................................................... 1
Disclosure Regarding Forward-Looking Statements ..................... 4
Risk Factors ........................................................ 5
Use of Proceeds ..................................................... 9
Selling Shareholder ................................................. 9
Plan of Distribution ................................................ 10
Description of Capital Stock ........................................ 12
Legal Matters ....................................................... 13
Experts ............................................................. 13
Where You Can Find More Information ................................. 13
Documents Incorporated By Reference ................................. 14
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using the SEC's shelf registration rules.
Under the shelf registration rules, using this prospectus and, if required, one
or more prospectus supplements, the Selling Shareholder may sell from time to
time, in one or more offering, the shares of common stock covered by this
prospectus. The shares covered by this prospectus include the 45,996 shares of
common stock issuable upon the exercise of options issued to the Selling
Shareholder.
This prospectus also covers any shares of common stock that may be become
issuable pursuant to anti-dilution adjustment provisions that would increase the
number of shares issuable upon exercise of the warrants as a result of stock
splits, stock dividends or similar transactions.
A prospectus supplement may add, update or change information contained in
this prospectus. We recommend that you read carefully this entire prospectus,
especially the section entitled "Risk Factors" beginning on page 5, and the
section entitled "Documents Incorporated By Reference" beginning on page 14, and
any supplements before making a decision to invest in our common stock.
ii
As used in this prospectus, the terms "we", "us", "our," the "Company" and
Henry Bros. means Henry Bros. Electronics, Inc., unless otherwise indicated.
PROSPECTUS SUMMARY
Company Overview
We are a single-source/turn-key provider of technology-based security
solutions for medium and large commercial and governmental agencies in the
United States. As a single-source/turn-key provider of diversified
technology-based integrated security solutions, we can expedite project
completion, optimize system performance and manpower performance. The
continually evolving security requirements of commercial and government
entities, together with rapidly advancing technology, provides numerous
opportunities for us to assist our clients with their security needs.
The Offering
On November 5, 2001, the Company entered into an agreement with The Wall
Street Group, Inc. (the "Wall Street Group") for Wall Street Group to serve as
financial public relations counsel to the Company (the "Agreement"). Under the
Agreement, Wall Street Group was paid a monthly fee and reimbursed out-of-pocket
expenses, and earned options for the purchase of the Company's common stock. The
Agreement also provided Wall Street Group with the right to have the shares
issuable under the options to be registered for sale under the Securities Act of
1933. The Agreement further provided that any options earned by Wall Street
Group were to be granted to Wall Street Group's affiliate, Wall Street
Consultants, Inc. (the "Selling Shareholder"). Throughout the term of the
Agreement until its termination on April 6, 2003, Wall Street Group earned
options for the purchase of up to 45,996 shares of the Company's common stock.
This prospectus relates to the resale of the 45,996 shares issuable upon
exercise of the options earned under the Agreement.
Number of Shares Outstanding
As of January 30, 2006, 5,889,399 shares of our common stock were issued
and outstanding.
THE COMPANY
We are a single-source/turn-key provider of technology-based security
solutions for medium and large commercial and governmental agencies in the
United States.
Security Distributing and Marketing magazine (SDM) ranks the top 100
largest firms selling closed circuit TV (CCTV), access control and integrated
security systems. We were ranked No. 21 in SDM's Top Systems Integrators Report
published in 2005.
As a single-source/turn-key provider of diversified technology-based
integrated security solutions, we can expedite project completion, optimize
system performance and manpower performance. The continually evolving security
requirements of commercial and government entities, together with rapidly
advancing technology, provides numerous opportunities for us to assist our
clients with their security needs.
We believe that the following key attributes provide us with a sustainable
competitive advantage:
o Experience and expertise;
o Technological sophistication;
o Quality control; and
o Strong list of references.
1
Our Strategy
Our strategy consists of the following components: (1) Maintain and
develop long-term relationships with clients; (2) Focus on high value added
services; (3) Continue to expand our client base in targeted industries; (4)
Maintain a high level of technological sophistication; and (5) Sell additional
services to our established client base.
Our three operating units are integration, evacuation planning and
specialty products.
Our Integration Solution
At the beginning of each new client relationship, we designate one member
of our professional staff as the client service contact. This individual is the
point person for communications between the client and us and often acts, as the
client's project manager for all of its security needs. Our engagement may
include:
o Consulting and planning;
o Engineering and design;
o Systems installation and management;
o Systems training; and
o Maintenance and technical support.
