VIASAT
We are a leading provider of advanced wireless and satellite communications equipment and
services to the government and commercial markets. We are organized principally in two segments:
government and commercial. Our government business encompasses specialized products principally
serving defense customers and includes:
Tactical Data Links. Our Tactical Data Links product line primarily consists of our
multifunction information distribution system (MIDS) product. The MIDS terminal operates as part
of the Link-16 line-of-sight tactical radio system, which enables real time data networking
among ground and airborne military users providing an electronic picture of the entire
battlefield to each user in the network. We are also currently in the development phase of a
MIDS terminal for the U.S. Department of Defenses (DoD) JTRS airborne radio program, referred
to as MIDS-JTRS. We are one of only two current U.S. government certified providers of MIDS
production units.
Tactical Networking and Information Assurance. Tactical Networking and Information
Assurance products include our information security and ViaSat Data Controller (VDC) products.
Our information security products enable military and government communicators to secure
information up to Top Secret levels. Our VDC products provide reliable military tactical
communication channels using innovative error correction technology. Technology from some of
these products are integrated into some of our existing tactical radio products (such as MIDS
and UHF DAMA satellite products) as well as sold on a stand-alone basis.
Government Satellite Communication Systems. We have a 15 year history of leadership in the
UHF satellite communication terminal market. This includes the design and development of modems,
terminals and test and training equipment operating over the military UHF satellite band. These
products are used in manpack satellite communication terminals as well as airborne, ship,
shore and mobile applications. We generally focus on opportunities for high-speed satellite
communications products which operate in higher frequencies.
The commercial segment comprises two business product groups: satellite networks and antenna
systems. Our commercial business comprises an end-to-end capability to provide customers with
satellite communication equipment solutions and includes:
Consumer Broadband. Our consumer products include the development of equipment and
technology across multiple satellite standards, including the development of DOCSIS®
(Data Over Cable Service Interface Specification)-based terminals and gateways.
Mobile Broadband. Our mobile broadband products include the design and development of
airborne, maritime and ground mobile terminals and systems. Existing certified systems in the
in-flight broadband market include Connexion by Boeing® and SKYLink for ARINC. We are
also developing systems for the maritime and ground mobile markets.
Enterprise VSAT. Our Enterprise VSAT (Very Small Aperture Terminal) satellite
communication products and services comprises a wide range of terminals, hubs, and networks
control systems as well as network management services for customers in North America and
internationally.
Satellite Networking Systems Design and Technology Development. We perform leading-edge
research and development for satellite communications systems and have developed an extensive
portfolio of technologies. Technologies include satellite networking, beam forming modems,
coding, voice and video encoding, IP and ATM via satellite, satellite ground terminals, onboard
processing, advanced satellite design, and antennas.
Integrated Circuit Design and Development. We specialize in the design of integrated
circuits, packaged components, and modules for commercial, military and space applications.
Areas of expertise include high frequency communication technology, MMIC semiconductor design,
high-power transceiver design, high levels of functional integration, high-frequency packaging
and design for low-cost manufacturing.
We were incorporated in California in 1986 and reincorporated in Delaware in 1996. Our
principal executive offices are located at 6155 El Camino Real, Carlsbad, California 92009, and our
telephone number is (760) 476-2200.
1
RISK FACTORS
An investment in the common stock offered by this prospectus involves a high degree of
risk. In addition to the other information in this prospectus, you should carefully consider the
following risks before making an investment decision. The risks and uncertainties described below
are not the only ones we face. Additional risks and uncertainties not presently known to us or that
we currently consider immaterial may also impair our business operations. If any of the following
risks actually occur, our business and financial results could be harmed. In that case, the trading
price of our common stock could decline. You should also refer to the other information set forth
in our most recent Annual Report on Form 10-K and Quarterly Reports
on Form 10-Q.
A Significant Portion of Our Revenues Is Derived from a Few of Our Contracts
A small number of our contracts account for a significant percentage of our revenues. Our
largest revenue producing contracts are related to our tactical data links (which includes
multifunction information distribution systems, or MIDS) products generating approximately 24% of
our revenues in fiscal year 2006, 22% of our revenues in fiscal year 2005 and 15% of our revenues
in fiscal year 2004. Our five largest contracts generated approximately 44% of our revenues in
fiscal year 2006, 27% of our revenues in fiscal year 2005 and 24% of our revenues in fiscal year
2004. Further, we derived approximately 19% of our revenues in fiscal year 2006, 26% of our
revenues in fiscal year 2005 and 28% of our revenues in fiscal year 2004 from sales of VSAT
communications networks. The failure of these customers to place additional orders or to maintain
these contracts with us for any reason, including any downturn in their business or financial
condition, or our inability to renew our contracts with these customers or obtain new contracts
when they expire, could materially harm our business and impair the value of our common stock.
