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United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2002.
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ____to ____.
Commission File Number 0-23212
Telular Corporation
(Exact name of Registrant as specified in its charter)
Delaware 36-3885440
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
647 North Lakeview Parkway
Vernon Hills, Illinois
60061
(Address of principal executive offices)
(Zip Code)
(847) 247-9400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No _____
---
The number of shares outstanding of the Registrant's common stock, par value
$.01, as of June 30, 2002, the latest practicable date, was 12,879,054 shares.
1
TELULAR CORPORATION
Index
Part I - Financial Information Page No.
--------
Item 1. Financial Statements:
Consolidated Balance Sheets
June 30, 2002 (unaudited) and September 30, 2001 3
Consolidated Statements of Operations (unaudited)
Three Months Ended June 30, 2002 and June 30, 2001 4
Consolidated Statements of Operations (unaudited)
Nine Months Ended June 30, 2002 and June 30, 2001 5
Consolidated Statement of Stockholders' Equity (unaudited)
Period from September 30, 2001 to June 30, 2002 6
Consolidated Statements of Cash Flows (unaudited)
Nine Months Ended June 30, 2002 and June 30, 2001 7
Notes to the Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
Item 3. Quantitative and Qualitative Disclosures about Market Risk 15
Part II - Other Information
Item 1. Legal Proceedings 17
Item 2. Changes in Securities and Recent Sales of Unregistered Securities 17
Item 6. Exhibits and Reports on Form 8-K 18
Signatures 22
Exhibit Index 23
2
TELULAR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
June 30, September 30,
2002 2001
---------------------- -------------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 31,647 $ 36,385
Restricted cash 3,789 -
Short term investment 6 15
Trade receivables, net of allowance for doubtful accounts of
$104 and $210 at June 30, 2002 and September 30, 2001,
respectively 5,812 5,151
Inventories, net 7,386 10,008
Prepaid expenses and other current assets 673 363
---------------------- -------------------
Total current assets 49,313 51,922
Restricted cash - 3,000
Property and equipment, net 3,339 3,743
Other assets:
Excess of cost over fair value of net assets acquired 2,554 2,554
Other intangible assets, less accumulated amortization of
$500 and $125 at June 30, 2002 and September 20, 2001,
respectively 500 875
Deposits and other 303 75
---------------------- -------------------
Total other assets 803 950
---------------------- -------------------
Total assets $ 56,009 $ 62,169
====================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,367 $ 8,470
Accrued liabilities 1,163 1,700
Current portion of revolving line of credit 3,789 -
---------------------- -------------------
Total current liabilities 9,319 10,170
Long term revolving line of credit - 3,000
---------------------- -------------------
Total liabilities 9,319 13,170
---------------------- -------------------
Stockholders' equity:
Common stock; $.01 par value; 75,000,000 shares
authorized; 12,879,054 and 12,810,998 outstanding
at June 30, 2002 and September 30, 2001, respectively 129 129
Additional paid-in capital 149,484 149,071
Deficit (102,923) (99,904)
Accumulated other comprehensive loss - (297)
---------------------- -------------------
Total stockholders' equity 46,690 48,999
---------------------- -------------------
Total liabilities and stockholders' equity $ 56,009 $ 62,169
====================== ===================
See accompanying notes
3
TELULAR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share data)
(Unaudited)
Three Months Ended June 30,
2002 2001
--------------- ---------------
Net product sales $ 15,513 $ 28,093
Royalty revenue 112 250
--------------- ---------------
Total revenue 15,625 28,343
Cost of sales 11,129 19,797
--------------- ---------------
4,496 8,546
Engineering and development expenses 1,514 1,642
Selling and marketing expenses 2,051 1,971
General and administrative expenses 1,120 1,368
Amortization 125 130
--------------- ---------------
Income (loss) from operations (314) 3,435
Other income (expense), net (86) 41
--------------- ---------------
Income (loss) before income taxes (400) 3,476
Income taxes, net of tax benefit - -
--------------- ---------------
Net income (loss) $ (400) $ 3,476
=============== ===============
Net income (loss) per common share:
Basic $ (0.03) $ 0.27
Diluted $ (0.03) $ 0.27
Weighted average number of common shares outstanding:
Basic 12,876,043 12,771,824
Diluted 12,876,043 13,005,619
See accompanying notes
4
TELULAR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share data)
(Unaudited)
Nine Months Ended June 30,
2002 2001
---------------- ---------------
Net product sales $ 41,875 $ 76,876
Royalty and royalty settlement revenue 162 5,288
---------------- ---------------
Total revenue 42,037 82,164
Cost of sales 30,337 55,424
---------------- ---------------
11,700 26,740
Engineering and development expenses 4,723 4,768
Selling and marketing expenses 6,304 5,995
General and administrative expenses 3,371 3,931
Amortization 375 389
---------------- ---------------
Income (loss) from operations (3,073) 11,657
Other income, net 54 312
---------------- ---------------
Income (loss) before income taxes (3,019) 11,969
Income taxes, net of tax benefit - -
---------------- ---------------
Net income (loss) $ (3,019) $ 11,969
================ ===============
Net income (loss) per common share:
Basic $ (0.23) $ 0.94
Diluted $ (0.23) $ 0.92
Weighted average number of common shares outstanding:
Basic 12,850,990 12,728,662
Diluted 12,850,990 12,942,435
See accompanying notes
5
TELULAR CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Dollars in thousands)
(Unaudited)
Accumulated
Additional Other Total
Common Paid-In Comprehensive Stockholders'
Stock Capital Deficit Income (Loss) Equity
---------- ------------ ----------- ------------- -------------
Balance at September 30, 2001 $ 129 $ 149,071 $ (99,904) $ (297) $ 48,999
Comprehensive loss:
Net loss for period from October 1,
2001 to June 30, 2002 - - (3,019) - (3,019)
Permanent impairment in market
value of investments - - - 297 297
-------------
Comprehensive loss (2,722)
-------------
Deferred compensation related
to stock options - 105 - - 105
Stock options exercised - 118 - - 118
Stock issued in connection with
services and compensation - 190 - - 190
----------------------------------------------------------------------
Balance at June 30, 2002 $ 129 $ 149,484 $ (102,923) $ - $ 46,690
======================================================================
See accompanying notes
6
TELULAR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Nine Months Ended June 30,
2002 2001
---------- ----------
Operating Activities:
Net income (loss) $ (3,019) $ 11,969
Adjustments to reconcile net income (loss) to
net cash provided by/used in operating activities
Depreciation 1,036 1,041
Amortization 375 389
Inventory obsolescence expense 18 1,075
Compensation expense related to stock options 105 105
Common stock issued for services and compensation 190 279
Loss on sale of short term investment 303 109
Changes in assets and liabilities:
Trade receivables (661) 552
Related party receivables - 653
Inventories 2,604 (3,891)
Prepaid expenses, deposits and other (38) (10)
Trade accounts payable (4,103) 6,139
Related party accounts payable - (1,989)
Accrued liabilities (537) 727
---------- ----------
Net cash provided by (used in) operating activities (3,727) 17,148
Investing Activities:
Proceeds from the sale of short term investment 3 22
Increase in restricted cash (789) (703)
Acquisition of property and equipment (632) (736)
Advance to related parties, net (500) -
Acquisition of licenses and technology - (1,000)
---------- ----------
Net cash used in investing activities (1,918) (2,417)
---------- ----------
Financing Activities:
Proceeds from the issuance of common stock 118 217
Borrowings, net 789 703
---------- ----------
Net cash provided by financing activities 907 920
---------- ----------
Net increase (decrease) in cash and cash equivalents (4,738) 15,651
Cash and cash equivalents, beginning of period 36,385 20,527
---------- ----------
Cash and cash equivalents, end of period $ 31,647 $ 36,178
========== ==========
See accompanying notes
7
TELULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2002
(Unaudited, dollars in thousands, except share data)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. The preparation of financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates. In the opinion of
management, all adjustments considered necessary for a fair presentation
have been included. Operating results for the three and nine months ended
June 30, 2002, are not necessarily indicative of the results that may be
expected for the full fiscal year ending September 30, 2002. For further
information, refer to the consolidated financial statements and the
footnotes included in the Annual Report on Form 10-K for the fiscal year
ended September 30, 2001.