Consulting and planning
Security consulting and planning are the initial phases of determining a
security solution for a project. We have developed a planning process that
identifies all systems, policies and procedures that are required for the
successful operation of a security system that will both meet a client's current
needs and accommodate its projected future requirements. Our consulting and
planning process includes the following steps:
o Identify the client's objectives and security system requirements;
o Survey the site, including inventory of physical components and
software and evaluation of client's existing infrastructure and
security system;
o Assess and prioritize the client's vulnerabilities;
o Develop and evaluate system alternatives;
o Recommend a conceptual security plan design;
o Estimate the cost of implementing the conceptual plan; and
o Develop a preliminary implementation schedule.
2
As a result of this process, we provide the client with a master plan for
an effective security solution that addresses routine operating needs as well as
emergency situations.
We believe that our comprehensive planning process enables our clients to
budget for their security requirements on a long-term basis, identify
opportunities for cost reduction and prepare for future risks.
Engineering and design
The engineering and design process involves preparation of detailed
project specifications and working drawings by a team of our engineers, systems
designers and computer-aided design system operators. These specifications and
drawings detail the camera sensitivity requirements, layout of the control
center, placement of cameras, card readers and other equipment and electrical
requirements. Throughout our engineering and design process, our goal is to
understand our client's operational preferences in order to design a system that
is functional, cost-effective and accommodates our client's present and future
requirements. In addition, we attempt to incorporate our client's existing
personnel, equipment and other physical resources into the system design.
When retained as a single-source provider for turnkey security solutions,
we select system components required under the specifications and drawings. We
recommend that our customers buy proven off-the-shelf devices and software and
resort to custom equipment when absolutely necessary.
We have made a strategic decision not to represent any equipment
manufacturer exclusively, thereby maintaining objectivity and flexibility in
equipment selection. We believe that our technical proficiency with the products
of a wide range of manufacturers enables us to select components that will best
meet a project's requirements.
Systems installation and management
Under the supervision of our project manager, our technicians install
hardware, integrate hardware and software, and validate and test the system.
Subcontractors typically perform other aspects of the system installation such
as electrical installation and basic construction.
Components that may be integrated in a security system include the
following:
o Access control systems, which are designed to exclude unauthorized
personnel from specified areas;
o Intrusion detection systems, which detect unauthorized door and
window openings, glass breakage, vibration, motion, noise and alarms
and other peripheral equipment;
o Closed circuit television systems, which monitor and record entry
and exit activity or provide surveillance of designated areas;
o Critical condition monitoring systems, which provide alarm
monitoring and supervision of various systems and facilities; and
o Fire detection systems, intercoms, public address and network
connectivity that can expand a local security system into a closely
controlled worldwide system.
3
Systems training
Upon the completion of a systems integration project, we typically will
provide the customer with system-documentation and training in the operation and
maintenance of the system.
Maintenance and technical support
We provide maintenance and technical support services on a scheduled,
on-call, or emergency basis. These services include developing and implementing
maintenance programs both for security systems designed, engineered, or
integrated by us and for existing systems.
Our Emergency Preparedness Planning Program Solution
Our Emergency Preparedness Planning Programs ("EPPP") division works with
companies and managers of high-rise office buildings to analyze their specific
facilities needs with emergency preparedness plans. We provide demonstrations,
training and recommendations to clients. Our EPPP division provides a wide array
of services, including:
o Development of emergency plans and procedures;
o Expand existing fire/emergency and preparedness response plans;
o Articulate building strategy to tenants;
o Provide tenant inclusion;
o Increase building community unity, awareness and confidence; and
o Employee training.
Our Specialty Products Solution
The Company's specialty products solutions are provided by two
wholly-owned subsidiaries, Viscom Products, Inc. ("Viscom") and Airorlite
Communications, Inc. ("Airorlite"). Viscom has developed an integrated standard
solution for mobile digital recorders for deployment on municipal buses and
trains. This product is now being manufactured by a third party in accordance
with Viscom's standards. Airorlite specializes in the design, manufacture and
maintenance of wireless communications equipment used to enhance emergency radio
frequency services and cellular communication for both fixed and mobile
applications.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus contain "forward-looking statements" as defined by the Private
Securities Litigation Reform Act of 1995. The forward-looking statements include
certain statements pertaining to our capital resources, performance and results
of operations. In addition, all statements regarding anticipated growth in our
revenue, anticipated market conditions and results of operations are
forward-looking statements. To identify forward-looking statements look for
words like "believes," "expects," "may," "will," "should," "seeks," "intends,"
"plans," "estimates" or "anticipates" and similar words or phrases. Discussions
of strategy, plans or intentions often contain forward-looking statements.
