As filed with the Securities and Exchange Commission on February 3, 2006
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
UNIVERSAL DISPLAY CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2372688
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
375 PHILLIPS BOULEVARD
EWING, NEW JERSEY 08618
(609) 671-0980
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
STEVEN V. ABRAMSON
PRESIDENT AND CHIEF OPERATING OFFICER
UNIVERSAL DISPLAY CORPORATION
375 Phillips Boulevard
Ewing, New Jersey 08618
(609) 671-0980
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications to:
JUSTIN W. CHAIRMAN, ESQ.
MORGAN, LEWIS & BOCKIUS LLP
1701 Market Street
Philadelphia, PA 19103
(215) 963-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If 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 to a registration statement filed pursuant to General Instruction I.D.
filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the following box: |_|
CALCULATION OF REGISTRATION FEE
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Amount Proposed Maximum Proposed Maximum Amount of
Title of Shares to be to be Registered Aggregate Price Per Aggregate Offering Registration
Registered Share(1) Price(1) Fee(1)
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Common Stock, $0.01 par value 22,500 shares $13.12 $295,200 $32
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(1) Fee calculated in accordance with Rule 457(c) of the Securities Act of 1933,
as amended. Estimated solely for the purpose of calculating the registration fee
based on the average of the high and low prices per share of the Registrant's
common stock on February 2, 2006, as reported on the Nasdaq National Market.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
The information in this prospectus is not complete and may change. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 3, 2006
PROSPECTUS
22,500 SHARES
UNIVERSAL DISPLAY CORPORATION
COMMON STOCK
The shareholders of Universal Display Corporation identified in this
prospectus under "Selling Shareholders," or their donees, pledgees or other
transferees, are offering up to 22,500 shares of our common stock for resale to
the public. The selling shareholders will be selling shares of common stock that
they currently own.
We will not receive any proceeds from the resale of shares of our
common stock by the selling shareholders. We are paying the expenses of this
offering.
The primary market for our common stock is the Nasdaq National Market
System, where it trades under the symbol "PANL." On February 2, 2006, the last
reported sale price of our common stock on the Nasdaq National Market System was
$13.13 per share.
AN INVESTMENT IN OUR COMMON STOCK INVOLVES SIGNIFICANT RISKS. YOU
SHOULD CAREFULLY CONSIDER THE RISK FACTORS DESCRIBED BEGINNING ON PAGE 5 BEFORE
INVESTING IN OUR COMMON STOCK.
The securities have not been approved by the Securities and Exchange
Commission or any state securities commission, nor have they determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
THE DATE OF THIS PROSPECTUS IS ________, 2006
TABLE OF CONTENTS
Page
----
Cautionary Statement Concerning Forward-Looking Statements............ 3
Our Company........................................................... 4
Risk Factors.......................................................... 5
The Offering.......................................................... 14
Use of Proceeds....................................................... 15
Selling Shareholders.................................................. 15
Plan of Distribution.................................................. 17
About this Prospectus................................................. 18
Where You Can Find More Information................................... 18
Legal Opinion......................................................... 19
Experts............................................................... 19
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CAUTIONARY STATEMENT
CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus contain some "forward-looking statements." Forward-looking statements
concern our possible or assumed future results of operations, including
descriptions of our business strategies. These statements often include words
such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek,"
"will," "may" or similar expressions. These statements are based on assumptions
that we have made in light of our experience in the industry, as well as our
perceptions of historical trends, current conditions, expected future
developments and other factors we believe are appropriate in these
circumstances.
As you read and consider this prospectus, you should not place undue
reliance on any forward-looking statements. You should understand that these
statements involve substantial risk and uncertainty and are not guarantees of
future performance or results. They depend on many factors that are discussed
further in the section of this prospectus entitled "Risk Factors," including:
o the outcomes of our ongoing and future research and development
activities, and those of others, relating to organic light emitting diode
(OLED) technologies and materials;
o our ability to access future OLED technology developments of our academic
and commercial research partners;
o the potential commercial applications of and future demand for our OLED
technologies and materials, and of OLED products in general;
o our ability to form and continue strategic relationships with
manufacturers of OLED products;
o successful commercialization of products incorporating our OLED
technologies and materials by OLED manufacturers, and their continued
willingness to utilize our OLED technologies and materials;
o the comparative advantages and disadvantages of our OLED technologies and
materials versus competing technologies and materials currently on the
market;
o the nature and potential advantages of any competing technologies that may
be developed in the future;
o our ability to compete against third parties with resources greater than
ours;
o our ability to maintain and improve our competitive position following the
expiration of our fundamental OLED patents;
o the adequacy of protections afforded to us by the patents that we own or
license and the cost to us of enforcing those protections;
o our ability to obtain, expand and maintain patent protection in the
future, and to protect our unpatentable intellectual property;
o the payments that we expect to receive in the future under our existing
contracts and the terms that we are able to enter into with new OLED
display manufacturers;
o our future capital requirements and our ability to obtain additional
financing if and when needed; and
o our future OLED technology licensing and OLED material sales revenues and
results of operations.
Changes or developments in any of these areas could affect our financial results
or results of operations, and could cause actual results to differ materially
from those contemplated in the forward-looking statements.
All forward-looking statements speak only as of the date of this
prospectus or the documents incorporated by reference, as the case may be.
Except for special circumstances in which a duty to update arises when prior
disclosure becomes materially misleading in light of subsequent events, we do
not intend to update any of these forward-looking statements to reflect events
or circumstances after the date of this prospectus or to reflect the occurrence
of unanticipated events.
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OUR COMPANY
We are a leader in the research, development and commercialization of
organic light emitting diode, or OLED, technologies for use in a variety of flat
panel display and other applications. OLEDs are thin, light-weight and power
efficient devices, highly suitable for use in portable, full-color display
applications. We are focused on licensing our proprietary OLED technologies to
leading display manufacturers on a non-exclusive basis, and on selling our
proprietary OLED materials to these manufacturers. We believe this business
model allows us to concentrate on our core strengths of technology development
and innovation, while providing significant operating leverage. During the
second half of 2003, we recognized our first commercial chemical sales and
license fee revenues, and in the third quarter of 2004 we recognized our first
royalty revenues. We are currently selling one of our proprietary OLED materials
to Tohoku Pioneer Corporation, have established license agreements with Samsung
SDI Co., Ltd. and DuPont Displays, Inc. and have entered into technology
development and evaluation agreements with several flat panel display
manufacturers.
Initial applications for OLED displays are small- and medium-sized flat
panel displays in a wide variety of portable consumer electronics devices,
including mobile phones, personal digital assistants, or PDAs, cameras,
camcorders and electronic games. According to DisplaySearch, an independent
market research firm tracking the flat panel display industry, the market for
flat panel displays, which is currently dominated by liquid crystal displays, or
LCDs, is expected to reach an estimated $104.2 billion in 2009. We believe OLED
displays will capture a share of the growing flat panel display market because
they offer potential advantages over competing technologies with respect to
brightness, power efficiency, viewing angle, video response time and
manufacturing cost. According to DisplaySearch, the OLED display market is
expected to experience significant growth with revenues increasing from an
estimated $450 million in 2005 to an estimated $5.5 billion by 2009. We believe
that larger display applications, such as laptop computers, desktop computer
monitors and televisions, also represent a significant opportunity for OLED
displays given the potential advantages of OLED technologies for these
applications.
