As filed with the Securities and Exchange Commission on July 6, 2000
Registration No. ___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ATLANTIC TECHNOLOGY VENTURES, INC.
(Exact name of registrant as specified in its charter)
Delaware 8731 36-3898269
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
150 Broadway
Suite 1009
New York, New York 10038
(212) 267-2503
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
----------------
FREDERIC P. ZOTOS, ESQ.
President
150 Broadway
Suite 1009
New York, New York 10038
(212) 267-2503
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------
COPY TO:
EZRA G. LEVIN, ESQ.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
(212) 715-9100
Approximate date of commencement of proposed sale to the public: At
such time or times as may be determined by the selling shareholders after this
registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act"), check the following
box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| _______
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_| _______
If the delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. |_|
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------
Proposed
Number of Shares Maximum Proposed Maximum Amount of
Title of Shares to be Offering Price Aggregate Registration
to be Registered Registered Per Share(1) Offering Price(1) Fee
- ------------------------------------------------------------------------------------------------------------------
Common stock, par value $.01 per 400,000 $4.0625 $1,625,000 $429
share
- ------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act, based on the average
of the high and low sales prices for the common stock reported on the
Nasdaq SmallCap Market on Thursday, June 29, 2000.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until this Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
2
400,000 SHARES
ATLANTIC TECHNOLOGY VENTURES, INC.
COMMON STOCK
The shares of common stock of Atlantic Technology Ventures, Inc.
("Atlantic") covered by this prospectus are being offered and sold by certain
selling shareholders listed in this prospectus.
Atlantic's common stock is traded on the Nasdaq SmallCap Market under
the symbol "ATLC".
Investing in Atlantic's common stock involves risks. See "Risk Factors"
beginning on page 2.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed.
These securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The date of this Prospectus is July __, 2000.
TABLE OF CONTENTS
Risk Factors.................................................................2
Use of Proceeds..............................................................8
Selling Shareholders.........................................................8
Plan of Distribution.........................................................9
Legal Matters...............................................................11
Experts.....................................................................11
Additional Information......................................................11
Incorporation by Reference..................................................11
RISK FACTORS
Investing in our common stock is very risky, and you should be able to
bear losing your entire investment. You should carefully consider the risks
presented by the following factors.
Our Financial Condition and Need for Substantial Additional
Funding
Our future profitability is uncertain.
We were incorporated in 1993, and we have incurred significant
operating losses in each of our fiscal years since then. As of March 31, 2000,
our accumulated deficit was $20,168,314. We have not completed developing any of
our products or generated any product sales. All of our technologies are in the
research and development stage, which requires substantial expenditures. Our
operating revenue of $4,685,001 from inception through March 31, 2000 consists
of up-front and milestone payments and development revenue, including a profit
component, by Bausch & Lomb in connection with development of the Catarex
device, and a government grant. Except for additional milestone payments, which
we do not anticipate receiving until 2001 at the earliest, and further
development revenue from Bausch & Lomb, we do not expect to generate any
additional revenues in the near future. It is possible that we may not receive
any additional payments from Bausch & Lomb. We expect to incur significant
operating losses over the next several years, primarily due to continued and
expanded research and development programs, including preclinical studies and
clinical trials for our products and technologies under development, as well as
costs incurred in identifying and, possibly, acquiring, additional technologies.
We will need additional funding, and it may not be available.
As of March 31, 2000, we had cash, cash equivalents and short-term
investment balances of approximately $3,114,605. We will require substantial
additional resources to continue to develop and test our potential products, to
obtain regulatory approvals, to manufacture and commercialize any products that
we may develop, and to license new technologies.
We will need to obtain additional funding through public or private
equity or debt financings, through collaborative arrangements or from other
sources (including exercise of the warrants we have issued giving the holder the
right to purchase shares of our capital stock for a stated exercise price).
Additional financing sources may not be available on acceptable terms, if at
all. If adequate funds are not available, we may need to reduce significantly
our spending and delay, scale back or eliminate one or more of our research,
discovery or development programs.
If we are unable to pay in full the cash portion of the purchase price for our
shares of TeraComm Research, Inc. preferred stock, our ownership interest in
TeraComm would be proportionately reduced.