These, and all forward-looking statements, necessarily depend on assumptions,
data or methods that may be incorrect or imprecise.
4
Such statements reflect the current views of the Company and its
management with respect to future events and are subject to certain risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect, our
actual results, performance or achievements could differ materially from the
results expressed in, or implied by, these forward-looking statements.
Our actual results may differ materially from the results predicted or
from any other forward-looking statements made by, or on behalf of, us and
reported results should not be considered as an indication of future
performance. The potential risks and uncertainties include, among other things,
those described under "Risk Factors" elsewhere in this prospectus.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, events, levels of
activity, performance, or achievements. We do not assume responsibility for the
accuracy and completeness of the forward-looking statements. We do not intend to
update any of the forward-looking statements after the date of this prospectus
to conform them to actual results.
RISK FACTORS
The securities offered hereby involve a high degree of risk. Investors
should carefully consider the risks and uncertainties described below, as well
as all of the other information contained in the disclosure documents included
in this memorandum. Any of the following risks could materially adversely affect
our business, financial condition or operating results and could adversely
affect the value of an investment in our common stock.
We may not be able to develop or acquire new technological solutions necessary
for our customers' requirements
Our success depends on acquiring or developing new technology to satisfy
our customers' needs. Any failure or delay to deliver these advances on our part
could have a negative impact on our business.
We are dependent upon a small number of customers for a large portion of our
revenues
We have a small number of customers from which we receive a large portion
of our revenues. Although, no single customer comprised more then 10% of total
revenues during 2004, our five largest projects represented approximately 25% of
our revenues. Revenues from governmental agencies accounted for 20% in 2004
versus 21% in 2003. Consequently, we are often required to replace one customer
with one or more other customers in order to generate the same amount of
revenues. There can be no assurance that we will continue to be able to do so.
Some of our orders and contracts may be cancelled or modified so there is risk
that our full backlog may not be realized
Some of our orders and contract backlog are subject to cancellation and
modification by our customers so we cannot be certain that we will recognize the
full value of our backlog. As of September 30, 2005, our backlog was
approximately $14,802,000.
5
We are dependent on a few vendors, and we rely on timely deliveries of equipment
from all outside sources
There are a few vendors from whom we obtain devices and software for
specific access control and imaging, remote transmission, smart key and mobile
applications. The loss of any one of these companies as suppliers could have a
material adverse impact on our business, financial condition and results of
operations if we are unable to develop or acquire new technologies from other
sources. While we believe alternative vendors are available, we have not yet
identified them.
Timely vendor deliveries of equipment meeting our stringent
quality-control standards from all suppliers are also important to our business
because each installed system requires a variety of elements to be fully
functioning. The failure to deliver any critical device or component, when
needed, in operating condition, can delay a project, trigger vendor penalties,
halt progress payments or result in cancellation of a contract or order.
We experience intense competition for business from a variety of sources
In systems integration, we compete for new business with large
construction firms, electrical contractors, and consultants in the security
business and other systems integrators. Many of our competitors are much larger
than we are and have greater resources. In order to effectively compete in the
future, we may have to charge less for our services that may result in lower
profit margins.
We rely on only a few key executives
James E. Henry and Irvin F. Witcosky, our two executives, are vital to our
business operations. The loss of any one of them could have a material adverse
impact on our business, financial condition or results of operations.
Our business and growth will suffer if we are unable to hire and retain highly
skilled personnel
Competition for highly skilled employees is intense in our industry. The
design and the installation of our systems requires substantial technical
capabilities in many disparate disciplines from mechanics and computer science
to electronics and advanced software. Our future success depends on our ability
to attract, train, motivate and retain highly skilled employees. If we are
unable to hire and retain skilled personnel, our growth may be restricted, the
quality of our products and services diminished and our sales and the value of
your investment reduced. We may be unable to retain our skilled employees or
attract, assimilate and retain other highly skilled employees in the future.
