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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt">As filed with the
Securities and Exchange Commission on July 2, 2004</DIV>


<DIV align="center" style="font-size: 10pt">Registration No.&nbsp;333 -&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</DIV>



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<P align="center" style="font-size: 14pt"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, D.C. 20549</B>
</DIV>





<P align="center" style="font-size: 18pt"><B>FORM S-8</B>






<P align="center" style="font-size: 10pt"><B>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B>



<P align="center" style="font-size: 10pt"><HR align="center" size="1" noshade width="25%">


<P align="center" style="font-size: 24pt"><B>TERAFORCE TECHNOLOGY CORPORATION</B>

<DIV align="center" style="font-size: 10pt">(Exact name of Registrant as specified in its charter)</DIV>



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    <TD width="47%">&nbsp;</TD>
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<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B><BR>
(State or other jurisdiction of<BR>
incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>76-0471342</B><BR>
(I.R.S. Employer Identification Number)</TD>
</TR>


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</DIV>



<P align="center" style="font-size: 10pt"><B>TERAFORCE TECHNOLOGY CORPORATION AMENDED AND RESTATED STOCK INCENTIVE PLAN (1)<BR>
TERAFORCE TECHNOLOGY CORPORATION 1986 EMPLOYEE STOCK OPTION PLAN (2)<BR>
TERAFORCE TECHNOLOGY CORPORATION DIRECTORS&#146; STOCK PLAN (3)<BR>
(Full title of the plans)<BR>
1240 East Campbell Road<BR>
Richardson, Texas 75081<BR>
(469)&nbsp;330-4960</B><BR>
(Address, including zip code, and<BR>
telephone number, including area code,<BR>
of Registrant&#146;s principal<BR>
executive offices)



<P align="center" style="font-size: 10pt"><HR align="center" size="1" noshade width="25%">



<P align="center" style="font-size: 10pt"><B>ROBERT P. CAPPS<BR>
Executive Vice President<BR>
TeraForce Technology Corporation<BR>
1240 East Campbell Road<BR>
Richardson, Texas 75081<BR>
Telephone: (469)&nbsp;330-4960<BR>
Fax: (469)&nbsp;330-4972</B><BR>
(Name, address, including zip code, and telephone<BR>
number, including area code, of agent for service)



<P align="center" style="font-size: 10pt"><B>with a copy to:<BR>
WILLIAM L. BOEING<BR>
Haynes and Boone, LLP<BR>
2505 N. Plano Road, Suite&nbsp;4000<BR>
Richardson, Texas 75082<BR>
Telephone: (972)&nbsp;680-7550<BR>
Fax: (972)&nbsp;680-7551</B>



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<P align="center" style="font-size: 10pt"><B>CALCULATION OF REGISTRATION FEE</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">

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    <TD width="2%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="15" style="border-bottom: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Proposed</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Proposed</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount to</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Maximum</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Maximum</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount of</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="left"><B>Title of Securities</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>be Registered</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Offering Price</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Aggregate</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Registration</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="left"><B>to be Registered</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>(1)(2)(3)</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Per Share (4)</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Offering Price</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Fee (5)</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>


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    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
                    <TD align="center" valign="top" style="border-top: 1px solid #000000">Common Stock,<BR>
$.01 par value(6)
</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">17,286,000
</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">$0.176
</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">$3,042,336
</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 1px solid #000000">$385.47</TD>
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="15" style="border-top: 3px solid #000000">&nbsp;</TD>
</TR>


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</DIV>



<P>

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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The 17,286,000 shares registered hereby and issuable under the Company&#146;s
Amended and Restated Stock Incentive Plan (the &#147;Stock Incentive Plan&#148;),
represent additional shares of Common Stock issuable under the Stock
Incentive Plan pursuant to stockholder approval on May&nbsp;19, 2004 of an
amendment to the Stock Incentive Plan increasing the number of shares
available for issuance under the Stock Incentive Plan from 9,500,000 to
the greater of (i)&nbsp;21,000,000 and (ii)&nbsp;a</TD>
</TR>

