Selling Security Holder Offering Prospectus
962,750 SHARES
PARLEX CORPORATION LOGO
COMMON STOCK
______________________
This prospectus covers the resale of an aggregate of 962,750 shares
of our common stock, consisting of 406,250 shares issuable upon conversion
of our Series A Preferred Stock, 203,125 shares issuable upon exercise of
common stock purchase warrants granted to the purchasers of the Series A
Preferred Stock and 121,875 shares issuable pursuant to an over-allotment
option by the purchasers of the Series A Preferred Stock. In addition, this
prospectus covers the registration of (i) an additional 31,500 shares
issuable upon exercise of common stock purchase warrants granted to a
placement agent in connection with a previous transaction, and (ii) 200,000
shares that may be payable as dividends on the Series A Preferred Stock.
We will receive no part of the proceeds from the sale of any of the
shares by the selling security holders although we may receive, subject to
certain anti-dilution adjustments, cash proceeds from the exercise of the
common stock purchase warrants at $8.00 per share. As of July 8, 2004, none
of the selling security holders has exercised his, her or its conversion
rights under the Series A Preferred Stock, or rights to exercise the common
stock purchase warrants.
Our common stock is quoted on the Nasdaq National Market under the
symbol "PRLX." On July 8, 2004, the last reported sale price for our common
stock as reported by the Nasdaq National Market was $6.30 per share. Our
executive offices are located at One Parlex Place, Methuen, Massachusetts
01844, and our telephone number is (978) 685-4341.
______________________
Investing in our common stock involves a high degree of risk. Please see
"Risk Factors" beginning on page 4 for information that should be
considered carefully before investing.
______________________
These securities have not been approved or disapproved by the Securities
and Exchange Commission or any state securities commission, nor has the
Securities and Exchange Commission or any state securities commission
passed upon the adequacy or accuracy of this prospectus. Any representation
to the contrary is a criminal offense.
_____________________
The date of this prospectus is July 9, 2004.
______________________
TABLE OF CONTENTS
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Page
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Parlex Corporation 1
Risk Factors 1
Forward-Looking Statements 11
Use of Proceeds 11
Selling Security Holders 12
Plan of Distribution 16
Legal Matters 17
Experts 17
Where You Can Find More Information 17
Documents Incorporated by Reference 18
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You should rely only on the information contained in this prospectus or
information specifically incorporated by reference in this prospectus. We
have not authorized anyone to provide you with information that is
different. Neither the delivery of this prospectus, nor any sale made
hereunder, shall create any implication that the information in this
prospectus is correct after the date hereof. This prospectus is not an
offer to or solicitation of any person in any jurisdiction in which such
offer or solicitation is illegal.
PARLEX CORPORATION
This summary may not contain all of the information that may be
important to you. You should read the more detailed information and the
financial information and related notes that are incorporated by reference
into this prospectus.
We believe we are a leading provider of flexible interconnect
solutions to the automotive, telecommunications and networking, diversified
electronics, aerospace, home appliance, electronic identification, and
computer markets. Our product offerings, which we believe are the broadest
of any company in the flexible interconnect industry, include flexible
circuits, laminated cable, flexible interconnect hybrid circuits, prototype
flexible circuits and flexible interconnect assemblies.
Our objective is to be the supplier of choice for key customers in
markets where cost-effective flexible interconnects provide added value to
our customers' products. We believe that our creative engineering expertise,
our ability to advance the technology of manufacturing processes and
materials and our broad product portfolio allows us to provide the lowest
cost solution that meets the performance requirements of our customers.
We supply products to some of the leading original equipment
manufacturers in our target markets, including Hewlett-Packard, Raytheon,
Motorola, Dell Computer, Siemens, and Whirlpool. We also supply these
products to major electronic manufacturing companies such as Flextronics,
Solectron, Sanmina, and JABIL. We operate six manufacturing facilities,
which are located in China, Mexico, the United Kingdom and the United
States.
Parlex Corporation was incorporated in Massachusetts in 1970. Our
principal executive offices are located at One Parlex Place, Methuen,
Massachusetts 01844, and our telephone number is (978) 685-4341. Unless
otherwise indicated, references in this prospectus to "Parlex," "we," "us"
and "our" are to Parlex Corporation and our wholly-owned and majority-owned
subsidiaries.
RISK FACTORS
Our prospects are subject to certain uncertainties and risks. Our future
results may differ materially from the current results and actual results
could differ materially from those projected in the forward-looking
statements as a result of certain risk factors, other one-time events
and other important factors disclosed previously and from time to time
in our other filings with the Securities and Exchange Commission.
If we cannot obtain additional financing when needed, we may experience a
material adverse impact on our operations.
We may need to raise additional funds either through borrowings or further
equity financings. We may not be able to raise additional capital on
reasonable terms, or at all. The cash expected to be generated will not be
sufficient to enable us to meet our financing and operating obligations
over the next twelve months based on current growth plans. If we cannot
raise the required funds when needed, we may experience a material adverse
impact on our operations.
Our business has been, and could continue to be, materially adversely
affected as a result of general economic and market conditions.
We are subject to the effects of general global economic and market
conditions. Our operating results have been materially adversely affected
as a result of recent unfavorable economic conditions and reduced
electronics industry spending on both a domestic and worldwide basis.
Though we have experienced some general market spending improvement during
the past quarter, should market conditions not continue to improve, our
business, results of operations or financial condition could continue to be
materially adversely affected.
We have at times relied upon waivers from our lenders and amendments or
modifications to our financing agreements to avoid any acceleration of our
debt payments. In the event that we are not in compliance with our
financial covenants in the future, we cannot be certain our lenders will
grant us waivers or execute
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amendments on terms which are satisfactory to us. If such waivers are not
received, our debt is immediately callable.
Since entering into our current loan arrangement with our primary lender,
Silicon Valley Bank, in June of 2003, we have requested and received
several waivers relating to our failure to comply with certain financial
covenants under our loan arrangement. In conjunction with the waivers, we
have also executed several modifications of our loan arrangement which have
primarily resulted in easing our covenant compliance requirements, but have
also increased our costs of borrowing. Although we do not believe Silicon
Valley Bank will exercise any right it may have to immediately call our
debt if we fail to comply with our financial covenants, we cannot guarantee
that they will not do so. We are currently in compliance with all of our
financial covenants, as amended.