If Our Customers Experience Financial or Other Difficulties, Our Business Could Be Materially
Harmed
A number of our commercial customers have in the past, and may in the future experience
financial difficulties. Many of our commercial customers face risks that are similar to those we
encounter, including risks associated with market growth, product defects, acceptance by the market
of products and services, and the ability to obtain sufficient capital. Further, many of our
customers that provide satellite based services (including WildBlue, Telesat, Intelsat, Shin
Satellite, Boeing and AIRINC) could be materially affected by a satellite failure and/or satellite
launch failure. We cannot assure you that our customers will be successful in managing these risks.
If our customers do not successfully manage these types of risks, it could impair our ability to
generate revenues, collect amounts due from these customers and materially harm our business.
Major communications infrastructure programs, such as proposed satellite communications
systems, are important sources of our current and planned future revenues. We also participate in a
number of defense programs. Programs of these types often cannot proceed unless the customer can
raise substantial funds, from either governmental or private sources. As a result, our expected
revenues can be adversely affected by political developments or by conditions in private and public
capital markets. They can also be adversely affected if capital markets are not receptive to a
customers proposed business plans. If our customers are unable to raise adequate funds it could
materially harm our business and impair the value of our common stock.
Our Development Contracts May Be Difficult for Us to Comply With and May Expose Us to
Third-Party Claims for Damages
We are often party to government and commercial contracts involving the development of
new products. We derived approximately 25% of our revenues in fiscal year 2006, 24% of our revenues
in fiscal year 2005 and 29% of our revenues in fiscal year 2004 from these development contracts.
These contracts typically contain strict performance obligations and project milestones. We cannot
assure you we will comply with these performance obligations or meet these project milestones in
the future. If we are unable to comply with these performance obligations or meet these milestones,
our customers may terminate these contracts and, under some circumstances, recover damages or other
penalties from us. We are not currently, nor have we always been, in compliance with all
outstanding performance obligations and project milestones. In the past, when we have not complied
with the performance obligations or project milestones in a contract, generally, the other party
has not elected to terminate the contract or seek damages from us. However, we cannot assure you in
the future other parties will not terminate
their contracts or seek damages from us. If other parties elect to terminate their contracts
or seek damages from us, it could materially harm our business and impair the value of our common
stock.
2
Our Success Depends on the Development of New Satellite and Other Wireless Communications
Products and Our Ability to Gain Acceptance of These Products
The wireless and satellite communications markets are subject to rapid technological
change, frequent new and enhanced product introductions, product obsolescence and changes in user
requirements. Our ability to compete successfully in these markets depends on our success in
applying our expertise and technology to existing and emerging satellite and other wireless
communications markets. Our ability to compete in these markets also depends in large part on our
ability to successfully develop, introduce and sell new products and enhancements on a timely and
cost-effective basis that respond to ever-changing customer requirements. Our ability to
successfully introduce new products depends on several factors, including:
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successful integration of various elements of our complex technologies and system architectures, |
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timely completion and introduction of new product designs, |
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achievement of acceptable product costs, |
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timely and efficient implementation of our manufacturing and assembly processes and cost
reduction efforts, |
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establishment of close working relationships with major customers for the design of
their new wireless communications systems incorporating our products, |
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development of competitive products and technologies by competitors, |
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marketing and pricing strategies of our competitors with respect to competitive products, and |
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market acceptance of our new products. |
We cannot assure you our product or technology development efforts for communications products
will be successful or any new products and technologies we develop, including ArcLight, KG-250,
MIDS-Joint Tactical Radio System, Surfbeam (our Data Over Cable Service Interface System-based
consumer broadband product), DVB-S2 and LinkStar, will achieve sufficient market acceptance. We may
experience difficulties that could delay or prevent us from successfully selecting, developing,
manufacturing or marketing new products or enhancements. In addition, defects may be found in our
products after we begin deliveries that could result in the delay or loss of market acceptance. If
we are unable to design, manufacture, integrate and market profitable new products for existing or
emerging communications markets, it could materially harm our business and impair the value of our
common stock.
We Expect to Incur Research and Development Costs, Which Could Significantly Reduce Our
Profitability
Our future growth depends on penetrating new markets, adapting existing communications
products to new applications, and introducing new communications products that achieve market
acceptance. Accordingly, we are actively applying our communications expertise to design and
develop new hardware and software products and enhance existing products. We spent $15.8 million in
fiscal year 2006, $8.1 million in fiscal year 2005 and $10.0 million in fiscal year 2004 in
research and development activities. We expect to continue to spend discretionary funds on research
and development in the near future. The amount of funds spent on research and development projects
is dependent on the amount and mix of customer funded development, the types of technology being
developed and the affordability of the technology being developed. Because we account for research
and development as an operating expense, these expenditures will adversely affect our earnings in
the near future. Our research and development program may not produce successful results, which
could materially harm our business and impair the value of our common stock.