On May 12, 2000, we acquired shares of preferred stock representing a
35% ownership interest in TeraComm Research, Inc., a privately-held company that
is developing certain fiber optic technology. The purchase price for these
shares, which the parties valued at $6,795,000, consisted of 200,000 shares of
our common stock, a warrant to purchase a further 200,000 shares of our common
stock, and $5,000,000 in cash, $250,000 of which we had already paid to TeraComm
and the remaining $4,750,000 of which we agreed to pay to TeraComm in scheduled
installments over 12 months. We have since paid one of these installments, and
so have to date paid TeraComm in the aggregate $700,000 of the cash portion of
the purchase price. We do not currently have the full amount of the unpaid
portion of the cash purchase price. We intend to raise the necessary capital
through debt or equity financing, or a combination of both. It is, however,
possible that we will not be able to raise the required amount. If we are unable
to raise the full amount of the cash purchase price, our ownership interest
would be proportionately reduced. We are currently analyzing the accounting
treatment of this investment as it related to the possibility of an immediate
charge to operations equal to the estimated value of the acquired in-process
research and development.
2
Our Operations
We have a new management team.
In April 2000, we hired a new full-time President, Frederic P. Zotos,
who has been a member of our board of directors since May 1999; a new Chief
Financial Officer, Nicholas J. Rossettos; a new Vice President, Walter Glomb;
and a new Director of Administration, Kelly Harris. We anticipate that it will
take them time to become fully familiar with our operations, and until they are
it is possible that our business could suffer as a result of our having a
management team that consists entirely of new employees.
We depend on others to conduct clinical development, obtain regulatory
approvals, and manufacture and commercialize our technologies.
We do not have the resources to directly conduct full clinical
development, obtain regulatory approvals, manufacture or commercialize any of
our proposed products and we have no current plans to acquire such resources.
Our subsidiary, Optex, is party to a license and development agreement with
Bausch & Lomb, and we anticipate that we may enter into additional collaborative
agreements for the research and development, clinical testing, seeking of
regulatory approval, manufacturing or commercialization of our proposed
products. In addition, collaborative agreements we do enter into could limit our
control over the resources devoted to these activities as well as our
flexibility in considering alternatives for the commercialization of the
products involved.
We may not succeed in developing commercially viable products.
To be profitable, we must, alone or with others, successfully
commercialize our technologies. They are, however, in early stages of
development, will require significant further research, development and testing,
and are subject to the risks of failure inherent in the development of products
based on innovative or novel technologies. Each of the following is possible
with respect to any one of our products:
o that we will not be able to maintain our current research and
development schedules;
o that, in the case of one of our pharmaceutical technologies or the
Catarex device, we will not be able to enter into human clinical trials
because of scientific, governmental or financial reasons, or encounter
problems in clinical trials that will cause us to delay or suspend
development of one of the technologies;
o that it will be found to be ineffective or unsafe;
o that it will fail to meet applicable regulatory standards; or
o that it will fail to obtain required regulatory approvals.
Similarly, it is possible that, for the following reasons, we may be
unable to commercialize any given technology, even if it is shown to be
effective:
o it is uneconomical;
o in the case of one of our pharmaceutical technologies or the Catarex
device, it is not eligible for third-party reimbursement from
government or private insurers;
o others hold proprietary rights that preclude us from commercializing
it;
o others have brought to market equivalent or superior products;
o others have superior resources to market similar products or
technologies; or
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o it has undesirable or unintended side effects that prevent or limit
their commercial use.
Our ability to compete will suffer if we are unable to protect our patent rights
and trade secrets or if we infringe the proprietary rights of third parties.
Our success will depend to a large extent on our ability to obtain U.S.
and foreign patent protection for drug candidates and processes, preserve trade
secrets and operate without infringing the proprietary rights of third parties.
To obtain a patent on an invention, one must be the first to invent it
or the first to file a patent application for it. We cannot be sure that the
inventors of subject matter covered by patents and patent applications that we
own or license were the first to invent, or the first to file patent
applications for, those inventions. Furthermore, patents we own or license may
be challenged, infringed upon, invalidated, found to be unenforceable, or
circumvented by others, and our rights under any issued patents may not provide
sufficient protection against competing drugs or otherwise cover commercially
valuable drugs or processes.
We seek to protect trade secrets and other unpatented proprietary
information, in part by means of confidentiality agreements with our
collaborators, employees, and consultants. If any of these agreements is
breached, we may be without adequate remedies. Also, our trade secrets may
become known or be independently developed by competitors.
Government regulations may prevent us from commercializing one or more of our
technologies, or may delay commercialization or make it more expensive.
The federal government, principally the FDA, and comparable agencies in
state and local jurisdictions and in foreign countries extensively and
rigorously regulates all new drugs and medical devices, including our products
and technologies under development. These authorities, particularly the FDA,
impose substantial requirements upon preclinical and clinical testing,
manufacturing and commercialization of pharmaceutical and medical device
products.
