AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 11, 2008
REGISTRATION NO. 333- _________
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
RADA ELECTRONIC INDUSTRIES LTD.
(Exact name of Registrant as specified in its charter)
ISRAEL NOT APPLICABLE
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
RADA ELECTRONIC INDUSTRIES LTD.
7 GIBOREI ISRAEL STREET
NETANYA 42504, ISRAEL
TEL: (972)(9) 892-1111
(Address and telephone number of Registrant's principal executive offices)
---------------------------
RADA ELECTRONIC INDUSTRIES LTD.
7 GIBOREI ISRAEL STREET
NETANYA 42504, ISRAEL
TEL: (972)(9) 892-1111
(Name of agent for service)
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COPIES OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS SENT TO AGENT
FOR SERVICE, SHOULD BE SENT TO:
STEVEN J. GLUSBAND, ESQ. SARIT MOLCHO, ADV.
KARMIT S. GALILI, ESQ.
CARTER LEDYARD & MILBURN LLP S. FRIEDMAN & CO., ADVOCATES
2 WALL STREET 25 HAMERED STREET
NEW YORK, NY 10005 TEL AVIV, ISRAEL 68125
TEL: 212-238-8605 TEL: (972)(3) 796-1500
FAX: 212-732-3232 FAX: (972)(3) 796 1501
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------------------
CALCULATION OF REGISTRATION FEE
PROPOSED
PROPOSED MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO AGGREGATE PRICE AGGREGATE REGISTRATION
TO BE REGISTERED BE REGISTERED (1) PER UNIT OFFERING PRICE FEE (2)
---------------------------------- ------------ ------------ ------------ ------------
Ordinary shares, par value NIS
0.015 per share 152,765 $ 2.035 $ 310,877 $ 12.22
Ordinary shares, par value NIS
0.015 per share underlying
convertible note 1,435,407 $ 2.09(4) $ 3,000,000 $ 117.90
Ordinary shares, par value NIS
0.015 per share underlying
warrants issued on December 10, 2007 1,578,947 $ 2.375(4) $ 3,750,000 $ 147.38
Ordinary shares, par value NIS
0.015 per share underlying
warrants issued on June 29, 2007 155,782 $ 6.00(4) $ 934,692 $ 36.74
Ordinary shares, par value NIS
0.015 per share issued on June 29,
2007 606,804 $ 1.88(4) $ 1,140,792 $ 44.84
Total 3,929,705 $ 9,136,361 $ 359.08
(1) The number of ordinary shares registered hereunder is based upon the
maximum number of ordinary shares of the registrant that is issuable upon
conversion of the convertible note and the exercise of the warrants.
(2) Calculated pursuant to Section 6(b) of the Securities Act of 1933 as
follows: proposed maximum aggregate offering price multiplied by .0000393.
(3) Estimated pursuant to Rule 457(c) and 457(o) solely for the purpose of
computing the amount of the registration fee on the basis of the average of
the low bid and high ask prices ($2.03 and $2.04) of an ordinary share as
reported by NASDAQ on April 9, 2008.
(4) Calculated pursuant to Rule 457(g) solely for the purpose of calculating
the registration fee, based on the conversion price of the convertible note
and the exercise price of the warrants.
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
ii
The information in this prospectus is not complete and may be changed. 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 APRIL 11, 2008
PROSPECTUS
RADA ELECTRONIC INDUSTRIES LTD.
3,929,705 ORDINARY SHARES
This prospectus relates to up to 3,929,705 ordinary shares of RADA
Electronic Industries Ltd. that the selling shareholders named in this
prospectus or their transferees may offer from time to time. Of the ordinary
shares offered hereby up to: (i) 1,435,407 ordinary shares are issuable upon
conversion of a $3 million of a convertible note; and (ii) 1,578,947 ordinary
shares are issuable upon exercise of a warrant. Such convertible note and
warrant are dated December 10, 2007. In addition, up to 762,586 ordinary shares
are issuable upon exercise of warrants issued pursuant to an amendment and
exchange agreement dated June 29, 2007 and 152,765 ordinary shares were issued
to the selling shareholders pursuant to an amendment to amendment and exchange
agreement dated January 9, 2008. The registration of the ordinary shares does
not necessarily mean that the selling shareholders or their transferees will
offer or sell their shares.
We are not offering or selling any of our ordinary shares pursuant to this
prospectus. We will not receive any of the proceeds from the sale by the selling
shareholders of the ordinary shares offered by this prospectus. We will bear all
expenses in connection with the preparation of this prospectus.
Our ordinary shares are listed for trading on the NASDAQ Capital Market
under the symbol "RADA." On April 9, 2008, the closing price of our ordinary
shares on the NASDAQ Capital Market was $2.03.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
2008
TABLE OF CONTENTS
PAGE
----
Notice Regarding Forward-Looking Statements 3
Prospectus Summary 4
Risk Factors 6
Capitalization and Indebtedness 14
Reasons for the Offer and Use of Proceeds 14
Market Price Data 14
Selling Shareholders 15
Offer Statistics, Expected Time Table and Plan of Distribution 16
Expenses Associated with the Registration 17
Foreign Exchange Controls and Other Limitations 19
Experts 19
Legal Matters 19
Material Changes 19
Where You Can Best Find More Information; Incorporation
of Certain Information by Reference 19
Enforceability of Civil Liabilities 20
We are a "foreign private issuer" as defined in Rule 3b-4 under the
Securities Exchange Act of 1934, or the Exchange Act. As a result, our proxy
solicitations are not subject to the disclosure and procedural requirements of
Regulation 14A under the Exchange Act and transactions in our equity securities
by our officers and directors are exempt from Section 16 of the Exchange Act. In
addition, we are not required under the Exchange Act to file periodic reports
and financial statements as frequently or as promptly as United States companies
whose securities are registered under the Exchange Act.
You should rely only on the information included or incorporated by
reference in this prospectus or any supplement or free writing prospectus
prepared by us. We have not authorized anyone to provide information or
represent anything other than that contained in, or incorporated by reference
in, this prospectus. We have not authorized anyone to provide you with different
information. If you receive any other information, you should not rely on it. We
are not making an offer in any state or jurisdiction or under any circumstances
where the offer is not permitted. You should assume that the information in this
prospectus or any supplement or free writing prospectus prepared by us is
accurate only as of the date on their cover pages and that any information we
have incorporated by reference is accurate only as of the date of the document
incorporated by reference.
In this prospectus, "we," "us," "our," "the Company" and "RADA" refer to
RADA Electronic Industries Ltd., an Israeli company and our Chinese subsidiary.
Our annual report containing financial statements that have been examined
and reported on, with an opinion expressed by, an independent registered public
accounting firm, is published on our website. We prepare our financial
statements in U.S. dollars and in accordance with accounting principles
generally accepted in the United States. All references to "dollars" or "$" in
this prospectus are to U.S. dollars, and all references to "shekels" or "NIS"
are to New Israeli Shekels.
2
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated in it by reference contain
forward-looking statements which involve known and unknown risks and
uncertainties. We include this notice for the express purpose of permitting us
to obtain the protections of the safe harbor provided by the Private Securities
Litigation Reform Act of 1995 with respect to all such forward-looking
statements. Examples of forward-looking statements include: projections of
capital expenditures, competitive pressures, revenues, growth prospects, product
development, financial resources and other financial matters. You can identify
these and other forward-looking statements by the use of words such as "may,"
"will," "should," "plans," "anticipates," "believes," "estimates," "predicts,"
"intends," "potential" or the negative of such terms, or other comparable
terminology.
Our ability to predict the results of our operations or the effects of
various events on our operating results is inherently uncertain. Therefore, we
caution you to consider carefully the matters described under the caption "Risk
Factors" and certain other matters discussed in this prospectus, the documents
incorporated by reference in this prospectus, and other publicly available
sources. Such factors and many other factors beyond the control of our
management could cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements that
may be expressed or implied by the forward-looking statements.
3
PROSPECTUS SUMMARY
YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION ABOUT US, THE ORDINARY SHARES THAT MAY BE SOLD FROM TIME TO TIME,
AND OUR FINANCIAL STATEMENTS AND THE NOTES TO THEM, ALL OF WHICH APPEAR
ELSEWHERE IN THIS PROSPECTUS OR IN THE DOCUMENTS INCORPORATED BY REFERENCE IN
THIS PROSPECTUS.
RADA ELECTRONIC INDUSTRIES LTD.