</TABLE>


<P>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>number of shares equal to 12% of the number of Fully Diluted Shares (as
defined in the Stock Incentive Plan) outstanding from time to time,
subject to adjustment and substitution as set forth in Section&nbsp;8 of the
Stock Incentive Plan. Accordingly, we are registering an additional
17,286,000 shares issuable under the Stock Incentive Plan, such number
being equal to 26,786,000 shares (which is the approximate maximum number
of shares that can be available under the Stock Incentive Plan based on
the 250,000,000 shares of common stock authorized for issuance under the
Company&#146;s Amended and Restated Certificate of Incorporation, as amended),
less 9,500,000 shares previously registered, as described in this
footnote. Only the 17,286,000 newly authorized shares under the Stock
Incentive Plan are being registered hereunder. This Registration
Statement (and any prospectus relating to this Registration Statement)
also relates to earlier registration statements filed for issuance of shares of
Common Stock issuable under the Stock Incentive Plan as
follows: 3,000,000 shares were registered on the Company&#146;s registration
statement on Form S-8, filed on April&nbsp;4, 1996 (Commission File Number
333-3246); 1,000,000 shares were registered on the Company&#146;s registration
statement Form S-8, as amended by the Post-Effective Amendment No.&nbsp;1
filed on January&nbsp;2, 1998 (Commission File Number 333-3246);
1,000,000&nbsp;shares were registered on the Company&#146;s registration statement on Form
S-8 filed on August&nbsp;13, 1998 (Commission File No.&nbsp;333-61333); 1,000,000&nbsp;shares were registered on the Company&#146;s registration statement on Form
S-8 filed on August&nbsp;30, 1999 (Commission File No.&nbsp;333-86097); and
3,500,000 shares were registered on the Company&#146;s registration statement
on Form S-8, filed on July&nbsp;25, 2001 (Commission File Number 333-65860).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Registration Statement (and any prospectus relating to this
Registration Statement) also relates to an earlier registration statement
filed for issuances of shares of Common Stock issuable under the Company&#146;s
1986 Employee Stock Option Plan. Approximately 40,000 shares remain
issuable and were previously registered on the Company&#146;s registration
statement on Form S-8, originally filed on May&nbsp;22, 1986 (Commission File
No.33-5918), as amended by post effective amendments filed on December&nbsp;5,
1989 and December&nbsp;23, 1997 under the Company&#146;s 1986 Employee Stock Option
Plan.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Registration Statement (and any prospectus relating to this
Registration Statement) also relates to an earlier registration statement
filed for issuances of shares of Common Stock under the Company&#146;s
Directors&#146; Stock Plan for non-employee directors. Approximately 536,000&nbsp;shares were previously registered on the Company&#146;s registration statement
on Form S-8 filed on August&nbsp;30, 1999 (Commission File No.&nbsp;333-86099) under
the Company&#146;s Directors&#146; Stock Plan.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(h) under the Securities Act of 1933 as amended (the
&#147;Securities Act&#148;), the registration fee has been calculated based upon the
average of the bid and asked prices of the Common Stock as reported on the
OTC Bulletin Board on June&nbsp;30, 2004.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pursuant to Rules&nbsp;429 and 457, under the Securities Act, any prospectus
relating to the Registration Statement also relates to the earlier
registration statements filed with the SEC referenced in Notes (1)&nbsp;through
(3)&nbsp;above, for which an aggregate of 10,176,000 shares were registered and
$ 9,226.41 in registration fees were paid, and for which 10,076,000 shares
are being carried forward to this Registration Statement. The amount of
fees being carried forward from such prior registration statements is
$1,276.63.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In addition, pursuant to Rule 416(a) under the Securities Act, this
Registration Statement also covers an indeterminate number of shares of
Common Stock that may be issued to prevent dilution from stock splits,
stock dividends or similar transactions.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
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	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">PART I</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">PART II</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002">Item&nbsp;3. Incorporation of Documents by Reference.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#003">Item&nbsp;4. Description of Securities.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#004">Item&nbsp;5. Interests of Named Experts and Counsel.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#005">Item&nbsp;6. Indemnification of Directors and Officers.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#006">Item&nbsp;7. Exemption from Registration Claimed.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#007">Item&nbsp;8. Exhibits.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#008">Item&nbsp;9. Undertakings.</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">EXHIBIT INDEX</A></TD></TR>
<TR><TD colspan="9"><A HREF="d16575exv4w2.htm">Certificate of Amendment to Certificate of Inc.</A></TD></TR>
<TR><TD colspan="9"><A HREF="d16575exv5w1.htm">Opinion/Consent of Haynes and Boone, LLP</A></TD></TR>
<TR><TD colspan="9"><A HREF="d16575exv23w1.htm">Consent of Grant Thornton LLP</A></TD></TR>
</TABLE>
</CENTER>
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<P align="center" style="font-size: 10pt">INTRODUCTION



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On May&nbsp;19, 2004, the stockholders of the Company approved at its annual
meeting of stockholders a proposal to amend the Company&#146;s Amended and Restated
Stock Incentive Plan, as previously amended (the &#147;Plan&#148;), to, among other
things, increase the number of shares available for issuance under the Plan
from 9,500,000 to the greater of (i)&nbsp;21,000,000 and (ii)&nbsp;a number of shares
equal to 12% of the number of Fully Diluted Shares outstanding from time to
time, subject to adjustment and substitution as set forth in Section&nbsp;8 of the
Plan. As of June&nbsp;30, 2004 the Company had an aggregate of 180,300,083 fully
diluted shares outstanding as calculated pursuant to the Plan. Twelve percent
of this number equals 21,636,010 shares.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to Rule&nbsp;429, the prospectus forming a part of this registration
statement also relates to earlier registration statements filed for offering
under the Company&#146;s Amended and Restated Stock Incentive Plan (Commission File
Nos. 333-3246, 333-61333, 333-86097 and 333-65860), the Company&#146;s 1986 Stock
Option Plan (Commission File No.&nbsp;333-5918), and the Company&#146;s Directors&#146; Stock
Plan (Commission File No.&nbsp;333-86099).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Stock Incentive Plan, the Company&#146;s 1986 Employee Stock Option Plan,
and the Company&#146;s Directors&#146; Stock Plan shall herein collectively be referred
to as the &#147;Stock Plans&#148;.

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<DIV align="left"><A NAME="000"></A></DIV>

<P align="center" style="font-size: 10pt">PART I



<P align="center" style="font-size: 10pt">INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The document(s) containing the information specified in this Part&nbsp;I will
be sent or given to employees as specified by Rule&nbsp;428(b)(1). Such documents
are not being filed with the Securities and Exchange Commission (the &#147;SEC&#148;)
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule&nbsp;424. Such documents and the documents
incorporated by reference in this Registration Statement pursuant to Item&nbsp;3 of
Part&nbsp;II of this Form, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933, as amended (the
&#147;Securities Act&#148;).

<!-- link1 "PART II" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center" style="font-size: 10pt">PART II



<P align="center" style="font-size: 10pt">INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


<!-- link2 "Item&nbsp;3. Incorporation of Documents by Reference." -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="left" style="font-size: 10pt">Item&nbsp;3. Incorporation of Documents by Reference.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents filed by the Company with the SEC are incorporated
herein by reference:


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Annual Report on Form 10-K for the year ended December&nbsp;31,
2003, filed on March&nbsp;30, 2004;</TD></TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current Reports on Form 8-K filed or furnished on March&nbsp;18,
2004, May&nbsp;4, 2004 and May&nbsp;11, 2004; Amendment No.&nbsp;1,
filed June&nbsp;14, 2004, to the Current Report on Form 8-K originally
filed November&nbsp;24, 2003;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company&#146;s Definitive Proxy Statement on Schedule&nbsp;14A filed on
April&nbsp;2, 2004;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company&#146;s Quarterly Report on Form 10-Q for the quarter
ended March&nbsp;31, 2004, filed on May&nbsp;11, 2004;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All documents the Company subsequently files with the SEC
pursuant to Sections&nbsp;13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), prior to the
filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See Item&nbsp;4 below for a description of the securities being registered. To
the extent that prior filings listed in numbers 1-4 above conflict with this
Registration Statement, those prior filings are modified by this Registration


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt">Statement and included herein only as modified. To the extent that statements
in this Registration Statement or in the prior filings listed in numbers 1-4
above conflict with statements in future filings referenced in number 5 above,
this Registration Statement and the prior filings are modified by the future
filings listed in number 5 above.