Our strategy is to further develop and license our proprietary OLED
technologies to display manufacturers for use in small, medium and large
consumer electronic devices. Our key proprietary technology, phosphorescent
OLEDs, or PHOLEDs, has demonstrated the ability to provide up to four times the
efficiency of other types of OLEDs. We also are conducting research and
development work directed towards both improving our existing PHOLED
technologies and materials and further developing our proprietary OLED
technologies such as transparent OLEDs and flexible OLEDs. Our focus on
next-generation technologies is designed to enable us to continue our position
as a leading provider of OLED technologies.
We believe that our technology leadership and intellectual property
position will enable us to share in the revenues from OLED displays as they
enter the mainstream consumer electronics market. Through our internal research
and development efforts and our relationships with world-class partners such as
Princeton University, the University of Southern California and PPG Industries,
Inc., we have established a significant portfolio of OLED technologies and
associated intellectual property rights. We currently own, exclusively license
or have the sole right to sublicense approximately 750 patents issued and
pending worldwide. In addition, our management team has assembled a Scientific
Advisory Board that includes some of the leading researchers in the OLED
industry, which has enhanced our reputation and our competitive profile.
CORPORATE INFORMATION
Our corporation was organized under the laws of the Commonwealth of
Pennsylvania in April 1985. Our current business was commenced in June 1994 by a
New Jersey corporation that has since changed its name to UDC, Inc. UDC, Inc.
now functions as an operating subsidiary of ours and has overlapping officers
and directors. Our principal executive offices are located at 375 Phillips
Boulevard, Ewing, New Jersey 08618 and our telephone number is (609) 671-0980.
Our website is located at www.universaldisplay.com. The information contained on
our website is not a part of this prospectus.
-4-
RISK FACTORS
An investment in our securities involves a high degree of risk. Before
purchasing our common stock, you should carefully consider the risks described
below in this section and the risks described in the documents incorporated by
reference in this prospectus. You should not purchase our securities if you
cannot afford the loss of your entire investment.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
WE HAVE A HISTORY OF LOSSES AND MAY NEVER BE PROFITABLE.
Since inception, we have generated limited revenues while incurring
significant losses. We expect to incur losses for the foreseeable future and
until such time, if ever, as we are able to achieve sufficient levels of revenue
from the commercial exploitation of our OLED technologies and materials to
support our operations. You should note, however, that:
o OLED technologies may never be adopted for broad commercial usage;
o markets for flat panel displays utilizing OLED technologies may be
limited; and
o we may never generate sufficient revenues from the commercial exploitation
of our OLED technologies and materials to become profitable.
WE MAY REQUIRE ADDITIONAL FUNDING IN THE FUTURE IN ORDER TO CONTINUE OUR
BUSINESS.
Our capital requirements have been and will continue to be significant.
We may require additional funding in the future for the research, development
and commercialization of our OLED technologies and materials, to obtain and
maintain patents and other intellectual property rights in these technologies
and materials, and for working capital and other purposes, the timing and amount
of which are difficult to ascertain. Our cash on hand may not be sufficient to
meet all of our future needs. When we need additional funds, such funds may not
be available on commercially reasonable terms or at all. If we cannot obtain
more money when needed, our business might fail. Additionally, if we attempt to
raise money in an offering of shares of our common stock, preferred stock,
warrants or depositary shares, or if we engage in acquisitions involving the
issuance of such securities, the issuance of these shares will dilute our
then-existing shareholders.
IF OUR OLED TECHNOLOGIES AND MATERIALS ARE NOT FEASIBLE FOR BROAD-BASED PRODUCT
APPLICATIONS, WE MAY NEVER GENERATE REVENUES SUFFICIENT TO SUPPORT ONGOING
OPERATIONS.
Our business strategy is to license our OLED technologies and sell our
OLED materials to display manufacturers for incorporation into the flat panel
display products that they sell. Consequently, our success depends on the
ability and willingness of these manufactures to develop, manufacture and sell
commercial flat panel display products integrating our technologies and
materials.
Before display manufacturers will agree to utilize our OLED
technologies and materials for wide-scale commercial production, they will
likely require us to demonstrate to their satisfaction that our OLED
technologies and materials are feasible for broad-based product applications.
This, in turn, may require additional advances in our technologies and
materials, as well as those of others, for applications in a number of areas,
including with respect to:
o device reliability;
o the development of OLED materials with sufficient lifetimes, brightness
and color coordinates for full color OLED displays; and
-5-
o issues related to scalability and cost-effective fabrication technologies
for product applications.
We cannot be certain that these advances will ever occur, and hence our
OLED technologies and materials may never be feasible for broad-based product
applications
EVEN IF OUR OLED TECHNOLOGIES ARE TECHNICALLY FEASIBLE, THEY MAY NOT BE ADOPTED
BY DISPLAY MANUFACTURERS.
The potential size, timing and viability of market opportunities
targeted by us are uncertain at this time. Market acceptance of our OLED
technologies will depend, in part, upon these technologies providing benefits
comparable to cathode ray tube, or CRT, display and liquid crystal display, or
LCD, technologies (the current standard display technologies) at an advantageous
cost to manufacturers, and the adoption of products incorporating these
technologies by consumers. Many potential licensees of our OLED technologies
manufacture flat panel displays utilizing competing technologies, and may,
therefore, be reluctant to redesign their products or manufacturing processes to
incorporate our OLED technologies.
During the entire product development process for a new flat panel
display product, we face the risk that our technology will fail to meet the
manufacturer's technical, performance or cost requirements or will be replaced
by a competing product or alternative technology. For example, we are aware that
some of our licensees and prospective licensees have entered into arrangements
with our competitors regarding the development of competing technologies,
including the potential production of polymer-based OLED displays. Even if we
offer technologies that are satisfactory to a display manufacturer, the
manufacturer may choose to delay or terminate its product development efforts
for reasons unrelated to our technologies.
Mass production of OLED displays will require the availability of
suitable manufacturing equipment, components and materials, many of which are
available only from a limited number of suppliers. In addition, there may be a
number of other technologies that display manufacturers need to utilize to be
used in conjunction with our OLED technologies in order to bring OLED displays
and products containing them to the market. Thus, even if our OLED technologies
are a viable alternative to competing flat panel display technologies, if
display manufacturers are unable to obtain access to this equipment and these
components, materials and other technologies, they may not utilize our OLED
technologies.
THERE ARE NUMEROUS POTENTIAL ALTERNATIVES TO OLEDS FOR FLAT PANEL DISPLAYS,
WHICH MAY LIMIT OUR ABILITY TO COMMERCIALIZE OUR OLED TECHNOLOGIES AND
MATERIALS.