We are involved in the military and commercial aerospace industries. We are
engaged in the development, manufacture and sale of avionics systems (digital
video recorders, ground debriefing stations, stores management systems, flight
data recorders, inertial navigation systems), trainers upgrades, avionics
systems for the unmanned aerial vehicles market, and electro optic cameras for
airplanes and armored vehicles.
We were incorporated in Israel on December 8, 1970 and have one majority
owned subsidiary in China. Our registered offices and principal place of
business are located at 7 Giborei Israel Street, Netanya 42504, Israel, and our
telephone number is 972-9-892-1111. Our address on the internet is www.RADA.com.
ISSUANCE OF SECURITIES
On June 29, 2007 we entered into an amendment and exchange agreement with
certain of the investors that participated in a private placement of our shares
in 2002, or the 2002 Private Placement. Pursuant to such agreement we received a
loan in the principal aggregate amount of $400,000 for a period of three years
which bears interest at a rate of 8% per annum, paid in arrears on a quarterly
basis. In consideration for the loan we extended warrants to purchase up to an
aggregate of 155,782 ordinary shares, issued to certain of these investors in
the 2002 Private Placement until June 30, 2010, and repriced the exercise price
of warrants to purchase up to an aggregate of 606,804 ordinary shares issued to
certain of the investors in the 2002 Private Placement, to $1.88 per share from
$6.00 per share. Such warrants were also extended until June 30, 2010. On
January 9, 2008, we repaid $300,000 of the principal amount of the loan in
consideration for 152,765 ordinary shares.
On December 10, 2007 we issued to Howard P.L. Yeung, our controlling
shareholder, a $3.0 million convertible note. The convertible note will mature
on December 10, 2010, bears interest at a rate of six month Libor plus 3.5% and
is convertible into ordinary shares at a conversion price of $2.09 per share. In
addition, we granted Mr. Yeung the right to purchase up to an aggregate of
1,578,947 ordinary shares at $2.375 per share issuable upon the exercise of a
warrant which will expire on December 10, 2012. We refer to the convertible note
and the warrant together as the Loan Agreement.
We are filing this prospectus, at our expense, as required by the amendment
and exchange agreement mentioned above and a registration rights agreement
entered into with Mr. Yeung on December 10, 2007. We will not receive any
proceeds from the resale of the ordinary shares by the selling shareholders.
4
THE OFFERING
Ordinary shares offered 3,929,705 shares, including 152,765
ordinary shares that were issued to the
selling shareholders, up to 1,435,407
ordinary shares that issueable upon
conversion of a convertible note and
up to 2,341,533 shares issuable upon
exercise of outstanding warrants.
NASDAQ Capital Market Symbol "RADA"
Use of proceeds We will not receive any proceeds from the
sale of the existing ordinary shares
offered hereby. We will, however, receive
the economic benefit of the convertible
note and the proceeds from the exercise
of the warrants if and when they are
exercised.
Ordinary shares outstanding 8,858,553 shares
Risk Factors Prospective investors should carefully
consider the Risk Factors beginning on
Page 6 before buying the ordinary shares
offered hereby.
5
RISK FACTORS
INVESTING IN OUR ORDINARY SHARES INVOLVES A HIGH DEGREE OF RISK AND
UNCERTAINTY. YOU SHOULD CAREFULLY CONSIDER THE RISKS AND UNCERTAINTIES DESCRIBED
BELOW BEFORE INVESTING IN OUR ORDINARY SHARES. OUR BUSINESS, PROSPECTS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE ADVERSELY AFFECTED DUE TO
ANY OF THE FOLLOWING RISKS. IN THAT CASE, THE VALUE OF OUR ORDINARY SHARES COULD
DECLINE, AND YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT.
RISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
WE HAVE A HISTORY OF LOSSES, AND MAY NOT BE ABLE TO ACHIEVE OR SUSTAIN
PROFITABILITY IN THE FUTURE.
In the year ended December 31, 2007, we recorded a net loss of $1.1
million, and we have incurred losses in three out of the last five years. As of
December 31, 2007 our accumulated deficit was $62.4 million. We may not be able
to achieve or sustain profitability in the future.
WE MAY NEED TO RAISE ADDITIONAL CAPITAL IN THE FUTURE, WHICH MAY NOT BE
AVAILABLE TO US.
Our working capital requirements and the cash flow from our operating
activities are likely to vary greatly from quarter to quarter, depending on the
timing of orders and deliveries, the build-up of inventories, and the payment
terms offered to our customers. As a consequence of our significant losses, we
incurred significant bank debt and sold equity and debt securities in private
placements in the years 1997 through 2007. We may need to raise additional funds
for a number of uses, including:
o Working capital and operating activities;
o Implementing marketing and sales activities for our products;
o Maintaining and expanding research and development programs;
o Hiring additional qualified personnel; and
o Supporting an increased level of operations.
We may not be able to obtain additional funds on favorable terms. If we
cannot raise needed funds on favorable terms, we may be required to delay, scale
back or eliminate some aspects of our operations and we may not be able to:
o Develop new products;
o Enhance our existing products;
o Remain current with evolving industry standards;
o Fulfill our contractual obligations;
o Take advantage of future opportunities;
o Respond to competitive pressures or unanticipated requirements; or
o Retain our listing on the NASDAQ Capital Market.
If adequate funds are not available to us, our business, and results of
operations and financial condition will be materially and adversely affected.
Any equity or debt financings may cause dilution to our then-existing
shareholders and may increase our financing expenses. If additional funds are
raised through the issuance of equity securities, the net tangible book value
per share of our ordinary shares would decrease and the percentage ownership of
then current shareholders would be diluted.
6
WE MAY NOT BE ABLE TO IMPLEMENT OUR GROWTH STRATEGY, WHICH COULD ADVERSELY
AFFECT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
In line with our growth strategy, we have entered into teaming agreements
and other co-operation agreements with General Electric Aviation Systems
(formerly Smiths Aerospace Electronic Systems) or GE Aviation, and Lockheed
Martin Aerospace to increase our penetration into the aviation market. We are
currently investing and intend to continue to invest significant resources to
develop these relationships. Should our relationships fail to materialize into
significant agreements or should we fail to work efficiently with such parties,
we may lose sales and marketing opportunities and our business, results of
operations and financial condition could be adversely affected.
Our growth is partially dependant on the development of new products, based
on internal research and development. Although we carefully analyze the market
needs before we invest in the development of a new product, we cannot be sure
that the needs we identify are true, we might face difficulties or delays in the
development process that will result in changes of the market needs and
competing products may emerge during the development and certification process.
COMPETITION IN THE MARKET FOR AUTOMATED TEST EQUIPMENT AND AVIONICS EQUIPMENT IS
INTENSE. OUR PRODUCTS MAY NOT ACHIEVE MARKET ACCEPTANCE, WHICH COULD ADVERSELY
AFFECT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The market for our products is highly competitive, and we may not be able
to compete effectively in our market. Our principal competitors in the automated
test equipment market are Zaban in Israel, and Aerospatiale Avionique and Avtron
abroad. Our principal competitors in the avionics market are Harris, Rockwell
Collins, Honeywell, Elbit Systems Ltd., or Elbit, Israel Aircraft Industries
Ltd., or IAI, R.S.L. Ltd., TEAC, Enertec and Calculex. We expect to continue to
face competition from these and other competitors. Most, if not all, of our
competitors are far larger, have substantially greater resources including
financial, technological, marketing and distribution capabilities, and enjoy
greater market recognition than we have. These competitors may be able to
achieve greater economies of scale and may be less vulnerable to price
competition than us. We may not be able to offer our products as part of
integrated systems to the same extent as our competitors or successfully develop
or introduce new products that are more cost effective or offer better
performance than those of our competitors. Failure to do so could adversely
affect our business, financial condition and results of operations.
OUR INITIATIVE OF PROVIDING MANUFACTURING SERVICES MAY NOT SUCCEED, AND AS A
RESULT, WE MAY BE UNABLE TO ACHIEVE PROFITABILITY IN OUR BEIT-SHE'AN PRODUCTION
FACILITY AND MAY BE FORCED TO SHUT DOWN ITS OPERATIONS.
In June 2000, we began to provide manufacturing services to original
equipment manufacturers in Israel and the United States, using the manufacturing
capabilities of our Beit-She'an plant. The market for our manufacturing services
is highly competitive, and we may not be able to compete effectively in this
market. The cost of labor and the efficiency of the production equipment and
production processes are crucial to our success in this market. Consequently,
should we fail to maintain low labor costs, enhance our production equipment and
develop new and more efficient production methods, we may have to shut down the
operations of our Beit-She'an plant, which may harm our competitiveness and
could adversely affect our business, results of operations and financial
condition.