The issuance of our shares upon conversion of outstanding convertible
notes, conversion of preferred stock and upon exercise of outstanding
warrants may cause significant dilution to our stockholders and may have an
adverse impact on the market price of our common stock.
On July 28, 2003, we completed a private placement of our 7% convertible
subordinated notes (and accompanying warrants) in an aggregate subscription
amount of $6 million. The conversion price of the convertible notes and the
exercise price of the warrants is $8.00 per share. In addition, on June 8,
2004, we completed a private placement of 40,625 shares of our Series A
Convertible Preferred Stock (the "Preferred Stock") (and accompanying
warrants), for $80.00 per share, or $3.25 million in the aggregate. Each
share of Preferred Stock may be converted at any time at the holder of the
Preferred Stock's option for 10 shares of common stock, and the exercise
price of the warrants is $8.00 per share.
The issuance of our shares upon conversion of the convertible subordinated
notes and/or Preferred Stock, and exercise of the warrants, and their
resale by the holders thereof will increase our publicly traded shares.
These re-sales could also depress the market price of our common stock. We
will not control whether or when the holders of these securities elect to
convert or exercise their securities for common stock. For additional
information relating to the sale of Preferred Stock and related warrants,
please see "Selling Security Holders - Transaction Overview - Stock and
Warrant Purchase Agreement."
The perceived risk of dilution may cause our stockholders to sell their
shares, which would contribute to a downward movement in the stock price of
our common stock. Moreover, the perceived risk of dilution and the
resulting downward pressure on our stock price could encourage investors to
engage in short sales of our common stock. By increasing the number of
shares offered for sale, material amounts of short selling could further
contribute to progressive price declines in our common stock.
Substantial leverage and debt service obligations may adversely affect us.
We have a substantial amount of indebtedness. As of March 28, 2004, we had
approximately $23 million of consolidated debt. Our substantial level of
indebtedness increases the possibility that we may be unable to generate
sufficient cash to pay when due the principal of, interest on, or other
amounts due with respect to our indebtedness. Approximately 55% of our
outstanding indebtedness bears interest at floating rates. As a result, our
interest payment obligations on such indebtedness will increase if interest
rates increase.
Our substantial leverage could have significant negative consequences on
our financial condition, results of operations, and cash flows, including:
* Impairing our ability to meet one or more of the financial
ratios contained in our debt agreements or to generate cash
sufficient to pay interest or principal, including periodic
principal amortization payments, which events could result in
an acceleration of some or all of our outstanding debt as a
result of cross-default provisions;
* Increasing our vulnerability to general adverse economic and
industry conditions;
* Limiting our ability to obtain additional debt or equity
financing;
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* Requiring the dedication of a substantial portion of our cash
flow from operations to service our debt, thereby reducing the
amount of our cash flow available for other purposes, including
capital expenditures;
* Requiring us to sell debt or equity securities or to sell some
of our core assets, possibly on unfavorable terms, to meet
payment obligations;
* Limiting our flexibility in planning for, or reacting to,
changes in our business and the industries in which we compete;
and
* Placing us at a possible competitive disadvantage with less
leveraged competitors and competitors that may have better
access to capital resources.
Our credit agreement contains restrictive covenants that could adversely
affect our business by limiting our flexibility.
Our credit agreement imposes restrictions that affect, among other things,
our ability to incur additional debt, pay dividends, sell assets, create
liens, make capital expenditures and investments, merge or consolidate,
enter into transactions with affiliates, and otherwise enter into certain
transactions outside the ordinary course of business. Our credit agreement
also requires us to maintain specified financial ratios and meet certain
financial tests. Our ability to continue to comply with these covenants and
restrictions may be affected by events beyond our control. A breach of any
of these covenants or restrictions would result in an event of default
under our credit agreement. Upon the occurrence of a breach, the lender
under our credit agreement could elect to declare all amounts borrowed
there under, together with accrued interest, to be due and payable,
foreclose on the assets securing our credit agreement and/or cease to
provide additional revolving loans or letters of credit, which would have a
material adverse effect on us.
We have incurred losses in the first nine months of fiscal 2004 and in each
of the last three years, and we may continue to incur losses.
We incurred net losses in the recently completed nine months ended March
28, 2004, as well as in fiscal years 2003, 2002 and 2001. We had net losses
of $6.6 million in the nine months ended March 28, 2004, $19.5 million in
fiscal year 2003, $10.4 million in fiscal year 2002 and $6.2 million in
fiscal year 2001. Our operations may not be profitable in the future.
If we cannot obtain additional financing when needed, we may not be able to
expand our operations and invest adequately in research and development,
which could cause us to lose customers and market share.
The development and manufacturing of flexible interconnects is capital
intensive. To remain competitive, we must continue to make significant
expenditures for capital equipment, expansion of operations and research
and development. We expect that substantial capital will be required to
expand our manufacturing capacity and fund working capital for anticipated
growth. We may need to raise additional funds either through borrowings or
further equity financings. We may not be able to raise additional capital
on reasonable terms, or at all. If we cannot raise the required funds when
needed, we may not be able to satisfy the demands of existing and
prospective customers and may lose revenue and market share.
Our operating results fluctuate and may fail to satisfy the expectations of
public market analysts and investors, causing our stock price to decline.
Our operating results have fluctuated significantly in the past and we
expect our results to continue to fluctuate in the future. Our results may
fluctuate due to a variety of factors, including the timing and volume of
orders from customers, the timing of introductions of and market acceptance
of new products, changes in prices of raw materials, variations in
production yields and general economic trends. It is possible that in some
future periods our results of operations may not meet or exceed the
expectations of public market analysts and investors. If this occurs, the
price of our common stock is likely to decline.
Our quarterly results depend upon a small number of large orders received
in each quarter, so the loss of any single large order could adversely
impact quarterly results and cause our stock price to drop.
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A substantial portion of our sales in any given quarter depends on
obtaining a small number of large orders for products to be manufactured
and shipped in the same quarter in which the orders are received. Although
we attempt to monitor our customers' needs, we often have limited knowledge
of the magnitude or timing of future orders. It is difficult for us to
reduce spending on short notice on operating expenses such as fixed
manufacturing costs, development costs and ongoing customer service. As a
result, a reduction in orders, or even the loss of a single large order,
for products to be shipped in any given quarter could have a material
adverse effect on our quarterly operating results. This, in turn, could
cause our stock price to decline.