Our Ability to Protect Our Proprietary Technology is Limited and Infringement Claims Against
Us Could Restrict Our Ability to Conduct Business
Our success depends significantly on our ability to protect our proprietary rights to the
technologies we use in our products and services. If we are unable to protect our proprietary
rights adequately, our competitors could use the intellectual property we have developed to enhance
their own products and services, which could materially harm our business and impair the value of
our common stock. We currently rely on a combination of patents, trade secret laws, copyrights,
trademarks, service marks and contractual rights to protect our intellectual property. We cannot
assure you the steps we have taken to protect our proprietary rights are adequate. Also, we cannot
assure you our issued patents will remain valid or that any pending patent applications will be
issued. Additionally, the laws of some foreign countries in which our products are or may be sold
do not protect our intellectual property rights to the same extent as do the laws of the United
States.
Litigation may often be necessary to protect our intellectual property rights and trade
secrets, to determine the validity and scope of the proprietary rights of others or to defend
against claims of infringement or invalidity. We believe infringement, invalidity, right to use or
ownership claims by third parties or claims for indemnification resulting from infringement claims
will likely be asserted against us in the future. If any claims or actions are asserted against us,
we may seek to obtain a license under a third partys intellectual property rights. We cannot
assure you, however, that a license will be available under reasonable terms or at all. Litigation
of intellectual property claims could be extremely expensive and time consuming, which could
materially harm our business, regardless of the outcome of the litigation. If our products are
found to infringe upon the rights of third parties, we may be forced to incur substantial costs to
develop alternative products. We cannot assure you we would be able to develop alternative products
or, if these alternative products were developed, they would perform as required or be accepted in
the applicable markets. Also, we have delivered certain technical data and information to the U.S.
government under procurement contracts, and it may have unlimited rights to use that technical data
and information. There can be no assurance that the U.S. government will not authorize others to
use that data and information to compete with us. If we are unable to address any of the risks
described above relating to the protection of our proprietary rights or the U.S. governments
rights with respect to certain technical data and information, it could materially harm our
business and impair the value of our common stock.
Compliance with Changing Regulation of Corporate Governance and Public Disclosure May Result
in Additional Expenses
Changing laws, regulations and standards relating to corporate governance and public
disclosure, including the Sarbanes-Oxley Act of 2002, new Securities and Exchange Commission (SEC) regulations and Nasdaq Stock Market
rules, are creating uncertainty for companies such as ours. These new or changed laws, regulations
and standards are subject to varying interpretations in many cases due to their lack of
specificity, and as a result, their application in practice may evolve over time as new guidance is
provided by regulatory and governing bodies, which could result in continuing uncertainty regarding
compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance
practices. We are committed to maintaining high standards of corporate governance and public
disclosure. As a result, our efforts to comply with evolving laws, regulations and standards have
resulted in, and are likely to continue to result in, increased general and administrative expenses
and a diversion of management time and attention from revenue-generating activities to compliance
activities. In particular, our efforts to comply with Section 404 of the Sarbanes-Oxley Act of 2002
and the related regulations regarding our required assessment of our internal control over
financial reporting and our independent registered public accounting firms audit of that
assessment has required, and is likely to continue to require, the commitment of significant
financial and managerial resources, which could materially harm our business and impair the value
of our common stock.
We May Identify Material Weaknesses in the Future
In the past we have identified a material weakness in internal control over financial
reporting. From time to time, we have also experienced deficiencies in internal control over
financial reporting that have not risen to the level of a material weakness. Although we have been
able to remediate the material weakness and certain internal control deficiencies in the past, we
cannot assure you in the future that a material weakness will not exist. If this would be the case,
and we cannot timely remediate such material weakness, management may conclude that our internal
control over financial reporting is not operating effectively or our independent registered public
accounting firm may be required to issue an adverse opinion on our internal control over financial
reporting, which could in either case adversely affect investor confidence and impair the value of
our common stock.
Changes in Financial Accounting Standards Related to Stock Option Expenses Are Expected to
Have a Significant Effect on Our Reported Results
The Financial Accounting Standards Board (FASB) issued a revised standard that requires
that we record compensation expense in the statement of operations for employee stock options using
the fair value method. The adoption of the new standard is expected to have a significant effect on
our reported earnings and could adversely impact our ability to provide accurate guidance on our
future reported financial results due to the variability of the factors used to establish the value
of stock options. As a result, the adoption of the new standard in fiscal year 2007 could impair
the value of our common stock and result in greater stock price volatility.
Any Failure to Successfully Integrate Strategic Acquisitions Could Adversely Affect Our
Business
In order to position ourselves to take advantage of growth opportunities, we have made,
and may continue to make, strategic acquisitions that involve significant risks and uncertainties.
