Prospectus Filed pursuant to 424(b)(3)
Registration Number: 333-49036
1,647,312 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 from time to
time by BH Capital Investments, L.P. and Excalibur Limited Partnership, both of
whom will receive these shares by converting shares of our Series B convertible
preferred stock or exercising warrants held by them that are exercisable for
shares of our common stock.
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 November 21, 2000.
TABLE OF CONTENTS
Risk Factors.................................................................1
Use of Proceeds.............................................................10
Selling Shareholders........................................................10
Plan of Distribution........................................................11
Legal Matters...............................................................13
Experts.....................................................................13
Additional Information......................................................13
Incorporation by Reference..................................................13
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 June 30, 2000,
our accumulated deficit was $23,255,699. 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 $6,119,635 from inception through June 30, 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 June 30, 2000, we had a cash and cash equivalents balance of
approximately $1,605,801. 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 could 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. We have as of October 30, 2000, paid TeraComm
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in the aggregate $1,000,000 of the cash portion of the purchase price. The
parties have agreed that a further $1,000,000 is payable when TeraComm achieves
an agreed technical milestone, and the remainder is thereafter payable in three
quarterly installments of $1,000,000. If upon TeraComm achieving the technical
milestone or if by December 30, 2000 (even if TeraComm does not achieve the
technical milestone), we elect not to pay the next installment of the cash
portion of the purchase price, we would forfeit the right to pay any further
installments on the cash purchase price and our ownership interest in TeraComm
would be reduced to reflect the proportion of the total purchase price that we
had actually paid.
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.
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:
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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
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
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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
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.
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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
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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.
Our Securities
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
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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. 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.
Holders of Series B preferred stock have rights superior to those of the holders
of Series A preferred stock and Atlantic's common stock.
Holders of shares of Atlantic's outstanding Series B convertible
preferred stock can convert each share into shares of common stock without
paying us any cash. The conversion rate is equal to $2.90 divided by the
conversion price. The conversion price per share of Series B preferred stock on
any given day is the lower of (1) $3.00, (2) the average closing bid price of
our common stock during the five trading days ending the immediately preceding
trading day, or (3) the average of the two lowest closing bid prices on the
principal market of the common stock out of 15 trading days immediately prior to
conversion. The conversion price may be adjusted in favor of holders of shares
of Series B stock upon certain triggering events. Accordingly, the number of
shares of common stock that holders of shares of Series B preferred stock
receive upon conversion may increase, which could adversely affect the
prevailing market price of our other securities.
In addition, each March 31, June 30, September 30, and December 31, we
are obligated to pay dividends, in arrears, to holders of shares of Series B
preferred stock, and the dividends consist of 8% annually of the original
purchase price paid for the Series B preferred stock. These dividends must be
paid either in cash or in shares of Series B preferred stock. If these dividends
are paid in shares of Series B preferred stock, those shares will be valued at
85% of the two lowest consecutive closing bid prices of our common stock during
the 20 trading days prior to the applicable dividend date. We must also pay to
holders of Series B preferred stock, on an as-converted basis, any dividends
(other than dividends payable in shares of our capital stock) that we propose to
distribute to the holders of Series A preferred stock, common stock, or other
junior securities. Our issuing additional shares of Series B preferred stock
without payment of any cash to us could adversely affect the prevailing market
price of our other securities.
If Atlantic is 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 B preferred stock a liquidation preference equal to
the original purchase price paid per share of Series B preferred stock for each
share of Series B preferred stock held, before any payment is
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made to holders of shares of our Series A preferred stock or common stock. After
payment of the liquidation preference, we might not have any assets remaining to
pay the holders of shares of Series A preferred stock or common stock. The
liquidation preference could adversely affect the market price of our other
securities.
The board of directors needs to obtain the approval of two-thirds of
the outstanding shares of Series B preferred stock, voting separately as a
class, to approve certain actions that the board of directors may wish to take.
Accordingly, if the board of directors is unable to obtain the required approval
on a timely basis from the holders of shares of Series B preferred stock, its
ability to conduct business may be impaired.
The holders of shares of Series B preferred stock have rights in
addition to those summarily described above. A complete description of the
rights of the Series B preferred stock is contained in the certificate of
designations of the Series B preferred stock filed with the Secretary of State
of Delaware.
Holders of shares of our Series B preferred stock could require us to repurchase
their shares.