Because we sell a substantial portion of our products to a limited number
of customers, the loss of a significant customer or a substantial reduction
in orders by any significant customer would adversely impact our operating
results.
Historically we have sold a substantial portion of our products to a
limited number of customers. Our 20 largest customers based on sales
accounted for approximately 51% of total revenues through the first nine
months of fiscal 2004, 50% of total revenues in fiscal 2003, 44% in fiscal
2002 and 55% in fiscal 2001.
We expect that a limited number of customers will continue to account for a
high percentage of our total revenues in the foreseeable future. As a
result, the loss of a significant customer or a substantial reduction in
orders by any significant customer would cause our revenues to decline and
have an adverse effect on our operating results.
If we are unable to respond effectively to the evolving technological
requirements of customers, our products may not be able to satisfy the
demands of existing and prospective customers and we may lose revenues and
market share.
The market for our products is characterized by rapidly changing technology
and continuing process development. The future success of our business will
depend in large part upon our ability to maintain and enhance our
technological capabilities. We will need to develop and market products
that meet changing customer needs, and successfully anticipate or respond
to technological changes on a cost-effective and timely basis. There can be
no assurance that the materials and processes that we are currently
developing will result in commercially viable technological processes, or
that there will be commercial applications for these technologies. In
addition, we may not be able to make the capital investments required to
develop, acquire or implement new technologies and equipment that are
necessary to remain competitive. If we fail to keep pace with technological
change, our products may become less competitive or obsolete and we may
lose customers and revenues.
Competing technologies may reduce demand for our products.
Flexible circuit and laminated cable interconnects provide electrical
connections between components in electrical systems and are used as a
platform to support the attachment of electronic devices. While flexible
circuits and laminated cables offer several advantages over competing
printed circuit board and ceramic hybrid circuit technologies, our
customers may consider changing their designs to use these alternative
technologies in future applications. If our customers switch to alternative
technologies, our business, financial condition and results of operations
could be materially adversely affected. It is also possible that the
flexible interconnect industry could encounter competition from new
technologies in the future that render existing flexible interconnect
technology less competitive or obsolete.
We are heavily dependent upon certain target markets for domestic
manufacturing. A slowdown in these markets could have a material impact on
domestic capacity utilization resulting in lower sales and gross margins.
We manufacture our products in six facilities worldwide, including lower
cost offshore locations in China. However, a significant portion of our
manufacturing is still performed domestically. Domestic manufacturing may
be at a competitive disadvantage with respect to price when compared to
lower cost facilities in Asia and other locations. While historically our
competitors in these locations have produced less technologically advanced
products, they continue to expand their capabilities. Further, we have
targeted markets that have historically sought domestic manufacturing,
including the military and aerospace markets. Should we be unsuccessful in
maintaining our
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competitive advantage or should certain target markets also move production
to lower cost offshore locations, our domestic sales will decline resulting
in significant excess capacity and reduced gross margins.
A significant downturn in any of the sectors in which we sell products
could result in a revenue shortfall.
We sell our flexible interconnect products principally to the automotive,
telecommunications and networking, diversified electronics, military, home
appliance, electronic identification and computer markets. The worldwide
electronics industry has seen a substantial downturn since 2001 impacting a
number of our target markets. Although we serve a variety of markets to
avoid a dependency on any one sector, a significant further downturn in any
of these market sectors could cause a material reduction in our revenues,
which could be difficult to replace.
We rely on a limited number of suppliers, and any interruption in our
primary sources of supply, or any significant increase in the prices of
materials, chemicals or components, would have an adverse effect on our
short-term operating results.
We purchase the bulk of our raw materials, process chemicals and components
from a limited number of outside sources. In fiscal 2003, we purchased
approximately 17% of our materials from DuPont and Northfield Acquisition
Co., doing business as Sheldahl, our two largest suppliers. We operate
under tight manufacturing cycles with a limited inventory of raw materials.
As a result, although there are alternative sources of the materials that
we purchase from our existing suppliers, any unanticipated interruption in
supply from DuPont or Sheldahl, or any significant increase in the prices
of materials, chemicals or components, would have an adverse effect on our
short-term operating results.
The additional expenses and risks related to our existing international
operations, as well as any expansion of our global operations, could
adversely affect our business.
We own a 90.1% equity interest in our investment in China, Parlex Shanghai,
which manufactures and sells flexible circuits. We also operate a facility
in Mexico for use in the finishing, assembly and testing of flexible
circuit and laminated cable products. We have a facility in the United
Kingdom where we manufacture polymer thick film flexible circuits and
polymer thick film flexible circuits with surface mounted components and
intend to introduce production of laminated cable within the next year. We
will continue to explore appropriate expansion opportunities as demand for
our products increases.
Manufacturing and sales operations outside the United States carry a number
of risks inherent in international operations, including: imposition of
governmental controls, regulatory standards and compulsory licensure
requirements; compliance with a wide variety of foreign and U.S. import and
export laws; currency fluctuations; unexpected changes in trade
restrictions, tariffs and barriers; political and economic instability;
longer payment cycles typically associated with foreign sales; difficulties
in administering business overseas; foreign labor issues; wars and acts of
terrorism; and potentially adverse tax consequences. Although these issues
have not materially impacted our revenues or operations to date, we cannot
guarantee that they will not impact our revenues or operations in the
future.
International expansion may require significant management attention, which
could negatively affect our business. We may also incur significant costs
to expand our existing international operations or enter new international
markets, which could increase operating costs and reduce our profitability.
We face significant competition, which could make it difficult for us to
acquire and retain customers.
We face competition worldwide in the flexible interconnect market from a
number of foreign and domestic providers, as well as from alternative
technologies such as rigid printed circuits. Many of our competitors are
larger than we are and have greater financial resources. New competitors
could also enter our markets. Our competitors may be able to duplicate our
strategies, or they may develop enhancements to, or future generations of,
products that could offer price or performance features that are superior
to our products. Competitive pressures could also necessitate price
reductions, which could adversely affect our operating results. In
addition, some of our competitors are based in foreign countries and have
cost structures and prices based on foreign currencies. Accordingly,
currency
7
fluctuations could cause our dollar-priced products to be less competitive
than our competitors' products priced in other currencies.
