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PROSPECTUS
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18,000,000
Shares of Common Stock
From time
to time, we may offer and sell shares of common stock in amounts, at prices and
on terms described in one or more supplements to this prospectus, to be
determined at or prior to the time of sale, up to 18,000,000 shares. We will
specify in an accompanying prospectus supplement the terms of any
offering.
We may
also authorize one or more free writing prospectuses to be provided to you
in connection with a specific offering.
We may sell these
shares to or through underwriters and also to other purchasers or through
agents. We will set forth the names of any underwriters or agents in the
accompanying prospectus supplement.
You
should read this prospectus and any prospectus supplement and/or free writing
prospectus carefully before you invest.
Investing
in our common stock involves a high degree of risk. See the section entitled
“Risk Factors” on page 1 of this prospectus and under similar headings in the
other documents that are incorporated by reference into this
prospectus.
This
prospectus may not be used to consummate a sale of any securities unless
accompanied by a prospectus supplement.
The
shares of our common stock may be sold directly by us to investors, through
agents designated from time to time or to or through underwriters or dealers.
For additional information on the methods of sale, you should refer to the
section entitled “Plan of Distribution.” The net proceeds we expect to receive
from such sale will also be set forth in a prospectus supplement.
Our
common stock is currently listed on the NYSE Amex Equities U.S. Market under the
symbol “PKT.” On January 12, 2010, the last reported sales price for our common
stock was $0.61 per share. As of January 12, 2010, the aggregate market value of
our outstanding common stock held by non-affiliates, or the public float, was
approximately $55,782,932, which was calculated based on 91,447,429 shares of
outstanding common stock held by non-affiliates and on a price of $0.61 per
share, the closing price of our common stock on January 12, 2010. Pursuant to
General Instruction I.B.6 of Form S-3, in no event will we sell our common stock
in a public primary offering with a value exceeding more than one-third of our
public float in any 12-month period so long as our public float remains below
$75.0 million. We have not offered any securities pursuant to General
Instruction I.B.6 of Form S-3 during the 12 calendar months prior to and
including the date of this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal
offense.
The date
of this prospectus is February 9, 2010.
TABLE OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement we filed with the Securities and
Exchange Commission, or the SEC. You should rely only on the information we have
provided or incorporated by reference in this prospectus or any prospectus
supplement and/or free writing prospectus. We have not authorized anyone to
provide you with information different from that contained in this prospectus.
No dealer, salesperson or other person is authorized to give any information or
to represent anything not contained in this prospectus. You must not rely on any
unauthorized information or representation. This prospectus is an offer to sell
only the shares of common stock offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. You should assume that the
information in this prospectus or any prospectus supplement is accurate only as
of the date on the front of the document and that any information we have
incorporated by reference is accurate only as of the date of the document
incorporated by reference, regardless of the time of delivery of this prospectus
or any sale of a security.
This
prospectus is part of a registration statement that we filed with the SEC using
a “shelf” registration process. Under this shelf registration process, we may
sell up to 18,000,000 shares of our common stock in one or more offerings. Each
time we sell any of our common stock under this prospectus, we will provide a
prospectus supplement that will contain more specific information about the
terms of that offering. We may also use the prospectus supplement to add, update
or change any of the information contained in this prospectus or in documents we
have incorporated by reference. This prospectus, together with any applicable
prospectus supplements and the documents incorporated by reference into this
prospectus, includes all material information relating to this offering. Please
carefully read both this prospectus and any prospectus supplement together with
the additional information described below under “Where You Can Find More
Information.”
We may
sell shares of our common stock through underwriters or dealers, through agents,
directly to purchasers or through a combination of these methods. We and our
agents reserve the sole right to accept or reject in whole or in part any
proposed purchase of common stock. The prospectus supplement, which we will
prepare and file with the SEC each time we offer shares of common stock, will
set forth the names of any underwriters, agents or others involved in the sale
of common stock, and any applicable fee, commission or discount arrangements
with them. See “Plan of Distribution.”
THIS
PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES UNLESS IT IS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
SUMM
ARY
Procera
Networks, Inc.
We
are a provider of broadband bandwidth management and control products for
broadband communications networks. Our products enable network congestion
management, network operating intelligence, and subscriber or user service
management. Our products are based upon proprietary network traffic
identification technology based upon deep-packet inspection, or DPI,
capabilities, as well as network reporting functions. Our products are used by
entities that have a broadband network, including communications service
providers, universities, enterprises and government entities. The communications
service providers that use our products include cable, telephone and mobile
communications companies.
Our
products include software applications running on a high performance hardware
platform. The high performance hardware platform is designed to handle broadband
network throughput ranging from 4 megabytes per second to 40 gigabytes per
second per device. Multiple devices can be deployed in a synchronized cluster,
linearly scaling to 64 devices and through-put of 2.5 terabytes per
second.
Network
administrators typically use our products to monitor network use or traffic on
an application and user-specific basis in real-time. Our products enable network
administrators to improve network utilization, thereby reducing additional
infrastructure investment. Our software application is branded PacketLogic TM.
The PacketLogic software application has five functional modules: traffic
identification and classification, traffic shaping, traffic filtering, flow
statistics and web-based statistics.