These risks and uncertainties include:
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the difficulty in integrating newly-acquired businesses and operations in an efficient
and effective manner, |
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the challenges in achieving strategic objectives, cost savings and other benefits
expected from acquisitions, |
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the risk our markets do not evolve as anticipated and the technologies acquired do not
prove to be those needed to be successful in those markets, |
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the potential loss of key employees of the acquired businesses, |
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the risk of diverting the attention of senior management from the operations of our business, |
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the risks of entering markets in which we have less experience, and |
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the risks of potential disputes concerning indemnities and other obligations that could
result in substantial costs and further divert managements attention and resources. |
Any failure to successfully integrate strategic acquisitions could harm our business and
impair the value of our common stock. Furthermore, to complete future acquisitions we may issue
equity securities, incur debt, assume contingent liabilities or have amortization expenses and
write-downs of acquired assets, which could cause our earnings per share to decline.
Exports of Our Defense Products are Subject to the International Traffic in Arms Regulations
and Require a License from the U.S. Department of State Prior to Shipment
We must comply with the United States Export Administration Regulations and the
International Traffic in Arms Regulations, or ITAR. Our products that have military or strategic
applications are on the munitions list of the ITAR and require an individual validated license in
order to be exported to certain jurisdictions. Any changes in export regulations may further
restrict the export of our products, and we may cease to be able to procure export licenses for our
products under existing regulations. The length of time required by the licensing process can vary,
potentially delaying the shipment of products and the recognition of the corresponding revenue. Any
restriction on the export of a significant product line or a significant amount of our products
could cause a significant reduction in net sales.
Adverse Regulatory Changes Could Impair Our Ability to Sell Products
Our products are incorporated into wireless communications systems that must comply with
various government regulations, including those of the Federal Communications Commission (FCC). In
addition, we operate and provide services to customers through the use of several satellite earth
hub stations, which are licensed by the FCC. Regulatory changes, including changes in the
allocation of available frequency spectrum and in the military standards and specifications that
define the current satellite networking environment, could materially harm our business by (1)
restricting development efforts by us and our customers, (2) making our current products less
attractive or obsolete, or (3) increasing the opportunity for additional competition. Changes in,
or our failure to comply with, applicable regulations could materially harm our business and impair
the value of our common stock. In addition, the increasing demand for wireless communications has
exerted pressure on regulatory bodies worldwide to adopt new standards for these products and
services, generally following extensive investigation of and deliberation over competing
technologies. The delays inherent in this government approval process have caused
and may continue to cause our customers to cancel, postpone or reschedule their installation
of communications systems. This, in turn, may have a material adverse effect on our sales of
products to our customers.
9
Our Executive Officers and Directors Own a Large Percentage of Our Common Stock and Exert
Significant Influence Over Matters Requiring Stockholder Approval
As
of August 11, 2006, our executive officers and directors and their affiliates
beneficially owned an aggregate of approximately 18.6% of our common stock. Accordingly, these
stockholders may be able to significantly influence the outcome of corporate actions requiring
stockholder approval, such as mergers and acquisitions. These stockholders may exercise this
ability in a manner that advances their best interests and not necessarily those of other
stockholders. This ownership interest could also have the effect of delaying or preventing a change
in control.
We Have Implemented Anti-Takeover Provisions That Could Prevent an Acquisition of Our Business
at a Premium Price
Some of the provisions of our certificate of incorporation and bylaws could discourage,
delay or prevent an acquisition of our business at a premium price. These provisions:
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permit the Board of Directors to increase its own size and fill the resulting vacancies, |
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provide for a Board comprised of three classes of directors with each class serving a
staggered three-year term, |
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authorize the issuance of preferred stock in one or more series, and |
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prohibit stockholder action by written consent. |
In addition, Section 203 of the Delaware General Corporation Law imposes restrictions on
mergers and other business combinations between us and any holder of 15% or more of our common
stock.
Risks Related to Our Common Stock
Future Sales of Our Common Stock in the Public Market Could Lower the Stock Price
We may, in the future, sell additional shares of common stock in subsequent public offerings.
We may also issue additional shares of common stock to finance future acquisitions, including
acquisitions larger than those we have done in the past, through the use of equity. Additionally,
a substantial number of shares of our common stock are available for future sale pursuant to stock
options and warrants. We cannot predict the size of future issuances of our common stock or the
effect, if any, that future sales and issuances of shares of our common stock will have on the
market price of our common stock. Sales of substantial amounts of our common stock (including
shares issued upon the exercise of stock options and warrants or in connection with acquisition
financing), or the perception that such sales could occur, may adversely affect prevailing market
prices for our common stock.