There are many costly and time-consuming procedures required for
approval of a new drug, including lengthy and detailed preclinical and clinical
testing and validation of manufacturing and quality control processes. Several
years may be needed to satisfy these requirements, and this time period may vary
substantially depending on the type, complexity and novelty of the product
candidate. Government regulation can delay or prevent marketing of potential
products for a considerable period of time and impose costly procedures upon our
activities. Moreover, the FDA or other regulatory agency may not grant approval
for any products developed or not grant approval on a timely basis, and success
in preclinical or early stage clinical trials does not assure success in later
stage clinical trials.
Data obtained from preclinical and clinical activities are susceptible
to varying interpretations. This could delay, limit or prevent regulatory
approval. Even if regulatory approval of a product is granted, limitations may
be imposed on the indicated uses of a product. Further, later discovery of
previously unknown problems with a product may result in added restrictions on
the product, including withdrawal of the product from the market. Any delay or
failure in obtaining regulatory approvals would materially and adversely affect
our business, financial condition and results of operations.
A drug and medical device manufacturer (either us or one of our
third-party manufacturers) must conform to Good Manufacturing Practices, or
"GMP," regulations, which the FDA enforces strictly through their facilities
inspection programs. Contract manufacturing facilities must pass a pre-approval
inspection of their manufacturing facilities before the FDA will approve a New
Drug Application, or "NDA." Certain material manufacturing changes that occur
after approval are also subject to FDA review and clearance or approval. FDA or
other regulatory agencies may not approve the process or the facilities by which
any of our products may be manufactured. Our dependence on others to manufacture
our products may adversely affect our ability to develop and deliver products on
a timely and competitive basis. If we are required to manufacture our own
products we will be required to build or purchase a manufacturing facility, will
be subject to the regulatory requirements described above, to similar risks
4
regarding delays or difficulties encountered in manufacturing any such products
and will require substantial additional capital. We may be unable to manufacture
any such products successfully or in a cost-effective manner.
The FDA's policies may change and additional government regulations and
policies may be instituted, both of which could prevent or delay regulatory
approval of our potential products. Moreover, increased attention to the
containment of health care costs in the U.S. could result in new government
regulations that could materially and adversely affect our business. We are
unable to predict the likelihood of adverse governmental regulations that could
arise from future legislative or administrative action, either in the U.S. or
abroad.
We will also be subject to a variety of foreign regulations governing
clinical trials, registration and sales of our products. Regardless of whether
FDA approval is obtained, approval of a product by comparable regulatory
authorities of foreign countries must be obtained prior to marketing the product
in those countries. The approval process varies from country to country and the
time needed to secure approval may be longer or shorter than that required for
FDA approval. Delays in the approval process or failure to obtain such foreign
approvals would materially and adversely affect our business, financial
condition and results of operations.
We depend upon our key license agreements.
With the exception of the Catarex technology, we have licensed our
proprietary technology from others. If we do not meet our financial, development
or other obligations under our license agreements in a timely manner, we could
lose the rights to some or all of our proprietary technologies, which could
materially and adversely affect our business and financial condition and results
of operations. In addition, our rights to our 2-5A antisense technology are
contingent on the Cleveland Clinic upholding its obligations to the National
Institutes of Health with respect to 2-5A. We could lose our rights to 2-5A if
the Cleveland Clinic fails to properly discharge its obligations to the National
Institutes of Health.
We carry only a limited amount of product liability insurance.
If we develop and commercialize any products, through third-party
arrangements or otherwise, we may be exposed to product liability claims. We
intend to carry product liability insurance when we initiate the Phase I study
of CT-3. Some of our license agreements require us to obtain product liability
insurance when we begin clinical testing or commercialization of our proposed
products and to indemnify our licensors against product liability claims brought
against them as a result of the products developed by us. We may not be able to
obtain such insurance at all, in sufficient amounts to protect us against such
liability or at a reasonable cost. None of our licensors has made, nor is
expected to make, any representations to us as to the safety or efficacy of the
inventions covered by the license agreements or as to any products which may be
made or used under rights granted therein. In addition, Optex is required to
indemnify Bausch & Lomb for certain matters under the terms of their development
and license agreement. Product liability claims brought against us or a party
that we are obligated to indemnify could materially and adversely affect our
business, financial condition and results of operations.
Any breach by us of environmental regulations could result in our incurring
significant costs.