We have not been consistently profitable and may not be profitable in the future
For the years ended December 31, 2003 and 2004 our sales were $18,261,065
and $29,725,718, respectively, and our net income (loss) was ($2,957,102) and
$44,021, respectively. Our profitability has not been continuous and we can make
no assurance that we will be profitable in the future.
Our quarterly results will continue to fluctuate
Our quarterly results have varied significantly in the past and will
likely continue to do so in the future due to a variety of factors, including
the timing and nature of projects from which revenues are recognized during any
particular quarter. Such fluctuations may contribute to the volatility in the
market price for our common stock.
6
Lengthy sales cycle
Sale of our services and products frequently involves a substantial
commitment of resources to evaluate a potential project and prepare a proposal.
In addition, approval of proposals often involves a lengthy process due to
clients' internal procedures and capital expenditure approval processes. We may
not be awarded a project that we have prepared a proposal for and, even if we
are, a substantial period of time may elapse from when we made the proposal to
when we recognize sales from the project.
We may make acquisitions or form joint ventures that are unsuccessful
Part of our growth strategy may involve acquisitions or joint ventures
with other system integrators. This strategy is subject to the following risks:
o We may not be able to identify suitable acquisition and joint
venture candidates.
o If the purchase price of an acquisition includes cash, we may need
to use a significant portion of our available cash.
o Even if we make an acquisition of a company or form a joint venture,
we could have difficulty assimilating the acquired company's
operations and personnel or working with the joint venture. These
difficulties could disrupt our ongoing business, distract our
management and employees and increase our expenses and charges, and,
thus, could have a material impact on our business, financial
condition and results of operations.
o We may not be able to retain key employees of the acquired companies
or maintain good relations with its customers or suppliers.
o We may be required to incur additional debt.
o We may be required to issue equity securities to pay for
acquisition, which will dilute existing shareholders.
o We may have to incur significant accounting charges, such as
impairment of intangible assets, which may adversely affect our
results of operations.
We have limited cash and may not be able to receive additional financing
As of September 30, 2005, we had approximately $714,489 in cash. We
believe that this, together with anticipated cash flows from operation and
amounts available under our $4 million revolving line of credit with our bank
will be sufficient to satisfy our working capital requirements for the
foreseeable future. However, we may need to seek additional financing sooner
than we anticipate as a result of factors including but not limited to the
following:
o changes in operating plans
o lower than anticipated sales
o increased operating costs; and
o potential acquisitions
7
However, additional financing may not be available on commercially
reasonable terms, if at all.
Our Chief Executive Officer and Chief Operating Officer own the majority of our
common stock and their interests may be different from and conflict with yours
Mr. Henry and Mr. Witcosky beneficially own a total of approximately
47.54% of our outstanding common stock, without taking into account shares
issuable under common stock purchase warrants and stock options. Accordingly, if
they act together, they will have the power to control the election of all of
our directors and other issues for which the approval of our shareholders is
required.
Our stock price may fluctuate, which may make it difficult to resell your shares
at attractive prices
The market price of our common stock may be highly volatile. The market
prices of securities of other technologically oriented companies of similar size
have been extremely volatile. Factors that could cause volatility in our stock
price include:
o fluctuations in our quarterly operating results;
o changes in the market valuations of other security or technology
companies and stock market prices and volume fluctuations generally;
o economic conditions specific to the security industry;
o announcements by us or our competitors relating to new services or
technologies, significant acquisitions, strategic relationships,
joint ventures or capital commitments;
o applicable regulatory developments; and
o additions or departures of our key personnel.
The trading volume in our common stock fluctuates and as a result you may find
it difficult to sell your shares of our common stock
Our common stock is listed on the American Stock Exchange. Trading in our
common stock fluctuates and on some trading days is minimal. Failure to maintain
an active trading market in our common stock could negatively affect the price
of our common stock and your ability to sell our common stock.
If we are delisted from the American Stock Exchange, you may also find it
more difficult to trade our common stock due to "penny stock" rules.
If we are unable to satisfy the requirements for continued listing on the
American Stock Exchange, trading, if any, in our common stock would be conducted
in the over-the-counter market in what is commonly referred to as the "pink
sheets" or on the OTC Bulletin Board. In this event, it may be extremely
difficult to sell or trade our common stock.
Availability of significant amount of our common stock for sale could cause its
market price to decline
If our stockholders sell substantial amounts of our common stock in the
public market following this offering or the perception exists that such sales
could occur, including shares issued upon exercise of outstanding common stock
purchase options, the market price of our common stock could fall.