<!-- link2 "Item&nbsp;4. Description of Securities." -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="left" style="font-size: 10pt">Item&nbsp;4. Description of Securities.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our certificate of incorporation permits the issuance of up to 250,000,000
shares of common stock and 50,000,000 shares of preferred stock. As of June
30, 2004, there were 133,561,526 shares of our common stock and no shares of
our preferred stock outstanding. The following description of our capital
stock is intended to be a summary, and you should read it in conjunction with
our amended and restated certificate of incorporation, as amended, filed with
the SEC.


<P align="left" style="font-size: 10pt">Common Stock


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under our certificate of incorporation, we may issue 250,000,000 shares of
common stock, par value $0.01 per share. All shares of our common stock have
one vote per share. Holders of our common stock may receive dividends, when
and as declared by the board of directors, if funds are legally available for
the payment of dividends. Shares of our common stock have no preemptive,
conversion, sinking fund, redemption or similar provisions. In the event of
our liquidation, stockholders of our common stock participate on a pro rata
basis in the distribution of any of our assets that are remaining after the
payment of liabilities and any liquidation preference on outstanding shares of
convertible preferred stock. All outstanding shares of our common stock are
fully paid and nonassessable.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is traded on the OTC Bulletin Board operated by Nasdaq
under the symbol &#147;TERA.&#148; Prior to June&nbsp;19, 2001, our common stock was quoted
on the Nasdaq SmallCap Market under the symbol &#147;ICOM.&#148; On June&nbsp;19, 2001,
Nasdaq delisted our common stock for failing to maintain a minimum bid price of
$1.00. On January&nbsp;30, 2001, we changed our trading symbol to &#147;TERA&#148; from
&#147;ICOM&#148; to reflect our name change to TeraForce Technology Corporation from
Intelect Communications, Inc.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The high and low bid prices for our common stock for each full quarter of
the last two fiscal years, as reported on the OTC Bulletin Board and Nasdaq,
are as follows (these prices are inter-dealer prices, without mark-up,
mark-downs or commission included and may not necessarily represent actual
transactions):

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Quarter period ended</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>High</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Low</B><HR size="1" noshade></TD>
</TR>


<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">March&nbsp;31</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.220</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">June&nbsp;30</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.155</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">March&nbsp;31</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.240</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.120</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">June&nbsp;30</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.140</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">September&nbsp;30</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.150</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">December&nbsp;31</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.200</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">March&nbsp;31</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.100</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">June&nbsp;30</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.110</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">September&nbsp;30</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.100</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">December&nbsp;31</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.240</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of June&nbsp;30, 2004, there were approximately 35,000 owners of record
(including nominee holders such as banks and brokerage firms who hold shares
for the benefit of beneficial owners) of our common stock.


<P align="left" style="font-size: 10pt">Preferred Stock


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our certificate of incorporation authorizes the issuance of up to
50,000,000 shares of preferred stock with a par value of $0.01 per share. No
shares of our preferred stock were outstanding as of the date this Registration
Statement was filed. We may issue the preferred stock in series, and the
shares of each series shall have rights and preferences as designated by the
resolution of our board of directors. In the designation of any series of
preferred stock, our board of directors has authority, without further action
by the holders of our common stock, to fix the number of shares constituting
that series and to fix the dividends rights, dividend rate, conversion rights,
terms of redemption and the liquidation preferences of that series of preferred
stock. The issuance of preferred stock could adversely affect the voting power
of holders of our common stock and the likelihood that holders of our common
stock will receive dividend payments and payments upon liquidation and could
have the effect of delaying, deferring or preventing a change in control.


<P align="left" style="font-size: 10pt">Warrants


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of June&nbsp;30, 2004, there were outstanding warrants to purchase an
aggregate of 26,718,557 shares of common stock at prices ranging from $0.12 to
$0.55. The warrants expire at various times on or before March&nbsp;31, 2007.


<P align="left" style="font-size: 10pt">Transfer agent and registrar


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transfer agent and registrar for our common stock is American Stock
Transfer and Trust Company.

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<DIV align="left"><A NAME="004"></A></DIV>

<P align="left" style="font-size: 10pt">Item&nbsp;5. Interests of Named Experts and Counsel.


<P align="left" style="font-size: 10pt">Legal Matters



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the 17,286,000 additional shares of common stock
registered hereby have been passed upon for us by our counsel, Haynes and
Boone, LLP.


<P align="left" style="font-size: 10pt">Experts


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our consolidated financial statements incorporated in this Registration
Statement by reference to our Annual Report on Form 10-K for the year ended
December&nbsp;31, 2003 have been incorporated in reliance on the report of Grant
Thornton LLP, independent registered public accounting firm, given on the
authority of Grant Thornton LLP as experts in accounting and auditing.