The flat panel display market is currently, and will likely continue to
be for some time, dominated by displays based on LCD technology. Numerous
companies are making substantial investments in, and conducting research to
improve characteristics of, LCDs. Plasma and other competing flat panel display
technologies have been, or are being, developed. Advances in LCD technology or
any of these other technologies may overcome their current limitations and
permit them to become the leading technologies for flat panel displays, either
of which could limit the potential market for flat panel displays utilizing our
OLED technologies and materials. This, in turn, would cause display
manufacturers to avoid entering into commercial relationships with us, or to
terminate or not renew their existing relationships with us.
OTHER OLED TECHNOLOGIES MAY BE MORE SUCCESSFUL OR COST-EFFECTIVE THAN OURS,
WHICH MAY LIMIT THE COMMERCIAL ADOPTION OF OUR OLED TECHNOLOGIES AND MATERIALS.
Our competitors have developed OLED technologies that differ from or
compete with our OLED technologies. In particular, Eastman Kodak Company's
competing fluorescent OLED technology, which entered the marketplace prior to
ours, may become entrenched in the flat panel industry before our OLED
technologies have a chance to become widely utilized. Moreover, our competitors
may succeed in developing new OLED technologies that are more cost-effective or
have fewer display limitations than our OLED technologies. If our OLED
technologies, and particularly our phosphorescent OLED technology, are unable to
capture a substantial portion of the OLED display market, our business strategy
may fail.
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MANY OF OUR COMPETITORS HAVE GREATER RESOURCES, WHICH MAY MAKE IT DIFFICULT FOR
US TO COMPETE SUCCESSFULLY AGAINST THEM.
The flat panel display industry is characterized by intense
competition. Many of our competitors have better name recognition and greater
financial, technical, marketing, personnel and research capabilities than us.
Because of these differences, we may never be able to compete successfully in
the OLED display market.
THE FLAT PANEL DISPLAY INDUSTRY HAS HISTORICALLY EXPERIENCED SIGNIFICANT
DOWNTURNS, WHICH MAY ADVERSELY AFFECT THE DEMAND FOR AND PRICING OF OUR OLED
TECHNOLOGIES AND MATERIALS.
Because we do not sell any display products to consumers, our success
depends upon the ability and continuing willingness of our display manufacturer
licensees to market commercial products integrating our technologies and
materials, and the widespread acceptance of those products. Any slowdown in the
demand for our licensees' products would adversely affect our royalty revenues
and thus our business. The markets for our display manufacturer licensees'
products are highly competitive, with pressure on prices and profit margins due
largely to additional and growing capacity from flat panel display industry
competitors. Success in the market for end-user products that may integrate our
OLED technologies and materials also depends on factors beyond the control of
our licensees and us, including the cyclical and seasonal nature of the end-user
markets that our licensees serve, as well as industry and general economic
conditions.
The flat panel display industry has experienced significant periodic
downturns, often in connection with, or in anticipation of, declines in general
economic conditions. These downturns have been characterized by lower product
demand, production overcapacity and erosion of average selling prices. Our
business strategy is dependent on display manufacturers building and selling
displays that incorporate our OLED technologies and materials. Industry-wide
fluctuations and downturns in the demand for flat panel displays, and OLED
displays in particular, could cause significant harm to our business.
IF WE FAIL TO MAKE ADVANCES IN OUR OLED RESEARCH AND DEVELOPMENT ACTIVITIES, WE
MIGHT NOT SUCCEED IN COMMERCIALIZING OUR OLED TECHNOLOGIES AND MATERIALS.
Further advances in our OLED technologies and materials depend, in
part, on the success of the research and development work we conduct, both alone
and with our research partners. We cannot be certain that this work will yield
additional advances in the research and development of these technologies and
materials.
Our research and development efforts remain subject to all of the risks
associated with the development of new products based on emerging and innovative
technologies, including, without limitation, unanticipated technical or other
problems and the possible insufficiency of funds for completing development of
these products. Technical problems may result in delays and cause us to incur
additional expenses that would increase our losses. If we cannot complete
research and development of our OLED technologies and materials successfully, or
if we experience delays in completing research and development of our OLED
technologies and materials for use in potential commercial applications,
particularly after incurring significant expenditures, our business may fail.
IF WE CANNOT FORM AND MAINTAIN LASTING BUSINESS RELATIONSHIPS WITH OLED DISPLAY
MANUFACTURERS, OUR BUSINESS STRATEGY WILL FAIL.
Our business strategy ultimately depends upon our development and
maintenance of commercial licensing and material supply relationships with
high-volume manufacturers of OLED displays. As of January 31, 2006, we had
entered into only three such relationships, one with Samsung SDI Co., Ltd., one
with Dupont Displays, Inc. and one with Tohoku Pioneer Corporation. All of our
other relationships with display manufacturers currently are limited to
technology development and the evaluation of our OLED technologies and materials
for possible use in commercial production. Some or all of these relationships
may not succeed or, even if they are successful, may not result in the display
manufacturers entering into commercial licensing and material supply
relationships with us.
-7-
Under our existing technology development and evaluation agreements, we
are working with display manufacturers to incorporate our technologies into
their products for the commercial production of OLED displays. However, these
technology development and evaluation agreements typically last for limited
periods of time, such that our relationships with the display manufacturers will
expire unless they continually are renewed. The display manufacturers may not
agree to renew their relationships with us on a continuing basis. In addition,
we regularly continue working with display manufacturers evaluating our OLED
technologies and materials after our existing agreements with them have expired
while we are attempting to negotiate contract extensions or new agreements with
them. Should our relationships with the display manufacturers not continue or be
renewed, our business would suffer.
Our ability to enter into additional commercial licensing and material
supply relationships, or to maintain our existing technology development and
evaluation relationships, may require us to make financial or other commitments.
We might not be able, for financial or other reasons, to enter into or continue
these relationships on commercially acceptable terms, or at all. Failure to do
so may cause our business strategy to fail.
CONFLICTS MAY ARISE WITH OUR LICENSEES OR JOINT DEVELOPMENT PARTNERS, RESULTING
IN RENEGOTIATION OR TERMINATION OF, OR LITIGATION RELATED TO, OUR AGREEMENTS
WITH THEM. THIS WOULD ADVERSELY AFFECT OUR REVENUES.
Conflicts could arise between us and our licensees or joint development
partners as to royalty rates, milestone payments or other commercial terms.
Similarly, we may disagree with our licensees or joint development partners as
to which party owns or has the right to commercialize intellectual property that
is developed during the course of the relationship or as to other non-commercial
terms. If such a conflict were to arise, a licensee or joint development partner
might attempt to compel renegotiation of certain terms of their agreement or
terminate their agreement entirely, and we might lose the royalty revenues and
other benefits of the agreement. Either we or the licensee or joint development
partner might initiate litigation to determine commercial obligations, establish
intellectual property rights or resolve other disputes under the agreement. Such
litigation could be costly to us and require substantial attention of
management. If we were unsuccessful in such litigation, we could lose the
commercial benefits of the agreement, be liable for other financial damages and
suffer losses of intellectual property or other rights that are the subject of
dispute. Any of these adverse outcomes could cause our business strategy to
fail.