We Expect Our Stock Price to Be Volatile
The market price of our common stock has been volatile in the past. For example, since April
2, 2001, the market price of our common stock has ranged from $3.91 to $30.83. Trading prices may
continue to fluctuate in response to a number of events and factors, including the following:
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quarterly variations in operating results and announcements of innovations, |
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new products, services and strategic developments by us or our competitors, |
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developments in our relationships with our customers, distributors and suppliers, |
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regulatory developments, |
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changes in our revenues, expense levels or profitability, |
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changes in financial estimates and recommendations by securities analysts, |
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failure to meet the expectations of securities analysts, |
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changes in the wireless communications industry, and |
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changes in the economy. |
Any of these events may cause the market price of our common stock to fall. In addition, the
stock market in general and the market prices for technology companies in particular have
experienced significant volatility that often has been unrelated to the operating performance of
these companies. These broad market and industry fluctuations may adversely affect the market price
of our common stock, regardless of our operating performance.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains and incorporates by reference forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. These forward-looking statements include, but are not limited to, statements about our
plans, objectives, expectations and intentions and other statements contained in this prospectus
that are not historical facts. When used in this prospectus, the words expects, anticipates,
intends, plans, believes, seeks, estimates, could, should, may, will and similar
expressions are generally intended to identify forward-looking statements. These forward-looking
statements are subject to a number of risks, uncertainties and assumptions about us, including,
among other things:
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the ability to successfully grow our commercial business, while maintaining our
significant government business, |
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the ability to successfully develop, introduce and sell new satellite and other wireless
communications products, |
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the ability to successfully develop technologies according to anticipated schedules that
meet performance expectations, |
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the ability to successfully integrate strategic acquisitions, |
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changes in product supply, pricing and customer demand, |
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changes in relationships with key suppliers, and |
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increased competition and other factors affecting the telecommunications market generally. |
We have described other risks concerning us under the caption entitled Risk Factors. We
undertake no obligation to publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. In light of these risks and uncertainties,
the forward-looking events and circumstances discussed in this prospectus may not occur and actual
results could differ materially from those anticipated or implied in the forward-looking
statements.
USE OF PROCEEDS
We will not receive any proceeds from the sale by the selling stockholders of the common stock
offered by this prospectus.
11
SELLING STOCKHOLDERS
Merger Agreement. Under the terms of an agreement and plan of merger and reorganization dated
June 20, 2006, we acquired all of the outstanding capital stock of Enerdyne Technologies, Inc.
Enerdyne is now our wholly owned subsidiary. As part of the aggregate purchase price, we issued to
the selling stockholders an aggregate of 744,104 shares of our common stock. We also agreed to
register for resale the 744,104 shares of our common stock offered by the selling stockholders in
this prospectus (of which 97,055 shares are only transferable to the selling stockholders under the
make whole provision described below). In connection with the acquisition, we entered into an
escrow agreement with the selling stockholders under which 67,226 of the shares of common stock
issued to the selling stockholders were placed in escrow to secure the indemnification obligations
of the selling stockholders under the merger agreement.
Make Whole. To the extent that the value of the shares of our common stock issued to HPLX
Funding, LLC (the sole former preferred stockholder of Enerdyne), together with the amount of any
proceeds from the sale of such shares within 45 days after the effectiveness of the registration
statement of which this prospectus is a part, is less than the value of the shares when issued, we
have agreed to transfer to HPLX up to 71,967 additional shares of our common stock to cover such
difference. Likewise, to the extent that the value of the shares of our common stock issued to
HPLX, together with the amount of any proceeds from the sale of such shares within 45 days after
the effectiveness of the registration statement, is greater than the value of the shares when
issued, HPLX has agreed to return to us for cancellation up to 71,967 shares of our common stock to
cover such difference. In the case of the former common stockholders of Enerdyne (Messrs. Nixon,
Gardner, Wickman and Kulinski listed below), who have agreed not to sell any shares of our common
stock issued to them at closing prior to the later of (a) the effective date of the registration
statement of which this prospectus is a part or (b) July 20, 2006 (the Make Whole Deadline), to the
extent that the value of such shares on the Make Whole Deadline is less than 80% of the value of
the shares when issued, we have agreed to transfer to the common stockholders up to 25,088
additional shares of our common stock to cover such difference (i.e., the difference between the
value of the shares on the Make Whole Deadline and 80% of the value of the shares when issued); and
to the extent that the value of such shares on the Make Whole Deadline is greater than 120% of the
value of the shares when issued, the common stockholders have agreed to return to us for
cancellation up to 25,088 shares of our common stock to cover such difference (i.e., the difference
between the value of the shares on the Make Whole Deadline and 120% of the value of the shares when
issued).
The following
table sets forth information with respect to the shares beneficially owned by
the selling stockholders. The information regarding shares owned after the offering assumes the
sale of all shares offered by the selling stockholders. Other than as described above or in the
footnotes to the table below, none of the selling stockholders has held a position or office or had
a material relationship with us or any of our affiliates within the past three years other than as
a result of the ownership of our common stock. The address of each the selling stockholders
is c/o Enerdyne Technologies, Inc. 1935 Cordell Court, San Diego, CA 92020.