8
As of January 30, 2006, there were 5,889,399 shares of our common stock
issued and outstanding. An additional 45,996 shares issuable under outstanding
options are being registered for resale under this prospectus. A sale of all or
a significant portion of these shares could have an adverse impact on our stock
price.
USE OF PROCEEDS
If the options are issued to the Selling Stockholder, we would receive a
maximum of $321,372 as a result of such exercises. Notwithstanding, there is no
assurance the options will be exercised. If we receive any proceeds from the
exercised options, these proceeds will be used for general working capital
purposes. The net proceeds from the sale of the securities covered by this
prospectus will be received by the Selling Shareholder. We will not receive any
of the proceeds from any sale by the Selling Shareholder of the securities
covered by this prospectus.
SELLING SHAREHOLDER
The following table sets forth, as of January 30, 2006, information as to
the shares of common stock that may be sold in this offering by the Selling
Shareholder. Because the Selling Shareholder may offer all or a portion of the
shares of common stock offered by this prospectus at any time and from time to
time after the date hereof, we cannot predict the number of shares that the
Selling Shareholder may retain upon completion of this offering. In the table
below, the percentage ownership after the offering is based upon the assumed
sale by the Selling Shareholder of all shares it may offer for sale pursuant to
this prospectus. Beneficial ownership includes both outstanding common stock and
shares issuable upon the exercise of options. One option for the purchase of
40,000 is exercisable during a five-year period commencing November 5, 2001. A
second option for the purchase of 5,996 shares is exercisable during a five-year
period commencing on November 5, 2002. The percentage of beneficial ownership
for Selling Shareholder is calculated based on 5,889,399 shares of common stock
issued and outstanding at January 30, 2006, plus the additional shares that the
Selling Shareholder is deemed to beneficially own as set forth in the table,
which includes the shares offered by this prospectus. The exercise prices of the
options pursuant to which those additional securities are issuable are subject
to adjustment in certain circumstances. The shares offered by this prospectus
shall be deemed to include shares offered by any pledgee, donee, transferee or
other successor in interest of the Selling Shareholder listed below, provided
that this prospectus is amended or supplemented if required by applicable law.
The information in this table is based upon information provided by each
respective Selling Shareholder.
Beneficial Ownership Shares Being Beneficial Ownership
Before this Offering Offered After this Offering
Name Number of Shares Percentage Number of Shares Percentage
Wall Street 45,996 .77 45,996 0
Consultants, Inc.(1)
----------
(1) The shares beneficially owned and being offered by Wall Street Consultants,
Inc. consist of (i) 40,000 shares issuable upon the exercise of options
(currently excercisable) with an exercise price of $7.00 per share and (ii)
5,996 shares issuable upon the exercise of options (currently excercisable) with
an exercise price of $6.90 per share. Donald Kirsch is the President of Wall
Street Consultants, Inc, and as such has voting and investment control over
these securities. Mr. Kirsch disclaims beneficial ownership of these securities.
9
PLAN OF DISTRIBUTION
The Selling Shareholder, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of its shares of common stock or interests in shares of common stock on any
stock exchange, market or trading facility on which the shares are traded or in
private transactions. These dispositions may be at fixed prices, at prevailing
market prices at the time of sale, at prices related to the prevailing market
price, at varying prices determined at the time of sale, or at negotiated
prices.
The Selling Shareholder may use any one or more of the following methods
when disposing of shares or interests therein:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent, but may position and resell a portion of the block
as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o short sales effected after the date the registration statement of
which this prospectus is a part is declared effective by the SEC;
o through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;
o broker-dealers may agree with the Selling Shareholder to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The Selling Shareholder may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by it and, if they
default in the performance of their secured
10
obligations, the pledgees or secured parties may offer and sell the shares of
common stock, from time to time, under this prospectus, or under an amendment to
this prospectus under Rule 424(b)(3) or other applicable provision of the
Securities Act amending the list of Selling Shareholder to include the pledgee,
transferee or other successors in interest as selling stockholders under this
prospectus. The Selling Shareholder also may transfer the shares of common stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.