2. Inventories
The components of inventories consist of the following (000's):
June 30, September 30,
2002 2001
----------- -------------
(unaudited)
Raw materials $ 3,807 $ 5,486
Finished goods 3,774 5,468
-------- --------
7,581 10,954
Less: Reserve for obsolescence 195 946
-------- --------
$ 7,386 $ 10,008
======== ========
The June 30, 2002, amounts reflect a $1,771 reduction in inventory and a
$700 reduction in related reserve for obsolescence resulting from the
final sale in the first quarter of fiscal year 2002 of last generation
Code Division Multiple Access (CDMA) FWT products. (See Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations)
3. Goodwill and Intangible Assets
Effective October 1, 2001, the Company early adopted Statement of
Financial Accounting Standards, "Goodwill and Other Intangible Assets"
(SFAS 142), which resulted in the discontinuance of the amortization of
goodwill. Under the Statement, goodwill will be carried at its book value
as of September 30, 2001. The Company completed its annual impairment test
of goodwill as of June 30, 2002, and determined that its goodwill is not
impaired. In accordance with SFAS 142, the Company will test the value of
its goodwill for any impairment at least annually and future impairment,
if any will be recognized as an expense in the period of impairment.
The Company's other intangible assets at June 30, 2002 and September 30,
2001 were $500 and $875, respectively. The Company's goodwill was $2,554
at June 30, 2002 and September 30, 2001.
8
TELULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2002
(Unaudited, dollars in thousands, except share data)
Amortization expense for other intangible assets was $375 and $0 for the
first nine months of fiscal year 2002 and 2001, respectively. Amortization
expense for goodwill was $389 for the first nine months of fiscal year
2001.
As required by SFAS 142 the results for the prior year's quarter have not
been restated. A reconciliation of net income as if SFAS 142 had been
adopted is presented below for the three and nine months ended June 30,
2001.
Three Months Ended Nine Months Ended
June 30, 2001 June 30, 2001
------------- -------------
Net income as reported $ 3,476 $ 11,969
Add back goodwill amortization 130 389
--------- --------
Adjusted net income $ 3,606 $ 12,358
========= ========
Basic earnings per share as reported $ 0.27 $ 0.94
Goodwill amortization 0.01 0.03
--------- --------
Adjusted basic earnings per share $ 0.28 $ 0.97
========= ========
Diluted earnings per share as reported $ 0.27 $ 0.92
Goodwill amortization 0.01 0.03
--------- --------
Adjusted diluted earnings per share $ 0.28 $ 0.95
========= ========
4. Advance to Shareholder
In 1992, the Telular Group L.P., predecessor of the Company, entered into
a contribution agreement with DNIC Brokerage Company (DNIC) pursuant to
which DNIC contributed a variety of assets including certain patents and
license agreements, to the Company. Under the contribution agreement, DNIC
retained the right to receive the first $250 per year in annual royalty
payments pursuant to the contributed license agreements. On October 10,
2001, the Company entered into an agreement with DNIC, pursuant to which
the Company agreed to advance an amount not to exceed $750 of future
royalties to DNIC to be used solely for the purpose of purchasing the
Company's common stock in open market transactions.
Beginning on October 1, 2001, all royalties received by the Company for
the benefit of DNIC will first be applied to amounts advanced to DNIC by
the Company, and any remaining royalties will be paid to DNIC. Advances
outstanding bear interest at the prime rate as published in the Wall
Street Journal. The Company invoices DINC for interest semiannually on
April 1 and October 1. Interest from October 1, 2001 through April 1, 2002
totaled $14. During the first quarter of fiscal year 2002, the Company
advanced a total of $750 to DNIC under the terms of this arrangement. On
April 1, 2002, in accordance with the advance agreement, the Company
offset $250 of royalties earned by DNIC against the $750 outstanding
balance of the advance. On June 30, 2002 the current portion is $250,
which has been recorded in other current assets, and the long-term portion
included in other assets is $250. DNIC is a shareholder of the Company,
who as of November 9, 2001 held 1,050,759 shares of the Company's Common
Stock.
5. Revolving Line of Credit
On January 7, 2000, the Company entered into a Loan and Security Agreement
with Wells Fargo Business Credit Inc. (Wells) to provide a revolving
credit facility with a loan limit of $5,000 (the Loan). In accordance
9
TELULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2002
(Unaudited, dollars in thousands, except share data)
with the agreement, 100% of the outstanding amount of the Loan is
collaterized with restricted cash. At June 30, 2002, the Company had
approximately $3,789 of available borrowings under the Loan, of which
$3,789 was outstanding. Under the Loan, the Company is restricted from
making dividend payments. The Loan matures on January 7, 2003, and carries
interest at the bank's prime rate. To reduce applicable financing fees,
the Company issued 50,000 shares of Common Stock Warrants to Wells.
The Warrants have a strike price of $16.29 per share and expire on January
6, 2005. The value of the Warrants was accounted for as deferred financing
costs, and was recorded at the fair value of the financing fees of $195.
The deferred financing costs are included in other assets and are being
amortized over the life of the Loan.
6. Redeemable Preferred Stock and Preferred Stock
On June 30, 2002 and September 30, 2001, the Company had 21,000 shares of
$0.01 par value Redeemable Preferred Stock authorized and none
outstanding.
The Company also had 9,979,000 shares of $0.01 par value Preferred Stock
authorized and none outstanding on June 30, 2002 and September 30, 2001.
7. Segment Disclosures
The Company, which is organized on the basis of products and services, has
two reportable business segments, Fixed Wireless Terminals and Security
Products. The Company designs, develops, manufactures and markets both
fixed wireless terminals and security products. Fixed wireless terminals
bridge wireline telecommunications customer premises equipment with
cellular-type transceivers for use in wireless communication networks.