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Number of |
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Shares |
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Beneficially |
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Shares Beneficially Owned After |
Name of |
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Owned Prior to |
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Number of Shares |
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Offering |
Selling Stockholder |
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the Offering |
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Being Offered |
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Number |
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Percentage |
HPLX Funding, LLC(1) |
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551,751 |
(3) |
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551,751 |
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0 |
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* |
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Brandon L. Nixon(2) |
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104,489 |
(4) |
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104,489 |
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0 |
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* |
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Steven H. Gardner(2) |
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52,244 |
(5) |
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52,244 |
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0 |
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* |
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Paul P. Wickman(2) |
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24,222 |
(6) |
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24,222 |
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0 |
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* |
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Michael B. Kulinski(2) |
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11,398 |
(7) |
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11,398 |
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0 |
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* |
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(1) |
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The members of HPLX are Housatonic Micro Fund, L.P., Housatonic Micro Fund SBIC, L.P. and Lexington
Funding LLC. The members of the board of directors of HPLX Funding LLC are Brandon Nixon, chairman, Joseph Niehaus
and Harvey Gettleson. |
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(2) |
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The selling stockholder is currently an officer of Enerdyne, a wholly owned subsidiary of
ViaSat. |
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The shares being offered include 71,967 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
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The shares being offered include 13,629 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
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The shares being offered include 6,814 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
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The shares being offered include 3,159 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
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The shares being offered include 1,486 shares of common stock transferable to the selling
stockholder under the make whole provision described above. |
The selling stockholders listed in the above table may have sold or transferred, in
transactions pursuant to this prospectus or exempt from the registration requirements of the
Securities Act, some or all of their shares since the date as of which the information is presented
in the above table. Information concerning the selling stockholders may change from time to time
and any such changed information will be set forth in supplements to this prospectus or amendments
to the registration statement of which this prospectus is a part if and when necessary.
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PLAN OF DISTRIBUTION
The selling stockholders, which as used herein includes donees, pledgees, transferees or other
successorsininterest selling shares received after the date of this prospectus from a selling
stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time,
sell, transfer or otherwise dispose of any or all of their shares on any stock exchange, market or
trading facility on which the shares are traded or in private transactions. These dispositions may
be at fixed prices, at prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.
The selling stockholders may use any one or more of the following methods when disposing of
shares:
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ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers; |
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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; |
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
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an exchange distribution in accordance with the rules of the applicable exchange; |
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privately negotiated transactions; |
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short sales effected after the date the registration statement of which this
prospectus is a part is declared effective by the SEC; |
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through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise; |
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broker-dealers may agree with the selling stockholders to sell a specified number
of such shares at a stipulated price per share; |
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a combination of any such methods of sale; or |
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any other method permitted pursuant to applicable law. |
The selling stockholders may also sell shares under Rule 144 under the Securities Act, if
available, rather than under this prospectus. The selling stockholders are not obligated to, and
there is no assurance that the selling stockholders will, sell all or any of the shares we are
registering. The selling stockholders may transfer, devise or gift such shares by other means not
described in this prospectus.
In connection with the sale of our shares, the selling stockholders may enter into hedging
transactions with broker-dealers or other financial institutions, which may in turn engage in short
sales of the common stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of our common stock short and deliver these securities to close
out their short positions, or loan or pledge the common stock to broker-dealers that in turn may
sell these securities. The selling stockholders may also enter into option or other transactions
with broker-dealers or other financial institutions or the creation of one or more derivative
securities which require the delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The aggregate proceeds to the selling stockholders from the sale of the common stock offered
by them will be the purchase price of the common stock less discounts or commissions, if any. Each
of the selling stockholders reserves the right to accept and, together with their agents from time
to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly
or through agents. We will not receive any of the proceeds from this offering. We are required to
pay certain fees and expenses incurred by us incident to the registration of the shares.
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Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the selling
stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions
and discounts to exceed what is customary in the types of transactions involved. Any profits on
the resale of shares by a broker-dealer acting as principal might be deemed to be underwriting
discounts or commissions under the Securities Act. Discounts, concessions, commissions and similar
selling expenses, if any, attributable to the sale of shares will be borne by a selling
stockholder. The selling stockholders may agree to indemnify any agent, dealer or broker-dealer
that participates in transactions involving sales of the shares if liabilities are imposed on that
person under the Securities Act.
The selling stockholders, broker-dealers or agents that participate in the sale of the common
stock may be underwriters within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the shares may be
underwriting discounts and commissions under the Securities Act. Selling stockholders who are
underwriters within the meaning of Section 2(11) of the Securities Act will be subject to the
prospectus delivery requirements of the Securities Act. There is no underwriter or coordinating
broker acting in connection with the proposed sale of the resale shares by the selling
stockholders.