WE RELY SOLELY ON PPG INDUSTRIES TO MANUFACTURE THE OLED MATERIALS WE USE AND
SELL TO DISPLAY MANUFACTURERS.
Our business prospects depend significantly on our ability to obtain
proprietary OLED materials for our own use and for sale to display
manufacturers. Our agreements with PPG Industries, Inc. provide us with a source
for these materials for research, development and evaluation purposes, as well
as for commercial purposes. All of these agreements are, however, currently
scheduled to expire on or before December 31, 2008. Our inability to continue
obtaining these OLED materials from PPG Industries or another source would have
a material adverse effect on our revenues from sales of these materials, as well
as on our ability to perform research and development work and to support those
display manufacturers currently evaluating our OLED technologies and materials
for possible commercial use.
IF WE CANNOT OBTAIN AND MAINTAIN APPROPRIATE PATENT AND OTHER INTELLECTUAL
PROPERTY RIGHTS PROTECTION FOR OUR OLED TECHNOLOGIES AND MATERIALS, OUR BUSINESS
WILL SUFFER.
The value of our OLED technologies and materials is dependent on our
ability to secure and maintain appropriate patent and other intellectual
property rights protection. Although we own or license many patents respecting
our OLED technologies and materials that have already been issued, there can be
no assurance that additional patents applied for will be obtained, or that any
of these patents, once issued, will afford commercially significant protection
for our OLED technologies and materials, or will be found valid if challenged.
Moreover, we have not obtained patent protection for some of our OLED
technologies and materials in all foreign countries in which OLED displays or
materials might be manufactured or sold. In any event, the patent laws of other
countries may differ from those of the United States as to the patentability of
our OLED technologies and materials and the degree of protection afforded.
The strength of our current intellectual property position results
primarily from the essential nature of our fundamental patents covering
phosphorescent OLED devices and certain materials utilized in these devices.
These patents begin expiring in 2017. While we hold a wide range of additional
patents and patent applications whose expiration dates extend (and in the case
of patent applications, will extend) beyond 2017, many of which are also of key
importance in the OLED industry, none are of an equally essential nature as our
fundamental patents, and therefore our competitive position after 2017 may be
less certain.
-8-
We may become engaged in litigation to protect or enforce our patent
and other intellectual property rights, or in International Trade Commission
proceedings to abate the importation of goods that would compete unfairly with
those of our licensees. In addition, we may have to participate in interference
or reexamination proceedings before the U.S. Patent and Trademark Office, or in
opposition, nullity or other proceedings before foreign patent offices, with
respect to our patents or patent applications. All of these actions would place
our patents and other intellectual property rights at risk and may result in
substantial costs to us as well as a diversion of management attention.
Moreover, if successful, these actions could result in the loss of patent or
other intellectual property rights protection for the key OLED technologies and
materials on which our business depends.
In addition, we rely in part on unpatented proprietary technology, and
others may independently develop the same or similar technology or otherwise
obtain access to our unpatented technology. To protect our trade secrets,
know-how and other proprietary information, we require employees, consultants,
financial advisors and strategic partners to enter into confidentiality
agreements. These agreements may not ultimately provide meaningful protection
for our trade secrets, know-how or other proprietary information in the event of
any unauthorized use, misappropriation or disclosure of those trade secrets,
know-how or other proprietary information. In particular, we may not be able to
fully or adequately protect our proprietary information as we conduct
discussions with potential strategic partners. If we are unable to protect the
proprietary nature of our technology, it will harm our business.
WE OR OUR LICENSEES MAY INCUR SUBSTANTIAL COSTS OR LOSE IMPORTANT RIGHTS AS A
RESULT OF LITIGATION OR OTHER PROCEEDINGS RELATING TO OUR PATENT AND OTHER
INTELLECTUAL PROPERTY RIGHTS.
There are a number of other companies and organizations that have been
issued patents and are filing patent applications relating to OLED technologies
and materials, including Eastman Kodak Company, Cambridge Display Technology,
Fuji Film Co., Ltd., Canon, Inc., Pioneer Corporation, Semiconductor Energy
Laboratories Co. and Mitsubishi Chemical Corporation. As a result, there may be
issued patents or pending patent applications of third parties that would be
infringed by the use of our OLED technologies or materials, thus subjecting our
licensees to possible suits for patent infringement in the future. Such lawsuits
could result in our licensees being liable for damages or require our licensees
to obtain additional licenses that could increase the cost of their products,
which might have an adverse affect on their sales and thus our royalties or
cause them to seek to renegotiate our royalty rates.
In addition, in the future we may assert our intellectual property
rights by instituting legal proceedings against others. We cannot assure you
that we will be successful in enforcing our patents in any lawsuits we may
commence. Defendants in any litigation we may commence to enforce our patents
may attempt to establish that our patents are invalid or are unenforceable.
Thus, any patent litigation we commence could lead to a determination that one
or more of our patents are invalid or unenforceable. If a third party succeeds
in invalidating one or more of our patents, that party and others could compete
more effectively against us. Our ability to derive licensing revenues from
products or technologies covered by these patents could also be adversely
affected.
Whether our licensees are defending the assertion of third-party
intellectual property rights against their businesses arising as a result of the
use of our technology, or we are asserting our own intellectual property rights
against others, such litigation can be complex, costly, protracted and highly
disruptive to our or our licensees' business operations by diverting the
attention and energies of management and key technical personnel. As a result,
the pendency or adverse outcome of any intellectual property litigation to which
we or our licensees are subject could disrupt business operations, require the
incurrence of substantial costs and subject us or our licensees to significant
liabilities, each of which could severely harm our business.
-9-
Plaintiffs in intellectual property cases often seek injunctive relief
in addition to money damages. Any intellectual property litigation commenced
against our licensees could force them to take actions that could be harmful to
their business and thus to our royalties, including the following:
o stop selling their products that incorporate or otherwise use technology
that contains our allegedly infringing intellectual property;
o attempt to obtain a license to the relevant third-party intellectual
property, which may not be available on reasonable terms or at all; or
o attempt to redesign their products to remove our allegedly infringing
intellectual property to avoid infringement of the third-party
intellectual property.
If our licensees are forced to take any of the foregoing actions, they
may be unable to manufacture and sell their products that incorporate our
technology at a profit or at all. Furthermore, the measure of damages in
intellectual property litigation can be complex, and is often subjective or
uncertain. If our licensees were to be found liable for infringement of
proprietary rights of a third party, the amount of damages they might have to
pay could be substantial and is difficult to predict. Decreased sales of our
licensees' products incorporating our technology would have an adverse effect on
our royalty revenues under existing licenses. Any necessity to procure rights to
the third-party technology might cause our existing licensees to renegotiate the
royalty terms of their license with us to compensate for this increase in their
cost of production or, in certain cases, to terminate their license with us
entirely. Were this renegotiation to occur, it would likely harm our ability to
compete for new licensees and have an adverse effect on the terms of the royalty
arrangements we could enter into with any new licensees.