REDUCTION IN MILITARY BUDGETS WORLDWIDE MAY CAUSE A REDUCTION IN OUR REVENUES,
WHICH WOULD ADVERSELY AFFECT OUR BUSINESS, OPERATING RESULTS AND FINANCIAL
CONDITION.
A significant portion of our revenues is derived from the sale of products
with military applications. These revenues, on a consolidated basis, totaled
approximately $11.6 million, or 83% of revenues, in 2007, $11.6 million, or 89%,
of revenues in 2006 and $11.8 million, or 88 % of revenues, in 2005. The
military budgets of a number of countries may be reduced in the future. Declines
in military budgets may result in reduced demand for our products and
manufacturing services. This would result in reduction in our core business'
revenues and adversely affect our business, results of operations and financial
condition.
7
SALES OF OUR PRODUCTS ARE SUBJECT TO GOVERNMENTAL PROCUREMENT PROCEDURES AND
PRACTICES; TERMINATION, REDUCTION OR MODIFICATION OF CONTRACTS WITH OUR
CUSTOMERS, AND ESPECIALLY WITH THE GOVERNMENT OF ISRAEL, OR A SUBSTANTIAL
DECREASE IN OUR CUSTOMERS' BUDGETS MAY ADVERSELY AFFECT OUR BUSINESS, OPERATING
RESULTS AND FINANCIAL CONDITION.
Our military aviation products are sold primarily to government agencies
and authorities and government-owned companies, many of which have complex and
time-consuming procurement procedures. A long period of time often elapses from
the time we begin marketing a product until we actually sell that product to a
particular customer. In addition, our sales to government agencies, authorities
and companies are directly affected by these customers' budgetary constraints
and the priority given in their budgets to the procurement of our products.
Further, our business with the State of Israel and other governmental
entities is, in general, subject to delays in funding and performance of
contracts and the termination of contracts or subcontracts for convenience,
among others. The termination, reduction or modification of our contracts or
subcontracts with the Government of Israel in the event of change in
requirements, policies or budgetary constraints would have an adverse effect on
our business, operating results and financial condition.
IF WE DO NOT RECEIVE THE GOVERNMENTAL APPROVALS NECESSARY FOR THE EXPORT OF OUR
PRODUCTS, OUR REVENUES MAY DECREASE. SIMILARLY IF OUR SUPPLIERS AND PARTNERS DO
NOT RECEIVE GOVERNMENT APPROVALS NECESSARY TO EXPORT THEIR PRODUCTS OR DESIGNS
TO US, OUR REVENUES MAY DECREASE AND WE MAY FAIL TO IMPLEMENT OUR GROWTH
STRATEGY.
Under Israeli law, the export of certain of our products and know-how is
subject to approval by the Israeli Ministry of Defense. To initiate sales
proposals with regard to exports of our products and know-how and to export such
products or know-how, we must obtain permits from the Ministry of Defense. We
may not be able to receive in a timely manner all the required permits for which
we may apply in the future.
Similarly, under foreign laws the export of certain military products,
technical designs and spare parts require the prior approval of, or export
license from, such foreign governments. In order to maintain our third party
production, certain co-development activities and procurements required for the
performance of certain contracts, we must receive detailed technical designs,
products or products' parts samples from our strategic partners or suppliers. We
may not be able to receive all the required permits and/or licenses in a timely
manner. Consequently, our revenues may decrease and we may fail to implement our
growth strategy.
WE DEPEND ON SALES TO KEY CUSTOMERS AND THE LOSS OF ONE OR MORE OF OUR KEY
CUSTOMERS WOULD RESULT IN A LOSS OF A SIGNIFICANT AMOUNT OF OUR REVENUES, WHICH
WOULD ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
A significant portion of our revenues is derived from a small number of
customers. Our major customers during the three years ended December 31, 2007
were as follows:
PERCENTAGE OF REVENUES
------------------------------------------
2005 2006 2007
---------- ---------- ----------
GE Aviation 21% 38% 17%
Israeli Ministry of Defense 12% 5% 5%
Israel Aviation Industries 14% 20% 17%
RAFAEL Advanced Defense Systems - 2% 10%
Lockheed Martin 12% 9% 4%
Hindustan Aeronautics 5% 3% 14%
We anticipate that a significant portion of our future revenues will
continue to be derived from sales to a small number of customers. If our
principal customers do not continue to purchase products from us at current
levels or if such customers are not retained and we are not able to derive
sufficient revenues from sales to new customers to compensate for their loss,
our revenues would be reduced and adversely affect our business, financial
condition and results of operations.
8
WE DEPEND ON A LIMITED NUMBER OF SUPPLIERS OF COMPONENTS FOR OUR PRODUCTS AND IF
WE ARE UNABLE TO OBTAIN THESE COMPONENTS WHEN NEEDED, WE WOULD EXPERIENCE DELAYS
IN MANUFACTURING OUR PRODUCTS AND OUR FINANCIAL RESULTS COULD BE ADVERSELY
AFFECTED.
We acquire most of the components for the manufacturing of our products
from a limited number of suppliers and subcontractors, most of whom are located
in Israel and the United States. Certain of these suppliers are currently the
sole source of one or more components upon which we are dependent. Suppliers of
some of the components for manufacturing require us to place orders with
significant lead-time to assure supply in accordance with our manufacturing
requirements. Inadequacy of operating funds may cause us to delay placement of
such orders and may result in delays in supply. Delays in supply may
significantly hurt our ability to fulfill our contractual obligations and may
significantly hurt our business and result of operations. We may not be able to
continue to obtain such components from these suppliers on satisfactory
commercial terms. Temporary disruptions of our manufacturing operations would
ensue if we were required to obtain components from alternative sources, which
may have an adverse effect on our financial results.
RAPID TECHNOLOGICAL CHANGES MAY ADVERSELY AFFECT THE MARKET ACCEPTANCE OF OUR
PRODUCTS AND COULD ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The avionics market in which we compete is subject to technological
changes, introduction of new products, change in customer demands and evolving
industry standards. Our future success will depend upon our ability to keep pace
with technological developments and to timely address the increasingly
sophisticated needs of our customers by supporting existing and new technologies
and by developing and introducing enhancements to our current products and new
products. We may not be successful in developing and marketing enhancements to
our products that will respond to technological change, evolving industry
standards or customer requirements. In addition, we may experience difficulties
that could delay or prevent the successful development, introduction and sale of
such enhancements and such enhancements may not adequately meet the requirements
of the market and may not achieve any significant degrees of market acceptance.
If release dates of our new products or enhancements are delayed or, if when
released, they fail to achieve market acceptance, our business, operating
results and financial condition would be materially adversely affected.
WE MAY ENCOUNTER DIFFICULTIES WITH OUR INTERNATIONAL OPERATIONS AND SALES.
Exports accounted for 62% of our sales in 2007, 67% of our sales in 2006
and 59% of our sales in 2005. This subjects us to many risks inherent in
engaging in export international business, including:
o Limitations and disruptions resulting from the imposition of
government controls;
o Changes in regulatory requirements;
o Export license requirements;
o Economic or political instability;
o Trade restrictions;
o Changes in tariffs;
o Currency fluctuations;
o Longer receivable collection periods and greater difficulty in
accounts receivable collection;
o Greater difficulty in safeguarding intellectual property;
o Difficulties in managing overseas subsidiaries and international
operations; and
o Potential adverse tax consequences.
We may not be able to sustain or increase revenues from international
operations and may encounter significant difficulties in connection with the
sale of our products in international markets. Any of these events will have a
material adverse affect on our business, operating results and financial
condition.
9
CURRENCY EXCHANGE RATE FLUCTUATIONS IN THE WORLD MARKETS IN WHICH WE CONDUCT
BUSINESS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, RESULTS OF
OPERATIONS AND FINANCIAL CONDITION.
We may be adversely affected by fluctuations in currency exchange rates.
While our revenues are generally denominated in U.S. dollars, a significant
portion of our expenses is incurred in NIS. As of December 31, 2007 our losses
due to the decrease of the U.S. dollars were approximately $200,000. We do not
currently engage in any currency hedging transactions intended to reduce the
effect of fluctuations in foreign currency exchange rates on our results of
operations. If we were to determine that it was in our best interests to enter
into any hedging transactions in the future, we may not be able to do so.
Furthermore, such transactions, if entered into, may not materially reduce the
effect of fluctuations in foreign currency exchange rates on our results of
operations. In addition, if for any reason, exchange or price controls or other
restrictions on the conversion of foreign currencies into NIS were imposed, our
business could be adversely affected. In the future, such fluctuations may have
a material adverse effect on revenues from international sales, operating
expenses and consequently, on our business, operating results and financial
condition.