Holders of shares of our Series B preferred stock could upon the
occurrence of any one of a number of events require us to repurchase any of
those shares, any shares issued upon conversion of shares of our Series B
preferred stock ("Conversion Shares"), or any shares issued upon exercise of
certain warrants granted to the holders of shares of our Series B preferred
stock ("Warrant Shares"). The events that could trigger this repurchase right
include our failure to timely file a registration statement registering for
resale Conversion Shares and Warrant Shares, our failure to timely obtain
effectiveness of any such registration statement, and our amending without the
consent of the holders of shares of our Series B preferred stock our certificate
of incorporation or bylaws in a manner that materially and adversely affects the
rights of any holder of shares of our Series B preferred stock, the Conversion
Shares, or the Warrant Shares. The price at which we would be required to
repurchase these shares is the greater of (1) 125% of the aggregate purchase
price of the shares of Series B preferred stock and the exercise price of the
Warrant Shares, as applicable, paid for the shares to be repurchased, and (2)
the market price of the shares being repurchased. If the repurchase right is
exercised at a time when our reserves of cash are limited, we might be forced to
reduce significantly our spending or may even be forced to cease doing business.
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 us any
cash. 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.
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In addition, each February 7 and August 7 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 issuing 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 Atlantic is 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. A complete description of the rights of
the Series A preferred stock is contained in the certificate of designations of
the Series A preferred stock filed with the Secretary of 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 October 30, 2000, our outstanding convertible securities (other
than those relating to the Series B and 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 October 30, 2000, there were
outstanding 689,656 shares of Series B preferred stock, half of which are being
held in escrow until certain events have occurred. The conversion rate is equal
to $2.90 divided by the conversion price. The conversion price per share of
Series B preferred stock on any given day is the lower of (1) $3.00, (2) the
average closing bid price of our common stock during the five trading days
ending the immediately preceding trading day, or (3) the average of the two
lowest closing bid prices on the principal market of the common stock out of 15
trading days immediately prior to conversion. As of October 27, 2000, there were
outstanding 362,728 shares of Series A preferred stock and warrants to purchase
112,896 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 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 B Convertible Preferred
stock provides that we may not authorize or issue additional shares of Series A
preferred stock or Series B preferred stock or authorize or issue securities
that have superior rights to the Series B stock without the consent of at least
two-thirds of the outstanding shares of the Series B preferred stock, so long as
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at least 10% of the Series B preferred stock remains unconverted. Accordingly,
so long as at least 10% of the Series B preferred stock remains unconverted, the
terms under which we could obtain additional funding, if at all, may be
adversely affected.
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
We will not receive any proceeds from any sales of the shares by the
selling stockholders.
SELLING STOCKHOLDERS
On September 28, 2000, pursuant to the terms of a Convertible Preferred
Stock and Warrants Purchase Agreement (the "Purchase Agreement"), we issued to
BH Capital Investments, L.P. and Excalibur Limited Partnership (referred to as
the "selling stockholders") at the initial closing of a private placement a
total of 689,656 shares of Series B preferred stock and warrants to purchase a
further 134,000 shares of common stock, with one half of these shares and
warrants being held in escrow. The term "selling stockholders" also includes
donees and pledgees selling shares covered by this prospectus that were
received, directly or indirectly, from the selling stockholders after the date
of this prospectus. The term "selling stockholders" also includes any direct or
indirect transferees of the shares covered by this prospectus or other
successors-in-interest of the shares covered by this prospectus selling shares
received after the date of this prospectus from a selling stockholder as a gift,
pledge, partnership distribution or other non-sale related transfer. The terms
of the Series B preferred stock, including the conversion terms, are set forth
in the Series B certificate of designations that is a part of our certificate of
incorporation, and the terms of the warrants are set forth in the Purchase
Agreement
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and in a separate Stock Purchase Warrant Certificate issued by Atlantic. The
selling stockholders have not had any position, office or other material
relationship with us within the past three years.
Pursuant to the Purchase Agreement, we have agreed to file and maintain
the effectiveness of the registration statement of which this prospectus forms a
part registering a number of shares equal to double (1) the number of shares
initially issuable upon conversion of the shares of Series B preferred stock
issued to the selling stockholders and (2) the number of shares of our common
stock issuable upon exercise of the warrants we granted the selling
stockholders, amounting to 1,647,312 shares in total. We also agreed to pay all
fees and expenses incident to the registration of the shares of common stock
underlying the Series B preferred stock and the shares of common stock issuable
upon exercise of the warrants, including all registration and filing fees, all
fees and expenses of complying with state blue sky or securities laws, all costs
of preparing the registration statement, and fees and disbursements of our
counsel and independent accountants. Brokerage commissions and similar selling
expenses, if any, attributable to the sale of shares will be borne by the
selling stockholders. The selling stockholders may, pursuant to this prospectus,
from time to time offer and sell the shares offered in this prospectus. None of
those shares were issued or outstanding on the date of this prospectus. The
information concerning the selling stockholders may change from time to time. If
required, those changes will be set forth in accompanying supplements to this
prospectus.