Security products provide wireless backup systems for commercial and
residential alarm systems.
Export sales of fixed wireless terminals represent 89% and 94% of total
fixed wireless net product sales for the first nine months of fiscal year
2002 and 2001, respectively.
Export sales of security products were insignificant for the first nine
months of fiscal year 2002 and 2001.
Summarized below are the Company's segment revenue and net income (loss)
by reportable segment:
Nine Months Ended
June 30,
2002 2001
---- ----
Revenue
Fixed Wireless Terminals $ 32,934 $ 73,893
Security Products 9,103 8,271
-------- --------
$ 42,037 $ 82,164
Net Income (Loss)
Fixed Wireless Terminals $ (2,400) $ 13,261
Security Products (619) (1,292)
-------- --------
$ (3,019) $ 11,969
10
TELULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2002
(Unaudited, dollars in thousands, except share data)
For the nine months ended June 30, 2002, one customer located in Mexico,
accounted for 54% of the fixed wireless terminal net product sales and one
customer, located in the USA, accounted for 25% of the security products
net product sales. For the nine months ended June 30, 2001, one customer,
located in Mexico, accounted for 83% of the fixed wireless terminal net
product sales and two customers, both located in the USA, accounted for
18% and 17% respectively, of the security products net product sales.
8. Earnings Per Share
Basic and diluted net income (loss) per common share are computed based
upon the weighted-average number of shares of common stock outstanding.
Common shares issuable upon the exercise of options, warrants and
redeemable preferred stock are not included in the per share calculations
if the effect of their inclusion would be anti-dilutive.
The following table sets forth the computation of basic and diluted
earnings per share:
Three Months Ended June 30,
2002 2001
---- ----
Net income (loss) $ (400) $ 3,476
=========== ===========
Weighted average number of common shares outstanding
Basic 12,876,043 12,771,824
Effect of dilutive employee stock options - 233,795
----------- -----------
Diluted 12,876,043 13,005,619
=========== ===========
Net income (loss) per share
Basic $ (0.03) $ 0.27
Diluted $ (0.03) $ 0.27
=========== ===========
Nine Months Ended June 30,
2002 2001
---- ----
Net income (loss) $ (3,019) $ 11,969
=========== ===========
Weighted average number of common shares outstanding
Basic 12,850,990 12,728,662
Effect of dilutive employee stock options - 213,773
----------- -----------
Diluted 12,850,990 12,942,435
=========== ===========
Net income (loss) per share
Basic $ (0.23) $ 0.94
Diluted $ (0.23) $ 0.92
=========== ===========
11
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
The Company designs, develops, manufactures and markets products based on its
proprietary interface technologies, which provide the capability to bridge
standard telecommunications equipment, including standard telephones, fax
machines, data modems and alarm panels with standard wireless communication
networks in the cellular and PCS frequency bands (collectively cellular).
Applications of the Company's technology include cellular fixed wireless
telecommunications as a primary access service where wireline systems are
unavailable, unreliable or uneconomical, as well as cellular backup systems for
wireline telephone systems and cellular wireless security and alarm monitoring
signaling. The Company's principal product lines are: PHONECELL(R), a line of
cellular Fixed Wireless Terminals and cellular Fixed Wireless Desktop Phones
(collectively FWTs), and TELGUARD(R), a line of cellular wireless security and
alarm monitoring signaling products.
Currently, the Company is devoting a substantial portion of its resources to
international market development, extension of its core product line to new
cellular wireless standards, expansion, protection and licensing of its
intellectual property rights and development of underlying radio technology.
The Company's operating expense levels are based in large part on expectations
of future revenues. If anticipated sales in any quarter do not occur as
expected, expenditure and inventory levels could be disproportionately high, and
the Company's operating results for that quarter, and potentially for future
quarters, could be adversely affected. Certain factors that could significantly
impact expected results are described in Cautionary Statements Pursuant to the
Securities Litigation Reform Act that is set forth in Exhibit 99 to the
Company's Form 10-K for the fiscal year ended September 30, 2001.
Results of Operations
Third quarter fiscal year 2002 compared to third quarter fiscal year 2001
Net Product Sales. Net product sales decreased 45%, or $12.6 million, to $15.5
million for the three months ended June 30, 2002 compared to the same period
last year. Sales of PHONECELL(R) products decreased 51%, or $13.1 million,
during the third quarter of fiscal year 2002 compared to the same period of
fiscal year 2001. This decrease was the result of reduced shipments of desktop
phones to a large customer in Mexico under the Company's supply agreement with
that customer. Sales of TELGUARD(R) products increased 19%, or $0.5 million,
during the third quarter of fiscal year 2002 compared to the same period last
year.
Royalty Revenue. Royalty revenue decreased 55% from $0.2 million, for the three
months ended June 30, 2001, to $0.1 million during the same period of fiscal
year 2002. The decrease is the result of lower royalties from Motorola.
Cost of Sales. Cost of sales decreased $8.7 million, or 44%, for the three
months ended June 30, 2002 compared to the same period last year. Cost of sales
for the third quarter 2002 of $11.1 million, or 71% of total revenue, compares
to $19.8 million, or 70% of total revenue, for the third quarter of fiscal year
2001. The decrease in cost of sales during the second quarter of fiscal year
2002 is due primarily to the decreased sales volume.
Engineering and Development Expenses. Engineering and development expenses of
$1.5 million for the three months ended June 30, 2002 decreased 8% from $1.6
million for the same period of fiscal year 2001. The decrease consists primarily
of lower performance bonuses based on reduced profitability.
General and Administrative Expenses (G&A). G&A for the three months ended June
30, 2002 decreased 18%, or $0.2 million, compared to the same period last year.
The decrease consists primarily of lower performance bonuses based on reduced
profitability.
12
Other Income (Expense). Other income (expense) for the third quarter of fiscal
year 2002 decreased $0.1 million, compared to the same period during fiscal year
2001. The decrease is primarily due to lower interest income, as a result of
significant interest rate reductions compared to the rates for the same period
last year.
Net Income (Loss). The Company recorded net loss of ($0.4) million for the three
months ended June 30, 2002 compared to a net income of $3.5 million for the
third quarter of last year. The decrease is primarily the result of the lower
sales volume.
Net Income (Loss) per Common Share. Basic net loss per share of ($0.03) for the
three months ended June 30, 2002 compares to basic net income per share of $0.27
for the same period last year. The decrease is primarily the result of the lower
sales volume.
First nine months fiscal year 2002 compared to first nine months fiscal year
2001
Net Product Sales. Net product sales of $41.9 million for the nine months ended
June 30, 2002 decreased 46% from $76.9 million for the same period last year.