The selling stockholders may from time to time pledge or grant a security interest in some or
all of the shares owned by them and, if they default in the performance of any of their secured
obligations, the pledgees or secured parties may offer and sell the shares from time to time under
this prospectus as it may be supplemented from time to time, or under an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the
list of selling stockholders to include the pledgee, transferee or other successors in interest as
selling stockholders under this prospectus.
To the extent required, the shares to be sold, the names of the selling stockholders, the
respective purchase prices and public offering prices, the names of any agents, dealer or
underwriter, any applicable commissions or discounts with respect to a particular offer will be set
forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to
the registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if applicable, the common stock
may be sold in these jurisdictions only through registered or licensed brokers or dealers. In
addition, in some states the common stock may not be sold unless it has been registered or
qualified for sale or an exemption from registration or qualification requirements is available and
is complied with.
The anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of
shares in the market and to the activities of the selling stockholders and their affiliates. In
addition, we will make copies of this prospectus (as it may be supplemented or amended from time to
time) available to the selling stockholders for the purpose of satisfying the prospectus delivery
requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
We have agreed with the selling stockholders to keep the registration statement of which this
prospectus constitutes a part effective until the sale of all the shares registered thereby or
until all of such shares may be continuously sold by each selling stockholder within a 90 day
period under Rule 144 of the Securities Act.
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DESCRIPTION OF CAPITAL STOCK
General
This prospectus describes the general terms of our capital stock. For a more
detailed description of these securities, you should read the applicable provisions of Delaware law
and our certificate of incorporation and bylaws.
Under our certificate of incorporation, the total number of shares of all
classes of stock that we have authority to issue is 105,000,000, consisting of 5,000,000 shares of
preferred stock, par value $.0001 per share, and 100,000,000 shares of common stock, par value
$.0001 per share.
Common Stock
As
of August 11, 2006, we had 28,576,116 shares of common stock outstanding. The holders of
our common stock are entitled to one vote for each share on all matters voted on by stockholders.
The holders of our common stock do not have cumulative voting rights, which mean that holders of
more than one-half of the shares voting for the election of directors can elect all of the
directors then being elected. Subject to the preferences of any of our outstanding preferred stock,
the holders of our common stock are entitled to a proportional distribution of any dividends that
may be declared by the board of directors. In the event of our liquidation or dissolution, the
holders of our common stock are entitled to share equally in all assets remaining after payment of
liabilities and any payments due to holders of any outstanding shares of our preferred stock. The
outstanding shares of our common stock are fully paid and nonassessable. The rights, preferences
and privileges of holders of our common stock are subject to, and may be adversely affected by, the
rights of the holders of shares of any of our outstanding preferred stock.
Preferred Stock
We currently have no outstanding shares of preferred stock. Under our certificate of
incorporation, our board of directors is authorized to issue shares of our preferred stock from
time to time, in one or more classes or series, without stockholder approval. Prior to the issuance
of shares of each series, the board of directors is required by the General Corporation Law of the
State of Delaware, known as the DGCL, and our certificate of incorporation to adopt resolutions and
file a certificate of designation with the Secretary of State of the State of Delaware. The
certificate of designation fixes for each class or series the designations, powers, preferences,
rights, qualifications, limitations and restrictions, including the following:
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the number of shares constituting each class or series; |
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voting rights; |
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rights and terms of redemption, including sinking fund provisions; |
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dividend rights and rates; |
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dissolution; |
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terms concerning the distribution of assets; |
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conversion or exchange terms; |
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redemption prices; and |
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liquidation preferences. |
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Anti-Takeover Provisions
As a corporation organized under the laws of the State of Delaware, we are subject to
Section 203 of the DGCL, which restricts our ability to enter into business combinations with an
interested stockholder or a stockholder owning 15% or more of our outstanding voting stock, or that
stockholders affiliates or associates, for a period of three years. These restrictions do not
apply if:
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prior to becoming an interested stockholder, our board of directors approves either the
business combination or the transaction in which the stockholder becomes an interested
stockholder; |
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upon consummation of the transaction in which the stockholder becomes an interested
stockholder, the interested stockholder owns at least 85% of our voting stock outstanding
at the time the transaction commenced, subject to exceptions; or |
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on or after the date a stockholder becomes an interested stockholder, the business
combination is both approved by our board of directors and authorized at an annual or
special meeting of our stockholders by the affirmative vote of at least two-thirds of the
outstanding voting stock not owned by the interested stockholder. |
Some provisions of our certificate of incorporation and bylaws could also have
anti-takeover effects. These provisions:
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permit the board of directors to increase its own size and fill the resulting vacancies; |
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provide for a board comprised of three classes of directors with each class serving a
staggered three-year term; |
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authorize the issuance of preferred stock in one or more series; and |
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prohibit stockholder action by written consent. |
These provisions are intended to enhance the likelihood of continuity and
stability in the composition of the policies formulated by the board of directors. In addition,
these provisions are intended to ensure that the board of directors will have sufficient time to
act in what it believes to be in the best interests of us and our stockholders. These provisions
also are designed to reduce our vulnerability to an unsolicited proposal for a takeover of us that
does not contemplate the acquisition of all of our outstanding shares or an unsolicited proposal
for the restructuring or sale of all or part of us. The provisions are also intended to discourage
some tactics that may be used in proxy fights.
