FILED PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933, AS AMENDED
FILING COMPANY: CLEARONE COMMUNICATIONS INC., REGISTRATION NO. 333-82242
SUBJECT COMPANY: E.MERGENT, INC.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
ClearOne has filed with the SEC an amended registration statement that includes
a preliminary proxy statement/prospectus for the merger. The amended
registration statement and proxy statement/prospectus contain important
information about ClearOne, E.mergent, the merger and related matters, including
detailed risk factors. The information contained in the amended registration
statement and preliminary proxy statement/prospectus is not complete and may be
changed. E.mergent intends to mail a definitive proxy statement/prospectus to
its stockholders in connection with seeking their approval of the merger.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND
THE DEFINITIVE PROXY STATEMENT/PROSPECTUS CAREFULLY BECAUSE THEY CONTAIN
IMPORTANT INFORMATION. Investors and security holders may obtain free copies of
the registration statement and the proxy statement/prospectus through the web
site maintained by the SEC at http://www.sec.gov, or by directing a request to
ClearOne at 1825 Research Way, Salt Lake City, UT 84119, attention: Bryce
Benson, telephone (801) 975-7200, or to E.mergent at 5960 Golden Hills Drive,
Golden Valley, MN 55416, attention Jill Larson, telephone (736) 417-4257. In
addition to the registration statement and the proxy statement/prospectus,
ClearOne and E.mergent file annual, quarterly and special reports, proxy
statements and other information with the SEC. Investors and security holders
may read and obtain free copies of any such reports, statements and other
information through the web site maintained by the SEC, or by contacting
ClearOne and E.mergent at the addresses listed above.
E.mergent, its directors and certain of its executive officers may be considered
participants in the solicitation of proxies in connection with the merger.
Information concerning the participants in the solicitation is set forth in the
ClearOne's registration statement and will be set forth in the definitive proxy
statement/prospectus when it becomes available.
EXCERPTS FROM CONFERENCE CALL SCRIPTS
The following are excerpts from the scripted portion of a telephone conference
call with members of the financial community and general public made available
for replay by telephone and through the website of ClearOne Communications Inc.
beginning on April 23, 2002. These excerpts include those portions of the
scripts which address the pending transaction between ClearOne Communications
Inc., and E.mergent, Inc.
CLEARONE COMMUNICATIONS, INC.
April 23, 2002
9:15 a.m. Mountain Time
Moderator: Frances M. Flood
Excerpts from Prepared Remarks of Frances Flood,
- ------------------------------------------------
President and Chief Executive Officer
- -------------------------------------
Thank you Gaylen. Good morning everyone and thank you for joining our third
quarter for fiscal 2002 conference call. Randy Wichinski, our Chief Financial
Officer is with me today as well as several other members of our executive team.
During today's call, we will review the third quarter's performance, provide
detail regarding the Ivron contract modification and give a status report on our
pending Emergent acquisition.
Let's start with product sales: We began utilizing Distributors about this time
last year. We engaged them, to help consolidate smaller dealers who sporadically
bought a few products from us. During the past four quarters - we have worked
with these distributors to conduct training, technical support and collection
for these dealers. Nearly two-thirds of our product sales - shipped during the
last two weeks of the quarter. These included: the new XAP 400 audio system and
the V-There video, replenishing some inventory level at the Distributors to
accommodate higher demand products and signing on 15 new dealers who today
purchase E.mergent products. All of these elements contributed to increase
accounts receivables.
We are disappointed that the E.mergent deal is not closed. But experience has
taught us to control the things you can and let the rest sort themselves out. To
this end, we have been diligently working on pre-acquisition initiatives where
possible and making good headway. Post acquisition, these efforts will pay off
with less learning curve than usually associated with newly acquired companies.
Excerpts from Prepared Remarks of Randall J. Wichinski,
- -------------------------------------------------------
Vice President and Chief Financial Officer
- ------------------------------------------
For the record, and for the benefit of our legal counsel, although we are very
optimistic about all of our accomplishments this quarter and the anticipated
effect the E.mergent acquisition will have on our financial results for the rest
of the fiscal year, we are precluded from giving specific financial guidance
while the acquisition is pending. We have responded to all of the review
questions from the SEC and we expect to get their final approval so that we can
mail the proxy materials to the EMRT shareholders and close the merger. At this
point it appears that the actual close will be in mid to late May. We are
anxiously waiting for the close of the transaction, and as soon as it is closed
we intend to provide more definitive guidance for the balance of the fiscal
year.
You will also note that our tax rate has decreased to approximately 33%. There
are several reasons for this decrease, including the recognition of various tax
planning opportunities, and certain tax-advantaged investments that we have
utilized. Since the amount of cash invested in tax-advantaged investments will
be decreasing over the near term with our use of cash in the EMRT acquisition,
the tax benefits associated with these investments will similarly decrease;
therefore, for purposes of going forward we might see the tax rate go back up to
approximately 34 or 35% in future quarters.
END OF EXCERPTS FROM CONFERENCE CALL SCRIPTS
FORWARD LOOKING INFORMATION
The foregoing conference call scripts contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1993, as amended and are subject
to the Safe Harbor provisions created by such statutes. Such statements include
statements about ClearOne's beliefs, plans, intentions and strategies, including
ClearOne's expectations about ClearOne's future financial results and the merger
of ClearOne with E.mergent, Inc. Such statements are not guarantees of the
future performance of ClearOne or the combined company. They are based on
ClearOne's current expectations, forecasts and assumptions resulting from
information currently available to ClearOne. These forward-looking statements
involve risks and uncertainties that could cause actual outcomes and results to
differ materially from the results and expectations described. With regard to
the proposed merger, while the companies have executed a definitive merger
agreement, there is no assurance that the parties will complete the transaction.
In the event that the companies do not receive the necessary shareholder
approvals or fail to satisfy conditions for closing, the transaction will
terminate. Further, if the merger is completed, ClearOne may experience
difficulties in introducing or integrating acquired products into new or
existing ClearOne products or difficulties in capitalizing on new distribution
channels or an expanded customer base. Additional risks and uncertainties
include, but are not limited to conditions in the financial markets relevant to
the proposed merger, the failure to achieve expected synergies, efficiencies and
cost-savings of operations, discontinuity of component supply or availability,
risk of price fluctuation, loss of major customers, fluctuations in operating
results, changes in technology, competition, the ability to manage rapid growth,
the ability to manage business and personnel integration, risks associated with
international sales and operations, the ability to retain key personnel and
intellectual property rights enforcement. The revenues and earnings of ClearOne
and the combined company, and their ability to achieve their planned business
objectives, will be subject to such factors, which make estimation of future
operating results uncertain. For a further list and description of risks and
uncertainties, see the reports filed with the Securities and Exchange Commission
by ClearOne, specifically ClearOne's Form 10-Q For December 31, 2001, Form 10-K
for June 30, 2001, and Form 8-K filed February 6, 2002 in connection with the
merger with E.mergent. ClearOne disclaims any intention or obligation to update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.