Federal, state and local laws, rules, regulations and policies govern
our use, generation, manufacture, storage, air emission, effluent discharge,
handling and disposal of certain materials and wastes. Although we believe that
we have complied with these laws and regulations in all material respects and
have not been required to take any action to correct any noncompliance, we may
be required to incur significant costs to comply with environmental and health
and safety regulations in the future. In addition, our research and development
activities involve the controlled use of hazardous materials and we cannot
eliminate the risk of accidental contamination or injury from these materials,
although we believe that our safety procedures for handling and disposing of
such materials comply with the standards prescribed by state and federal
regulations. In the event of an accident, we could be held liable for any
resulting damages and we do not have insurance to cover this contingency.
Conflicts of interest could arise as a result of our directors serving on the
boards of other companies.
Steve H. Kanzer and Peter O. Kliem serve as directors of other
companies, and in the future other of our directors may from time to time serve
as directors of other companies. If any of those companies compete with us,
conflicts of interest could arise.
5
Our Securities
Holders of our Series A preferred stock have rights superior to those of the
holders of our common stock.
Holders of shares of our outstanding Series A preferred stock can
convert each share into 3.27 shares of our common stock without paying any cash
to us. The conversion price of shares of Series A preferred stock is $3.06 per
share of common stock. Both the conversion rate and the conversion price may be
adjusted in favor of holders of shares of Series A preferred stock upon certain
triggering events. Accordingly, the number of shares of common stock that
holders of shares of Series A preferred stock receive upon conversion may
increase, which could adversely affect the prevailing market price of our other
securities.
In addition, each February 7th and August 7th we are obligated to pay
dividends, in arrears, to the holders of shares of Series A preferred stock, and
the dividends consist of 0.065 additional shares of Series A preferred stock for
each outstanding share of Series A preferred stock. Our obligation to issue
additional shares of Series A preferred stock without payment of any cash to us
could adversely affect the prevailing market price of our other securities.
If we are liquidated, sold to or merged with another entity (and we are
not the surviving entity after the merger), we will be obligated to pay holders
of shares of Series A preferred stock a liquidation preference of $13.00 per
share before any payment is made to holders of shares of common stock. After
payment of the liquidation preference, we might not have any assets remaining to
pay the holders of shares of common stock. The liquidation preference could
adversely affect the market price of our other securities.
We need to obtain the approval of a supermajority (66.67%) of the
outstanding shares of Series A preferred stock, voting separately as a class, to
approve certain actions that we may wish to take. Accordingly, if we are unable
to obtain the required approval on a timely basis from the holders of shares of
Series A preferred stock, our ability to conduct business may be impaired.
The holders of shares of Series A preferred stock have rights in
addition to those summarily described above. A complete description of the
rights of the Series A preferred stock is contained in the Certificate of
Designations for the Series A preferred stock filed with the Secretary of State
of the State of Delaware.
Our capitalization structure may adversely affect the price of our common stock
and impede our ability to obtain additional funding.
As of March 31, 2000, our outstanding convertible securities (other
than those relating to the Series A preferred stock), both vested and unvested,
were convertible into 4,145,950 shares of common stock at prices ranging from
$1.00 to $10.00 per share. As of March 31, 2000, there were outstanding 575,617
shares of Series A preferred stock and warrants to purchase 117,195 shares of
Series A preferred stock, which may be converted into shares of common stock at
a conversion rate of 3.27 shares of common stock for each share of Series A
preferred stock. Exercise of these convertible securities or conversion of the
Series A preferred stock into shares of common stock may adversely affect the
market price of the common stock as well as the market price of our
publicly-traded warrants.
The Certificate of Designations of the Series A preferred stock
provides that we may not issue securities that have superior rights to the
Series A preferred stock without the consent of the holders of the Series A
preferred stock. Accordingly, so long as these convertible securities remain
unexercised and shares of the Series A preferred stock remain unconverted, the
terms under which we could obtain additional funding, if at all, may be
adversely affected.
Our redeeming the redeemable warrants could cause holders to exercise their
warrants at an inopportune time, or result in holders forfeiting their right to
exercise their warrants.
Under certain conditions, we may redeem our redeemable warrants. If we
state our intention to do so, that could encourage holders to exercise their
redeemable warrants and pay the exercise price at a time when it may be
6
disadvantageous for them to do so, to sell their redeemable warrants at the
current market price when they might otherwise wish to hold their redeemable
warrants, or to accept the redemption price, which may be substantially less
than the market value of the redeemable warrants at the time of redemption.