<!-- link2 "Item&nbsp;6. Indemnification of Directors and Officers." -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="left" style="font-size: 10pt">Item&nbsp;6. Indemnification of Directors and Officers.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Amended and Restated Certificate of Incorporation, as amended (the
&#147;Certificate of Incorporation&#148;), provides that no director of the Company will
be personally liable to the Company or any of its stockholders for monetary
damages arising from the director&#146;s breach of fiduciary duty as a director.
However, this does not apply with respect to any action in which the director
would be liable under Section&nbsp;174 of the General Corporation Law of the State
of Delaware (the &#147;Delaware Code&#148;) nor does it apply with respect to any
liability in which the director (i)&nbsp;breached his duty of loyalty to the Company
or its stockholders; (ii)&nbsp;did not act in good faith or, in failing to act, did
not act in good faith; (iii)&nbsp;acted in a manner involving intentional misconduct
or a knowing violation of law or, in failing to act, shall have acted in a
manner involving intentional misconduct or a knowing violation of law; or (iv)
derived an improper personal benefit.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s Certificate of Incorporation provides that the Company shall
indemnify its directors and officers and former directors and officers to the
fullest extent permitted by the Delaware Code. Pursuant to the provisions of
Section&nbsp;145 of the Delaware Code, the Company has the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding (other than an
action by or in the right of the Company) by reason of the fact that he is or
was a director, officer, employee, or agent of the Company, against any and all
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with such action, suit, or proceeding. The
power to indemnify applies only if such person acted in good faith and in a manner he reasonably believed to be in the
best interest, or not opposed to the best interest, of the Company and with
respect to any criminal action or proceeding, had no reasonable cause to
believe his


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt">conduct was unlawful.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The power to indemnify applies to actions brought by or in the right of
the Company as well, but only to the extent of defense and settlement expenses
and not to any satisfaction of a judgment or settlement of the claim itself and
with the further limitation that in such actions no indemnification shall be
made in the event of any adjudication of negligence or misconduct unless the
court, in its discretion, believes that in light of all the circumstances
indemnification should apply.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The statute further specifically provides that the indemnification
authorized thereby shall not be deemed exclusive of any other rights to which
any such officer or director may be entitled under any bylaws, agreements, vote
of stockholders or disinterested directors, or otherwise.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article&nbsp;XI of the Company&#146;s Restated Bylaws provides that the Company
shall indemnify each of its directors and officers, its former directors and
officers and agents of the Company against expenses actually and reasonably
incurred by him or her in connection with the defense of any action, suit or
proceeding, civil or criminal, in which such person is made a party by reason
of being or having been such director or officer, except in situations where he
or she shall be adjudged in such action, suit or proceeding to be liable for
negligence or misconduct in the performance of his or her duty to the Company.
In the event of a criminal conviction (whether based on a plea of guilty or
nolo contendere or its equivalent, or after trial), such conviction shall not
be deemed an adjudication of liability for negligence or misconduct in the
performance of duty to the Company if such director or officer acted in good
faith in what he or she considered to be the best interest of the Company and
without reasonable cause to believe that his or her actions were illegal. In
absence of an adjudication which expressly absolves the director or officer of
liability to the Company or its stockholders for negligence or misconduct, or
in the event of a settlement, the right to indemnification of a director or
officer shall be conditioned upon prior resolution adopted by two-thirds of the
disinterested members of the Board or by independent counsel.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article&nbsp;XI of the Company&#146;s Restated Bylaws also provides that the Company
may purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Company, or is or was serving at
the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the
Company would have the power to indemnify him or her against such liability
under the provisions of the Delaware Code. The Company maintains insurance on
behalf of its directors and officers to protect them against such claims.

<!-- link2 "Item&nbsp;7. Exemption from Registration Claimed." -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="left" style="font-size: 10pt">Item&nbsp;7. Exemption from Registration Claimed.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.

<!-- link2 "Item&nbsp;8. Exhibits." -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="left" style="font-size: 10pt">Item&nbsp;8. Exhibits.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The exhibits listed below are filed as part of this registration
statement. See the Index of Exhibits with the exhibits filed as part of this
Registration Statement.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description of Exhibit</B><HR size="1" noshade></TD>
</TR>


<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Certificate of Incorporation of the Company, filed
as an exhibit to the Company&#146;s Form&nbsp;8-K filed on February&nbsp;1, 2001 and
incorporated herein by reference.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate of Amendment of the Company&#146;s Amended and Restated
Certificate of Incorporation.</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description of Exhibit</B><HR size="1" noshade></TD>
</TR>


<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated By-laws of the Company, filed as an exhibit to the
Company&#146;s Annual Report on Form&nbsp;10-K filed April&nbsp;15, 2003 and incorporated
herein by reference.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to By-laws of the Company, filed as an exhibit to the Company&#146;s
Annual Report on Form&nbsp;10-K filed March&nbsp;30, 2004 and incorporated herein by
reference.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Stock Incentive Plan, filed as an exhibit to the
Company&#146;s Annual Report on Form&nbsp;10-K filed March&nbsp;30, 2004 and incorporated
herein by reference.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Haynes and Boone, LLP regarding validity of the shares registered.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Grant Thornton LLP.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Haynes and Boone, LLP (included in their opinion filed as Exhibit&nbsp;5.1).</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney of officers and directors of TeraForce Technology
Corporation (included on signature page hereto).</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>




<P>

<HR size="1" width="18%" align="left" noshade>


<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">*</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">filed herewith</TD>
</TR>

</TABLE>


<!-- link2 "Item&nbsp;9. Undertakings." -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="left" style="font-size: 10pt">Item&nbsp;9. Undertakings.


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The undersigned registrant hereby undertakes:</TD>
</TR>

</TABLE>


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:</TD>
</TR>

</TABLE>


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To include any prospectus required by
Section&nbsp;10(a)(3) of the Securities Act;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To reflect in the prospectus any
facts or events arising after the effective date of this
Registration Statement (or the most recent
post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar
value of securities offered would not exceed that which
was registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20&nbsp;percent change in the maximum aggregate offering
price set forth in the &#147;Calculation of Registration Fee&#148;
table in the effective registration statement;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To include any material information
with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material
change to such information in this Registration
Statement;</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>provided, however</I>, that paragraphs (a)(1)(i) and (a) (1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8, or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the SEC by the Registrant pursuant to Section&nbsp;13 or
Section 15(d) of the Exchange Act that are incorporated by reference in
this Registration Statement.