In connection with the sale of our common stock or interests therein, the
Selling Shareholder may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The Selling
Shareholder may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Shareholder may also enter into option or other transactions with broker-dealers
or other financial institutions or the creation of one or more derivative
securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
The aggregate proceeds to the Selling Shareholder from the sale of the
common stock offered by it will be the purchase price of the common stock less
discounts or commissions, if any. The Selling Shareholder reserves the right to
accept and, together with its agents from time to time, to reject, in whole or
in part, any proposed purchase of common stock to be made directly or through
agents. We will not receive any of the proceeds from this offering. Upon any
exercise of the warrants by payment of cash, however, we will receive the
exercise price of the warrants.
The Selling Shareholder also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act of
1933, provided that it meets the criteria and conform to the requirements of
that rule.
The Selling Shareholder and any underwriters, broker-dealers or agents
that participate in the sale of the common stock or interests therein may be
"underwriters" within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act.
Selling shareholders who are "underwriters" within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.
To the extent required, the shares of our common stock to be sold, the
names of any selling shareholders, the respective purchase prices and public
offering prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if applicable,
the common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers. In addition, in some states the common stock may
not be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.
We have advised the Selling Shareholder that the anti-manipulation rules
of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the Selling Shareholder and its affiliates. In
addition, we will make copies of this prospectus (as it may be supplemented or
amended from time to time) available to the Selling Shareholder for the purpose
of
11
satisfying the prospectus delivery requirements of the Securities Act. The
Selling Shareholder may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
We have agreed to indemnify the Selling Shareholder against liabilities,
including liabilities under the Securities Act and state securities laws,
relating to the registration of the shares offered by this prospectus.
We have agreed with the Selling Shareholder to keep the registration
statement of which this prospectus constitutes a part effective until the
earlier of (1) such time as all of the shares covered by this prospectus have
been disposed of pursuant to and in accordance with the registration statement
or (2) the date on which the shares may be sold pursuant to Rule 144(k) of the
Securities Act.
DESCRIPTION OF CAPITAL STOCK
As of January 30, 2006, the Company was authorized to issue:
o 10,000,000 shares of common stock, $0.01 par value, of which
5,889,399 shares were issued and outstanding; and
o 2,000,000 shares of preferred stock, $0.01 par value, none of
which were outstanding.
This description of our securities is a summary and does not contain all
the information that may be important to you. You should read this summary
together with our certificate of incorporation, as amended, our bylaws, and the
applicable provisions of the Delaware General Corporation Law. For more
information, you should read "Documents Incorporated by Reference."
Holders of our common stock are entitled to one vote for each share held
on all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Accordingly, holders of a majority of the shares of our common
stock entitled to vote in any election of directors may elect all of the
directors standing for election. Apart from preferences that may be applicable
to any shares of preferred stock outstanding at the time, holders of our common
stock are entitled to receive dividends, if any, ratably as may be declared from
time to time by our board of directors out of funds legally available therefore.
Upon our liquidation, dissolution or winding up, the holders of our common stock
are entitled to receive ratably, our net assets available after the payment of
all liabilities and liquidation preferences on any outstanding preferred stock.
Holders of our common stock have no preemptive, subscription, redemption or
conversion rights, and there are no redemption or sinking fund provisions
applicable to the common stock. The outstanding shares of our common stock are,
and the shares offered in this offering will be, when issued and paid for,
validly issued, duly authorized, fully paid and nonassessable. The rights,
preferences and privileges of holders of our common stock are subject to, and
may be adversely affected by, the rights of the holders of shares of any series
of preferred stock which we may designate and issue in the future. No shares of
preferred stock are presently outstanding and as of the date of this prospectus,
we do not have any present plan to issue any shares of preferred stock.
Anti-Takeover Effects of Provisions of Delaware Law
Section 203 of the Delaware General Corporation Law contains provisions
that may make the acquisition of control of our company by means of a tender
offer, open market purchase, proxy fight or otherwise, more difficult. We must
comply with the provisions of this law. In general, Section 203 prohibits a
publicly held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner.
A "business combination" includes a merger, asset sale or other
transaction resulting in a financial benefit
12
to the interested stockholder. An "interested stockholder" is a person who,
together with affiliates and associates, owns, or, in some cases, within three
years prior, did own, 15% or more of the corporation's voting stock. Under
Section 203, a business combination between us and an interested stockholder is
prohibited unless it satisfies one of the following three conditions:
o our board of directors must have previously approved either the
business combination or the transaction that resulted in the
stockholder becoming an interested stockholder;
o upon consummation of the transaction that resulted in the
stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of our voting stock outstanding at
the time the transaction commenced, excluding, for purposes of
determining the number of shares outstanding, shares owned by (1)
persons who are directors and also officers and (2) employee stock
plans, in some instances; and
o the business combination is approved by our board of directors and
authorized at an annual or special meeting of the stockholders by
the affirmative vote of the holders of at least 66 2/3% of our
outstanding voting stock that is not owned by the interested
stockholder.