Holders of redeemable warrants will automatically forfeit their rights to
purchase the shares of common stock issuable upon exercise of the redeemable
warrants unless the redeemable warrants are exercised before they are redeemed.
The value of our redeemable warrants may suffer if a prospectus covering the
underlying shares of common stock is not kept effective and current or if the
underlying shares are not registered in those states in which the securities are
to be offered.
A holder of any of our redeemable warrants has the right to exercise
them for the purchase of shares of common stock only if we have filed with the
Commission a current prospectus covering the resale of the shares of common
stock issuable upon exercise of the redeemable warrants and only if the resale
of the shares of common stock has been registered or qualified, or is deemed to
be exempt from registration or qualification under the securities laws of the
state of residence of the holder of the redeemable warrant. We have filed and
have undertaken to keep effective and current a prospectus permitting the
purchase and sale of the common stock underlying the redeemable warrants, but we
cannot assure you that we will be able to keep the prospectus effective and
current. Although we intend to seek to qualify for sale the resale of the shares
of common stock underlying the redeemable warrants in those states in which the
securities are to be offered, no assurance can be given that this qualification
will occur. The redeemable warrants may be deprived of any value if a prospectus
covering the shares of common stock issuable upon the exercise thereof is not
kept effective and current or if the underlying shares are not, or cannot be,
registered in the applicable states.
Delisting from Nasdaq and the resulting market illiquidity could adversely
affect our ability to raise funds.
Although our common stock, redeemable warrants and the units offered in
our initial public offering are quoted on the Nasdaq SmallCap Market, continued
inclusion of those securities on Nasdaq will require the following:
o that we maintain at least $2,000,000 in net tangible assets;
o that the minimum bid price for the common stock be at least $1.00 per
share;
o that the public float consist of at least 500,000 shares of common
stock, valued in the aggregate at more than $1,000,000;
o that the common stock have at least two active market makers;
o that the common stock be held by at least 300 holders; and
o that we adhere to certain corporate governance requirements.
If we are unable to satisfy these maintenance requirements, our
securities may be delisted from Nasdaq.
If we were to be delisted, trading, if any, in the securities would
thereafter be conducted in the over-the-counter market in the "pink sheets" or
the National Association of Securities Dealers' "Electronic Bulletin Board."
Consequently, the liquidity of our securities could be materially impaired, not
only in the number of securities that could be bought and sold at a given price,
but also through delays in the timing of transactions and reduction in security
analysts' and the media's coverage of us, which could result in lower prices for
our securities than might otherwise be attained and could also result in a
larger spread between the bid and asked prices for our securities. In addition,
if our securities were delisted it could materially and adversely affect our
ability to raise funding.
In addition, if our securities are delisted from trading on Nasdaq and
the trading price of our common stock is less than $5.00 per share, our common
stock would be a "penny stock." Broker-dealers who sell penny stocks must
provide purchasers of these stocks with a standardized risk-disclosure document
prepared by the Commission.
7
It provides information about penny stocks and the nature and level of risks
involved in investing in the penny-stock market. A broker must also give a
purchaser, orally or in writing, bid and offer quotations and information
regarding broker and salesperson compensation, make a written determination that
the penny stock is a suitable investment for the purchaser, and obtain the
purchaser's written agreement to the purchase. In the event our securities are
delisted, the penny stock rules may make it difficult for you to sell your
shares of our stock. Because of the rules, there is less trading in penny
stocks. Also, many brokers choose not to participate in penny stock
transactions.
Our securities are relatively illiquid compared to securities traded on the
principal trading markets.
Our securities are traded on the Nasdaq SmallCap Market and lack the
liquidity of securities traded on the principal trading markets. Accordingly, an
investor may be unable to promptly liquidate an investment in our securities.
Similarly, the sale of a larger block of our securities could depress the price
of our securities to a greater degree than a company that typically has a higher
volume of trading in its securities.
Our stock price has been and may continue to be volatile.
The securities markets have, from time to time, experienced significant
price and volume fluctuations that may be unrelated to the operating performance
of particular companies or industries. Thus, the market price of our securities,
like the stock prices of many publicly traded biotechnology and smaller
companies, has been and may continue to be especially volatile. Announcements
regarding technological innovations, regulatory matters, new commercial products
by us or our competitors, developments or disputes concerning patent or
proprietary rights, publicity regarding actual or potential medical results
relating to products under development by us or our competitors, regulatory
developments in both the U.S. and foreign countries, public concern as to the
safety of pharmaceutical products and economic and other external factors, as
well as continued operating losses by us and period-to-period fluctuations in
our financial results may have a significant impact on the market price of our
securities.