As is commonplace in technology companies, we employ individuals who
were previously employed at other technology companies. To the extent our
employees are involved in research areas that are similar to those areas in
which they were involved at their former employers, we may be subject to claims
that such employees or we have, inadvertently or otherwise, used or disclosed
the alleged trade secrets or other proprietary information of the former
employers. Litigation may be necessary to defend against such claims. The costs
associated with these actions or the loss of rights critical to our or our
licensees' business could negatively impact our revenues or cause our business
to fail.
THE U.S. GOVERNMENT HAS RIGHTS TO OUR OLED TECHNOLOGIES THAT MIGHT PREVENT US
FROM REALIZING THE BENEFITS OF THESE TECHNOLOGIES.
The U.S. government, through various government agencies, has provided
and continues to provide funding to us, Princeton University and the University
of Southern California for research activities related to certain aspects of our
OLED technologies. Because we have been provided with this funding, the
government has rights to these OLED technologies that could restrict our ability
to market them to the government for military and other applications, or to
third parties for commercial applications. Moreover, if the government
determines that we have not taken effective steps to achieve practical
application of these OLED technologies in any field of use in a reasonable time,
the government could require us to grant licenses to other parties in that field
of use. Any of these occurrences would limit our ability to obtain the full
benefits of our OLED technologies.
IF WE CANNOT KEEP OUR KEY EMPLOYEES OR HIRE OTHER TALENTED PERSONS AS WE GROW,
OUR BUSINESS MIGHT NOT SUCCEED.
Our performance is substantially dependent on the continued services of
senior management and other key personnel, and on our ability to offer
competitive salaries and benefits to our employees. We do not have employment
agreements with any of our management or other key personnel. Additionally,
competition for highly skilled technical, managerial and other personnel is
intense. We might not be able to attract, hire, train, retain and motivate the
highly skilled managers and employees we need to be successful. If we fail to
attract and retain the necessary technical and managerial personnel, our
business will suffer and might fail.
-10-
RISKS RELATING TO THIS OFFERING
WE CAN ISSUE SHARES OF PREFERRED STOCK THAT MAY ADVERSELY AFFECT THE RIGHTS OF
SHAREHOLDERS OF OUR COMMON STOCK.
Our Articles of Incorporation authorize us to issue up to 5,000,000
shares of preferred stock with designations, rights and preferences determined
from time-to-time by our Board of Directors. Accordingly, our Board of Directors
is empowered, without shareholder approval, to issue preferred stock with
dividend, liquidation, conversion, voting or other rights superior to those of
shareholders of our common stock. For example, an issuance of shares of
preferred stock could:
o adversely affect the voting power of the shareholders of our common stock;
o make it more difficult for a third party to gain control of us;
o discourage bids for our common stock at a premium; or
o otherwise adversely affect the market price of our common stock.
As of January 31, 2006, we have issued and outstanding 200,000 shares
of Series A Nonconvertible Preferred Stock, all of which are held by an entity
controlled by members of the family of Sherwin I. Seligsohn, our Chairman of the
Board and Chief Executive Officer. Our Board of Directors has authorized and
issued other shares of preferred stock in the past, none of which are currently
outstanding, and may do so again at any time in the future.
IF THE PRICE OF OUR COMMON STOCK GOES DOWN, WE MAY HAVE TO ISSUE MORE SHARES
THAN ARE PRESENTLY ANTICIPATED TO BE ISSUED UNDER OUR AGREEMENT WITH PPG
INDUSTRIES.
Under our agreements with PPG Industries, we are required to issue to
PPG Industries shares of our common stock for services rendered by it, though
under limited circumstances we are required to compensate PPG Industries fully
in cash in lieu of common stock. The number of shares of common stock that we
are required to deliver to PPG is determined based on a formula requiring that
the lower the price of our common stock at and around the time of issuance, the
greater the number of shares that we would be required to issue to PPG
Industries. Lower than anticipated market prices for our common stock, and
correspondingly greater numbers of shares issuable to PPG Industries, with a
resulting increase in the number of shares available for public sale, could
cause people to sell our common stock, including in short sales, which could
drive down the price of our common stock, thus reducing its value and perhaps
hindering our ability to raise additional funds in the future. In addition, such
an increase in the number of outstanding shares of our common stock would
further dilute existing holders of this stock.
OUR EXECUTIVE OFFICERS AND DIRECTORS OWN A LARGE PERCENTAGE OF OUR COMMON STOCK
AND COULD EXERT SIGNIFICANT INFLUENCE OVER MATTERS REQUIRING SHAREHOLDER
APPROVAL, INCLUDING TAKEOVER ATTEMPTS.
Our executive officers and directors, their respective affiliates and
the adult children of Sherwin Seligsohn, our Chairman of the Board and Chief
Executive Officer, beneficially own, as of January 31, 2006, approximately 16.3%
of the outstanding shares of our common stock. Moreover, Pine Ridge Financial
Inc. and First Investors Holding Co., Inc., as successor to Strong River
Investments, Inc., assigned to our management their rights to vote the shares of
our common stock they received or are entitled to receive upon conversion of
warrants, notes and preferred stock issued in an August 2001 private placement
transaction, of which warrants to purchase 744,452 shares remain outstanding as
of January 31, 2006. Accordingly, these shareholders and members of management
may, as a practical matter, be able to exert significant influence over matters
requiring approval by our shareholders, including the election of directors and
the approval of mergers or other business combinations. This concentration also
could have the effect of delaying or preventing a change in control of us.
-11-
BECAUSE THE VAST MAJORITY OF OLED DISPLAY MANUFACTURERS ARE LOCATED IN THE
ASIA-PACIFIC REGION, WE ARE SUBJECT TO INTERNATIONAL OPERATIONAL, FINANCIAL,
LEGAL AND POLITICAL RISKS WHICH MAY NEGATIVELY IMPACT OUR OPERATIONS.
Many of our licensees and prospective licensees have a majority of
their operations in countries other than the United States, particularly in the
Asia-Pacific region. Risks associated with our doing business outside of the
United States include:
o compliance with a wide variety of foreign laws and regulations;
o legal uncertainties regarding taxes, tariffs, quotas, export controls,
export licenses and other trade barriers;
o economic instability in the countries of our licensees, causing delays or
reductions in orders for their products and therefore our royalties;
o political instability in the countries in which our licensees operate,
particularly in South Korea relating to its disputes with North Korea and
in Taiwan relating to its disputes with China;
o difficulties in collecting accounts receivable and longer accounts
receivable payment cycles; and
o potentially adverse tax consequences.
Any of these factors could impair our ability to license our OLED
technologies and sell our OLED materials, thereby harming our business.
THE MARKET PRICE OF OUR COMMON STOCK MIGHT BE HIGHLY VOLATILE.
The market price of our common stock might be highly volatile, as has
been the case with our common stock in the past as well as the securities of
many companies, particularly other small and emerging-growth companies. Factors
such as the following may have a significant impact on the market price of our
common stock in the future:
o our expenses and operating results;
o announcements by us or our competitors of technological developments, new
product applications or license arrangements; and
o other factors affecting the flat panel display and related industries in
general.
OUR OPERATING RESULTS MAY HAVE SIGNIFICANT PERIOD-TO-PERIOD FLUCTUATIONS, WHICH
WOULD MAKE IT DIFFICULT TO PREDICT OUR FUTURE PERFORMANCE.