We will need to make a continued high level of investment in product
research and development, sales and marketing and ongoing customer service
and support in order to remain competitive. We may not have sufficient
resources to be able to make these investments. Moreover, we may not be
able to make the technological advances necessary to maintain our
competitive position in the flexible interconnect market.
We face risks from fluctuations in the value of foreign currency versus the
U.S. dollar and the cost of currency exchange.
While we transact business predominantly in U.S. dollars, a large portion
of our sales and expenses are denominated in foreign currencies, primarily
the Chinese Renminbi ("RMB"), the basic unit of currency issued by the
People's Bank of China. Currently, our exposure to risk from foreign
exchange is limited due to the fact that the People's Republic of China has
fixed the exchange rate of the Renminbi to the US dollar. The value of the
Renminbi is subject to changes in the PRC government's policies and depends
to an extent on its domestic and international economic and political
developments, as well as supply and demand in the local market. We cannot
give any assurance that the Renminbi will continue to remain stable against
the US dollar and other foreign currencies. Any devaluation of the Renminbi
may adversely affect our results of operations. In addition, a small
portion of our sales and expenses are denominated in Euros and the British
Pound. Changes in the relation of foreign currencies to the U.S. dollar
will affect our cost of sales and operating margins and could result in
exchange losses. We do not enter into foreign exchange contracts to reduce
our exposure to these risks.
If we are unable to attract, retain and motivate key personnel, we may not
be able to develop, sell and support our products and our business may lack
strategic direction.
We are dependent upon key members of our management team. In addition, our
future success will depend in large part upon our continuing ability to
attract, retain and motivate highly qualified managerial, technical and
sales personnel. Competition for such personnel is intense, and there can
be no assurance that we will be successful in hiring or retaining such
personnel. We currently maintain a key person life insurance policy in the
amount of $1.0 million on Peter J. Murphy. If we lose the services of Mr.
Murphy or one or more other key individuals, or are unable to attract
additional qualified members of the management team, our ability to
implement our business strategy may be impaired. If we are unable to
attract, retain and motivate qualified technical and sales personnel, we
may not be able to develop, sell and support our products.
If we are unable to protect our intellectual property, our competitive
position could be harmed and our revenues could be adversely affected.
We rely on a combination of patent and trade secret laws and non-disclosure
and other contractual agreements to protect our proprietary rights. We own
22 patents issued and have 12 patent applications pending in the United
States and have several corresponding foreign patent applications pending.
Our existing patents may not effectively protect our intellectual property
and could be challenged by third parties, and our future patent
applications, if any, may not be approved. In addition, other parties may
independently develop similar or competing technologies. Competitors may
attempt to copy aspects of our products or to obtain and use information
that we regard as proprietary. If we fail to adequately protect our
proprietary rights, our competitors could offer similar products using
materials, processes or technologies developed by us, potentially harming
our competitive position and our revenues.
If we become involved in a protracted intellectual property dispute, or one
with a significant damages award or which requires us to cease selling some
of our products, we could be subject to significant liability and the time
and attention of our management could be diverted.
Although no claims have been asserted against us for infringement of the
proprietary rights of others, we may be subject to a claim of infringement
in the future. An intellectual property lawsuit against us, if successful,
could subject us to significant liability for damages and could invalidate
our proprietary rights. A successful lawsuit against us could also force us
to cease selling, or redesign, products that incorporate the infringed
intellectual property. We could also be required to obtain a license from
the holder of the intellectual property to use the infringed technology. We
might not be able to obtain a license on reasonable terms, or at all. If we
fail to develop a non-infringing technology on a timely basis or to license
the infringed technology on acceptable terms, our revenues could decline
and our expenses could increase.
We may, in the future, be required to initiate claims or litigation against
third parties for infringement of our proprietary rights or to determine
the scope and validity of our proprietary rights or the proprietary rights
of competitors. Litigation with respect to patents and other intellectual
property matters could result in substantial costs and divert our
management's attention from other aspects of our business.
Market prices of technology companies have been highly volatile, and our
stock price may be volatile as well.
From time to time the U.S. stock market has experienced significant price
and trading volume fluctuations, and the market prices for the common stock
of technology companies in particular have been extremely volatile. In the
past, broad market fluctuations that have affected the stock price of
technology companies have at times been unrelated or
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disproportionate to the operating performance of these companies. Any
significant fluctuations in the future might result in a material decline
in the market price of our common stock.
Following periods of volatility in the market price of a particular
company's securities, securities class action litigation has often been
brought against that company. If we were to become involved in this type of
litigation, we could incur substantial costs and diversion of management's
attention, which could harm our business, financial condition and operating
results.
The costs of complying with existing or future environmental regulations,
and of curing any violations of these regulations, could increase our
operating expenses and reduce our profitability.
We are subject to a variety of environmental laws relating to the storage,
discharge, handling, emission, generation, manufacture, use and disposal of
chemicals, solid and hazardous waste and other toxic and hazardous
materials used to manufacture, or resulting from the process of
manufacturing, our products. We cannot predict the nature, scope or effect
of future regulatory requirements to which our operations might be subject
or the manner in which existing or future laws will be administered or
interpreted. Future regulations could be applied to materials, products or
activities that have not been subject to regulation previously. The costs
of complying with new or more stringent regulations, or with more vigorous
enforcement of these regulations, could be significant.
Environmental laws require us to maintain and comply with a number of
permits, authorizations and approvals and to maintain and update training
programs and safety data regarding materials used in our processes.
Violations of these requirements could result in financial penalties and
other enforcement actions. We could also be required to halt one or more
portions of our operations until a violation is cured. Although we attempt
to operate in compliance with these environmental laws, we may not succeed
in this effort at all times. The costs of curing violations or resolving
enforcement actions that might be initiated by government authorities could
be substantial.
Undetected problems in our products could directly impair our financial
results.
If flaws in design, production, assembly or testing of our products were to
occur by us or our suppliers, we could experience a rate of failure in our
products that would result in substantial repair or replacement costs and
potential damage to our reputation. Continued improvement in manufacturing
capabilities, control of material and manufacturing quality, and costs and
product testing, are critical factors in our future growth. There can be no
assurance that our efforts to monitor, develop, modify and implement
appropriate test and manufacturing processes for our products will be
sufficient to permit us to avoid a rate of failure in our products that
results in substantial delays in shipment, significant repair or
replacement costs, or potential damage to our reputation, any of which
could have a material adverse effect on our business, results of operations
or financial condition.