Sales of PHONECELL(R) products decreased 52% from $68.6 million during the first
nine months of fiscal year 2001 to $32.8 million during the same period of
fiscal year 2002. This decrease was the result of lower shipments of desktop
phones to a large customer in Mexico under the Company's supply agreement with
that customer. The sale of TELGUARD(R) products increased 10% from $8.3 million
during the nine months ended June 30, 2001 to $9.1 million during the nine
months ended June 30, 2002.
Royalty and Royalty Settlement Revenue. Royalty and royalty settlement revenue
decreased 97% from $5.3 million during the first nine months of fiscal year 2001
to $0.2 million during the same period of fiscal year 2002. The fiscal year 2001
amount includes $4.7 million in royalty settlement revenue related to the
termination of the OEM and Option agreements with Motorola.
Cost of Sales. Cost of sales of $30.3 million for the nine months ended June 30,
2002 decreased 45% from $55.4 million for the same period last year. The
decrease in cost of sales during the first nine months of fiscal year 2002 is
due primarily to the decreased sales volume and a one-time special charge of
$1.0 million in the second quarter of fiscal year 2001. The one-time special
charge in the second quarter of fiscal year 2001 was to reduce the carrying cost
of CDMA FWT due to poor market conditions. Cost of sales for the first nine
months of fiscal year 2002 is 72% of total revenue, compared to 67% of total
revenue for the same period last year. The increase in cost of sales as a
percentage of total revenue is due to a decline in the absorption of fixed costs
resulting from the decrease in total revenue.
General and Administrative Expenses (G&A). G&A for the first nine months of
fiscal year 2002 decreased 14%, or $0.6 million, compared to the first nine
months of fiscal year 2001. The decrease consists primarily of lower performance
bonuses based on reduced profitability.
Other Income. Other income during the first nine months of fiscal year 2002
decreased by $0.2 million compared to the same period of fiscal 2001. The
decrease is primarily due to lower interest income, as a result of significant
interest rate reductions compared to the rates for the same period last year.
Net Income (Loss). The Company recorded a net loss of ($3.0) million for the
first nine months of fiscal year 2002 compared to net income of $12.0 million
for the same period of fiscal year 2001. The decrease is primarily the result of
the lower sales volume and lower royalty and royalty settlement revenue.
Net Income (Loss) per Common Share. A basic loss per share of ($0.23) for the
first nine months of fiscal year 2002 compares to a basic income per share of
$0.94 for the same period of fiscal year 2001.
Liquidity and Capital Resources
On June 30, 2002, the Company had $31.6 million in cash and cash equivalents
with a working capital surplus of $40.0 million.
13
The Company used $3.7 million of cash in operations during the first nine months
of fiscal year 2002 compared to cash generated of $17.1 million during the same
period of fiscal year 2001. This year-over-year increase in cash used in
operations resulted primarily from lower volume production and shipments of
desktop phones to its large customer in Mexico, which reduced profitability.
Volume production and shipments to Mexico occurred throughout fiscal year 2001,
were absent during the first quarter of fiscal year 2002 and then resumed at a
lower volume during both the second and third quarters of fiscal year 2002.
Cash used in investing activities of $1.9 million during the first nine months
of fiscal year 2002 compares to $2.4 million during the same period of fiscal
year 2001. Cash used in investing activities during the first nine months of
fiscal year 2002 included $0.5 million in net cash advanced against future
royalties to a shareholder of the Company (See Note 4 to the Consolidated
Financial Statements). By contrast, during the same period last year the Company
used $1.0 million in cash to acquire a GPRS software product license (classified
as intangible assets). Cash used in other investing activities during the first
nine months of fiscal year 2002 also includes $0.8 million of increases in
restricted cash related to the revolving line of credit (offset by the same
amount of cash from financing activity) and $0.6 million in capital spending for
product testing equipment. These compare to $0.7 million and $0.7 million,
respectively, for the same investing activities during the first nine months of
fiscal year 2001.
Cash provided by financing activities of $0.9 million during the first nine
months of fiscal year 2002 compares to $0.9 million during the same period of
fiscal year 2001. The fiscal year 2002 amount consists primarily of $0.8 million
in proceeds of loans under the terms of the Company's revolving line of credit
(offset by the same amount of restricted cash from investing activity) compared
to $0.7 million last year. The issuance of common stock in connection with the
exercise of employee stock options provided cash of $0.1 million during the
first nine months of fiscal year 2002 compared to $0.2 million for the same
period last year.
Based upon its current operating plan, the Company believes its existing capital
resources will enable it to maintain its current and planned operations. Cash
requirements may vary and are difficult to predict given the nature of the
developing markets targeted by the Company. The amount of royalty income from
the Company's licensees is unpredictable, but could have a significant impact on
the Company's earnings and cash flow.
The Company generally requires its foreign customers to prepay, to obtain
letters of credit or to qualify for export credit insurance underwritten by
third party credit insurance companies prior to the Company making international
shipments. Also, to mitigate the effects of currency fluctuations on the
Company's results of operations, the Company conducts all of its international
transactions in U.S. dollars.
Outlook
The statements contained in this outlook are based on current expectations.
These statements are forward looking, and actual results may differ materially.
Based upon observed trends, the Company believes that the market for cellular
FWTs will experience substantial growth over the next five years. The Company
has identified significant growth opportunities throughout Africa, Brazil,
China, India, Mexico and the USA. Each of these markets will develop at a
different pace, and the sales cycle for these regions are likely to be several
months or quarters. Further, economic conditions play an important role in the
timing of market development for the Company's products. In connection with the
present global economic slowdown, the Company's prospects for continued growth
have been accordingly reduced in the near term. However, as economic conditions
improve, the Company is well positioned with a wide range of products to
capitalize on these market opportunities.
In recent months there has been considerable price pressure in the cellular FWT
market, particularly for CDMA products, where several CDMA manufacturers are
competing for the same business. There also appears to be an excess amount of
CDMA product in the distribution channel. The combination of multiple suppliers
and excess
14
product in the channel has resulted in a significant decline in CDMA product
prices. Consequently, the Company sold all of its last generation CDMA product
at a loss during the three months ended December 31, 2001.
The Company's next generation CDMA FWTs will incorporate the 1xRTT standard for
high-speed data. The Company expects an improvement in market conditions for
CDMA when 1xRTT networks and products become generally available.
The Company expects to improve its position in the Global System for Mobile
Communication (GSM) FWT markets with the launch of its PHONECELL(R) SX5 GSM
products with General Packet Radio Service (GPRS) in 2002. GPRS in GSM networks
allow for the use of high-speed data applications.
Shipments under the Company's agreement with its Mexican customer to supply
$67.5 million Desktop Phones dated September 13, 2000, were completed during the
fourth quarter of fiscal year 2001. The absence of desktop phone shipments to
Mexico during the first quarter of fiscal year 2002 resulted in a significant
decline in net product sales. On January 2, 2002, the Mexican customer ordered
additional desktop phones under the above agreement and the Company shipped the
additional desktop phones to Mexico from February through June 2002. On June 14,
2002, the Company and its Mexican customer extended the above agreement, to
include a $24 million order for more desktop phones to be shipped from August
through December 2002. In addition, on June 19, 2002, the Company received a
letter of intent from its Mexican customer indicating its intent to acquire an
additional $18 million in desktop phones after December 2002 provided that there
is a demand for such phones in the consumer market in Mexico.