WE ARE DEPENDENT ON OUR SENIOR MANAGEMENT AND KEY PERSONNEL, IN PARTICULAR
HERZLE BODINGER, THE CHAIRMAN OF OUR BOARD OF DIRECTORS, AND OUR PRESIDENT, AND
MR. ZVI ALON, OUR CHIEF EXECUTIVE OFFICER, WHOSE LOSS COULD ADVERSELY AFFECT OUR
BUSINESS.
Our future success depends in large part on the continued services of our
senior management and key personnel. In particular, we are dependent on the
services of Herzle Bodinger, the chairman of our Board of Directors and our
president, and Mr. Zvi Alon, our chief executive officer. Any loss of the
services of Herzle Bodinger, other members of senior management or other key
personnel could negatively and materially affect our business.
OUR PROPRIETARY TECHNOLOGY IS DIFFICULT TO PROTECT AND UNAUTHORIZED USE OF OUR
PROPRIETARY TECHNOLOGY BY THIRD PARTIES MAY IMPAIR OUR ABILITY TO COMPETE
EFFECTIVELY, WHICH COULD ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Our success and ability to compete largely depends upon protecting our
proprietary technology. We rely on a combination of trade secrets, copyright law
and confidentiality, non-disclosure and assignment-of-inventions agreements to
protect our proprietary technology. Except for a patent that relates to our
ACE(TM) system, we do not have any patents.
OUR PRODUCTS MAY INFRINGE ON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS.
Third parties may assert infringement claims against us or claims that we
have violated a patent or infringed on a copyright, trademark or other
proprietary right belonging to them. In addition, any infringement claim, even
one without merit, could result in the expenditure of significant financial and
managerial resources to defend.
THE STATUS OF OUR CHINESE SUBSIDIARY AND ITS JOINT VENTURE WITH BEIJING TIANZU
FORESTRY COMPANY IS UNCERTAIN AND WE MAY BE REQUIRED TO INITIATE LITIGATION IN
ORDER TO ENFORCE OUR RIGHTS.
Beijing Huarui Aircraft Components Maintenance and Services Co., Ltd. or
CACS, our Chinese subsidiary, conducts its business in an approximately 16,000
square foot facility in Beijing that includes offices and test and repair
facilities. The land for this facility was leased by Beijing Tianzu Forestry
Company or Tianzu, the minority shareholder in CACS, from the Chinese government
for 30 years. Under a joint venture agreement, and in consideration for its
equity investment in CACS, Tianzu granted CACS usage rights in the land,
constructed the buildings and granted CACS the ownership of these buildings.
However, the transfer of the title to the land and the buildings has not been
completed. Although Tianzu is legally obligated to complete such transfer of
title to the land and the buildings, such transfer may not be completed and we
may be required to initiate litigation in order to enforce our rights to receive
title to the land and buildings.
WE MAY FAIL TO MAINTAIN EFFECTIVE INTERNAL CONTROLS IN ACCORDANCE WITH SECTION
404 OF THE SARBANES-OXLEY ACT OF 2002, WHICH COULD HAVE AN ADVERSE EFFECT ON OUR
FINANCIAL RESULTS AND THE MARKET PRICE OF OUR ORDINARY SHARES.
The Sarbanes-Oxley Act of 2002 imposes certain duties on us and our
executives and directors. Our efforts to comply with the requirements of Section
404 of the Sarbanes-Oxley Act of 2002 governing internal controls and procedures
for financial reporting, which started in connection with this Annual Report on
Form 20-F, have resulted in increased general and administrative expense and a
diversion of management time and attention, and we expect these efforts to
require the continued commitment of significant resources. We may identify
material weaknesses or significant deficiencies in our assessments of our
internal controls over financial reporting. Failure to maintain effective
internal controls over financial reporting could result in investigation or
sanctions by regulatory authorities and could have a material adverse effect on
our operating results, investor confidence in our reported financial information
and the market price of our ordinary shares.
10
RISK FACTORS RELATED TO OUR ORDINARY SHARES
OUR SHARE PRICE HAS BEEN VOLATILE IN THE PAST AND MAY DECLINE IN THE FUTURE.
Our ordinary shares have experienced significant market price and volume
fluctuations in the past and may experience significant market price and volume
fluctuations in the future in response to factors such as the following, some of
which are beyond our control:
o Quarterly variations in our operating results;
o Operating results that vary from the expectations of securities
analysts and investors;
o Changes in expectations as to our future financial performance,
including financial estimates by securities analysts and investors;
o Announcements of technological innovations or new products by us or
our competitors;
o Announcements by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments;
o Changes in the status of our intellectual property rights;
o Announcements by third parties of significant claims or proceedings
against us;
o Additions or departures of key personnel;
o Future sales of our ordinary shares;
o Delisting of our shares from the NASDAQ Capital Market; and
o Stock market price and volume fluctuations.
Domestic and international stock markets often experience extreme price and
volume fluctuations. Market fluctuations, as well as general political and
economic conditions, such as a recession or interest rate or currency rate
fluctuations or political events or hostilities in or surrounding Israel, could
adversely affect the market price of our ordinary shares.
In the past, securities class action litigation has often been brought
against companies following periods of volatility in the market price of its
securities. We may in the future be the target of similar litigation. Securities
litigation could result in substantial costs and divert management's attention
and resources both of which could have a material adverse effect on our business
and results of operations.
SUBSTANTIAL FUTURE SALES OF OUR ORDINARY SHARES MAY DEPRESS OUR SHARE PRICE.
If our principal shareholders sell substantial amounts of their ordinary
shares, including shares registered under effective registration statements and
shares issuable upon the exercise of outstanding warrants, or convertible notes,
or if the perception exists that our principal shareholders may sell a
substantial number of our ordinary shares, the market price of our ordinary
shares may fall. Any substantial sales of our shares in the public market also
might make it more difficult for us to sell equity or equity-related securities
in the future at a time, in a place and on terms we deem appropriate.
WE DO NOT INTEND TO PAY DIVIDENDS.
We have never declared or paid cash dividends on our ordinary shares and do
not expect to do so in the foreseeable future. The declaration of dividends is
subject to the discretion of our board of directors and will depend on various
factors, including our operating results, financial condition, future prospects
and any other factors deemed relevant by our board of directors. You should not
rely on an investment in our company if you require dividend income from your
investment in our company. The success of your investment will likely depend
entirely upon any future appreciation of the market price of our ordinary
shares, which is uncertain and unpredictable. There is no guarantee that our
ordinary shares will appreciate in value or even maintain the price at which you
purchased your ordinary shares.
11
RISKS RELATING TO OUR LOCATION IN ISRAEL
POLITICAL, ECONOMIC AND MILITARY INSTABILITY IN ISRAEL MAY DISRUPT OUR
OPERATIONS AND NEGATIVELY AFFECT OUR BUSINESS CONDITION, HARM OUR RESULTS OF
OPERATIONS AND ADVERSELY AFFECT OUR SHARE PRICE.
We are incorporated under the laws of, and our principal executive offices
and manufacturing and research and development facilities are located in, the
State of Israel. As a result, political, economic and military conditions
affecting Israel directly influence us. Any major hostilities involving Israel,
a full or partial mobilization of the reserve forces of the Israeli army, the
interruption or curtailment of trade between Israel and its present trading
partners, or a significant downturn in the economic or financial condition of
Israel could have a material adverse effect on our business, financial condition
and results of operations.
Since the establishment of the State of Israel in 1948, Israel and its Arab
neighbors have engaged in a number of armed conflicts. A state of hostility,
varying from time to time in intensity and degree, has led to security and
economic problems for Israel. Major hostilities between Israel and its neighbors
may hinder Israel's international trade and lead to economic downturn. This, in
turn, could have a material adverse effect on our operations and business. There
has been an increase in unrest and terrorist activity in Israel, which began in
September 2000 and which has continued with varying levels of severity through
2007. The future effect of this deterioration and violence on the Israeli
economy and our operations is unclear. Recently, there was an escalation in
violence among Israel, Hamas, the Palestinian Authority and other groups, as
well as extensive hostilities along Israel's northern border with Lebanon in the
summer of 2006, and extensive hostilities along Israel's border with the Gaza
Strip since June 2007 when the Hamas effectively took control of the Gaza Strip,
which have intensified since February 2008. Ongoing violence between Israel and
the Palestinians as well as tension between Israel and the neighboring Syria and
Lebanon may have a material adverse effect on our business, financial conditions
and results of operations.