If we acquire additional businesses, these acquisitions will involve
financial uncertainties as well as personnel contingencies, and may be
risky and difficult to integrate.
We have completed two acquisitions in the past five years and we may
acquire additional businesses that could complement or expand our business.
Acquired businesses may not generate the revenues or profits that we expect
and we may find that they have unknown or undisclosed liabilities. In
addition, if we do make acquisitions, we will face a number of other risks
and challenges, including: the difficulty of integrating dissimilar
operations or assets; potential loss of key employees of the acquired
business; assimilation of new employees who may not contribute or perform
at the levels we expect; diversion of management time and resources; and
additional costs associated with obtaining any necessary financing.
These factors could hamper our ability to receive the anticipated benefits
from any acquisitions we may pursue, and could adversely affect our
financial condition and our stock price.
Our stock is thinly traded.
Our stock is thinly traded and you may have difficulty in reselling your
shares quickly. The low trading volume of our common stock is outside of
our control, and we cannot guarantee that trading volume will increase in
the near future.
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We do not expect to pay dividends in the foreseeable future.
We have never paid cash dividends on our common stock and we do not expect
to pay cash dividends on our common stock any time in the foreseeable
future. In addition, our current financing agreements prohibit the payment
of dividends. The future payment of dividends directly depends upon our
future earnings, capital requirements, financial requirements and other
factors that our board of directors will consider. For the foreseeable
future, we will use earnings from operations, if any, to finance our
growth, and we will not pay dividends to our common stockholders. You
should not rely on an investment in our common stock if you require
dividend income. The only return on your investment in our common stock, if
any, would most likely come from any appreciation of our common stock.
We may have exposure to additional income tax liabilities.
As a multinational corporation, we are subject to income taxes in both the
United States and various foreign jurisdictions. Our domestic and
international tax liabilities are subject to the allocation of revenues and
expenses in different jurisdictions and the timing of recognizing revenues
and expenses. Additionally, the amount of income taxes paid is subject to
our interpretation of applicable tax laws in the jurisdictions in which we
file. From time to time, we are subject to income tax audits. While we
believe we have complied with all applicable income tax laws, there can be
no assurance that a governing tax authority will not have a different
interpretation of the law and assess us with additional taxes. Should we be
assessed with significant additional taxes, there could be a material
adverse affect on our results of operations or financial condition.
We could use preferred stock to resist takeovers, and the issuance of
preferred stock may cause additional dilution.
Our Articles of Organization authorizes the issuance of up to 1,000,000
shares of preferred stock, of which 40,625 shares are issued and
outstanding as a result of our preferred stock offering completed in June
2004. Our Articles of Organization gives our board of directors the
authority to issue preferred stock without approval of our stockholders. We
may issue additional shares of preferred stock to raise money to finance
our operations. We may authorize the issuance of the preferred stock in one
or more series. In addition, we may set the terms of preferred stock,
including:
* dividend and liquidation preferences;
* voting rights;
* conversion privileges;
* redemption terms; and
* other privileges and rights of the shares of each authorized
series.
The issuance of large blocks of preferred stock could possibly have a
dilutive effect to our existing stockholders. It can also negatively impact
our existing stockholders' liquidation preferences. In addition, while we
include preferred stock in our capitalization to improve our financial
flexibility, we could possibly issue our preferred stock to friendly third
parties to preserve control by present management. This could occur if we
become subject to a hostile takeover that could ultimately benefit Parlex
and Parlex's stockholders.
10
FORWARD-LOOKING STATEMENTS
This prospectus, and other documents that we have incorporated by
reference or included by attachment, contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
and is subject to the safe-harbor created by such Act. Forward-looking
statements express our expectations or predictions of future events or
results. They are not guarantees and are subject to many risks and
uncertainties. There are a number of factors - many beyond our control -
that could cause actual events or results to be significantly different
from those described in the forward-looking statement. Any or all of our
forward-looking statements in this report or in any other public statements
we make may turn out to be wrong.
Forward-looking statements can be identified by the fact that they do
not relate strictly to historical or current facts. They use words such as
"anticipate," "estimate," "expect," "project," "intend," "plan," "believe"
or words of similar meaning. They may also use words such as "will,"
"would," "should," "could" or "may". Factors that may cause our actual
results to differ materially from those described in forward-looking
statements include the risks discussed elsewhere in this prospectus under
the caption "Risk Factors". We undertake no obligation to release publicly
the result of any revision to these forward-looking statements that may be
made to reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of any of the
shares by any of the selling security holders. To the extent that the
warrants underlying certain of the shares covered by this prospectus are
exercised on other than a cashless basis, we may receive, subject to any
anti-dilution adjustments, $8.00 per share upon such exercise. We plan to use
any proceeds we receive upon exercise of the warrants for general corporate
purposes. Pending use of the net proceeds for any of these purposes, we may
invest the net proceeds in short-term investment grade instruments,
interest-bearing bank accounts, certificates of deposit, money market
securities, U.S. government securities or mortgage-backed securities
guaranteed by federal agencies.
11
SELLING SECURITY HOLDERS
Transaction Overview
Stock and Warrant Purchase Agreements
On May 7, 2004 and June 8, 2004, we entered into stock and warrant
purchase agreements with a small number of investors (the "Investors") to
purchase shares of Parlex's Series A Preferred Stock (the "Preferred Stock")
and related warrants to purchase our common stock (the "Warrants"). The
purchase agreements provided for the purchase and sale of an aggregate
40,625 shares of Preferred Stock and Warrants to purchase an aggregate
203,125 shares of common stock for the aggregate amount of $3.25 million.
We received net proceeds of approximately $3.0 million, after payment of
placement agent fees, legal expenses and related costs.
The Preferred Stock and Warrants were sold for $80.00 per unit. The
Preferred Stock may be converted in whole or in part at any time by the
Investors into shares of common stock at an initial conversion price of
$8.00 per share. In the event the trading price of Parlex common stock
exceeds 150% of the conversion price for 20 consecutive trading days, then
all outstanding shares of Preferred Stock shall be automatically converted
into common stock.
The Preferred Stock has a fixed dividend rate of 8.25% per annum,
payable quarterly, at our sole discretion, in either cash or shares of
common stock. If we do not redeem the Preferred Stock on the third
anniversary date of the issuance date (as discussed below), then the fixed
dividend rate shall thereafter be increased to 14% per annum, and shall be
payable solely in cash.