Forward Looking Information
Statements contained in this filing, other than historical statements, consist
of forward-looking information. The Company's actual results may vary
considerably from those discussed in this filing as a result of various risks
and uncertainties. For example, there are a number of uncertainties as to the
degree and duration of the revenue momentum, which could impact the Company's
ability to be profitable as lower sales may likely result in lower margins. In
addition, product development expenditures, which are expected to benefit future
periods, are likely to have a negative impact on near term earnings. Other risks
and uncertainties, which are discussed in Exhibit 99 to the Company's 10-K for
the period ended September 30, 2001, include the risk that technological change
will render the Company's technology obsolete, the Company's ability to protect
intellectual property rights in its products, unfavorable economic conditions
could lead to lower product sales, the risk of litigation, the Company's ability
to develop new product, the Company's dependence on contractors, the Company's
ability to maintain quality control, the risk of doing business in developing
markets, the Company's dependence on research and development, the uncertainty
of additional funding, dilution of ownership to stockholders resulting from
financing activities, volatility of Common Stock price, the effects of control
by existing shareholders, intense industry competition including competition
from its licensees and new market entrants with cellular phone docking station
products and the uncertainty in the development of wireless service generally.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
On March 2, 1998, the Company received 300,000 shares of ORA Electronics, Inc.
common stock ("ORA stock") in connection with the settlement of patent
litigation. ORA stock is traded on Nasdaq's Over The Counter (OTC) system. The
Company's holdings in ORA stock are valued at the quoted price on OTC for ORA
stock on the date of each balance sheet presented. Since 1998 the Company has
reduced its holdings in ORA stock via open market sales and holds 116,500 shares
of ORA stock on June 30, 2002. During the third quarter of fiscal year 2002, the
Company recognized a loss on the sale of ORA stock of $119,000.
On April 17, 2002, ORA filed a Chapter 11 voluntary petition in U.S. Bankruptcy
Court in California. Despite this filing, ORA stock continues to be traded on
OTC. However, during the third quarter of fiscal year 2002, the Company reduced
the carrying cost of its holdings in ORA stock to the market value as quoted on
OTC, and recognized a loss of $169,000.
15
Pursuant to the settlement with ORA, as amended, the Company received rights to
12,200,000 additional shares of ORA stock (Additional Shares) from ORA on
February 1, 2002. On June 25, 2002, the Company agreed to sell its rights to the
Additional Shares to an individual investor in exchange for $120,000 (net of
legal fees). Upon the closing of this transaction, the Company will release ORA
from the terms of the settlement, as amended.
During the third quarter, the Company also released a $148,000 reserve for legal
fees for a contingent ORA stock transaction that did not occur.
The combination of the income from the assignment of rights, the release of the
legal reserve and the losses recognized on the market value decline of ORA stock
have been recorded as other income. The net effect of these transactions was to
decrease other income during the third quarter of fiscal year 2002 by $20,000.
The Company frequently invests available cash and cash equivalents in short term
instruments such as certificates of deposit, commercial paper and money market
accounts. Although the rate of interest paid on such investments may fluctuate
over time, each of the Company's investments is made at a fixed interest rate
over the duration of the investment. All of these investments have maturities of
less than 90 days. The Company believes its exposure to market risk fluctuates
for these investments is not material as of June 30, 2002.
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of trade accounts receivable.
For international sales, the Company generally receives either payment prior to
shipment or irrevocable letters of credit that are confirmed by U.S. banks to
reduce its credit risk. Further, the Company purchases credit insurance for all
significant open accounts outside of the United States. The Company performs
ongoing credit evaluations and charges amounts to operations when they are
determined to be uncollectible.
16
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On October 5, 2000, the Company filed suit against Vox2, Inc., of Northborough,
Massachusetts, which manufactures a cellular interface product named the Vox
Link. The Company has alleged infringement of its U.S. Patents: 4,659, 096;
5,715,296; and 5,946,616, and seeks injunction, damages and attorney fees and
costs. On January 8, 2002, a Magistrate recommended that Vox2, Inc.'s product
not be enjoined. Despite the Company's objection, the court adopted the
Magistrate's recommendation. The Company is continuing with the discovery
process in its case against Vox2, Inc.
On September 8, 2001, the Company filed a patent infringement lawsuit in Korea
for an injunction against LG Electronics on its cellular interface products for
CDMA Fixed Wireless Terminals; Models LST-220(F) and 2200(F). On December 4,
2001 the Korean Court denied the Company an injunction on the sale or
manufacture of these products because LG Electronics stated it had ceased
manufacturing the products as of December 26, 2000. The Company is currently
preparing to file a separate cause of action for damages arising out of the
sales of the LST-220(F), 230(F), 2200(F) and 2300(F) by LG Electronics.
While no assurance can be given regarding the outcome of legal proceedings that
arise in the ordinary course of business, the Company believes that the final
outcome of these matters will not have a material effect on the Company's
consolidated financial position or results of operations. However, because of
the nature and inherent uncertainties of litigation, should the outcome of any
legal actions be unfavorable, the Company may be required to pay damages and
other expenses, which could have a material adverse effect on the Company's
financial position and results of operations.
Item 2. CHANGES IN SECURITIES AND RECENT SALES OF UNREGISTERED SECURITIES
Restriction on Dividends
On January 7, 2000, the Company entered into a Loan and Security Agreement with
Wells Fargo Business Credit Inc. to provide a revolving credit facility with a
loan limit of $5 million (the Loan). (See Note 5 to the Consolidated Financial
Statements) Under the terms of the Loan, the Company is prohibited from paying
cash dividends during the term of the Loan.
Recent Sales of Unregistered Securities
During the three months ended June 30, 2002, the Company issued 6,278 shares of
Common Stock valued at $32,204 to the law of firm of Hamman and Benn for legal
services. These issuances were exempt from registration pursuant to Section 4(2)
of the Securities Act of 1933, as amended, as they did not involve a public
offering of securities.