Classified Board of Directors
The certificate of incorporation provides for the board of directors to be divided into
three classes of directors, with each class as nearly equal in number as possible, serving
staggered three-year terms. As a result, approximately one-third of the board of directors will be
elected each year. The classified board provision will help to assure the continuity and stability
of the board of directors and our business strategies and policies as determined by the board of
directors. The classified board provision could have the effect of discouraging a third party from
making a tender offer or attempting to obtain control of us. In addition, the classified board
provision could delay stockholders who do not agree with the policies of the board of directors
from removing a majority of the board of directors for two years.
No Stockholder Action by Written Consent; Special Meetings
The certificate of incorporation provides that stockholder action can only be taken at an
annual or special meeting of stockholders and prohibits stockholder action by written consent in
lieu of a meeting.
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The certificate of incorporation also provides that special meetings of
stockholders may be called only by the board of directors, its chairman, our president or
secretary. Stockholders are not permitted to call a special meeting of stockholders or to require
that the board of directors call a special meeting.
Number of Directors; Removal; Filling Vacancies
The certificate of incorporation provides that the board of directors will consist of
between four and eleven members, the exact number to be fixed by resolution adopted by affirmative
vote of a majority of the board of directors. The board of directors
currently consists of seven
directors. Further, the certificate of incorporation authorizes the board of directors to fill
newly created directorships. Accordingly, this provision could prevent a stockholder from obtaining
majority representation on the board of directors by permitting the board of directors to enlarge
the size of the board and fill the new directorships with its own nominees. A director so elected
by the board of directors holds office until the next election of the class for which the director
has been chosen and until his or her successor is elected and qualified. The certificate of
incorporation also provides that directors may be removed only for cause and only by the
affirmative vote of holders of a majority of the total voting power of all outstanding securities.
The effect of these provisions is to preclude a stockholder from removing incumbent directors
without cause and simultaneously gaining control of the board of directors by filling the
vacancies created by the removal with its own nominees.
Transfer Agent and Registrar
The Transfer Agent and Registrar for our common stock is Computershare Investor Services
LLC.
LEGAL MATTERS
Latham & Watkins LLP, San Diego, California, will pass upon the validity of the securities
being offered by this prospectus.
EXPERTS
The
financial statements and managements assessment of internal control
over financial reporting (which is included in Managements
Report on Internal Control over Financial Reporting) incorporated in this Prospectus by reference to the
Annual Report on Form 10-K of ViaSat, Inc. for the year ended March 31, 2006 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
an independent registered public
accounting firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Exchange Act and file annual,
quarterly and special reports, proxy statements and other information with the SEC. You may read
and copy any reports, proxy statements and other information we file at the SECs public reference
room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. You may also access filed documents at the
SECs web site at www.sec.gov.
We are incorporating by reference some information about us that we file with the SEC. We
are disclosing important information to you by referencing those filed documents. Any information
that we reference this way is considered part of this prospectus. The information in this
prospectus supersedes information incorporated by reference that we have filed with the SEC prior
to the date of this prospectus, while information that we file with the SEC after the date of this
prospectus that is incorporated by reference will automatically update and supersede this
information.
We incorporate by reference the following documents we have filed, or may file, with the SEC:
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Our Annual Report on Form 10-K for the fiscal year ended March 31, 2006 filed with the
SEC on June 6, 2006, as amended by our Annual Report on Form
10-K/A filed with the SEC on July 28, 2006; |
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Our Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2006 filed with the SEC on August 10, 2006; |
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Our Current Reports on Form 8-K filed with the SEC on
April 5, 2006, May 8, 2006, June 23, 2006,
July 18, 2006 and August 10, 2006; |
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The description of our common stock contained in our Registration Statement on Form 8-A
filed with the SEC on November 20, 1996; and |
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All documents filed by us with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this prospectus and before the termination of this offering. |
To the extent that any information contained in any Current Report on Form 8-K, or any exhibit
thereto, was furnished to, rather than filed with, the SEC, such information or exhibit is
specifically not incorporated by reference in this prospectus.
You may request a free copy of any of the documents incorporated by reference in this
prospectus by writing or telephoning us at the following address:
ViaSat, Inc.
6155 El Camino Real
Carlsbad, California 92009
(760) 476-2200
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