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

</TABLE>


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.</TD>
</TR>

</TABLE>


<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each
filing of the Registrant&#146;s annual report pursuant to Section 13(a)
or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan&#146;s annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has 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 the payment by the Registrant
of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
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
such issue.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richardson, State of Texas, on July&nbsp;2, 2004.


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top">&nbsp;</TD>
    <TD colspan="3">TERAFORCE TECHNOLOGY CORPORATION<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000">/s/  Herman M. Frietsch
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2"><B>Herman M. Frietsch</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2"><B>Chairman and Chief Executive Officer</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt">POWER OF ATTORNEY




<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Herman M. Frietsch and Robert P. Capps
and each of them his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission (the &#147;SEC&#148;), granting unto said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Act, this registration statement has
been signed by the following persons in the capacities and on the dates
indicated.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Signature</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B><HR size="1" noshade></TD>
</TR>


<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" nowrap valign="top">/s/ Herman M. Frietsch<BR>
<HR size="1" noshade>
Herman M. Frietsch</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Chief Executive Officer and<BR>
Director (Principal Executive Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 2,&nbsp;2004</TD>
</TR>

<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ Robert P. Capps<BR>
<HR size="1" noshade>
Robert P. Capps</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Executive Vice President and<BR>
Chief Financial Officer<BR>
(Principal Financial Officer and Principal<BR>
Accounting Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 2,&nbsp;2004</TD>
</TR>

<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ Anton von and zu Liechtenstein<BR>
<HR size="1" noshade>
Anton von and zu Liechtenstein</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 2,&nbsp;2004</TD>
</TR>

<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ Robert E. Garrison II<BR>
<HR size="1" noshade>
Robert E. Garrison II</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 2,&nbsp;2004</TD>
</TR>

<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ David H. Yedwab<BR>
<HR size="1" noshade>
David H. Yedwab</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 2,&nbsp;2004</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "EXHIBIT INDEX" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="center" style="font-size: 10pt">EXHIBIT INDEX


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>Description of Exhibit</B><HR size="1" noshade></TD>
</TR>


<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Certificate of Incorporation of the Company, filed
as an exhibit to the Company&#146;s Form&nbsp;8-K filed on February&nbsp;1, 2001 and
incorporated herein by reference.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate of Amendment of the Company&#146;s Amended and Restated
Certificate of Incorporation.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated By-laws of the Company, filed as an exhibit to the
Company&#146;s Annual Report on Form&nbsp;10-K filed April&nbsp;15, 2003 and incorporated
herein by reference.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to By-laws of the Company, filed as an exhibit to the Company&#146;s
Annual Report on Form&nbsp;10-K filed March&nbsp;30, 2004 and incorporated herein by
reference.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Stock Incentive Plan, filed as an exhibit to the
Company&#146;s Annual Report on Form&nbsp;10-K filed March&nbsp;30, 2004 and incorporated
herein by reference.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Haynes and Boone, LLP regarding validity of the shares registered.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Grant Thornton LLP.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Haynes and Boone, LLP (included in their opinion filed as Exhibit&nbsp;5.1).</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney of officers and directors of TeraForce Technology
Corporation (included on signature page hereto).</TD>
</TR>


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</TABLE>
</DIV>




<P>

<HR size="1" width="18%" align="left" noshade>


<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">*</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">filed herewith</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