17
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (listed by number according to Exhibit table of Item 601 in
Regulation S-K)
Number Description Reference
------ ----------- ---------
3.1 Certificate of Incorporation Filed as Exhibit 3.1 to
Registration Statement
No. 33-72096 (the Registration
Statement)
3.2 Amendment No. 1 to Certificate Filed as
of Incorporation Exhibit 3.2 to
the Registration
Statement
3.3 Amendment No. 2 to Certificate Filed as
of Incorporation Exhibit 3.3 to
the Registration
Statement
3.4 Amendment No. 3 to Certificate Filed as
of Incorporation Exhibit 3.4 to
Form 10-Q filed
February 16, 1999
3.5 Amendment No.4 to Certificate Filed as
of Incorporation Exhibit 3.5 to
Form 10-Q filed
February 16, 1999
3.6 By-Laws Filed as
Exhibit 3.4 to
the Registration
Statement
4.1 Certificate of Designations, Preferences, Filed as Exhibit 99.2
and Rights of Series A Convertible Preferred Form 8-K filed
Stock April 25, 1997
4.2 Loan agreement with Wells Fargo Business Filed as Exhibit 4.5 to
Form 10-Q filed
February 14, 2000
4.3 Stock Purchase Warrant with Wells Fargo Filed as Exhibit 4.6 to
Business Form 10-Q filed
February 14, 2000
10.1 Employment Agreement with Kenneth E. Millard Filed as Exhibit
10.1 to Form 10-Q
filed August 14, 1996
10.2 Stock Option Agreement with Kenneth E. Millard Filed as Exhibit
10.2 to Form 10-Q
filed August 14, 1996
10.3 Stock Purchase Agreement By Filed as Exhibit
and Among Telular Corporation 10.3 to Form 10-Q
and TelePath Corporation (which filed August 14, 1996
had changed its name to Wireless
Domain, Incorporated)
10.4 Appointment of Larry J. Ford Filed as Exhibit 10.2
to Form 10-Q filed
May 1, 1995
10.5 Option Agreement with Motorola Filed as Exhibit 10.6
dated November 10, 1995 to Form 10-K filed
December 26, 1996 (1)
10.6 Amendment No.1 dated September 24, 1996 Filed as Exhibit 10.7
to Option Agreement with Motorola to Form 10-Q filed
August 13, 1999 (1)
18
10.7 Amendment No.2 dated April 30, 1999 Filed as Exhibit 10.8
to Option Agreement with Motorola to Form 10-Q filed
August 13, 1999 (1)
10.8 Stock Purchase Agreement Filed as Exhibit 10.11
between Motorola, Inc. and to the Registration
Telular Corporation dated Statement
September 20, 1993
10.9 Patent Cross License Agreement Filed as Exhibit 10.12
between Motorola, Inc. and the to the Registration
Company, dated March 23, 1990 Statement (1)
and Amendments No. 1, 2 and
3 thereto
10.10 Amendment No. 4 to Patent Cross License Filed as Exhibit 10.11
Agreement between Motorola, Inc. and the to Form 10-Q filed
Company, dated May 3, 1999 August 13, 1999 (1)
10.11 Amended and Restated Shareholders Filed as Exhibit 10.15
Agreement dated November 2, 1993 to the Registration
Statement (1)
10.12 Amendment No. 1 to Amended and Filed as Exhibit 10.24
Restated Shareholders the Registration
Agreement, dated January 24, 1994 Statement
10.13 Amendment No. 2 to Amended and Filed as Exhibit 10.5
Restated Shareholders Agreement, to the Form 10-Q filed
dated June 29, 1995 July 28, 1995
10.14 Amended and Restated Registration Filed as Exhibit 10.16
Rights Agreement dated November to the Registration
2, 1993 Statement
10.15 Amendment No. 1 to Amended and Filed as Exhibit 10.25
Restated Registration Rights to the Registration
Agreement, dated January 24, 1994 Statement
10.16 Securities Purchase Agreement dated Filed as Exhibit 99.1 to
April 16, 1997, by and between Telular Form 8-K filed
Corporation and purchasers of the April 25, 1997
Series A Convertible Preferred Stock
10.17 Registration Rights Agreement dated Filed as Exhibit 99.3 to
April 16, 1997, by and between Telular Form 8-K filed
Corporation and purchasers of the April 25, 1997
Series A Convertible Preferred Stock
10.18 Securities Purchase Agreement dated Filed as Exhibit 99.3 to
June 6, 1997, by and between Telular Registration Statement on
Corporation and purchasers of the Series Form S-3, Registration
A Convertible Preferred Stock No. 333-27915, as amended
by Amendment No. 1 filed
June 13, 1997, and further
Amended by Amendment
No. 2 filed July 8, 1997
(Form S-3)
10.19 Registration Rights Agreement dated Filed as Exhibit 99.4 to
June 6, 1997, by and between Telular Form S-3
Corporation and purchasers of the Series
A Convertible Preferred Stock
10.20 Agreement and Plan of Merger by and Filed as Exhibit 10.21
among Wireless Domain Incorporated to Form 10-K filed
(formerly TelePath), Telular-WD (a December 19, 1998
wholly-owned subsidiary of Telular) and
certain stockholder of Wireless Domain
Incorporated
19
10.21 Common Stock Investment Agreement Filed as Exhibit 4.8 to
dated March 3, 2000 Registration Statement on
Form S-3, Registration
No. 333-33810 filed
March 31, 2000, as amended
By Amendment No. 1 filed
April 28, 2000
10.22 Registration Rights Agreement Filed as Exhibit 4.9 to
dated March 3, 2000 Registration Statement on
Form S-3, Registration
No. 333-33810 filed
March 31, 2000, as amended
By Amendment No. 1 filed
April 28, 2000
10.23 Employment Agreement with Daniel D. Filed as Exhibit 10.22
Giacopelli to Form 10-Q filed
February 13, 1998
10.24 OEM Equipment Purchase Agreement Filed as Exhibit 10.27
for WAFU dated April 30, 1999 to form 10-Q filed
August 13, 1999 (1)
10.25 Settlement and Release of Claims Filed as Exhibit 10.25
Agreement with Motorola (1) to Form 10-Q filed
February 14, 2001 (1)
10.26 Agreement for the Purchase of Telular Filed as Exhibit 10.1
Fixed Telephony Digital Cellular to Form 8-K filed
Telephones dated as of September 13, September 13, 2000 (1)
2000, among Telular Corporation, et.al (1)
10.27 Nonqualified Stock Option Agreement, Filed as Exhibit 4.9 to
dated as of October 31, 2000, by and Registration Statement on
between the Company and Larry J. Ford Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.28 Nonqualified Stock Option Agreement, Filed as Exhibit 4.10 to
dated as of October 26, 1999, by and Registration Statement on
between the Company and Larry J. Ford Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.29 Nonqualified Stock Option Agreement, Filed as Exhibit 4.11 to
dated as of October 27, 1998, by and Registration Statement on
between the Company and Larry J. Ford Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.30 Nonqualified Stock Option Agreement, Filed as Exhibit 4.12 to
dated as of February 28, 1997, by and Registration Statement on
between the Company and Larry J. Ford Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.31 Nonqualified Stock Option Agreement, Filed as Exhibit 4.13 to
dated as of April 17, 1996, by and Registration Statement on
between the Company and Larry J. Ford Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.32 Nonqualified Stock Option Agreement, Filed as Exhibit 4.14 to
dated as of April 7, 1995, by and Registration Statement on