USE OF PROCEEDS
Atlantic will not receive any proceeds from any sales of the shares.
SELLING SHAREHOLDERS
On May 12, 2000, Atlantic issued in a private placement to TeraComm
Research, Inc., a Delaware corporation ("TeraComm"), 200,000 shares of Atlantic
common stock and granted TeraComm a warrant to acquire a further 200,000 shares
of Atlantic common stock. (This transaction is described in our Current Report
on Form 8-K filed with the Securities and Exchange Commission.) On June 29,
2000, TeraComm distributed those Atlantic shares as a dividend to the following
holders of TeraComm common stock, each of whom received the number of shares of
Atlantic common stock set forth opposite his or her name. On the same date,
TeraComm also transferred the warrant as a dividend to the following holders of
TeraComm common stock, and as a result of that transfer each of the following
holders holds a warrant to acquire, on the same terms as the warrant issued to
TeraComm, the number of shares set forth opposite his or her name.
8
Number of Shares Issuable Upon
Selling Shareholder Number of Shares Exercise of Warrant
- ------------------- ---------------- -------------------
Kenneth A. Puzey 120,000 120,000
Thomas G. Ference 40,000 40,000
David L. Simon 7,100 7,100
Terry Allen 6,000 6,000
John M. Fife 6,000 6,000
David G. Weaver 6,000 6,000
Harvey Bordett 2,500 2,500
Donna M. Kaylor 2,000 2,000
Robert E. Nary 2,000 2,000
Wayne K. Higashi 1,000 1,000
Linda A. Meloro 1,000 1,000
Linda Pellegrino 1,000 1,000
Brian Slepian 1,000 1,000
Stephen C. Shear 1,000 1,000
Michael L. Edwards 800 800
Curtis B. Prochowski 600 600
Thomas S. Staron, Jr. 400 400
Mathew P. & Jennifer Haynos 300 300
Susan E. Murley 300 300
Jonathan H. Fay (custodians: Jon Fay and 200 200
Elaine Ploof)
Brian R. Kessler 200 200
Jed H. Rankin 200 200
Mark Staron 200 200
William D. Surdock 200 200
Each of the TeraComm shareholders listed above is offering for sale
under this prospectus all of the shares of Atlantic common stock set forth
opposite his or her name, both those currently held and those issuable upon
exercise of a warrant.
All of these shares of common stock held by the selling shareholders
are being offered for resale pursuant to this prospectus. Each of the selling
shareholders has sole voting and investment power with respect to all his or her
shares of our common stock offered for sale in this prospectus. To our
knowledge, except for these shares, none of the selling shareholders owns any
shares of Atlantic common stock.
The aggregate proceeds to the selling shareholders from the sale of the
common stock offered by them hereby will be the purchase price of common stock
less discounts and commissions, if any.
PLAN OF DISTRIBUTION
The selling shareholders, which term includes their successors,
transferees, pledgees or donees or their successors, may sell the common stock
directly to purchasers or through underwriters, broker-dealers or agents, who
may receive compensation in the form of discounts, concessions or commissions
from the selling shareholders or the purchasers, which discounts, concessions or
commissions as to any particular underwriter, broker-dealer or agent may be in
excess of those customary in the types of transactions involved.
The common stock may be sold by any selling shareholder in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at prices related to such prevailing market prices, at varying prices determined
at the time of sale, or at negotiated prices. Such sales may be effected in
transactions, which may involve crosses or block transactions (1) on any
national securities exchange or quotation service on which the common stock may
be listed or quoted at the time of sale, (2) in the over-the-counter market, (3)
in transactions otherwise than on such exchanges or services or in the
over-the-counter market, (4) through the writing of options, whether such
options are listed on an options exchange or otherwise,
9
or (5) through the settlement of short sales. In connection with the sale of our
common stock or otherwise, any selling shareholder may enter into hedging
transactions with broker-dealers or other financial institutions which may in
turn engage in short sales of the common stock and deliver these securities to
close out such short positions, or loan or pledge the common stock to
broker-dealers that in turn may sell these securities.
Each selling shareholder reserves the right to accept and, together
with its agents from time to time, to reject, in whole or in part, any proposed
purchase of common stock to be made directly or through agents.
Our outstanding common stock is listed for trading on the Nasdaq
SmallCap Market under the symbol "ATLC".
Any underwriters, broker-dealers or agents that participate in the sale
of the common stock may be "underwriters" within the meaning of Section 2(11) of
the Securities Act. Any discounts, commissions, concessions or profit they earn
on any resale of the shares may be underwriting discounts and commissions under
the Securities Act.