We were
incorporated in 2002, and in October 2003, we merged with Zowcom, Inc., a
publicly-traded Nevada corporation. Our principal executive offices are located
at 100 Cooper Court, Los Gatos, CA 95032. Further information can be found on
our website: www.proceranetworks.com. Information found on our website is not
incorporated by reference into this prospectus. Our telephone number is (408)
890-7100.
RISK FACTORS
Investing
in shares of our common stock involves a high degree of risk. The prospectus
supplement applicable to a particular offering of common stock will contain a
discussion of the risks applicable to an investment in Procera and to the shares
of common stock that we are offering under that prospectus supplement. Before
making an investment decision, you should carefully consider the risks described
under “Risk Factors” in the applicable prospectus supplement and in our most
recent Annual Report on Form 10-K, or any updates in our Quarterly Reports on
Form 10-Q, together with all of the other information appearing in or
incorporated by reference into this prospectus and any applicable prospectus
supplement, in light of your particular investment objectives and financial
circumstances. Our business, financial condition or results of operations could
be materially adversely affected by any of these risks. The trading price of our
shares of common stock could decline due to any of these risks, and you may lose
all or part of your investment.
DISCL
OSURE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus or any accompanying prospectus supplement, including the documents
that we incorporate by reference, may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). Forward-looking statements include those that
express plans, anticipation, intent, contingency, goals, targets or future
development and/or otherwise are not statements of historical fact. Any
forward-looking statements are based on our current expectations and projections
about future events and are subject to risks and uncertainties known and unknown
that could cause actual results and developments to differ materially from those
expressed or implied in such statements.
In some
cases, you can identify forward-looking statements by terminology, such as
“expects,” “anticipates,” “intends,” “estimates,” “plans,” “believes,” “seeks,”
“may,” “should”, “could” or the negative of such terms or other similar
expressions. Accordingly, these statements involve estimates, assumptions and
uncertainties that could cause actual results to differ materially from those
expressed in them. Any forward-looking statements are qualified in their
entirety by reference to the risk factors described herein and those included in
any accompanying prospectus supplement or in any document incorporated by
reference into this prospectus.
You
should read this prospectus and any accompanying prospectus supplement and the
documents that we reference herein and therein and have filed as exhibits to the
registration statement, of which this prospectus is part, completely and with
the understanding that our actual future results may be materially different
from what we concurrently expect. You should assume that the information
appearing in this prospectus, any accompanying prospectus supplement and any
document incorporated herein reference is accurate as of its date only.
Because the risk factors referred to above could cause actual results or
outcomes to differ materially from those expressed in any forward-looking
statements made by us or on our behalf, you should not place undue reliance on
any forward-looking statements. Further, any forward-looking statement speaks
only as of the date on which it is made, and we undertake no obligation to
update any forward-looking statement to reflect events or circumstances after
the date on which the statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it is not
possible for us to predict which factors will arise. In addition, we cannot
assess the impact of each factor on our business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements. We qualify all of the
information presented in this prospectus, any accompanying prospectus supplement
and any document incorporated herein by reference, and particularly our
forward-looking statements, by these cautionary statements.
USE
OF PROCEEDS
Except as
described in any prospectus supplement, we currently intend to use the net
proceeds from the sale of our shares of common stock covered by this prospectus
for general working capital purposes, including:
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Procuring
inventory for sale to our
customers;
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Increasing
our research and development activities, including hiring additional
software engineers; and
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Increasing
our sales and marketing activities, including hiring additional sales and
marketing employees.
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We may
also use a portion of the net proceeds to pay down debt, or to invest in or
acquire businesses or technologies that we believe are complementary to our own,
although we have no current plans, commitments or agreements with respect to any
acquisitions as of the date of this prospectus. Pending these uses, we intend to
invest the net proceeds in demand deposits, money market accounts or in
investment-grade, interest-bearing securities.
PLA
N OF DISTRIBUTION
We may
sell shares of our common stock through underwriters or dealers, through agents,
or directly to one or more purchasers. A prospectus supplement or supplements
will describe the terms of the offering of the securities, including, to the
extent applicable:
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the
name or names of any underwriters;
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the
purchase price of the shares of our common stock and the proceeds we will
receive from the sale;
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any
over-allotment options under which underwriters may purchase additional
shares of our common stock from us;
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any
agency fees or underwriting discounts and other items constituting agents’
or underwriters’ compensation;
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any
public offering price;
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any
discounts or concessions allowed or reallowed or paid to dealers;
and
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any
securities exchange or market on which the shares of our common stock may
be listed.
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Only
underwriters named in the prospectus supplement are underwriters of the
securities offered by the prospectus supplement.
If
underwriters are used in the sale, they will acquire the shares of our common
stock for their own account and may resell the shares of our common stock from
time to time in one or more transactions at a fixed public offering price or at
varying prices determined at the time of sale. The obligations of the
underwriters to our purchase shares of our common stock will be subject to the
conditions set forth in the applicable underwriting agreement. We may offer
shares of our common stock to the public through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Subject to certain conditions, the underwriters will be obligated to purchase
all of the shares of our common stock offered by the prospectus supplement. Any
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may change from time to time. We may use underwriters with whom
we have a material relationship. We will describe in the prospectus supplement,
naming the underwriter, the nature of any such relationship.