between the Company and Larry J. Ford Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.33 Nonqualified Stock Option Agreement, Filed as Exhibit 4.15 to
dated as of October 31, 2000, by and Registration Statement on
between the Company and John E. Berndt Form S-8, Registration
No. 333-61970 filed
May 31, 2001
20
10.34 Nonqualified Stock Option Agreement, Filed as Exhibit 4.16 to
dated as of October 26, 1999, by and Registration Statement on
between the Company and John E. Berndt Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.35 Nonqualified Stock Option Agreement, Filed as Exhibit 4.17 to
dated as of October 27, 1998, by and Registration Statement on
between the Company and John E. Berndt Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.36 Nonqualified Stock Option Agreement, Filed as Exhibit 4.18 to
dated as of February 28, 1997, by and Registration Statement on
between the Company and John E. Berndt Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.37 Nonqualified Stock Option Agreement, Filed as Exhibit 4.19 to
dated as of December 3, 1996, by and Registration Statement on
between the Company and John E. Berndt Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.38 Nonqualified Stock Option Agreement, Filed as Exibit 10.38 to
dated as of July 25, 2001, by and Form 10-K filed
between the Company and Mitchell H. Saranow December 21, 2001
10.39 Nonqualified Stock Option Agreement, Filed as Exibit 10.38 to
dated as of August 30, 2001, by and Form 10-K filed
between the Company and Richard D. Haning December 21, 2001
10.40 Advance Agreement dated as of Filed as Exhibit 10.40 to
October 9, 2001, by and between the Form 10-K filed
Company and DNIC Brokerage Company December 21, 2001
10.41 Nonqualified Stock Option Agreement, Filed as Exhibit 10.41 to
dated as of October 30, 2001, by and Form 10-K filed
between the Company and John E. Berndt December 21, 2001
10.42 Nonqualified Stock Option Agreement, Filed as Exhibit 10.42 to
dated as of October 30, 2001, by and Form 10-K filed
between the Company and Larry J. Ford December 21, 2001
10.43 Nonqualified Stock Option Agreement, Filed as Exhibit 10.43 to
dated as of October 30, 2001, by and Form 10-K filed
between the Company and Richard D. Haning December 21, 2001
10.44 Nonqualified Stock Option Agreement, Filed as Exhibit 10.44 to
dated as of October 30, 2001, by and Form 10-K filed
between the Company and Mitchell H. Saranow December 21, 2001
10.45 Amendment 1 dated June 20, 2002, to the Filed herewith (1)
September 13, 2000 Agreement for the
Purchase of Telular Fixed Telephony
Telephony Digital Cellular Telephones
among Telular Corporation, et.al. (1)
99.1 Certification Pursuant to 18 U.S.C. Section Filed herewith
Section 1350 as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
(1) Certain portions of this exhibit have been omitted and filed
separately with the United States Securities and Exchange Commission
pursuant to a request for confidential treatment. The omitted portions
have been replaced by an * enclosed by brackets ([*]).
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the three months
ended June 30, 2002.
21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report on Form 10-Q to be signed on its behalf
by the undersigned, thereunto duly authorized.
Telular Corporation
Date August 13, 2002 By: /s/ Kenneth E. Millard
--------------------------------- ------------------------------
Kenneth E. Millard
President & Chief Executive
Officer
Date August 13, 2002 /s/ Jeffrey L. Herrmann
--------------------------------- ------------------------------
Jeffrey L. Herrmann
Executive Vice President,
Chief Operating Officer &
Chief Financial Officer
Date August 13, 2002 /s/ Robert L. Zirk
--------------------------------- ------------------------------
Robert L. Zirk
Controller & Chief Accounting
Officer
22
Exhibit Index
Number Description Reference
------ ----------- ---------
3.1 Certificate of Incorporation Filed as Exhibit 3.1 to
Registration Statement
No. 33-72096 (the Registration
Statement)
3.2 Amendment No. 1 to Certificate Filed as
of Incorporation Exhibit 3.2 to
the Registration
Statement
3.3 Amendment No. 2 to Certificate Filed as
of Incorporation Exhibit 3.3 to
the Registration
Statement
3.4 Amendment No. 3 to Certificate Filed as
of Incorporation Exhibit 3.4 to
Form 10-Q filed
February 16, 1999
3.5 Amendment No. 4 to Certificate Filed as
of Incorporation Exhibit 3.5 to
Form 10-Q filed
February 16, 1999
3.6 By-Laws Filed as
Exhibit 3.4 to
the Registration
Statement
4.1 Certificate of Designations, Preferences, Filed as Exhibit 99.2
and Rights of Series A Convertible Preferred Form 8-K filed
Stock April 25, 1997
4.2 Loan agreement with Wells Fargo Business Filed as Exhibit 4.5 to
Form 10-Q filed
February 14, 2000
4.3 Stock Purchase Warrant with Wells Filed as Exhibit 4.6 to
Fargo Business Form 10-Q filed
February 14, 2000
10.1 Employment Agreement with Filed as Exhibit
Kenneth E. Millard 10.1 to Form 10-Q
filed August 14, 1996
10.2 Stock Option Agreement with Filed as Exhibit
Kenneth E. Millard 10.2 to Form 10-Q
filed August 14, 1996
10.3 Stock Purchase Agreement By Filed as Exhibit
and Among Telular Corporation 10.3 to Form 10-Q
and TelePath Corporation (which filed August 14, 1996
had changed its name to Wireless
Domain, Incorporated)
10.4 Appointment of Larry J. Ford Filed as Exhibit 10.2
to Form 10-Q filed
May 1, 1995
10.5 Option Agreement with Motorola Filed as Exhibit 10.6
dated November 10, 1995 to Form 10-K filed
December 26, 1996 (1)
10.6 Amendment No. 1 dated September 24, 1996 Filed as Exhibit 10.7
to Option Agreement with Motorola to Form 10-Q filed
August 13, 1999 (1)
23
10.7 Amendment No.2 dated April 30, 1999 Filed as Exhibit 10.8
to Option Agreement with Motorola to Form 10-Q filed
August 13, 1999 (1)
10.8 Stock Purchase Agreement Filed as Exhibit 10.11
between Motorola, Inc. and to the Registration
Telular Corporation dated Statement
September 20, 1993
10.9 Patent Cross License Agreement Filed as Exhibit 10.12
between Motorola, Inc. and the to the Registration
Company, dated March 23, 1990 Statement (1)
and Amendments No. 1, 2 and
3 thereto
10.10 Amendment No. 4 to Patent Cross License Filed as Exhibit 10.11
Agreement between Motorola, Inc. and the to Form 10-Q filed
Company, dated May 3, 1999 August 13, 1999 (1)
10.11 Amended and Restated Shareholders Filed as Exhibit 10.15
Agreement dated November 2, 1993 to the Registration
Statement (1)
10.12 Amendment No. 1 to Amended and Filed as Exhibit 10.24
Restated Shareholders the Registration
Agreement, dated January 24, Statement
1994
10.13 Amendment No. 2 to Amended and Filed as Exhibit 10.5
Restated Shareholders Agreement, to the Form 10-Q filed
dated June 29, 1995 July 28, 1995
10.14 Amended and Restated Registration Filed as Exhibit 10.16