To the extent required, the common stock to be sold, the name of each
selling shareholder, the respective purchase prices and the public offering
prices, the name of any agent, dealer or underwriter, and any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement of which this prospectus is a part.
We have agreed to indemnify the selling shareholders against certain
liabilities, including certain liabilities under the Securities Act, or to
contribute to payments that the selling shareholders may be required to make in
respect of such liabilities.
We have agreed with the selling shareholders to keep the registration
statement of which this prospectus is a part effective for a period of two years
or until all of the shares offered by this prospectus have been sold, whichever
period ends earlier.
10
LEGAL MATTERS
Certain legal matters in connection with the shares of our common stock
offered for resale in this prospectus have been passed upon for us by Kramer
Levin Naftalis & Frankel LLP, New York, New York.
EXPERTS
The consolidated financial statements of Atlantic and its subsidiaries
(a development stage company) as of December 31, 1999 and 1998, and for each of
the years in the three-year period ended December 31, 1999, and for the period
from July 13, 1993 (inception) to December 31, 1999, have been incorporated by
reference herein and in the registration statement in reliance upon the report
of KPMG LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of that firm as experts in accounting and
auditing.
ADDITIONAL INFORMATION
We have filed a registration statement on Form S-3 with the Securities
and Exchange Commission relating to the common stock offered by this prospectus.
This prospectus does not contain all of the information set forth in the
registration statement and the exhibits and schedules to the registration
statement. Statements contained in this prospectus concerning the contents of
any contract or other document referred to are not necessarily complete and in
each instance we refer you to the copy of the contract or other document filed
as an exhibit to the registration statement, each such statement being qualified
in all respects by such reference.
For further information with respect to us and the common stock we are
offering, please refer to the registration statement. A copy of the registration
statement can be inspected by anyone without charge at the public reference room
of the Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's Regional Offices located at 7 World Trade Center, Suite
1300, New York, New York 10048, and 500 West Madison Street, Chicago, Illinois
60601. Please call the Commission at 1-800-SEC-0330 for further information on
the operation of the public reference room. Copies of these materials can be
obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site (http://www.sec.gov) that contains information regarding
registrants that file electronically with the Commission.
Our common stock is quoted for trading on the Nasdaq SmallCap Market,
and you may inspect at the offices of the Nasdaq SmallCap Market, located at
1735 K Street, N.W., Washington, D.C. 20006, the registration statement relating
to the common stock offered by this prospectus, reports filed by us under the
Exchange Act, and other information concerning us.
INCORPORATION BY REFERENCE
Incorporated by reference into this prospectus is the information set
forth in the following documents:
o our Annual Report on Form 10-KSB for the fiscal year ended December 31,
1999;
o our Quarterly Report on Form 10-QSB for the quarter ended March 31,
2000;
o our Current Report on Form 8-K filed May 26, 2000;
o the description of our capital stock set forth in our Registration
Statement under the Securities Exchange Act;
o all other reports filed by us pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual
report referred to above; and
11
o all documents subsequently filed by us with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the
termination of this offering.
We will furnish to any person to whom this prospectus is delivered,
without charge, a copy of these documents upon written or oral request to
Nicholas J. Rossettos, Corporate Secretary, 150 Broadway, Suite 1009, New York,
New York 10038, tel. (212) 267-2503. A copy of any exhibits to these documents
will be furnished to any shareholder upon written or oral request and payment of
a nominal fee.
12
No dealer, salesman or other person has been authorized to give any information
or to make representations other than those contained in this prospectus, and if
given or made, such information or representations must not be relied upon as
having been authorized by us or the selling shareholders. Neither the delivery
of this prospectus nor any sale hereunder will, under any circumstances, create
an implication that the information herein is correct as of any time subsequent
to its date. This prospectus does not constitute an offer to or solicitation of
offers by anyone in any jurisdiction in which such an offer or solicitation is
not authorized or in which the person making such an offer is not qualified to
do so or to anyone to whom it is unlawful to make such an offer or solicitation.
400,000 SHARES
ATLANTIC TECHNOLOGY VENTURES, INC.