On the third anniversary of the issuance date, we may in our sole
discretion redeem all, but not less than all, of the then-outstanding
Preferred Stock. The redemption price shall be equal to the initial
purchase price of the Preferred Stock, subject to equitable adjustments for
stock splits or similar actions, plus all accrued and unpaid dividends to
the redemption date. We must provide the Investors with notice of our
intent to redeem at least 30 days prior to the third anniversary date.
Following receipt of such notice, the Investors may elect to convert their
Preferred Stock into common stock prior to the redemption date, provided
that they perform such conversion within 20 days of receipt of the
redemption notice.
The Investors do not have any redemption rights relating to the
Preferred Stock.
The Investors voting rights are limited to matters relating to the
Preferred Stock. Specifically, so long as at least 33-1/3% of the
originally issued Preferred Stock remains outstanding, we may not, without
obtaining the approval of at least 50% of the holders thereof:
* amend, alter or repeal the preferences, special rights or other
powers of the Preferred Stock in an adverse manner;
* increase or decrease the number of authorized shares of
Preferred Stock;
* create any additional class or series of shares of stock
unless the same ranks junior to the Preferred Stock as to
dividends and the distribution of assets on the liquidation,
dissolution or winding up of Parlex; or
* purchase or redeem, or set aside any sums for the purchase or
redemption of, any shares of common stock, except for certain
limited repurchases of shares held by officers, employees,
directors or consultants of Parlex.
In connection with the transaction, we also issued the Warrants to
each of the Investors to purchase up to an additional aggregate of 203,125
shares of our common stock. Resale of the shares of our common stock
issuable upon exercise of the Warrants is also covered by this prospectus.
The Warrants, which expire in three years, are exercisable:
* at an initial exercise price of $8.00 per share;
* commencing six months after their issuance date; and
12
* on a cashless basis, whereby the holder, rather than pay the
exercise price in cash, may surrender a number of warrants
equal to the exercise price of the warrants being exercised.
The conversion price of the Preferred Stock and the exercise price of
the Warrants are subject to adjustment in the event of:
* stock splits, dividends and certain combinations;
* certain distributions on account of our common stock; and/or
* certain reclassifications, exchanges or substitutions affecting
our common stock.
Each of the Investors also received an option to purchase a number of
additional shares of Preferred Stock and Warrants equal to 20% of the
number initially purchased by such investor (the "Over-Allotment Option").
The Over-Allotment Option may be exercised in whole or in part (but only
once) on or before 180 days following the closing date. The Over-Allotment
Option is exercisable at $80.00 per unit of Preferred Stock and Warrant
purchased.
Warrants to Investec Inc. and its Affiliates
Investec Inc., and four of its current or former affiliates, have been
issued warrants to purchase a total of 31,500 shares of common stock in
connection with placement services they provided to us relating to our
private placement of $6.0 million of our convertible subordinated notes in
July of 2003. The warrants are immediately exercisable at an exercise price
of $8.00 per share and expire on July 28, 2008. The warrants issued to
Investec and its affiliates may be converted on a cashless basis, and are not
subject to any anti-dilution provisions other than standard provisions
relating to stock splits, stock dividends and similar events.
Ownership Table
The following table sets forth:
* the name of each selling security holder; and
* the amount of common stock beneficially owned by each selling
security holder. The amount set forth is the aggregate amount
of (i) the shares underlying the Preferred Stock and the
Warrants held by the selling security holder as of the date
hereof, (ii) the shares underlying the Preferred Stock and
Warrants that may be obtained by the selling shareholder upon
exercise of his, her or its Over-Allotment Option, and (iii)
the selling shareholder's proportionate share of the 200,000
shares of common stock that are being registered hereby that
may be issued by us to the holders of Preferred Stock in lieu
of cash dividends. The specific number of shares held by each
of the selling security holders in each of the aforementioned
three categories is set forth in the footnote relating to such
security holder.
Beneficial ownership is determined in accordance with the rules of
the SEC and generally includes voting or investment power with respect to
outstanding voting securities, as well as any voting securities which the
person has the right to acquire within 60 days, through the conversion or
exercise of any security or other right. The information as to the number
of shares of our common stock owned by each selling security holder is
based upon our books and records and the information provided by our
transfer agent.
We may amend or supplement this prospectus, from time to time, to
update the disclosure set forth in the table. Because the selling security
holders identified in the table may sell some or all of the shares owned by
them which are included in this prospectus, and because there are currently
no agreements, arrangements or understandings with respect to the sale of
any of the shares, no estimate can be given as to the number of shares
available for resale hereby that will be held by the selling security
holders upon termination of this offering. We have, therefore, assumed for
the purposes of the following table, that the selling security holders will
sell all of the shares owned beneficially by them, which are covered by
this prospectus.
13
Number of
Shares
Beneficially Number of Number of Percent
Owned and to Shares to be Shares Owned After
Name of Selling Security Holder be Owned(1) Offered(1) After Offering Offering
------------------------------- ------------ ------------ -------------- --------
Laurence W. Lytton 315,193(2) 315,193(2) 0 *
Needham & Company, Inc. 286,538(3) 286,538(3) 0 *
Peter S. Lynch and Carolyn A. Lynch 80,231(4) 80,231(4) 0 *
Peter S. Lynch and Carolyn A. Lynch
1999 Unitrust 70,190(5) 70,190(5) 0 *
The Lynch Foundation 64,483(6) 64,483(6) 0 *
Tetra Offshore Fund 38,969(7) 38,969(7) 0 *
Selwyn Partners L.P. 28,654(8) 28,654(8) 0 *
Alice Winzer Lytton Family LLC 28,654(9) 28,654(9) 0 *
Investec Inc. 18,900(10) 18,900(10) 0 *
Tetra Capital Partners, L.P 18,338(11) 18,338(11) 0 *
John T. Sunderland(12) 4,200(12) 4,200(12) 0 *
Peter M. Fry(13) 3,150(13) 3,150(13) 0 *
Frank J. Drazka(14) 3,150(14) 3,150(14) 0 *
Martin D. Magida(15) 2,100(15) 2,100(15) 0 *
Total 962,750(16) 962,750(16) 0 *
======= ======= =
The figures presented in this column represent the number of shares
owned by such entity assuming the conversion of all Preferred Stock,
and the exercise of all warrants, owned by such Investor.