</BODY>
</HTML>
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sv8
Table of Contents
As filed with the
Securities and Exchange Commission on July 2, 2004
Registration No. 333 -
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TERAFORCE TECHNOLOGY CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
76-0471342
(I.R.S. Employer Identification Number)
TERAFORCE TECHNOLOGY CORPORATION AMENDED AND RESTATED STOCK INCENTIVE PLAN (1)
TERAFORCE TECHNOLOGY CORPORATION 1986 EMPLOYEE STOCK OPTION PLAN (2)
TERAFORCE TECHNOLOGY CORPORATION DIRECTORS' STOCK PLAN (3)
(Full title of the plans)
1240 East Campbell Road
Richardson, Texas 75081
(469) 330-4960
(Address, including zip code, and
telephone number, including area code,
of Registrant's principal
executive offices)
ROBERT P. CAPPS
Executive Vice President
TeraForce Technology Corporation
1240 East Campbell Road
Richardson, Texas 75081
Telephone: (469) 330-4960
Fax: (469) 330-4972
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
with a copy to:
WILLIAM L. BOEING
Haynes and Boone, LLP
2505 N. Plano Road, Suite 4000
Richardson, Texas 75082
Telephone: (972) 680-7550
Fax: (972) 680-7551
CALCULATION OF REGISTRATION FEE
Proposed
Proposed
Amount to
Maximum
Maximum
Amount of
Title of Securities
be Registered
Offering Price
Aggregate
Registration
to be Registered
(1)(2)(3)
Per Share (4)
Offering Price
Fee (5)
Common Stock,
$.01 par value(6)
17,286,000
$0.176
$3,042,336
$385.47
(1)
The 17,286,000 shares registered hereby and issuable under the Company's
Amended and Restated Stock Incentive Plan (the "Stock Incentive Plan"),
represent additional shares of Common Stock issuable under the Stock
Incentive Plan pursuant to stockholder approval on May 19, 2004 of an
amendment to the Stock Incentive Plan increasing the number of shares
available for issuance under the Stock Incentive Plan from 9,500,000 to
the greater of (i) 21,000,000 and (ii) a
Table of Contents
number of shares equal to 12% of the number of Fully Diluted Shares (as
defined in the Stock Incentive Plan) outstanding from time to time,
subject to adjustment and substitution as set forth in Section 8 of the
Stock Incentive Plan. Accordingly, we are registering an additional
17,286,000 shares issuable under the Stock Incentive Plan, such number
being equal to 26,786,000 shares (which is the approximate maximum number
of shares that can be available under the Stock Incentive Plan based on
the 250,000,000 shares of common stock authorized for issuance under the
Company's Amended and Restated Certificate of Incorporation, as amended),
less 9,500,000 shares previously registered, as described in this
footnote. Only the 17,286,000 newly authorized shares under the Stock
Incentive Plan are being registered hereunder. This Registration
Statement (and any prospectus relating to this Registration Statement)
also relates to earlier registration statements filed for issuance of shares of
Common Stock issuable under the Stock Incentive Plan as
follows: 3,000,000 shares were registered on the Company's registration
statement on Form S-8, filed on April 4, 1996 (Commission File Number
333-3246); 1,000,000 shares were registered on the Company's registration
statement Form S-8, as amended by the Post-Effective Amendment No. 1
filed on January 2, 1998 (Commission File Number 333-3246);
1,000,000 shares were registered on the Company's registration statement on Form
S-8 filed on August 13, 1998 (Commission File No. 333-61333); 1,000,000 shares were registered on the Company's registration statement on Form
S-8 filed on August 30, 1999 (Commission File No. 333-86097); and
3,500,000 shares were registered on the Company's registration statement
on Form S-8, filed on July 25, 2001 (Commission File Number 333-65860).
(2)
This Registration Statement (and any prospectus relating to this
Registration Statement) also relates to an earlier registration statement
filed for issuances of shares of Common Stock issuable under the Company's
1986 Employee Stock Option Plan. Approximately 40,000 shares remain
issuable and were previously registered on the Company's registration
statement on Form S-8, originally filed on May 22, 1986 (Commission File
No.33-5918), as amended by post effective amendments filed on December 5,
1989 and December 23, 1997 under the Company's 1986 Employee Stock Option
Plan.
(3)
This Registration Statement (and any prospectus relating to this
Registration Statement) also relates to an earlier registration statement
filed for issuances of shares of Common Stock under the Company's
Directors' Stock Plan for non-employee directors. Approximately 536,000 shares were previously registered on the Company's registration statement
on Form S-8 filed on August 30, 1999 (Commission File No. 333-86099) under
the Company's Directors' Stock Plan.
(4)
Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(h) under the Securities Act of 1933 as amended (the
"Securities Act"), the registration fee has been calculated based upon the
average of the bid and asked prices of the Common Stock as reported on the
OTC Bulletin Board on June 30, 2004.
(5)
Pursuant to Rules 429 and 457, under the Securities Act, any prospectus
relating to the Registration Statement also relates to the earlier
registration statements filed with the SEC referenced in Notes (1) through
(3) above, for which an aggregate of 10,176,000 shares were registered and
$ 9,226.41 in registration fees were paid, and for which 10,076,000 shares
are being carried forward to this Registration Statement. The amount of
fees being carried forward from such prior registration statements is
$1,276.63.
(6)
In addition, pursuant to Rule 416(a) under the Securities Act, this
Registration Statement also covers an indeterminate number of shares of
Common Stock that may be issued to prevent dilution from stock splits,
stock dividends or similar transactions.
TABLE OF CONTENTS
PART I
PART II
Item 3. Incorporation of Documents by Reference.
Item 4. Description of Securities.
Item 5. Interests of Named Experts and Counsel.
Item 6. Indemnification of Directors and Officers.
Item 7. Exemption from Registration Claimed.
Item 8. Exhibits.
Item 9. Undertakings.
SIGNATURES
EXHIBIT INDEX
Certificate of Amendment to Certificate of Inc.
Opinion/Consent of Haynes and Boone, LLP
Consent of Grant Thornton LLP
Table of Contents
INTRODUCTION
On May 19, 2004, the stockholders of the Company approved at its annual
meeting of stockholders a proposal to amend the Company's Amended and Restated
Stock Incentive Plan, as previously amended (the "Plan"), to, among other
things, increase the number of shares available for issuance under the Plan
from 9,500,000 to the greater of (i) 21,000,000 and (ii) a number of shares
equal to 12% of the number of Fully Diluted Shares outstanding from time to
time, subject to adjustment and substitution as set forth in Section 8 of the
Plan. As of June 30, 2004 the Company had an aggregate of 180,300,083 fully
diluted shares outstanding as calculated pursuant to the Plan. Twelve percent
of this number equals 21,636,010 shares.
Pursuant to Rule 429, the prospectus forming a part of this registration
statement also relates to earlier registration statements filed for offering
under the Company's Amended and Restated Stock Incentive Plan (Commission File
Nos. 333-3246, 333-61333, 333-86097 and 333-65860), the Company's 1986 Stock
Option Plan (Commission File No. 333-5918), and the Company's Directors' Stock
Plan (Commission File No. 333-86099).
The Stock Incentive Plan, the Company's 1986 Employee Stock Option Plan,
and the Company's Directors' Stock Plan shall herein collectively be referred
to as the "Stock Plans".
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in this Part I will
be sent or given to employees as specified by Rule 428(b)(1). Such documents
are not being filed with the Securities and Exchange Commission (the "SEC")
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. Such documents and the documents
incorporated by reference in this Registration Statement pursuant to Item 3 of