Many of our executive officers and employees in Israel are obligated to
perform annual military reserve duty and are subject to being called for active
duty under emergency circumstances. If a military conflict or war arises, these
individuals could be required to serve in the military for extended periods of
time. Our operations could be disrupted by the absence for a significant period
of one or more of our executive officers or key employees or a significant
number of other employees due to military service. Any disruption in our
operations could adversely affect our business.
FLUCTUATIONS IN THE EXCHANGE RATE BETWEEN THE U.S. DOLLAR AND FOREIGN CURRENCIES
MAY AFFECT OUR OPERATING RESULTS.
A significant portion of the cost of our operations, mainly personnel and
facility-related, is incurred in NIS. Therefore, our NIS related costs, as
expressed in U.S. dollars, are influenced by the exchange rate between the U.S.
dollar and the NIS. In addition, if the rate of inflation in Israel exceeds the
rate of devaluation of the NIS in relation to the U.S. dollar, or if the timing
of such devaluations were to lag considerably behind inflation, our cost as
expressed in U.S. dollars may increase. NIS linked balance sheet items may
create foreign exchange gains or losses, depending upon the relative dollar
values of the NIS at the beginning and end of the reporting period, affecting
our net income and earnings per share. Although we may use hedging techniques we
may not be able to eliminate the effects of currency fluctuations. Thus,
exchange rate fluctuations could have a material adverse impact on our operating
results and share price.
SERVICE AND ENFORCEMENT OF LEGAL PROCESS ON US AND OUR DIRECTORS AND OFFICERS
MAY BE DIFFICULT TO OBTAIN.
Service of process upon our directors and officers and the Israeli experts
named herein, most of whom reside outside the United States, may be difficult to
obtain within the United States. Furthermore, since substantially all of our
assets, most of our directors and officers and the Israeli experts named in this
annual report are located outside the U.S., any judgment obtained in the United
States against us or these individuals or entities may not be collectible within
the United States.
12
There is doubt as to the enforceability of civil liabilities under the
Securities Act and the Securities Exchange Act in original actions instituted in
Israel. However, subject to certain time limitations and other conditions,
Israeli courts may enforce final judgments of United States courts for
liquidated amounts in civil matters, including judgments based upon the civil
liability provisions of those Acts.
YOUR RIGHTS AND RESPONSIBILITIES AS A SHAREHOLDER WILL BE GOVERNED BY ISRAELI
LAW AND DIFFER IN SOME RESPECTS FROM THOSE OF A TYPICAL U.S. CORPORATION.
Because we are an Israeli company, the rights and responsibilities of our
shareholders are governed by our articles of association and by Israeli law.
These rights and responsibilities differ in some respects from the rights and
responsibilities of shareholders in a typical U.S. corporation. In particular, a
shareholder of an Israeli company has a duty to act in good faith towards the
company and other shareholders and to refrain from abusing his, her or its power
in the company, including, among other things, in voting at the general meeting
of shareholders on certain matters. Israeli law provides that these duties are
applicable to shareholder votes on, among other things, amendments to a
company's articles of association, increases in a company's authorized share
capital, mergers and interested party transactions requiring shareholder
approval. In addition, a shareholder who knows that it possesses the power to
determine the outcome of a shareholders' vote or to appoint or prevent the
appointment of a director or executive officer in the company has a duty of
fairness towards the company. However, Israeli law does not define the substance
of this duty of fairness. Because Israeli corporate law has undergone extensive
revisions in recent years, there is little case law available to assist in
understanding the implications of these provisions that govern shareholder
behavior.
AS A FOREIGN PRIVATE ISSUER WHOSE SHARES ARE LISTED ON THE NASDAQ CAPITAL
MARKET, WE MAY FOLLOW CERTAIN HOME COUNTRY CORPORATE GOVERNANCE PRACTICES
INSTEAD OF CERTAIN NASDAQ REQUIREMENTS.
As a foreign private issuer whose shares are listed on the NASDAQ Capital
Market, we are permitted to follow certain home country corporate governance
practices instead of certain requirements of the NASDAQ Marketplace Rules. A
foreign private issuer that elects to follow a home country practice instead of
such requirements, must submit to NASDAQ in advance a written statement from an
independent counsel in such issuer's home country certifying that the issuer's
practices are not prohibited by the home country's laws. In addition, a foreign
private issuer must disclose in its annual reports filed with the Securities and
Exchange Commission or on its website each such requirement that it does not
follow and describe the home country practice followed by the issuer instead of
any such requirement. As a foreign private issuer listed on the NASDAQ Capital
Market, we may follow home country practice with regard to, among other things,
composition of the board of directors, director nomination procedure,
compensation of officers, and quorum at shareholders' meetings. In addition, we
may follow our home country law, instead of the NASDAQ Marketplace Rules, which
require that we obtain shareholder approval for certain dilutive events, such as
for the establishment or amendment of certain equity based compensation plans,
an issuance that will result in a change of control of the company, certain
transactions other than a public offering involving issuances of a 20% or more
interest in the company and certain acquisitions of the stock or assets of
another company.
13
CAPITALIZATION AND INDEBTEDNESS
The table below sets forth the capitalization and indebtedness of our
company as of December 31, 2007,on an actual basis and as adjusted to give
effect to the issuance of 152,765 ordinary shares at a price of $1.964 per share
in connection with a loan repayment in January 2008. Such ordinary shares are
being registered for resale in this prospectus.
DECEMBER 31, 2007 DECEMBER 31, 2007
------------ ------------
Actual As Adjusted
(in thousands) (in thousands)
Short-term bank credit and current maturities of long-term loans 490 490
Loan from shareholders, net 261 65
Convertible note from a shareholder, net 1,622 1,622
Ordinary shares of NIS 0.015 par value, 16,333,333 shares
authorized; issued and outstanding 8,705,788 shares actual,
8,858,553 shares as adjusted 116 118
Additional paid-in capital 68,968 69,365
Accumulated deficit (62,359) (62,562)
------------ ------------
Total shareholders' equity $ 6,725 $ 6,921
============ ============
Total capitalization and indebtedness $ 9,098 $ 9,098
REASONS FOR THE OFFER AND USE OF PROCEEDS
We will not receive any of the proceeds from the sale by the selling
shareholders of our ordinary shares. We will, however, receive the proceeds from
the exercise of the warrants issued to selling shareholders if and when they are
exercised. We have agreed to bear all expenses relating to the registration of
the ordinary shares registered pursuant to the registration statements of which
this prospectus is a part.
MARKET PRICE DATA
Our ordinary shares trade on the NASDAQ Capital Market under the symbol
RADA. The following table sets forth, for the periods indicated, the range of
high and low sales prices of the ordinary shares on the NASDAQ Capital Market:
2006 HIGH LOW
---- ----- -----
First Quarter $3.90 $2.79
Second Quarter 2.85 1.95
Third Quarter 3.03 2.16
Fourth Quarter 2.67 1.98
2007 HIGH LOW
---- ----- -----
First Quarter $2.15 $1.74
Second Quarter 2.20 1.42
Third Quarter 2.55 1.52
Fourth Quarter 3.00 1.95
MONTHLY STOCK INFORMATION
The following table sets forth, for the most recent six months, the range
of high ask and low bid prices of our ordinary shares on the NASDAQ Capital
Market:
2007 HIGH LOW
---- ----- -----
October $2.15 $2.00
November 2.15 1.74
December 2.03 1.89
2008
----
January $2.80 $2.06
February 2.18 2.07
March 2.18 1.81
14
SELLING SHAREHOLDERS
The ordinary shares being offered by the selling shareholders were issued
or are issuable pursuant to an amendment and exchange agreement, dated June 29,
2007, an amendment to the amendment and exchange agreement, dated January 9,
2008, and the Loan Agreement dated December 10, 2007. We are registering the
ordinary shares in order to permit the selling shareholders to offer the shares
for resale from time to time.
Mr. Howard Yeung is the beneficial holder of 59.5% of our outstanding
shares. Accordingly, he may be deemed to control our company. All the selling
shareholders except for Mr.Yeung participated in our 2002 Private Placement. Mr.
Ben-Zion Gruber serves as our director since June 2002.
The table below lists the selling shareholders and other information
regarding the beneficial ownership of the ordinary shares by each of the selling
shareholders. The information in this table is based on 8,858,553 ordinary
shares outstanding as of April 9, 2008. The first column lists each of the
selling shareholders. The second and third columns list the number and
percentage of ordinary shares beneficially owned by each selling shareholder
prior to the offering, based on each selling shareholder's ownership of the
ordinary shares, as of April 9, 2008. The fourth column lists the ordinary
shares being offered by this prospectus by each of the selling shareholders. The
fifth and sixth columns of the following table assume the sale of all of the
ordinary shares offered by the selling shareholders pursuant to this prospectus.