Includes (i) 137,500 shares underlying Preferred Stock and 68,750
shares underlying common stock purchase warrants purchased on May 7,
2004, and June 8, 2004, (ii) 41,250 shares underlying additional
Preferred Stock and common stock purchase warrants that may be
purchased pursuant to the Over-Allotment Option, and (iii) 67,693
shares that may be issued in lieu of cash dividends, which amount
represents such Investor's proportionate share of the 200,000 shares
being registered hereunder for such purpose. Does not include shares
of our common stock that may be paid as dividends in lieu of cash.
Includes (i) 125,000 shares underlying Preferred Stock and 62,500 shares
underlying common stock purchase warrants purchased on May 7, 2004,
(ii) 37,500 shares underlying additional Preferred Stock and common
stock purchase warrants that may be purchased pursuant to the Over-
Allotment Option, and (iii) 61,538 shares that may be issued in lieu of
cash dividends, which amount represents such Investor's proportionate
share of
14
the 200,000 shares being registered hereunder for such purpose. Does
not include shares of our common stock that may be paid as dividends in
lieu of cash.
Includes (i) 35,000 shares underlying Preferred Stock and 17,500 shares
underlying common stock purchase warrants purchased on May 7, 2004,
(ii) 10,500 shares underlying additional Preferred Stock and common
stock purchase warrants that may be purchased pursuant to the Over-
Allotment Option, and (iii) 17,231 shares that may be issued in lieu of
cash dividends, which amount represents such Investor's proportionate
share of the 200,000 shares being registered hereunder for such
purpose. Does not include shares of our common stock that may be paid
as dividends in lieu of cash.
Includes (i) 30,620 shares underlying Preferred Stock and 15,310 shares
underlying common stock purchase warrants purchased on May 7, 2004,
(ii) 9,186 shares underlying additional Preferred Stock and common
stock purchase warrants that may be purchased pursuant to the Over-
Allotment Option, and (iii) 15,074 shares that may be issued in lieu of
cash dividends, which amount represents such Investor's proportionate
share of the 200,000 shares being registered hereunder for such
purpose. Does not include shares of our common stock that may be paid
as dividends in lieu of cash.
Includes (i) 28,130 shares underlying Preferred Stock and 14,065 shares
underlying common stock purchase warrants purchased on May 7, 2004,
(ii) 8,439 shares underlying additional Preferred Stock and common
stock purchase warrants that may be purchased pursuant to the Over-
Allotment Option, and (iii) 13,849 shares that may be issued in lieu of
cash dividends, which amount represents such Investor's proportionate
share of the 200,000 shares being registered hereunder for such
purpose. Does not include shares of our common stock that may be paid
as dividends in lieu of cash.
Includes (i) 17,000 shares underlying Preferred Stock and 8,500
shares underlying common stock purchase warrants purchased on May 7,
2004, (ii) 5,100 shares underlying additional Preferred Stock and
common stock purchase warrants that may be purchased pursuant to the
Over-Allotment Option, and (iii) 8,369 shares that may be issued in
lieu of cash dividends, which amount represents such Investor's
proportionate share of the 200,000 shares being registered hereunder
for such purpose. Does not include shares of our common stock that may
be paid as dividends in lieu of cash.
Includes (i) 12,500 shares underlying Preferred Stock and 6,250 shares
underlying common stock purchase warrants purchased on May 7, 2004,
(ii) 3,750 shares underlying additional Preferred Stock and common
stock purchase warrants that may be purchased pursuant to the Over-
Allotment Option, and (iii) 6,154 shares that may be issued in lieu of
cash dividends, which amount represents such Investor's proportionate
share of the 200,000 shares being registered hereunder for such
purpose. Does not include shares of our common stock that may be paid
as dividends in lieu of cash.
Includes (i) 12,500 shares underlying Preferred Stock and 6,250 shares
underlying common stock purchase warrants purchased on May 7, 2004,
(ii) 3,750 shares underlying additional Preferred Stock and common
stock purchase warrants that may be purchased pursuant to the Over-
Allotment Option, and (iii) 6,154 shares that may be issued in lieu of
cash dividends, which amount represents such Investor's proportionate
share of the 200,000 shares being registered hereunder for such
purpose. Does not include shares of our common stock that may be paid
as dividends in lieu of cash.
Includes 18,900 shares underlying common stock purchase warrants.
Includes (i) 8,000 shares underlying Preferred Stock and 4,000 shares
underlying common stock purchase warrants purchased on May 7, 2004,
(ii) 2,400 shares underlying additional Preferred Stock and common
stock purchase warrants that may be purchased pursuant to the Over-
Allotment Option, and (iii) 3,938 shares that may be issued in lieu of
cash dividends, which amount represents such Investor's proportionate
share of the 200,000 shares being registered hereunder for such
purpose. Does not include shares of our common stock that may be paid
as dividends in lieu of cash.
Mr. Sunderland is or was an affiliate of Investec Inc. Includes 4,200
shares underlying common stock purchase warrants.
15
Mr. Fry is or was an affiliate of Investec Inc. Includes 3,150 shares
underlying common stock purchase warrants.
Mr. Drazka is or was an affiliate of Investec Inc. Includes 3,150
shares underlying common stock purchase warrants.
Mr. Madiga is or was an affiliate of Investec Inc. Includes 2,100
shares underlying common stock purchase warrants.
Does not include 200,000 shares of our common stock being registered
hereunder in connection with the potential issuance of common stock in
lieu of dividends payable upon the Preferred Stock.
Parlex agreed to pay for all costs and expenses in the issuance, offer,
sale and delivery of the shares of our common stock. These include all
expenses and fees of preparing, filing and printing the registration
statement and mailing of these items. Parlex will not pay selling commissions
and expenses for any sales by the selling security holders, but will
indemnify the selling security holders against civil liabilities including
liabilities under the Securities Act of 1933.
PLAN OF DISTRIBUTION
The selling security holders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales may be
at fixed or negotiated prices. The selling security holders may use any one
or more of the following methods when selling shares:
* ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
* 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;
* purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
* an exchange distribution in accordance with the rules of the
applicable exchange;
* privately negotiated transactions;
* settlement of short sales entered into after the date of this
prospectus;
* broker-dealers may agree with the selling security holder to
sell a specified number of such shares at a stipulated price
per share;
* a combination of any such methods of sale; and
* any other method permitted pursuant to applicable law.