Due to the current stage of commercialization of our OLED technologies
and the significant development and manufacturing objectives that we and our
licensees must achieve to be successful, our quarterly operating results will be
difficult to predict and may vary significantly from quarter to quarter.
We believe that period-to-period comparisons of our operating results
are not a reliable indicator of our future performance at this time. Among other
factors affecting our period-to-period results, our license and technology
development fees often consist of large one-time or annual payments, resulting
in significant fluctuations in our revenues. If, in some future period, our
operating results or business outlook fall below the expectations of securities
analysts or investors, our stock price would be likely to decline and investors
in our common stock may not be able to resell their shares at or above the
initial public offering price. Broad market, industry and global economic
factors may also materially reduce the market price of our common stock,
regardless of our operating performance.
-12-
THE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK COULD DRIVE DOWN THE PRICE
OF OUR STOCK.
The price of our common stock can be expected to decrease if:
o other shares of our common stock that are currently subject to restriction
on sale become freely salable, whether through an effective registration
statement or based on Rule 144 under the Securities Act of 1933, as
amended; or
o we issue additional shares of our common stock that might be or become
freely salable, including shares that would be issued upon conversion of
our preferred stock or the exercise of outstanding warrants and options.
BECAUSE WE DO NOT INTEND TO PAY DIVIDENDS, SHAREHOLDERS WILL BENEFIT FROM AN
INVESTMENT IN OUR COMMON STOCK ONLY IF IT APPRECIATES IN VALUE.
We have never declared or paid any cash dividends on our
common stock. We currently intend to retain our future earnings, if any, to
finance further research and development and do not expect to pay any cash
dividends in the foreseeable future. As a result, the success of an investment
in our common stock will depend upon any future appreciation in its value. There
is no guarantee that our common stock will appreciate in value or even maintain
the price at which shareholders have purchased their shares.
-13-
THE OFFERING
All 22,500 shares of our common stock being offered hereunder are being
offered by the selling shareholders. These shares were issued to the selling
shareholders upon the exercise of warrants to purchase shares of our common
stock. The selling shareholders named in this prospectus may sell the shares of
common stock offered for resale in a secondary offering.
USE OF PROCEEDS
The selling shareholders will receive the proceeds from the resale of
the shares of common stock. We will not receive any proceeds from the resale of
the shares of common stock by the selling shareholders.
SELLING SHAREHOLDERS
The following table sets forth information regarding the beneficial
ownership of shares of common stock by the selling shareholders as of January
31, 2006, and the number of shares of common stock covered by this prospectus.
The shares being offered were acquired by the selling shareholders upon
the exercise by those individuals of warrants to purchase shares of our common
stock. The warrants were issued to such persons or entities as compensation for
the performance of investment banking or similar services. All of these warrants
were exercisable for five years following the date of issuance.
Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities. The shares of common stock subject to options or warrants currently
exercisable or exercisable within 60 days after January 31, 2006, are deemed
outstanding and to be beneficially owned by the selling shareholders holding
such options or warrants.
BENEFICIAL OWNERSHIP
AFTER RESALE OF SHARES
NUMBER OF MAXIMUM ----------------------
SHARES NUMBER OF
NAME OF BENEFICIALLY SHARES BEING NUMBER
SELLING SHAREHOLDER OWNED OFFERED OF SHARES(1) PERCENT(2)
-------------------- ------------- ------------ ------------- ------------
David DeWitt(3) 30,400 20,000 10,400 *
Louis P. Bansbach III 8,382 2,500 5,882 *
TOTALS 38,782 22,500 16,282 *
_____________
*Less than 1%.
(1) Assumes the sale of all shares being offered by this prospectus.
(2) The percentage ownership for each beneficial owner listed above is
based on 29,985,519 shares of common stock outstanding as of January
31, 2006. In accordance with SEC rules, options to purchase shares of
common stock that are exercisable as of January 31, 2006, or will
become exercisable within 60 days thereafter, are deemed to be
outstanding and beneficially owned by the person holding such options
for the purpose of computing such person's percentage ownership, but
are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person.
(3) Includes:
o 25,000 shares of common stock owned by Mr. DeWitt;
o 400 shares of common stock owned by a minor child of Mr. DeWitt;
and
o 5,000 shares of common stock that may be acquired by Mr. DeWitt
upon the exercise of options that are currently exercisable.
Mr. DeWitt is affiliated with a registered broker-dealer, and acquired
the warrants as to which these shares are issuable in 2001 as
compensation for the performance of investment banking or similar
services. At the time he acquired the warrant and shares, Mr. DeWitt
had no agreements, plans or understandings, directly or indirectly,
with any person to distribute the warrant or the shares issuable upon
the exercise thereof.
-14-
PLAN OF DISTRIBUTION
The selling shareholders, including any donees, pledgees or other
transferees who receive shares from the selling shareholders, may, from time to
time, sell all or a portion of the shares of common stock on any market upon
which the common stock my be quoted, in privately negotiated transactions or
otherwise, at fixed prices that may be changed, at market prices prevailing at
the time of sale, at prices related to such market prices or at negotiated
prices. The selling shareholders may sell the shares of common stock by various
methods, including one or more of the following:
o block trades in which the broker or dealer so engaged by the selling
shareholders will attempt to sell the shares of common stock as agent, but
may purchase and resell a portion of the block as principal to facilitate
the transaction;
o purchases by the broker or dealer as principal and resale by the broker or
dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of the exchange;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o negotiated transactions or otherwise, including an underwritten offering;
o market sales (both long and short to the extent permitted under the
federal securities laws);
o in connection with short sales of the shares of common stock;
o in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions in
standardized or over-the-counter options, if permitted under the
securities laws; and
o a combination of any of these methods of sale.
In effecting sales, brokers and dealers engaged by the selling
shareholders may arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions or discounts from the selling shareholders or,
if any such broker-dealer acts as agent for the purchaser of such shares, from
such purchaser, in amounts to be negotiated. These commissions or discounts may
exceed those customary in the types of transactions involved. Broker-dealers may
agree with a selling shareholder to sell a specified number of shares of common
stock at a stipulated price per share, and, to the extent such broker-dealer is
unable to do so acting as agent for the selling shareholder, to purchase as
principal any unsold shares of common stock at the price required to fulfill the
broker dealer commitment to the selling shareholder. Broker-dealers who acquire
shares of common stock as principal may thereafter resell such shares of common
stock form time to time in transactions (which may involve block transactions
and sales to and through other broker-dealers, including transactions of the
nature described above) at prices and on terms then prevailing at the time of
sale, at prices then related to then-current market price or in negotiated
transactions. In connection with such resales, broker-dealers may pay to or
receive from the purchasers of shares of common stock commissions as described
above. The selling shareholders may also sell the shares of common stock in
accordance with Rule 144 under the Securities Act of 1933, as amended, rather
than pursuant to this prospectus.