The selling shareholders may sell all, some or none of their shares in this
offering.
PERCENTAGE OF PERCENTAGE
NUMBER OF ORDINARY NUMBER OF NUMBER OF OF ORDINARY
ORDINARY SHARES SHARES ORDINARY SHARES ORDINARY SHARES SHARES
BENEFICIALLY BENEFICIALLY OFFERED BENEFICIALLY BENEFICIALLY
NAME OF SELLING OWNED PRIOR TO OWNED PRIOR PURSUANT TO OWNED AFTER OWNED AFTER
SHAREHOLDER OFFERING TO OFFERING THIS PROSPECTUS OFFERING OFFERING
---------------- --------- --------- --------- --------- ---------
Howard P.L.Yeung (1) 7,061,872(2)(3) 59.5% 3,014,354 4,047,518 45.7%
Paul Schwartz (4) 193,971 2.1% 193,971(5) - -
Chaim Hershkovitz (6) 101,992 1.1% 101,992(7) - -
Ben-Zion Gruber (8) 34,014 0.4% 34,014(9) - -
The Shaar Fund Ltd.(10) 138,775 1.7% 138,775(11) - -
Henry Lefkowitz (12) 102,041 1.1% 102,041(13) - -
Yisrael Meir Deutsch (14) 100,000 1.1% 100,000(15) - -
Yekotel Zeit (16) 127,551 1.4% 127,551(17) - -
Zvi Oren (18) 17,007 0.2% 17,007(19) - -
Maury Greenspan (20) 100,000 1.1% 100,000(21) - -
15
(1) The address of Mr. Howard P.L. Yeung is 2202 Kodak House II, 39 Healthy
Street, North Point, Hong Kong.
(2) Of the 7,061,87 ordinary shares, 450,029 shares are held by Horsham
Enterprises Ltd., a corporation incorporated in the British Virgin Islands.
Messrs. Howard P.L. Yeung and his brother Kenneth Yeung are the beneficial
owners, in equal shares, of Horsham Enterprises Ltd. Accordingly, Messrs.
Yeung may be deemed to be the beneficial owners of the ordinary shares held
by Horsham Enterprises Ltd.
(3) Includes 1,435,407 ordinary shares issuable upon conversion of a
convertible note and 1,578,947 ordinary shares issuable upon the exercise
of currently exercisable warrants.
(4) The address of Mr. Paul Schwarz is 25 Agasi Street, Jerusalem 93877,
Israel.
(5) Includes 66,667 ordinary shares issuable upon the exercise of warrants.
(6) The address of Mr. Chaim Hershkovitz is 22 Admor Mikotzic, Bnei Brak,
Israel.
(7) Includes 76,531 ordinary shares issuable upon the exercise of warrants.
(8) The address of Mr. Gruber is 11 Hagefen Street, Efrat 90435, Israel.
(9) Includes 34,014 ordinary shares issuable upon the exercise of warrants.
(10) The address of the Shaar Fund Ltd. is Pareraweg 45, Curacao, Netherlands
Antilles. CK Management Ltd., a company incorporated in the British Virgin
Islands and the fully-owned subsidiary of Citco Fund Services, is the sole
director of the Shaar Fund, an open-end fund. Shaar Fund Advisory Services
Ltd., a company incorporated in the British Virgin Islands, has the sole
voting and dispositive power regarding the shares beneficially owned by
Citco Fund Services. Such voting and dispositive power is exercised on
behalf of Shaar Fund Advisory Services by Michael Karp who has sole
investment and voting power. Accordingly, Shaar Fund Advisory Services may
be deemed to be the beneficial owner of the ordinary shares held by the
Shaar Fund.
(11) Includes 138,775 ordinary shares issuable upon the exercise of warrants.
(12) The address of Mr. Henry Lefkowitz is 1927 52nd Street, Brooklyn, New York
11204. Mr. Lefkowitz is the spouse of Mrs. Greta Lefkowitz. Mr. Lefkowitz
disclaims any beneficial interest in the ordinary shares held by Mrs.
Lefkowitz.
(13) Includes 102,041 ordinary shares issuable upon the exercise of warrants.
(14) The address of Mr. Yisrael Meir Deutsch is 10 Chai Taib, Jerusalem, Israel.
(15) Includes 100,000 ordinary shares issuable upon the exercise of warrants.
(16) The address of Mr. Yekotel Zeit is 30 Reved Street, Bnei Brak, Israel.
(17) Includes 127,551 ordinary shares issuable upon the exercise of warrants.
(18) The address of Mr. Zvi Oren is 8 Dakar Street, Ramat Gan, Israel.
(19) Includes 17,007 ordinary shares issuable upon the exercise of warrants.
(20) The address of Mr. Maury Greenspan is 52 Agassi Street, Jerusalem, Israel.
(21) Includes 100,000 ordinary shares issuable upon the exercise of warrants.
OFFER STATISTICS, EXPECTED TIME TABLE
AND PLAN OF DISTRIBUTION
We are registering the ordinary shares issued and issuable upon conversion
of the convertible note and upon exercise of the warrants to permit the resale
of these ordinary shares by the holders of the ordinary shares, convertible note
and warrants from time to time after the date of this prospectus. We will not
receive any of the proceeds from the sale by the selling shareholders of the
ordinary shares. We will bear all fees and expenses incident to our obligation
to register the ordinary shares.
The selling shareholders may sell all or a portion of the ordinary shares
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the ordinary
shares are sold through underwriters or broker-dealers, the selling shareholders
will be responsible for underwriting discounts or commissions or agent's
commissions. The ordinary shares may be sold in one or more transactions at
fixed prices, at prevailing market prices at the time of the sale, at varying
prices determined at the time of sale, or at negotiated prices. These sales may
be effected in transactions, which may involve crosses or block transactions,
o on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;
o in the over-the-counter market;
16
o in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
o through the writing of options, whether such options are listed on an
options exchange or otherwise;
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;
o sales pursuant to Rule 144;
o broker-dealers may agree with the selling security holders 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.
If the selling shareholders effect such transactions by selling ordinary
shares to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling shareholders or commissions from
purchasers of the ordinary shares for whom they may act as agent or to whom they
may sell as principal (which discounts, concessions or commissions as to
particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of
the ordinary shares or otherwise, the selling shareholders may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the ordinary shares in the course of hedging in positions they assume.
The selling shareholders may also sell ordinary shares short and deliver
ordinary shares covered by this prospectus to close out short positions. The
selling shareholders may also loan or pledge ordinary shares to broker-dealers
that in turn may sell such shares.
The selling shareholders may pledge or grant a security interest in some or
all of the warrants or ordinary shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell the ordinary shares from time to time pursuant to this prospectus
or any amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act of 1933, as amended, amending, if necessary, the
list of selling shareholders to include the pledgee, transferee or other
successors in interest as selling shareholders under this prospectus. The
selling shareholders also may transfer and donate the ordinary shares in other
circumstances in which case the transferees, donees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.
The selling shareholders and any broker-dealer participating in the
distribution of the ordinary shares may be deemed to be "underwriters" within
the meaning of the Securities Act, and any commission paid, or any discounts or
concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act. At the time a particular
offering of the ordinary shares is made, a prospectus supplement, if required,
will be distributed which will set forth the aggregate amount of ordinary shares
being offered and the terms of the offering, including the name or names of any
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling shareholders and any discounts,
commissions or concessions allowed or reallowed or paid to broker-dealers.
17
Under the securities laws of some states, the ordinary shares may be sold
in such states only through registered or licensed brokers or dealers. In
addition, in some states the ordinary shares may not be sold unless such shares
have been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
There can be no assurance that any selling shareholder will sell any or all
of the ordinary shares registered pursuant to the shelf registration statement,
of which this prospectus forms a part.
The selling shareholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of purchases and sales of any of the ordinary shares by the selling shareholders
and any other participating person. Regulation M may also restrict the ability
of any person engaged in the distribution of the ordinary shares to engage in
market-making activities with respect to the ordinary shares. All of the
foregoing may affect the marketability of the ordinary shares and the ability of
any person or entity to engage in market-making activities with respect to the
ordinary shares.
We will pay all expenses of the registration of the ordinary shares
pursuant to the registration rights agreement, and the amendment and exchange
agreement; provided, however, that a selling shareholder will pay all
underwriting discounts and selling commissions, if any. We will indemnify the
selling shareholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreement, or the
selling shareholders will be entitled to contribution. We may be indemnified by
the selling shareholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling shareholder specifically for use in this prospectus, in
accordance with the related registration rights agreement and the amendment and
exchange agreement, or we may be entitled to contribution.