The selling security holders may also sell shares under Rule 144
under the Securities Act of 1933, if available, rather than under this
prospectus. Broker-dealers engaged by the selling security holders may
arrange for other broker-dealers to participate in sales. Broker-dealers
may receive commissions or discounts from the selling security holders (or,
if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated. The selling security holders do not
expect these commissions and discounts to exceed what is customary in the
types of transactions involved.
The selling security holders may, from time to time, pledge or grant
a security interest in some or all of the shares or common stock or
warrants owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the
shares of common stock, from time to time, under this prospectus, or under
an amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the
16
Securities Act of 1933 amending the list of selling security holders to
include the pledgee, transferee or other successors-in-interest as selling
security holders under this prospectus.
The selling security holders also may transfer the shares of common
stock in other circumstances, in which case the transferees, pledgees or
other successors-in-interest will be the selling beneficial owners for
purposes of this prospectus.
The selling security holders and any broker-dealers or agents that
are involved in selling the shares may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933 in connection with such
sales. In such event, any commissions received by such broker-dealers or
agents and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act
of 1933. The selling security holders have informed us that they do not
have any agreement or understanding, directly or indirectly, with any
person to distribute the common stock.
LEGAL MATTERS
Several legal matters with respect to our shares of common stock
offered pursuant to this prospectus will be passed upon for us by Kutchin &
Rufo, P.C., Boston, Massachusetts. Edward D. Kutchin is a shareholder of the
professional corporation of Kutchin & Rufo, P.C. and also beneficially owns
shares of our common stock.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference from the Company's Annual Report on Form 10-K have been audited
by Deloitte & Touche LLP, an independent registered public accounting firm,
as stated in their report, which is incorporated herein by reference (which
report expresses an unqualified opinion and includes an explanatory paragraph
relating to a change in the method of accounting for goodwill and other
intangible assets), and has been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act, and in accordance with those requirements file reports, proxy
statements and other information with the Securities and Exchange
Commission. You may read and copy the reports, proxy statements and other
information that we file with the Commission under the informational
requirements of the Securities Exchange Act at the Commission's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call 1-800-SEC-0330 for information about the Commission's Public Reference
Room. The Commission also maintains a Web site that contains reports, proxy
and information statements and other information regarding registrants that
file electronically with the Commission. The address of the Commission's
Web site is http: //www.sec.gov. Our Web site is http: //www.parlex.com.
Information contained on our Web site is not a part of this prospectus.
We have filed with the Commission a registration statement on Form S-
3, including all amendments to the registration statement under the
Securities Act with respect to the shares of our common stock offered under
this prospectus. This prospectus does not contain all of the information
set forth in the registration statement, certain parts of which are omitted
in accordance with the rules and regulations of the Commission. For further
information regarding Parlex and the shares offered under this prospectus,
please see the registration statement and the exhibits and schedules filed
with the registration statement. Statements contained in this prospectus
regarding the contents of any agreement or other document filed as an
exhibit to the registration statement are not necessarily complete, and in
each instance please see the copy of the full agreement filed as an exhibit
to the registration statement. We qualify each of these statements in all
respects by the reference to the full agreement. The registration
statement, including the exhibits and schedules to the registration
statement, may be inspected at the Commission's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549 and copies of all or any
part of the registration statement may be obtained from the Commission's
office upon payment of the prescribed fees.
17
DOCUMENTS INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" the
information we file with them, which means that we can disclose important
information to you by referring you to those documents. The following
documents filed by us with the Commission are incorporated by reference in
this prospectus, except as superseded or modified by this prospectus:
* Our Annual Report on Form 10-K for the fiscal year ended June 30,
2003, filed with the Commission on October 14, 2004.
* Our Current Report on Form 8-K for July 28, 2003, filed with the
Commission on July 31, 2003.
* Our Current Report on Form 8-K for September 3, 2003, filed with
the Commission on September 3, 2003.
* Our Quarterly Report on Form 10-Q for the fiscal quarter ended
September 28, 2003, filed with the Commission on November 17,
2003.
* Our Current Report on Form 8-K for November 11, 2003, filed with
the Commission on November 12, 2003.
* Our Quarterly Report on Form 10-Q for the fiscal quarter ended
December 28, 2003, filed with the Commission on February 17,
2004.
* Our Current Report on Form 8-K for February 10, 2004, filed with
the Commission on February 11, 2004.
* Our Quarterly Report on Form 10-Q for the fiscal quarter ended
March 28, 2004, filed with the Commission on May 12, 2004.
* Our Current Report on Form 8-K for May 7, 2004, filed with the
Commission on May 11, 2004.
* Our Current Report on Form 8-K for May 10, 2004, filed with the
Commission on May 11, 2004.
* The description of our common stock, par value $0.10 per share,
contained in our registration statement on Form 8-A as filed with
the Commission on October 29, 1984, including any amendment or
report filed for the purpose of updating such description.
All documents filed by us under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act after the date of this prospectus and prior to
the termination of the offering made under this prospectus are incorporated
by reference in this prospectus and made a part of this prospectus from the
date we file the documents with the Commission. Any statement contained in
this prospectus or in a document incorporated or deemed to be incorporated
by reference in this prospectus shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or in any other subsequently filed document
which also is or is deemed to be incorporated by reference in this
prospectus modifies or supersedes such statement. Any statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
Notwithstanding the above, information that is "furnished to" the
Commission shall not be deemed "filed with" the Commission and shall not be
deemed incorporated by reference into this prospectus or the registration
statement of which this prospectus is a part.
18
We will provide without charge to each person, including any
beneficial owner, to whom this prospectus is delivered, upon the written or
oral request of that person, a copy of any document incorporated in this
prospectus by reference other than exhibits unless those exhibits are
specifically incorporated by reference into the documents. Requests for
these copies should be directed to:
Jonathan R. Kosheff
Chief Financial Officer
Parlex Corporation
One Parlex Place
Methuen, Massachusetts 01844
Telephone No.: (978) 685-4341
Copies of our Commission filings and other information about us are also
available on our website at www.parlex.com. The information on our website
is neither incorporated into, nor a part of, this prospectus.
19
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962,750 SHARES
PARLEX CORPORATION LOGO
COMMON STOCK
______________________
PROSPECTUS
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July 9, 2004
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