The selling shareholders and any other person selling shares of common
stock pursuant to this registration statement will be subject to the Securities
Exchange Act of 1934, as amended. The Securities Exchange Act of 1934 rules
include, without limitation, Regulation M, which may limit the timing of
purchases and sales of the shares of common stock by the selling shareholders.
In addition, Regulation M may restrict the ability of any person engaged in the
distribution of the shares of common stock to engage in market-making activities
with respect to the shares of common stock being distributed for a period of up
to five business days prior to the commencement of the distribution. This may
affect the marketability of the shares of common stock and the ability of the
selling shareholders and any other person or entity selling shares of common
stock pursuant to this registration statement to engage in market-making
activities with respect to the shares of common stock.
The selling shareholders and any broker-dealers or agents that
participate with the selling shareholders in sales of the shares of common stock
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended, in connection with those sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares of common stock purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933, as amended.
-15-
From time to time, the selling shareholders may pledge their shares of
common stock pursuant to the margin provisions of its customer agreements with
its brokers. Upon default by the selling shareholders, the broker may offer and
sell such pledged shares of common stock from time to time. Upon a sale of the
shares of common stock, the selling shareholders intend to comply with the
prospectus delivery requirements under the Securities Act of 1933, as amended,
by delivering a prospectus to each purchaser in the transaction. We intend to
file any amendments or other necessary documents in compliance with the
Securities Act of 1933, as amended, that may be required in the event the
selling shareholders default under any customer agreement with a broker.
We are required to pay all fees and expenses incident to the
registration of the shares of common stock. We have agreed to indemnify the
selling shareholders and related parties against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act of 1933, as
amended. Brokerage commissions and similar selling expenses, if any,
attributable to the sale of shares by the selling shareholders will be borne by
the selling shareholders. The selling shareholders may agree to indemnify
brokers, dealers or agents that participate in sales by the selling shareholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act of 1933, as amended.
ABOUT THIS PROSPECTUS
You should only rely on the information contained in this prospectus.
We have not authorized anyone to provide you with information different from
that contained in this prospectus. The information contained in this prospectus
is accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common stock.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended. Therefore, we file reports, proxy statements
and other information with, and furnish other reports to, the SEC. You can read
and copy all of these documents at the SEC's public reference facilities in
Washington, D.C., New York, New York and Chicago, Illinois. You may obtain
information on the operation of the SEC's public reference facilities by calling
the SEC at 1-800-SEC-0330. You can also read and copy all of the
above-referenced documents at the offices of the Nasdaq Stock Market, 1735 K
Street N.W., Washington, D.C. 20006. You also may obtain the documents we file
with the SEC from the SEC's Web site on the Internet that is located at
http://www.sec.gov.
We "incorporate by reference" in this prospectus the information we
file with the SEC, which means that we can disclose important information to you
by referring you to another document we file with the SEC. The information
incorporated by reference in this prospectus is an important part of this
prospectus, and information that we file later with the SEC will automatically
update and supersede this information. We incorporate by reference in this
prospectus the documents listed below and any future filings we make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended, including filings made (i) after the date of the initial
registration statement and prior to effectiveness of the registration statement
and (ii) after the date of this prospectus but before the end of this offering.
The documents that we are incorporating by reference are:
o Our Annual Report on Form 10-K for the year ended December 31, 2004;
o Our Quarterly Reports on Form 10-Q for the quarters ended March 31, June
30 and September 30, 2005;
o Our Current Reports on Form 8-K filed with the SEC on April 4, April 20,
August 5 and December 21, 2005; and
o The description of our common stock that is contained in our Registration
Statement on Form 8-A filed with the SEC on August 6, 1996.
You should read the information relating to us in this prospectus,
together with the information in the documents incorporated by reference in this
prospectus.
-16-
Any statement contained in a document incorporated by reference in this
prospectus, unless otherwise indicated in that document, speaks as of the date
of the document. Statements contained in this prospectus may modify or replace
statements contained in the documents incorporated by reference. In addition,
some of the statements contained in one or more of the documents incorporated by
reference may be modified or replaced by statements contained in a document
incorporated by reference that is filed thereafter.
You may request a copy of any or all of these filings, at no cost, by
writing or telephoning us at Universal Display Corporation, 375 Phillips
Boulevard, Ewing, New Jersey 08618, Attention: Corporate Secretary, Telephone:
(609) 671-0980.
LEGAL OPINION
Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania, will pass on
the validity of the shares of common stock that may be offered by the
prospectus.
EXPERTS
The consolidated financial statements of Universal Display Corporation
and subsidiary as of December 31, 2004 and 2003, and for each of the years in
the three-year period ended December 31, 2004, and management's assessment of
the effectiveness of internal control over financial reporting as of December
31, 2004, have been incorporated by reference herein in reliance upon the
reports of KPMG LLP, independent registered public accounting firm, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
-17-
================================================================================
22,500 Shares
UNIVERSAL DISPLAY CORPORATION
Common Stock
_______________
PROSPECTUS
_______________
__________, 2005
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered are as follows:
SEC registration fee $ 32
Transfer agent and registrar fees 500
Printing and engraving fees 500
Legal and accounting fees 3,500
Miscellaneous --
TOTAL $4,532
The selling shareholders described in the prospectus included herewith will not
pay any of the expenses of this offering.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Chapter 17, Subchapter D of the Pennsylvania Business Corporation Law
of 1988, as amended (the "PBCL") contains provisions permitting indemnification
of officers and directors of a business corporation in Pennsylvania.
Sections 1741 and 1742 of the PBCL provide that a business corporation
may indemnify directors and officers against liabilities and expenses they may
incur as such in connection with any threatened, pending or completed civil,
administrative or investigative proceeding, provided that the particular person
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the corporation, and, with respect to any
criminal proceeding, had no reasonable cause to believe his or her conduct was
unlawful. In general, the power to indemnify under these sections does not exist
in the case of actions against a director or officer by or in the right of the
corporation if the person otherwise entitled to indemnification shall have been
adjudged to be liable to the corporation unless it is judicially determined
that, despite the adjudication of liability but in view of all the circumstances
of the case, the person is fairly and reasonably entitled to indemnification for
specified expenses.
Section 1743 of the PBCL provides that the corporation is required to
indemnify directors and officers against expenses they may incur in defending
actions against them in such capacities if they are successful on the merits or
otherwise in the defense of such actions.
Section 1746 of the PBCL grants a corporation broad authority to
indemnify its directors and officers for liabilities and expenses incurred in
such capacity, except in circumstances where the act or failure to act giving
rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness.
Section 1747 of the PBCL permits a corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
representative of another corporation or other enterprise, against any liability
asserted against such person and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify the person against such liability under Chapter 17
Subchapter D of the PBCL.
The registrant's Bylaws provide a right to indemnification to the full
extent permitted by law, for expenses (including attorney `s fees), damages,
punitive damages, judgments, penalties, fines and amounts paid in settlement,
actually and reasonably incurred by any director or officer whether or not the
indemnified liability arises or arose from any threatened, pending or completed
proceeding by or in the right of the registrant (a derivative action) by reason
of the fact that such director or officer is or was serving as a director,
officer, employee or agent of the registrant or, at the request of the
registrant, as a director, officer, partner, fiduciary or trustee of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, unless the act or failure to act giving rise to the claim for
indemnification is financially determined by a court to have constituted willful
misconduct or recklessness. The Bylaws provide for the advancement of expenses
to an indemnified party upon receipt of an undertaking by the party to repay
those amounts if it is finally determined that the indemnified party is not
entitled to indemnification.