Part II of this Form, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933, as amended (the
"Securities Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Company with the SEC are incorporated
herein by reference:
1.
Annual Report on Form 10-K for the year ended December 31,
2003, filed on March 30, 2004;
2.
Current Reports on Form 8-K filed or furnished on March 18,
2004, May 4, 2004 and May 11, 2004; Amendment No. 1,
filed June 14, 2004, to the Current Report on Form 8-K originally
filed November 24, 2003;
3.
The Company's Definitive Proxy Statement on Schedule 14A filed on
April 2, 2004;
4.
The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2004, filed on May 11, 2004;
5.
All documents the Company subsequently files with the SEC
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the
filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold.
See Item 4 below for a description of the securities being registered. To
the extent that prior filings listed in numbers 1-4 above conflict with this
Registration Statement, those prior filings are modified by this Registration
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Statement and included herein only as modified. To the extent that statements
in this Registration Statement or in the prior filings listed in numbers 1-4
above conflict with statements in future filings referenced in number 5 above,
this Registration Statement and the prior filings are modified by the future
filings listed in number 5 above.
Item 4. Description of Securities.
Our certificate of incorporation permits the issuance of up to 250,000,000
shares of common stock and 50,000,000 shares of preferred stock. As of June
30, 2004, there were 133,561,526 shares of our common stock and no shares of
our preferred stock outstanding. The following description of our capital
stock is intended to be a summary, and you should read it in conjunction with
our amended and restated certificate of incorporation, as amended, filed with
the SEC.
Common Stock
Under our certificate of incorporation, we may issue 250,000,000 shares of
common stock, par value $0.01 per share. All shares of our common stock have
one vote per share. Holders of our common stock may receive dividends, when
and as declared by the board of directors, if funds are legally available for
the payment of dividends. Shares of our common stock have no preemptive,
conversion, sinking fund, redemption or similar provisions. In the event of
our liquidation, stockholders of our common stock participate on a pro rata
basis in the distribution of any of our assets that are remaining after the
payment of liabilities and any liquidation preference on outstanding shares of
convertible preferred stock. All outstanding shares of our common stock are
fully paid and nonassessable.
Our common stock is traded on the OTC Bulletin Board operated by Nasdaq
under the symbol "TERA." Prior to June 19, 2001, our common stock was quoted
on the Nasdaq SmallCap Market under the symbol "ICOM." On June 19, 2001,
Nasdaq delisted our common stock for failing to maintain a minimum bid price of
$1.00. On January 30, 2001, we changed our trading symbol to "TERA" from
"ICOM" to reflect our name change to TeraForce Technology Corporation from
Intelect Communications, Inc.
The high and low bid prices for our common stock for each full quarter of
the last two fiscal years, as reported on the OTC Bulletin Board and Nasdaq,
are as follows (these prices are inter-dealer prices, without mark-up,
mark-downs or commission included and may not necessarily represent actual
transactions):
Quarter period ended
High
Low
2004
March 31
0.370
0.220
June 30
0.260
0.155
2003
March 31
0.240
0.120
June 30
0.220
0.140
September 30
0.490
0.150
December 31
0.430
0.200
2002
March 31
0.180
0.100
June 30
0.330
0.110
September 30
0.230
0.100
December 31
0.240
0.105
As of June 30, 2004, there were approximately 35,000 owners of record
(including nominee holders such as banks and brokerage firms who hold shares
for the benefit of beneficial owners) of our common stock.
Preferred Stock
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Our certificate of incorporation authorizes the issuance of up to
50,000,000 shares of preferred stock with a par value of $0.01 per share. No
shares of our preferred stock were outstanding as of the date this Registration
Statement was filed. We may issue the preferred stock in series, and the
shares of each series shall have rights and preferences as designated by the
resolution of our board of directors. In the designation of any series of
preferred stock, our board of directors has authority, without further action
by the holders of our common stock, to fix the number of shares constituting
that series and to fix the dividends rights, dividend rate, conversion rights,
terms of redemption and the liquidation preferences of that series of preferred
stock. The issuance of preferred stock could adversely affect the voting power
of holders of our common stock and the likelihood that holders of our common
stock will receive dividend payments and payments upon liquidation and could
have the effect of delaying, deferring or preventing a change in control.
Warrants
As of June 30, 2004, there were outstanding warrants to purchase an
aggregate of 26,718,557 shares of common stock at prices ranging from $0.12 to
$0.55. The warrants expire at various times on or before March 31, 2007.
Transfer agent and registrar
The transfer agent and registrar for our common stock is American Stock
Transfer and Trust Company.
Item 5. Interests of Named Experts and Counsel.
Legal Matters
The validity of the 17,286,000 additional shares of common stock
registered hereby have been passed upon for us by our counsel, Haynes and
Boone, LLP.
Experts
Our consolidated financial statements incorporated in this Registration
Statement by reference to our Annual Report on Form 10-K for the year ended
December 31, 2003 have been incorporated in reliance on the report of Grant
Thornton LLP, independent registered public accounting firm, given on the
authority of Grant Thornton LLP as experts in accounting and auditing.
Item 6. Indemnification of Directors and Officers.
Our Amended and Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), provides that no director of the Company will
be personally liable to the Company or any of its stockholders for monetary
damages arising from the director's breach of fiduciary duty as a director.
However, this does not apply with respect to any action in which the director
would be liable under Section 174 of the General Corporation Law of the State
of Delaware (the "Delaware Code") nor does it apply with respect to any
liability in which the director (i) breached his duty of loyalty to the Company
or its stockholders; (ii) did not act in good faith or, in failing to act, did
not act in good faith; (iii) acted in a manner involving intentional misconduct
or a knowing violation of law or, in failing to act, shall have acted in a
manner involving intentional misconduct or a knowing violation of law; or (iv)
derived an improper personal benefit.
The Company's Certificate of Incorporation provides that the Company shall
indemnify its directors and officers and former directors and officers to the
fullest extent permitted by the Delaware Code. Pursuant to the provisions of
Section 145 of the Delaware Code, the Company has the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding (other than an
action by or in the right of the Company) by reason of the fact that he is or
was a director, officer, employee, or agent of the Company, against any and all
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with such action, suit, or proceeding. The
power to indemnify applies only if such person acted in good faith and in a manner he reasonably believed to be in the
best interest, or not opposed to the best interest, of the Company and with
respect to any criminal action or proceeding, had no reasonable cause to
believe his