COMMON STOCK
----------------------------
PROSPECTUS
----------------------------
JULY ___, 2000
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The Registrant estimates that expenses payable by the Registrant in
connection with the offering described in this Registration Statement will be as
follows:
Total
-----
SEC registration fee (actual) ............................................$429
Accounting fees and expenses ...........................................$1,000
Legal fees and expenses.................................................$6,000
Printing and engraving expenses.........................................$1,000
Miscellaneous expenses..................................................$1,000
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL")
permits a corporation, under specified circumstances, to indemnify its
directors, officers, employees or agents against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties by reason of the fact that they were or are directors, officers,
employees or agents of the corporation, if such directors, officers, employees
or agents acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, that is one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they will have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification will be made if such person will
have been adjudged liable to the corporation, unless and only to the extent that
the court in which the action or suit was brought will determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
The Registrant's Restated Certificate of Incorporation provides for
indemnification of directors and officers of the Registrant to the fullest
extent permitted by the DGCL. The Registrant has obtained liability insurance
for each director and officer for certain losses arising from claims or charges
made against them while acting in their capacities as directors or officers of
the Registrant.
Item 16. Exhibits
Exhibit No. Description
- ----------- -----------
5.1* Opinion of Kramer Levin Naftalis & Frankel LLP.
23.1* Consent of KPMG LLP.
23.2* Consent of Kramer Levin Naftalis & Frankel LLP (contained in
the opinion filed as Exhibit 5.1 hereto).
24.1* Power of Attorney (contained on the signature page of this
Registration Statement).
- ---------------
* Filed herewith
Item 17. Undertakings
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 Securities and Exchange Commission
such indemnification is against public policy as expressed in the 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.
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 the 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 the Registration Statement; and
iii. To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that clauses (i) and (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
such clauses is contained in periodic reports file with or furnished to
the Commission by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the 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 securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(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.
II-2
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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) 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.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on July 5, 2000.
By: _______________________
Frederic P. Zotos
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Frederic P. Zotos, 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
or all amendments to this registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, 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 for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
_______________________ Chief Executive Officer July 5, 2000
A. Joseph Rudick, M.D. and Director
_______________________ President July 5, 2000
Frederic P. Zotos and Director
_______________________ Chief Financial Officer July 5, 2000
Nicholas J. Rossettos
_______________________ Director July 5, 2000
Steve H. Kanzer
_______________________ Director July 5, 2000
Peter O. Klien
II-4
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
5.1* Opinion of Kramer Levin Naftalis & Frankel LLP.
23.1* Consent of KPMG LLP.
23.2* Consent of Kramer Levin Naftalis & Frankel LLP (contained in
the opinion filed as Exhibit 5.1 hereto).
24.1* Power of Attorney (contained on the signature page of this
Registration Statement).
- --------------
* Filed herewith
II-5
Exhibit 5.1
KRAMER LEVIN NAFTALIS & FRANKEL LLP
919 THIRD AVENUE
NEW YORK, N.Y. 10022 - 3852
TEL (212) 715-7787 47, Avenue Hoche
FAX (212) 715-8047 75008 Paris
France
July 6, 2000
Atlantic Technology Ventures, Inc.
150 Broadway
Suite 1009
New York, NY 10038
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel to Atlantic Technology Ventures,
Inc., a Delaware corporation (the "Company"), in connection with the preparation
and filing of a Registration Statement on Form S-3 (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission"), with
respect to the registration for resale under the Securities Act of 1933, as
amended (the "Act"), of 200,000 shares of the Company's common stock, par value
$.001 per share, issued by the Company to the selling shareholders named in the
Registration Statement (the "Shares") and 200,000 shares of the Company's common
stock issuable by the Company to the selling shareholders named in the
Registration Statement upon exercise of certain warrants (the "Warrant Shares").
In connection with the registration of the Shares and the
Warrant Shares, we have reviewed such documents and records as we have deemed
necessary to enable us to express an opinion on the matters covered hereby. In
rendering this opinion, we have (a) assumed (i) the genuineness of all
signatures on all documents examined by us, (ii) the authenticity of all
documents submitted to us as originals, and (iii) the conformity to original
documents of all documents submitted to us as photostatic or conformed copies
and the authenticity of the originals of such copies; and (b) relied (i) on
certificates of public officials and (ii) as to matters of fact, statements and
certificates of officers and representatives of the Company.
Based upon the foregoing, we are of the opinion that the
Shares have been validly issued, fully paid and non-assessable, and that the
Warrant Shares will, upon issuance, be validly issued, fully paid and
non-assessable.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement. In giving the foregoing consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Kramer Levin Naftalis & Frankel LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Atlantic Technology Ventures, Inc.:
We consent to the use of our report incorporated by reference herein and to the
reference to our firm under the heading "EXPERTS" in the prospectus.
KPMG LLP
Short Hills, New Jersey
July 5, 2000