The registrant's Bylaws authorize the Registrant to take steps to
ensure that all persons entitled to indemnification are properly indemnified,
including, if the Board of Directors so determines, by purchasing and
maintaining appropriate insurance.
ITEM 16. LIST OF EXHIBITS
The exhibits filed as part of this registration statement are as
follows:
EXHIBIT
NUMBER DESCRIPTION
------- ------------
5.1 Opinion of Morgan, Lewis & Bockius LLP regarding legality of securities being registered.
23.1 Consent of Morgan, Lewis & Bockius LLP (included in its opinion filed as Exhibit 5.1
hereto).
23.2 Consent of KPMG LLP.
24.1 Powers of Attorney (included as part of the signature page hereof).
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;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that
(A) Paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the registration
statement is on Form S-8 (ss.239.16b of this
chapter), and the information required to be
included in a post-effective amendment by
those paragraphs is contained in reports
filed with or furnished to the Securities
and Exchange Commission by the Registrant
pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 (15
U.S.C. 78m or 78o(d)) that are incorporated
by reference in the Registration Statement;
and
(B) Paragraphs (a)(1)(i), (a)(1)(ii) and
(a)(1)(iii) of this section do not apply if
the registration statement is on Form S-3
(ss.239.13 of this chapter) or Form F-3
(ss.239.33 of this chapter) and the
information required to be included in a
post-effective amendment by those paragraphs
is contained in reports filed with or
furnished to the Securities and Exchange
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, or is contained in a
form of prospectus filed pursuant to Rule
424(b) (ss.230.424(b) of this chapter) that
is part of the registration statement.
(C) provided further, however, that paragraphs
(a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is for an offering of
asset-backed securities on Form S-1
(ss.239.11 of this chapter) or Form S-3
(ss.239.13 of this chapter), and the
information required to be included in a
post-effective amendment is provided
pursuant to Item 1100(c) of Regulation AB
((ss.229.1100(c)).
(1) 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.
(2) 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.
(3) That, for the purpose of determining liability under
the Securities Act of 1933 to any purchaser:
(i) If the registrant is relying on Rule 430B:
(A) Each prospectus filed by the registrant
pursuant to Rule 424(b)(3) shall be deemed
to be part of the registration statement as
of the date the filed prospectus was deemed
part of and included in the registration
statement; and
(B) Each prospectus required to be filed
pursuant to Rule 424(b)(2), (b)(5), or
(b)(7) as part of a registration statement
in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i),
(vii), or (x) for the purpose of providing
the information required by section 10(a) of
the Securities Act of 1933 shall be deemed
to be part of and included in the
registration statement as of the earlier of
the date such form of prospectus is first
used after effectiveness or the date of the
first contract of sale of securities in the
offering described in the prospectus. As
provided in Rule 430B, for liability
purposes of the issuer and any person that
is at that date an underwriter, such date
shall be deemed to be a new effective date
of the registration statement relating to
the securities in the registration statement
to which that prospectus relates, and the
offering of such securities at that time
shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no
statement made in a registration statement
or prospectus that is a part of the
registration statement or made in a document
incorporated or deemed incorporated by
reference into the registration statement or
prospectus that is a part of the
registration statement will, as to a
purchaser with a time of contract of sale
prior to such effective date, supersede or
modify any statement that was made in the
registration statement or prospectus that
was part of the registration statement or
made in any such document immediately prior
to such effective date; or
(ii) If the registration is subject to Rule 430C,
each prospectus filed pursuant to Rule
424(b) as part of a registration statement
relating to an offering, other than
registration statement relying on Rule 430B
or other than prospectuses filed in reliance
on Rule 430A, shall be deemed to be part of
and included in the registration statement
as of the date it is first used after
effectiveness. Provided, however, that no
statement made in a registration statement
or prospectus that is part of the
registration statement or prospectus that is
part of the registration statement will, as
to a purchaser with a time of contract of
sale prior to such first use, supersede or
modify any statement that was made in the
registration statement or prospectus that
was part of the registration statement or
made in any such document immediately prior
to such date of first use.
(4) That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any
purchaser in the initial distribution of the
securities:
The undersigned registrant undertakes that in a
primary offering of securities of the undersigned registrant
pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and
will be considered to offer or sell such securities to such
purchaser:
(i) Any preliminary prospectus or prospectus of
the undersigned registrant relating to the
offering required to be filed pursuant to
Rule 424;
(ii) any free writing prospectus relating to the
offering prepared by or on behalf of the
undersigned registrant or used or referred
to by the undersigned registrant;
(iii) The portion of any other free writing
prospectus relating to the offering
containing material information about the
undersigned registrant or its securities
provided by or on behalf of the undersigned
registrant; and
(iv) Any other communication that is an offer in
the offering made by the undersigned
registrant to the purchaser.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act 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 may be permitted to trustees, officers or controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Ewing, state of New Jersey, on February 3, 2006.
UNIVERSAL DISPLAY CORPORATION
By: /s/ Sidney D. Rosenblatt
-------------------------------------------
Sidney D. Rosenblatt
Executive Vice President, Chief Financial
Officer, Treasurer, Secretary and Director
Each person in so signing also makes, constitutes and appoints Steven
V. Abramson and Sidney D. Rosenblatt, and each of them acting alone, his or her
true and lawful attorney-in-fact, with full power of substitution, to execute
and cause to be filed with the securities and exchange commission pursuant to
the requirements of the Securities Act of 1933, as amended, any and all
amendments and post-effective amendments to this registration statement, and
including any registration statement for the same offering that is to be
effective upon filing pursuant to Rule 462(b) under the securities act, with
exhibits thereto and other documents in connection therewith, and hereby
ratifies and confirms all that said attorney-in-fact or his or her substitute or
substitutes may do or cause to be done by virtue hereof.
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/ Sherwin I. Seligsohn Chief Executive Officer and Chairman of the February 3, 2006
------------------------------------ Board (principal executive officer)
Sherwin I. Seligsohn
/s/ Steven V. Abramson President, Chief Operating Officer and Director February 3, 2006
------------------------------------
Steven V. Abramson
/s/ Sidney D. Rosenblatt Executive Vice President, Chief Financial February 3, 2006
------------------------------------ Officer, Treasurer, Secretary and Director
Sidney D. Rosenblatt (principal financial and accounting officer)
/s/ Leonard Becker Director February 3, 2006
------------------------------------
Leonard Becker
/s/ C. Keith Hartley Director February 3, 2006
------------------------------------
C. Keith Hartley
/s/ Elizabeth H. Gemmill Director February 3, 2006
------------------------------------
Elizabeth H. Gemmill
/s/ Lawrence Lacerte Director February 3, 2006
------------------------------------
Lawrence Lacerte