PLAN OF DISTRIBUTION
This prospectus covers the proposed resale of up to 1,647,312 shares of
our common stock by the selling stockholders. The selling stockholders may sell
the shares offered in this prospectus from time to time in one or more types of
transactions (which may include block transactions) on the NASDAQ SmallCap
Market, in the over-the-counter market, in negotiated transactions, through put
or call options transactions relating to those shares, through short sales, or a
combination of these methods of sales, at market prices prevailing at the time
of sale, at prices related to those market prices, or at negotiated prices. Such
transactions may or may not involve brokers or dealers.
The selling stockholders may effect such transactions by selling the
shares directly to purchasers, to or through broker-dealers, which may act as
agents or principals, or to underwriters, which will acquire shares for their
own account and resell them in one or more transactions. Such broker-dealers or
underwriters may receive compensation in the form of discounts, concessions, or
commissions from the selling stockholders and/or the purchasers for whom those
broker-dealers or underwriters act as agents or to whom they sell as principal,
or both (which compensation as to a particular broker-dealer might be in excess
of customary commissions), and any such discounts, concessions, or commissions
may be allowed or reallowed or paid to dealers.
The selling stockholders and any broker-dealers that act in connection
with the sale of the shares might be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, and any commissions received by
such broker-dealers and any profit on the resale of the shares offered in this
prospectus that are sold by them while acting as principals might be deemed to
be underwriting discounts or commissions under the Securities Act. We have
agreed
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to indemnify each selling stockholder against certain liabilities, including
liabilities arising under the Securities Act. The selling stockholders may agree
to indemnify any agent, dealer, or broker-dealer that participates in
transactions involving sales of the shares offered in this prospectus against
certain liabilities, including liabilities arising under the Securities Act.
Because selling stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the selling stockholders
will be subject to the prospectus delivery requirements of the Securities Act.
We informed the selling stockholders that the antimanipulation provisions of
Regulation M promulgated under the Exchange Act may apply to their sales in the
market.
The selling stockholders also may resell all or a portion of their
shares in open market transactions in reliance upon Rule 144 under the
Securities Act, provided they meet the criteria and conform to the requirements
of that rule.
To the best of our knowledge, there are currently no plans,
arrangements or understandings between either selling stockholder and any
broker, dealer, agent or underwriter regarding the sale by that selling
stockholder of any of the shares offered in this prospectus.
Upon our being notified by a selling stockholder that it has entered
into any material arrangement with a broker-dealer to sell shares through a
block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, we will, if required, file a supplement to
this prospectus pursuant to Rule 424(b) under the Securities Act, disclosing (1)
the name of each such selling stockholder and the name of the one or more
participating broker-dealers, (2) the number of shares involved, (3) the price
at which those shares were sold, (4) the commissions paid or discounts or
concessions allowed to those broker-dealers, (5) that those broker-dealers did
not conduct any investigation to verify the information set out or incorporated
by reference in this prospectus, and (6) other facts material to the
transaction. In addition, upon our being notified by a selling stockholder that
a donee or pledgee intends to sell more than 500 shares, we will file a
supplement to this prospectus, and upon our being notified by a selling
stockholder that a donee, pledgee, transferee, or other successor-in-interest
intends to sell more than 500 shares, we will file a supplement to this
prospectus.
Under the securities laws of some states, the selling stockholders may
only sell the shares in those states through registered or licenses brokers or
dealers. In addition, in some states the selling stockholders may not sell the
shares unless they have been registered or qualified for sale in that state or
an exemption from registration or qualification is available and is satisfied.
We have agreed with the selling stockholders that we will keep the
registration statement of which this prospectus is a part effective, pursuant to
Rule 415 of the Securities Act, at all times until the earlier of (1) the date
on which the selling stockholders may sell all of the shares covered by the
registration statement without restriction pursuant to Rule 144(k) of the
Securities Act, or (2) the date on which (A) the selling stockholders have sold
all of the shares offered by this prospectus and (B) none of the shares of
Series B preferred stock or the warrants issued to the selling stockholders are
outstanding.
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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 May 18, 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 said 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:
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o our Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1999;
o our Quarterly Reports on Form 10-QSB for the quarters ended
March 31 and June 30, 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
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.
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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.
1,647,312 SHARES
ATLANTIC TECHNOLOGY VENTURES, INC.
COMMON STOCK
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PROSPECTUS
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November 21, 2000
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