LEGAL MATTERS
Certain legal matters with respect to the securities will be passed upon
for us by Milberg Weiss Bershad & Schulman LLP, One Pennsylvania Plaza,
New York, New York 10119.
EXPERTS
The consolidated financial statements of Henry Bros. Electronics, Inc. as
of December 31, 2004 and for each of the years in the two-year period ended
December 31, 2004 incorporated by reference in this prospectus and elsewhere in
the registration statement have been audited by Demetrius & Company, LLC, an
independent registered public accounting firm, as indicated in their report in
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Because we are subject to the informational requirements of the Exchange
Act, we file reports, proxy statements and other information with the SEC. You
may read and copy these reports, proxy statements and other information at the
public reference facilities maintained by the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549. You may also obtain copies of those
materials at prescribed rates from the public reference section of the SEC at
450 Fifth Street, Washington, D.C. 20549. You may obtain information on the
operation of the public reference room by calling the SEC at (800) SEC-0330. In
addition, we are required to file electronic versions of those materials with
the SEC through the SEC's EDGAR system. The SEC maintains a web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC.
The information in this prospectus may not contain all the information
that may be important to you. You should read the entire prospectus, as well as
the documents incorporated by reference in the prospectus, and the Registration
Statement of which this prospectus is a part, including the exhibits thereto,
before making an investment decision.
13
We will furnish without charge to each person to whom a copy of this
prospectus is delivered, upon written or oral request, a copy of any and all of
these filings (except exhibits, unless they are specifically incorporated by
reference into this prospectus). You should direct any requests for copies to:
Henry Bros. Electronics, Inc.
280 Midland Avenue Saddle Brook, NJ 076363
Attention: Brian L. Reach
Telephone: (201) 794-6500
DOCUMENTS INCORPORATED BY REFERENCE
In this prospectus, we have incorporated by reference certain information
we have filed, or will file, with the SEC. The information incorporated by
reference is an important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this information. Any
statement contained in any document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded, for purposes of
this prospectus, to the extent that a statement contained in or omitted from
this prospectus, or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.
We incorporate by reference the documents listed below:
o our Annual Report on Form 10-KSB for the year ended December 31,
2004 filed with the SEC on March 28, 2005;
o our quarterly reports on Form 10-QSB for the quarters ended March
31, 2005, June 30, 2005 and September 30, 2005 filed with the SEC on
May, 16, 2005, August 15, 2005 and November 14, 2005, respectively;
o our current reports on Form 8-K originally filed on February 25,
2005, April 5, 2005, May 9, 2005, July 7, 2005, August 9, 2005,
October 14, 2005, November 15, 2005, December 19, 2005, and December
27, 2005, respectively; and
o the description of our common stock contained in Form 8-A filed on
November 14, 2001 and the related description our registration
statement on Form SB-2 (Registration No. 333-94477), as amended.
All documents that we file pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act (i) after the date of the initial registration statement of
which this prospectus forms a part and prior to effectiveness of the
registration statement, and (ii) after the date of this prospectus and prior to
the termination of the offering of the shares shall be deemed to be incorporated
by reference in this prospectus and to be a part hereof from the date of filing
of such documents.
You may obtain copies of those documents from us, free of cost, by
contacting us at the address or telephone number provided in "Where You Can Find
More Information" immediately above.
14
Information that we file later with the SEC and that is incorporated by
reference in this prospectus will automatically update and supersede information
contained in this prospectus. You will be deemed to have notice of all
information incorporated by reference in this prospectus as if that information
was included in this prospectus.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the fees and expenses in connection with
the resales of the securities registered hereunder. We will pay all of the costs
identified below. Except for the SEC registration fee and the placement agent
fees and expenses, all amounts are estimates.
SEC registration fee................................... $ 30.03
Accounting fees and expenses........................... 500.00
Legal fees and expenses................................ 2,500.00
Miscellaneous.......................................... 2,500.00
----------
Total.................................................. $ 5,530.03
==========
Item 15. Indemnification of Directors and Officers.