Rights Agreement dated November to the Registration
2, 1993 Statement
10.15 Amendment No. 1 to Amended and Filed as Exhibit 10.25
Restated Registration Rights to the Registration
Agreement, dated January 24, 1994 Statement
10.16 Securities Purchase Agreement dated Filed as Exhibit 99.1 to
April 16, 1997, by and between Telular Form 8-K filed
Corporation and purchasers of the April 25, 1997
Series A Convertible Preferred Stock
10.17 Registration Rights Agreement dated Filed as Exhibit 99.3 to
April 16, 1997, by and between Telular Form 8-K filed
Corporation and purchasers of the April 25, 1997
Series A Convertible Preferred Stock
10.18 Securities Purchase Agreement dated Filed as Exhibit 99.3 to
June 6, 1997, by and between Telular Registration Statement on
Corporation and purchasers of the Series Form S-3, Registration
A Convertible Preferred Stock No. 333-27915, as amended
by Amendment No. 1 filed
June 13, 1997, and further
Amended by Amendment
No. 2 filed July 8, 1997
(Form S-3)
10.19 Registration Rights Agreement dated Filed as Exhibit 99.4 to
June 6, 1997, by and between Telular Form S-3
Corporation and purchasers of the Series
A Convertible Preferred Stock
10.20 Agreement and Plan of Merger by and Filed as Exhibit 10.21
among Wireless Domain Incorporated to Form 10-K filed
(formerly TelePath), Telular-WD (a December 19, 1998
wholly-owned subsidiary of Telular) and
certain stockholder of Wireless Domain
Incorporated
24
10.21 Common Stock Investment Agreement Filed as Exhibit 4.8 to
dated March 3, 2000 Registration Statement on
Form S-3, Registration
No. 333-33810 filed
March 31, 2000, as amended
By Amendment No. 1 filed
April 28, 2000
10.22 Registration Rights Agreement Filed as Exhibit 4.9 to
dated March 3, 2000 Registration Statement on
Form S-3, Registration
No. 333-33810 filed
March 31, 2000, as amended
By Amendment No. 1 filed
April 28, 2000
10.23 Employment Agreement with Daniel D. Filed as Exhibit 10.22
Giacopelli to Form 10-Q filed
February 13, 1998
10.24 OEM Equipment Purchase Agreement Filed as Exhibit 10.27
for WAFU dated April 30, 1999 to form 10-Q filed
August 13, 1999 (1)
10.25 Settlement and Release of Claims Filed as Exhibit 10.25
Agreement with Motorola (1) to Form 10-Q filed
February 14, 2001 (1)
10.26 Agreement for the Purchase of Telular Filed as Exhibit 10.1
Fixed Telephony Digital Cellular to Form 8-K filed
Telephones dated as of September 13, September 13, 2000 (1)
2000, among Telular Corporation, et.al. (1)
10.27 Nonqualified Stock Option Agreement, Filed as Exhibit 4.9 to
dated as of October 31, 2000, by and Registration Statement on
between the Company and Larry J. Ford Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.28 Nonqualified Stock Option Agreement, Filed as Exhibit 4.10 to
dated as of October 26, 1999, by and Registration Statement on
between the Company and Larry J. Ford Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.29 Nonqualified Stock Option Agreement, Filed as Exhibit 4.11 to
dated as of October 27, 1998, by and Registration Statement on
between the Company and Larry J. Ford Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.30 Nonqualified Stock Option Agreement, Filed as Exhibit 4.12 to
dated as of February 28, 1997, by and Registration Statement on
between the Company and Larry J. Ford Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.31 Nonqualified Stock Option Agreement, Filed as Exhibit 4.13 to
dated as of April 17, 1996, by and Registration Statement on
between the Company and Larry J. Ford Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.32 Nonqualified Stock Option Agreement, Filed as Exhibit 4.14 to
dated as of April 7, 1995, by and Registration Statement on
between the Company and Larry J. Ford Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.33 Nonqualified Stock Option Agreement, Filed as Exhibit 4.15 to
dated as of October 31, 2000, by and Registration Statement on
between the Company and John E. Berndt Form S-8, Registration
No. 333-61970 filed
May 31, 2001
25
10.34 Nonqualified Stock Option Agreement, Filed as Exhibit 4.16 to
dated as of October 26, 1999, by and Registration Statement on
between the Company and John E. Berndt Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.35 Nonqualified Stock Option Agreement, Filed as Exhibit 4.17 to
dated as of October 27, 1998, by and Registration Statement on
between the Company and John E. Berndt Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.36 Nonqualified Stock Option Agreement, Filed as Exhibit 4.18 to
dated as of February 28, 1997, by and Registration Statement on
between the Company and John E. Berndt Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.37 Nonqualified Stock Option Agreement, Filed as Exhibit 4.19 to
dated as of December 3, 1996, by and Registration Statement on
between the Company and John E. Berndt Form S-8, Registration
No. 333-61970 filed
May 31, 2001
10.38 Nonqualified Stock Option Agreement, Filed as Exibit 10.38 to
dated as of July 25, 2001, by and Form 10-K filed
between the Company and Mitchell H. Saranow December 21, 2001
10.39 Nonqualified Stock Option Agreement, Filed as Exibit 10.38 to
dated as of August 30, 2001, by and Form 10-K filed
between the Company and Richard D. Haning December 21, 2001
10.40 Advance Agreement dated as of Filed as Exhibit 10.40 to
October 9, 2001, by and between the Form 10-K filed
Company and DNIC Brokerage Company December 21, 2001
10.41 Nonqualified Stock Option Agreement, Filed as Exhibit 10.41 to
dated as of October 30, 2001, by and Form 10-K filed
between the Company and John E. Berndt December 21, 2001
10.42 Nonqualified Stock Option Agreement, Filed as Exhibit 10.42 to
dated as of October 30, 2001, by and Form 10-K filed
between the Company and Larry J. Ford December 21, 2001
10.43 Nonqualified Stock Option Agreement, Filed as Exhibit 10.43 to
dated as of October 30, 2001, by and Form 10-K filed
between the Company and Richard D. Haning December 21, 2001
10.44 Nonqualified Stock Option Agreement, Filed as Exhibit 10.44 to
dated as of October 30, 2001, by and Form 10-K filed
between the Company and Mitchell H. Saranow December 21, 2001
10.45 Amendment 1 dated June 20, 2002, to the Filed herewith (1)
September 13, 2000 Agreement for the
Purchase of Telular Fixed Telephony
Digital Cellular Telephones amoung
Telular Corporation, et. al. (1)
99.1 Certification Pursuant to 18 U.S.C. Section Filed herewith
Section 1350 as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
(1) Certain portions of this exhibit have been omitted and filed
separately with the United States Securities and Exchange Commission
pursuant to a request for confidential treatment.
The omitted portions have been replaced by an * enclosed by brackets ([*]).
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