Once sold under the shelf registration statement, of which this prospectus
forms a part, the ordinary shares will be freely tradable in the hands of
persons other than our affiliates.
EXPENSES ASSOCIATED WITH THE REGISTRATION
We have agreed to bear all expenses relating to the registration of our
ordinary shares registered pursuant to the registration statement of which this
prospectus is a part. We estimate these expenses to be approximately $6,620,
which include the following categories of expenses:
SEC registration fee $ 359.08
Printing and photocopying 250
Legal fees and expenses 3,000
Accounting fees and expenses 3,000
Transfer agent and registrar fees and expenses -
Miscellaneous expenses 10.92
------------
Total Expenses $ 6,620
18
FOREIGN EXCHANGE CONTROLS AND OTHER LIMITATIONS
Non-residents of Israel who purchase our ordinary shares may freely convert
all amounts received in Israeli currency in respect of such ordinary shares,
whether as a dividend, liquidation distribution or as proceeds from the sale of
the ordinary shares, into freely-repatriable non-Israeli currencies at the rate
of exchange prevailing at the time of conversion (provided in each case that the
applicable Israeli income tax, if any, is paid or withheld).
Until May 1998, Israel imposed extensive restrictions on transactions in
foreign currency. These restrictions were largely lifted in May 1998. Since
January 1, 2003, all exchange control restrictions have been eliminated
(although there are still reporting requirements for foreign currency
transactions). Legislation remains in effect, however, pursuant to which
currency controls can be imposed by administrative action at any time.
The State of Israel does not restrict in any way the ownership or voting of
our ordinary shares by non-residents of Israel, except with respect to subjects
of countries that are in a state of war with Israel.
EXPERTS
The consolidated financial statements of RADA Electronic Industries Ltd.
and its subsidiary, appearing in RADA Electronic Industries Ltd. and its
subsidiary Annual Report (Form 20-F/A) for the year ended December 31, 2007,
have been audited by Kost Forer Gabbay & Kasierer, a member of Ernst & Young
Global, independent registered public accounting firm, as set forth in their
report thereon, included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
LEGAL MATTERS
Certain legal matters in connection with the registration of the ordinary
shares hereunder with respect to Israeli law will be passed upon for us by S.
Friedman & Co., Advocates, Tel Aviv, Israel, our Israeli counsel.
MATERIAL CHANGES
Except as otherwise described our Annual Report on Form 20-F for the fiscal
year ended December 31, 2007 and in our Reports on Form 6-K filed under the
Exchange Act and incorporated by reference herein, no reportable material
changes have occurred since December 31, 2007.
WHERE YOU CAN BEST FIND MORE INFORMATION; INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE
We file annual and special reports and other information with the
Securities and Exchange Commission (Commission File Number 0-15375). These
filings contain important information which does not appear in this prospectus.
For further information about us, you may read and copy these filings at the
SEC's public reference room at 450 Fifth Street, N.W, Washington, D.C. 20549.
You may obtain information on the operation of the public reference room by
calling the SEC at 1-800-SEC-0330, and may obtain copies of our filings from the
public reference room by calling (202) 551-8090.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to other documents which we have filed or will file with the SEC.
We are incorporating by reference in this prospectus the documents listed below
and all amendments or supplements we may file to such documents, as well as any
future filings we may make with the SEC on Form 20-F under the Exchange Act
before the time that all of the securities offered by this prospectus have been
sold or de-registered.
o Our Annual Report on Form 20-F and our amended Annual Report on Form
20-F/A, for the fiscal year ended December 31, 2007;
o Our Reports on Form 6-K submitted to the SEC on January 2, 2008,
January 10, 2008, January 14, 2008, February 13, 2008, March 10, 2008,
March 18, 2008 and March 28, 2008; and
19
o The description of our Ordinary Shares contained in our Registration
Statement on Form 8-A, File No. 0-15375, including any amendment or
reports for the purpose of updating such description.
In addition, we may incorporate by reference into this prospectus our
reports on Form 6-K filed after the date of this prospectus (and before the time
that all of the securities offered by this prospectus have been sold or
de-registered) if we identify in the report that it is being incorporated by
reference in this prospectus.
Certain statements in and portions of this prospectus update and replace
information in the above listed documents incorporated by reference. Likewise,
statements in or portions of a future document incorporated by reference in this
prospectus may update and replace statements in and portions of this prospectus
or the above listed documents.
We shall provide you without charge, upon your written or oral request, a
copy of any of the documents incorporated by reference in this prospectus, other
than exhibits to such documents which are not specifically incorporated by
reference into such documents. Please direct your written or telephone requests
to RADA Electronic Industries Ltd. 7 Giborei Israel Street, Netanya 42504,
Israel. Attn: Shiri Lazarovich, Chief Financial Officer, telephone number
(972)(9) 892-1111. You may also obtain information about us by visiting our
website at www.RADA.com. Information contained in our website is not part of
this prospectus.
We are an Israeli company and are a "foreign private issuer" as defined in
Rule 3b-4 under the Securities Exchange Act of 1934. As a result, (1) our proxy
solicitations are not subject to the disclosure and procedural requirements of
Regulation 14A under the Exchange Act, (2) transactions in our equity securities
by our officers and directors are exempt from Section 16 of the Exchange Act,
and (3) until November 4, 2002, we were not required to make, and did not make,
our SEC filings electronically, so that those filings are not available on the
SEC's Web site. However, since that date, we have been making all required
filings with the SEC electronically, and these filings are available over the
Internet at the SEC's Web site at http: // www.sec.gov.
In addition, we are not required under the Exchange Act to file periodic
reports and financial statements as frequently or as promptly as U.S. companies
whose securities are registered under the Exchange Act.
We make available annually to our shareholders an annual report containing
financial statements that have been examined and reported on, with an opinion
expressed by, an independent registered public accounting firm. We prepare our
financial statements in U.S. dollars and in accordance with accounting
principles generally accepted in the U.S.
ENFORCEABILITY OF CIVIL LIABILITIES
Service of process upon us and upon our directors and officers and the
Israeli experts named in this prospectus, most of whom reside outside the United
States, may be difficult to obtain within the United States. Furthermore,
because substantially all of our assets and substantially all of our directors
and officers are located outside the United States, any judgment obtained in the
United States against us or any of our directors and officers may not be
collectible within the United States.
We have been informed by our legal counsel in Israel, S. Friedman & Co.
Advocates, that there is doubt as to the enforceability of civil liabilities
under the Securities Act and the Exchange Act in original actions instituted in
Israel. However, subject to specified time limitations, Israeli courts may
enforce a United States final executory judgment in a civil matter including a
monetary or compensatory judgment in a non-civil matter, obtained after due
process before a court of competent jurisdiction according to the laws of the
state in which the judgment is given and the rules of private international law
currently prevailing in Israel, the laws of which do not prohibit the
enforcement of judgment of Israeli courts, provided that:
o the judgment is enforceable in the state in which it was given;
o adequate service of process has been effected and the defendant has
had a reasonable opportunity to present his arguments and evidence;
20
o the judgment and the enforcement thereof are not contrary to the law,
public policy, security or sovereignty of the State of Israel;
o the judgment was not obtained by fraud and does not conflict with any
other valid judgment in the same matter between the same parties; and
o an action between the same parties in the same matter is not pending
in any Israeli court at the time the lawsuit is instituted in the
foreign court and the judgment is no longer appealable and the
judgment is executory in the country in which it was given.
We have irrevocably appointed Puglisi & Associates as our agent to receive
service of process in any action against us in the state and federal courts
sitting in the City of New York, Borough of Manhattan arising out of this
offering or any purchase or sale of securities in connection therewith.
If a foreign judgment is enforced by an Israeli court, it generally will be
payable in Israeli currency, which can then be converted into non-Israeli
currency and transferred out of Israel. The usual practice in an action before
an Israeli court to recover an amount in a non-Israeli currency is for the
Israeli court to render judgment for the equivalent amount in Israeli currency
at the rate of exchange in force on the date thereof, but the judgment debtor
may make payment in foreign currency. Pending collection, the amount of the
judgment of an Israeli court stated in Israeli currency ordinarily will be
linked to the Israeli consumer price index plus interest at the annual statutory
rate set by Israeli regulations prevailing at such time. Judgment creditors must
bear the risk of unfavorable exchange rates.
21
RADA ELECTRONIC INDUSTRIES LTD.