As permitted by Section 145 of the Delaware General Corporation Law, Henry
Bros. Electronics, Inc.'s Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors to Henry Bros. Electronics,
Inc. or its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (A) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (B) for acts or omissions not in
good faith or that involve intentional misconduct or a knowing violation of law,
(C) under Section 174 of the Delaware General Corporation Law, or (D) for any
transaction which the director derived an improper personal benefit. In
addition, as permitted by Section 145 of the Delaware General Corporation Law,
the Bylaws of Henry Bros. Electronics, Inc. provide that the Corporation shall
indemnify its directors and officers under certain circumstances, including
those circumstances in which indemnification would otherwise be discretionary,
and Henry Bros. Electronics, Inc. is required to advance expenses to its
officers and directors as incurred in connection with proceedings against them
for which they may be indemnified.
The indemnification provision in the Bylaws may be sufficiently broad to
permit indemnification of Henry Bros. Electronics, Inc.'s executive officers and
directors for liabilities arising under the Securities Act of 1933, as amended.
Item 16. Exhibits.
See the exhibit index on the page following the signature page. The
exhibit index filed herewith and appearing immediately before the exhibits
hereto is incorporated by reference in response to this Item 16.
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, represents 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 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the 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 that 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 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement related to
securities offered herein, 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 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 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
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 New York, State of New York, on this 23rd day of
March, 2006.
HENRY BROS ELECTRONICS, INC.
By: /s/ James E. Henry
-----------------------------------------
James E. Henry
Chairman, Chief Executive Officer,
Treasurer and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS THAT each individual whose signature
appears below appoints James E. Henry, Irvin F. Witcosky and Brian L. Reach, and
each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution, for him and 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 on Form S-3 and to sign any registration
statement for the same offering covered by this Registration Statement that is
to be effective upon filing pursuant to Rule 415 promulgated under the
Securities Act of 1933 and all post-effective amendments thereto, and to file
the same, with all exhibits thereto and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and anything appropriate or necessary to be done, as fully and for all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ James E. Henry Chairman, Chief Executive Officer, March 23, 2006
---------------------- Treasurer and Director (Principal
James E. Henry Executive Officer)
/s/ Irvin F. Witcosky Chief Operating Officer, President, March 23, 2006
---------------------- Secretary and Director
Irvin F. Witcosky
/s/ Brian L. Reach Vice Chairman and Director March 23, 2006
----------------------
Brian L. Reach
Signature Title Date
/s/ Philip Timpanaro Chief Financial Officer (Principal March 23, 2006
---------------------- Financial and Accounting Officer)
Philip Timpanaro
/s/ Robert DeLia Director March 23, 2006
----------------------
Robert DeLia
/s/ James Power Director March 23, 2006
----------------------
James Power
/s/ Joseph P. Ritorto Director March 23, 2006
----------------------
Joseph P. Ritorto
/s/ David Sands Director March 23, 2006
----------------------
David Sands
*BY: /s/ Brian L. Reach
-------------------------------
Brian L. Reach
Attorney-in-Fact
EXHIBIT INDEX
Exhibit
Number Exhibit Description Method of Filing
------- ------------------- ----------------
4.1 Bylaws of the Company.............................................. (1)
4.2 Specimen Common Stock Certificate of the Company................... (2)
4.3 Form of Stock Option Agreement, dated as of November 5, 2001,
by and among the Company and Wall Street Group, Inc................ (3)
5.1 Opinion of Milberg Weiss Bershad & Schulman LLP.................... (3)
23.1 Consent of Demetrius & Company, L.L.C.............................. *
23.2 Consent of Milberg Weiss Bershad & Schulman LLP (included
in Exhibit 5.1) ................................................... (3)
24.1 Power of Attorney (see signature page in Part II of
Registration or Statement.......................................... *
(1) Incorporated by reference to Current Report on Form 8-K filed with the
Securities and Exchange Commission on August 9, 2005.
(2) Incorporated by reference to Amendment No. 6 to the Registration
Statement filed with the Securities and Exchange Commission on November 13,
2001.
(3) Incorporated by reference to the Registrant's Registration Statement
on Form S-3, File Number 333-131671, filed with the Securities and Exchange
Commission on February 8, 2006.
* Filed herewith.