We may
sell shares of our common stock directly or through agents we designate from
time to time. We will name any agent involved in the offering and sale of shares
of our common stock and we will describe any commissions we will pay the agent
in the prospectus supplement. Unless the prospectus supplement states otherwise,
our agent will act on a best-efforts basis for the period of its
appointment.
We may
authorize agents or underwriters to solicit offers by certain types of
institutional investors to purchase shares of our common stock from us at the
public offering price set forth in the prospectus supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. We will describe the conditions to these contracts and the commissions
we must pay for solicitation of these contracts in the prospectus
supplement.
We may
provide agents and underwriters with indemnification against civil liabilities
related to this offering, including liabilities under the Securities Act, or
contribution with respect to payments that the agents or underwriters may make
with respect to these liabilities. Agents and underwriters may engage in
transactions with, or perform services for, us in the ordinary course of
business.
Any
underwriter may engage in overallotment, stabilizing transactions, short
covering transactions and penalty bids in accordance with Regulation M under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). Overallotment
involves sales in excess of the offering size, which create a short position.
Stabilizing transactions permit bids to purchase the underlying security so long
as the stabilizing bids do not exceed a specified maximum. Short covering
transactions involve purchases of the securities in the open market after the
distribution is completed to cover short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a dealer when the securities
originally sold by the dealer are purchased in a covering transaction to cover
short positions. Those activities may cause the price of the securities to be
higher than it would otherwise be. If commenced, the underwriters may
discontinue any of the activities at any time.
LEGAL
MATTERS
McDonald
Carano Wilson LLP will pass upon the validity of the common stock being offered
by this prospectus.
EXP
ERTS
The
financial statements and management’s assessment of the effectiveness of
internal control over financial reporting (which is included in Management’s
Report on Internal Control over Financial Reporting) incorporated in this
prospectus by reference to the Annual Report on Form 10-K for the year ended
December 31, 2008 have been so incorporated in reliance on the report of PMB
Helin Donovan 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 a
reporting company and file annual, quarterly and current reports, proxy
statements and other information with the SEC. We have filed with the SEC a
registration statement on Form S-3 under the Securities Act with respect to the
securities we are offering under this prospectus. This prospectus does not
contain all of the information set forth in the registration statement and the
exhibits to the registration statement. For further information with respect to
us and the shares of common stock we are offering under this prospectus, we
refer you to the registration statement and the exhibits and schedules filed as
a part of the registration statement. You may read and copy the registration
statement, as well as our reports, proxy statements and other information, at
the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for more information about the operation
of the Public Reference Room.
The SEC maintains an Internet
site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC, including
Procera Networks, Inc. The SEC’s Internet site can be found at
http://www.sec.gov
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DISCLO
SURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers, and persons controlling the registrant
pursuant to the provisions described in Item 15 of the registration statement or
otherwise, we have been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than our payment of expenses incurred or paid by
our directors, officers, or controlling persons in the successful defense of any
action, suit, or proceeding) is asserted by our director, officer, or
controlling person in connection with the securities being registered, we will,
unless in the opinion of our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of the
issue.
IMPORT
ANT INFORMATION INCORPORATED BY REFERENCE
The SEC
allows us to “incorporate by reference” information into this prospectus, which
means that we can disclose important information to you by referring you to
another document filed separately with the Securities and Exchange Commission.
The documents incorporated by reference into this prospectus contain important
information that you should read about us.
The
following documents are incorporated by reference into this
prospectus:
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our
Form 10-K Annual Report for the fiscal year ended December 31, 2008 and
filed on March 16, 2009 (File No.
001-33691);
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our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009, June
30, 2009 and September 30, 2009, filed with the SEC on May 18, 2009,
August 12, 2009 and November 9, 2009,
respectively;
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our
Current Reports on Form 8-K filed March 19, 2009, April 13, 2009, April
30, 2009, May 8, 2009, July 17, 2009, November 4, 2009, November 17, 2009,
December 11, 2009 and January 20, 2010 and on Form 8-K/A filed February
11, 2010; and
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the
description of our common stock set forth in the Registration Statement on
Form 8-A filed with the SEC on September 19, 2007 (File No. 001-33691),
including any amendments or reports filed for the purpose of updating such
description.
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All
documents subsequently filed with the Securities and Exchange Commission by us
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the
date of the initial registration statement and prior to the filing of a
post-effective amendment which indicates that all securities offered herein have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be part of this prospectus
from the respective dates of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes hereof or of
the related prospectus supplement to the extent that a statement contained
herein or in any other subsequently filed document which is also incorporated or
deemed to be incorporated herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
Documents
incorporated by reference are available from us, without charge. You may obtain
documents incorporated by reference in this prospectus by requesting them in
writing or by telephone at the following address:
Procera
Networks, Inc.
100-C
Cooper Court.
Los
Gatos, California 95032
(408)
890-7100
Attn:
Corporate Secretary
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