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conduct was unlawful.
The power to indemnify applies to actions brought by or in the right of
the Company as well, but only to the extent of defense and settlement expenses
and not to any satisfaction of a judgment or settlement of the claim itself and
with the further limitation that in such actions no indemnification shall be
made in the event of any adjudication of negligence or misconduct unless the
court, in its discretion, believes that in light of all the circumstances
indemnification should apply.
The statute further specifically provides that the indemnification
authorized thereby shall not be deemed exclusive of any other rights to which
any such officer or director may be entitled under any bylaws, agreements, vote
of stockholders or disinterested directors, or otherwise.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
Article XI of the Company's Restated Bylaws provides that the Company
shall indemnify each of its directors and officers, its former directors and
officers and agents of the Company against expenses actually and reasonably
incurred by him or her in connection with the defense of any action, suit or
proceeding, civil or criminal, in which such person is made a party by reason
of being or having been such director or officer, except in situations where he
or she shall be adjudged in such action, suit or proceeding to be liable for
negligence or misconduct in the performance of his or her duty to the Company.
In the event of a criminal conviction (whether based on a plea of guilty or
nolo contendere or its equivalent, or after trial), such conviction shall not
be deemed an adjudication of liability for negligence or misconduct in the
performance of duty to the Company if such director or officer acted in good
faith in what he or she considered to be the best interest of the Company and
without reasonable cause to believe that his or her actions were illegal. In
absence of an adjudication which expressly absolves the director or officer of
liability to the Company or its stockholders for negligence or misconduct, or
in the event of a settlement, the right to indemnification of a director or
officer shall be conditioned upon prior resolution adopted by two-thirds of the
disinterested members of the Board or by independent counsel.
Article XI of the Company's Restated Bylaws also provides that the Company
may purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Company, or is or was serving at
the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the
Company would have the power to indemnify him or her against such liability
under the provisions of the Delaware Code. The Company maintains insurance on
behalf of its directors and officers to protect them against such claims.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The exhibits listed below are filed as part of this registration
statement. See the Index of Exhibits with the exhibits filed as part of this
Registration Statement.
Exhibit
Description of Exhibit
4.1
Amended and Restated Certificate of Incorporation of the Company, filed
as an exhibit to the Company's Form 8-K filed on February 1, 2001 and
incorporated herein by reference.
4.2*
Certificate of Amendment of the Company's Amended and Restated
Certificate of Incorporation.
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Exhibit
Description of Exhibit
4.3
Amended and Restated By-laws of the Company, filed as an exhibit to the
Company's Annual Report on Form 10-K filed April 15, 2003 and incorporated
herein by reference.
4.4
Amendment to By-laws of the Company, filed as an exhibit to the Company's
Annual Report on Form 10-K filed March 30, 2004 and incorporated herein by
reference.
4.5
Amended and Restated Stock Incentive Plan, filed as an exhibit to the
Company's Annual Report on Form 10-K filed March 30, 2004 and incorporated
herein by reference.
5.1*
Opinion of Haynes and Boone, LLP regarding validity of the shares registered.
23.1*
Consent of Grant Thornton LLP.
23.2*
Consent of Haynes and Boone, LLP (included in their opinion filed as Exhibit 5.1).
24.1*
Power of Attorney of officers and directors of TeraForce Technology
Corporation (included on signature page hereto).
*
filed herewith
Item 9. Undertakings.
(a)
The undersigned registrant hereby undertakes:
(1)
To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i)
To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii)
To reflect in the prospectus any
facts or events arising after the effective date of this
Registration Statement (or the most recent
post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar
value of securities offered would not exceed that which
was registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii)
To include any material information
with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material
change to such information in this Registration
Statement;
provided, however
, that paragraphs (a)(1)(i) and (a) (1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8, or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the SEC by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in
this Registration Statement.
(2)
That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the
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securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3)
To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b)
The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each
filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(c)
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has 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 the payment by the Registrant
of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
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
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richardson, State of Texas, on July 2, 2004.
TERAFORCE TECHNOLOGY CORPORATION
By:
/s/  Herman M. Frietsch
Herman M. Frietsch
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Herman M. Frietsch and Robert P. Capps
and each of them his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission (the "SEC"), granting unto said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Act, this registration statement has
been signed by the following persons in the capacities and on the dates
indicated.
Signature
Title
Date
/s/ Herman M. Frietsch
Herman M. Frietsch
Chief Executive Officer and
Director (Principal Executive Officer)
July 2, 2004
/s/ Robert P. Capps
Robert P. Capps
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)
July 2, 2004
/s/ Anton von and zu Liechtenstein
Anton von and zu Liechtenstein
Director
July 2, 2004
/s/ Robert E. Garrison II
Robert E. Garrison II
Director
July 2, 2004
/s/ David H. Yedwab
David H. Yedwab
Director
July 2, 2004
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EXHIBIT INDEX
Exhibit
Description of Exhibit
4.1
Amended and Restated Certificate of Incorporation of the Company, filed
as an exhibit to the Company's Form 8-K filed on February 1, 2001 and
incorporated herein by reference.
4.2*
Certificate of Amendment of the Company's Amended and Restated
Certificate of Incorporation.
4.3
Amended and Restated By-laws of the Company, filed as an exhibit to the
Company's Annual Report on Form 10-K filed April 15, 2003 and incorporated
herein by reference.
4.4
Amendment to By-laws of the Company, filed as an exhibit to the Company's
Annual Report on Form 10-K filed March 30, 2004 and incorporated herein by
reference.
4.5
Amended and Restated Stock Incentive Plan, filed as an exhibit to the
Company's Annual Report on Form 10-K filed March 30, 2004 and incorporated
herein by reference.
5.1*
Opinion of Haynes and Boone, LLP regarding validity of the shares registered.
23.1*
Consent of Grant Thornton LLP.
23.2*
Consent of Haynes and Boone, LLP (included in their opinion filed as Exhibit 5.1).
24.1*
Power of Attorney of officers and directors of TeraForce Technology
Corporation (included on signature page hereto).
*
filed herewith