3,929,705 ORDINARY SHARES
____________________________
PROSPECTUS
____________________________
You should rely only on the information incorporated by reference
or provided in this prospectus. We have not authorized anyone to
provide you with different information. We are not making any
offer to sell or buy any of the securities in any state where the
offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other
than the date that appears below.
2008
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 8. INDEMNIFICATION OF DIRECTORS AND OFFICERS
EXCULPATION OF OFFICE HOLDERS
The Israeli Companies Law provides that an Israeli company cannot exculpate
an office holder from liability with respect to a breach of his or her duty of
loyalty. If permitted by its articles of association, a company may exculpate in
advance an office holder from his or her liability to the company, in whole or
in part, with respect to a breach of his or her duty of care. However, a company
may not exculpate in advance a director from his or her liability to the company
with respect to a breach of his duty of care in the event of distributions.
INSURANCE OF OFFICE HOLDERS
The Israeli Companies Law provides that a company may, if permitted by its
articles of association, enter into a contract to insure office holders in
respect of liabilities incurred by the office holder with a respect to an act
performed in his or her capacity as an office holder, as a result of:
o a breach of the office holder's duty of care to the company or to
another person;
o a breach of the office holder's duty of loyalty to the company,
provided that the office holder acted in good faith and had reasonable
cause to assume that his or her act would not prejudice the company's
interests; or
o a financial liability imposed upon the office holder in favor of
another person.
INDEMNIFICATION OF OFFICE HOLDERS
The Israeli Companies Law provides that a company may, if permitted by its
articles of association, indemnify an office holder for acts or omissions
performed by the office holder in such capacity for:
o a monetary liability imposed on the office holder in favor of another
person by any judgment, including a settlement or an arbitrator's
award approved by a court;
o reasonable litigation expenses, including attorney's fees, actually
incurred by the office holder as a result of an investigation or
proceeding instituted against him or her by a competent authority,
provided that such investigation or proceeding concluded without the
filing of an indictment against the office holder or the imposition of
any monetary liability in lieu of criminal proceedings, or concluded
without the filing of an indictment against the office holder and a
monetary liability was imposed on the officer holder in lieu of
criminal proceedings with respect to a criminal offense that does not
require proof of criminal intent; and
o reasonable litigation expenses, including attorneys' fees, incurred by
the office holder or which were imposed on him or her by a court, in
an action instituted by the company or on the company's behalf or by
another person, against the office holder, or in a criminal charge
from which he was acquitted, or in a criminal proceeding in which the
office holder was convicted of a criminal offense which does not
require proof of criminal intent.
In accordance with the Israeli Companies Law, a company's articles of
association may permit the company to:
o prospectively undertake to indemnify an office holder, except that
with respect to a monetary liability imposed on the office holder by
any judgment, settlement or court-approved arbitration award, the
undertaking must be limited to types of events which the company's
board of directors deems foreseeable considering the company's actual
operations at the time of the undertaking, and to an amount or
standard that the board of directors has determined as reasonable
under the circumstances.
II - 1
o retroactively indemnify an office holder of the company.
LIMITATIONS ON EXCULPATION, INSURANCE AND INDEMNIFICATION
The Israeli Companies Law provides that neither a provision of the articles
of association permitting the company to enter into a contract to insure the
liability of an office holder, nor a provision in the articles of association or
a resolution of the board of directors permitting the indemnification of an
office holder, nor a provision in the articles of association exculpating an
office holder from duty to the company shall be valid, where such insurance,
indemnification or exculpation relates to any of the following:
o a breach by the office holder of his duty of loyalty unless, with
respect to insurance coverage or indemnification, the office holder
acted in good faith and had a reasonable basis to believe that the act
would not prejudice the company;
o a breach by the office holder of his duty of care if such breach was
committed intentionally or recklessly, unless the breach was committed
only negligently.
o any act or omission done with the intent to unlawfully yield a
personal benefit; or
o any fine or forfeiture imposed on the office holder.
Pursuant to the Israeli Companies Law, exculpation of, procurement of
insurance coverage for, and an undertaking to indemnify or indemnification of,
our office holders must be approved by our audit committee and our board of
directors and, if the office holder is a director, also by our shareholders.
Our Articles of Association allow us to insure, indemnify and exempt our
office holders to the fullest extent permitted by law, subject to the provisions
of the Israeli Companies Law. We currently maintain a directors and officers
liability insurance policy with a per claim and aggregate coverage limit of $7.5
million.
ITEM 9. EXHIBITS
(a) EXHIBITS
Exhibit No. Description of Exhibit
----------- ----------------------
4.1 Memorandum of Association of the Registrant (1)
4.2 Articles of Association of the Registrant (1)
4.3 Specimen of Ordinary Share Certificate (1)
4.4 Form of Amendment and Exchange Agreement dated
June 29, 2007
4.5 Form of Extended Warrant dated June 29, 2007
4.6 Form of Repriced and Extended Warrant dated June 29,
2007
4.7 Form of Amendment to Amendment and Exchange Agreement
dated June 29, 2007
4.8 Form of Convertible Note dated December 10, 2007
4.9 Form of Warrant dated December 10, 2007
4.10 Form of Registration Rights Agreement dated
December 10, 2007
5.1 Opinion of S. Friedman & Co., Advocates regarding
legality of the securities being registered
23.1 Consent of Kost Forer Gabbay & Kasierer, a Member of
Ernst & Young Global
23.3 Consent of S. Friedman & Co., Advocates (included in
Exhibit 5 hereto)
----------
(1) Previously filed as an exhibit to the Annual Report on Form 20-F for the
year ended December 31, 2000 and incorporated herein by reference.
II - 2
ITEM 10. UNDERTAKINGS
The undersigned Registrant hereby undertakes as follows:
(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 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this
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 this Registration Statement.
Provided, however, that paragraphs (i), (ii) and (iii) above do not
apply if the Registration Statement is on Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed or furnished to the Securities and
Exchange Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement or is contained in a form of prospectus filed
pursuant to Rule 424(b) that is part of the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, 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.
(4) To file a post-effective amendment to the registration statement to
include any financial statements required by Item 8.A of Form 20-F at the start
of any delayed offering or throughout a continuous offering. Financial
statements and information otherwise required by Section 10(a)(3) of the
Securities Act need not be furnished, provided that the Registrant includes in
the prospectus, by means of a post-effective amendment, financial statements
required pursuant to this paragraph and other information necessary to ensure
that all other information in the prospectus is at least as current as the date
of those financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective amendment need not be
filed to include financial statements and information required by Section
10(a)(3) of the Act or Rule 3-19 of Regulation S-K if such financial statements
and information are contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Form F-3.
(5) (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
II - 3
(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 part of the registration statement or made in a document incorporated or
deemed incorporated by reference into 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 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;
(6) 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 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(7) Insofar as indemnification for liabilities arising under the Securities
Act, may be permitted to directors, officers and controlling persons of the
Registrant, pursuant to the provisions described in Item 8 above, 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 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II - 4
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it complies with all of
the requirements for filing on Form F-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Netanya, Israel, on April 10, 2008.
By: /s/ Zvi Alon
----------------
Zvi Alon
Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, each director and officer whose
signature appears below constitutes and appoints, Zvi Alon and Shiri Lazarovich,
or either of these, his true and lawful attorney-in-fact and agent, with full
power of substitution and re-substitution, to sign in any and all capacities any
and all amendments or post-effective amendments to this registration statement
on Form F-3 and to file the same with all exhibits thereto and other documents
in connection therewith with the Securities and Exchange Commission, granting
such attorney-in-fact and agent full power and authority to do all such other
acts and execute all such other documents as he may deem necessary or desirable
in connection with the foregoing, as fully as the undersigned may or could do in
person, hereby ratifying and confirming all that such attorney-in-fact and agent
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities
indicated on April 10, 2008
Signature Title
--------- -----
/s/ Herzle Bodinger Chairman of the Board and President
-------------------
Herzle Bodinger
/s/ Zvi Alon Chief Executive Officer
------------
Zvi Alon
/s/ Shiri Lazarovich Chief Financial Officer
--------------------
Shiri Lazarovich
/s/ Adrian Berg Director
---------------
Adrian Berg
/s/ Roy Kui Chuen Chan Director
----------------------
Roy Kui Chuen Chan
/s/ Ben Zion Gruber Director
-------------------
Ben Zion Gruber
/s/ Michael Letchinger Director
----------------------
Michael Letchinger
/s/ Eli Akavia Outside Director
--------------
Eli Akavia
/s/ Nurit Mor Outside Director
-------------
Nurit Mor
II - 5