As filed with the Securities and Exchange Commission on February 1, 2002
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 (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification No.)
incorporation or Code Number)
organization)
350 Fifth Avenue
Suite 5507
New York, New York 10118
(212) 267-2503
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
----------------
FREDERIC P. ZOTOS, ESQ.
President
350 Fifth Avenue
Suite 5507
New York, New York 10118
(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. |_|
38
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 Maximum Proposed
Title of Shares Shares Offering Maximum Amountof
to be Registered to be Price Aggregate Registration
Registered Per Share(1) Offering Fee Price(1)
- -------------------------------------------------------------------------------
Common stock, par value 8,333,318 $ .265 $2,208,329.27 $527.79
$.001 per share (2)
- -------------------------------------------------------------------------------
Common stock, par value 8,333,318 $ .265 $2,208,329.27 $527.79
$.001 per share (3)
- -------------------------------------------------------------------------------
Common stock, par value 833,331 $ .265 $220,832.72 $52.78
$.001 per share (4)
- -------------------------------------------------------------------------------
Common stock, par value 70,000 $ .265 $18,550.00 $4.43
$.001 per share (5)
- -------------------------------------------------------------------------------
(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 NASD
Over-the-Counter Bulletin Board on January 29, 2002.
(2) Represent shares of our common stock issued under the securities
purchase agreement dated as of November 2, 2001, between Atlantic
Technology Ventures, Inc. and the investors.
(3) Represent shares of our common stock that are issuable upon exercise of
warrants issued to the investors under the securities purchase agreement.
(4) Represent shares of our common stock that are issuable upon exercise of
warrants issued to Joseph Stevens & Company, Inc., the placement agent,
under the placement agent agreement dated as of November 6, 2001 between
Atlantic and Joseph Stevens, for services rendered relating to the private
placement of our stock.
(5) Represent shares of our common stock that we agreed to issue to each of BH
Capital Investments, L.P. and Excalibur Limited Partnership in return for
their commitment to provide us with financing in connection with an asset
purchase for which we had submitted a bid.
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.
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17,569,967 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 NASD Over-the-Counter Bulletin
Board under the symbol "ATLC.OB".
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 ___________, 2002.
TABLE OF CONTENTS
RISK FACTORS.................................................................3
USE OF PROCEEDS..............................................................9
SELLING SHAREHOLDERS........................................................10
PLAN OF DISTRIBUTION........................................................12
EXPERTS.....................................................................13
ADDITIONAL INFORMATION......................................................13
Commission's Position On Indemnification For Securities Act
Liabilities.................................................................13
INCORPORATION BY REFERENCE..................................................13
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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.
Risks Related To Our Financial Condition
Because we have not completed developing any of our products or generated any
product sales, we expect to incur significant operating losses over the next
several years and our ability to generate profits in the future is uncertain.
We have never been profitable and we may never become profitable. As of
September 30, 2001, we had an accumulated deficit of $26,163,254. All of our
technologies are in the research and development stage, which requires
substantial expenditures. Our operating loss from inception includes revenues
consisting of milestone payments and development revenue, including a profit
component, by Bausch & Lomb in connection with development of the Catarex
device, and a government grant. In March 2001, we received $2.4 million of net
proceeds from the sale of substantially all of the assets of Optex
Ophthalmologics, Inc., our 81.2%-owned subsidiary. At the conclusion of this
sale of assets, we terminated our agreement with Bausch & Lomb that generated
the revenue described above. We do not have a current source of revenue nor do
we expect to generate any additional revenues in the near future. 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 do not expect to generate any additional revenues in the near future.
If we do not obtain additional funding, our ability to develop our technologies
will be materially adversely affected.
We will need substantial additional funds to develop our technologies. We
will seek those funds 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). Funding may not, however, be
available on acceptable terms, if at all. Additionally, because our common stock
has been delisted from Nasdaq, it may be more difficult to obtain additional
funding. Furthermore, pursuant to the common stock purchase agreement with
Fusion Capital, and until its termination, we have agreed not to issue any
variable-priced equity or variable-priced equity-like securities unless we have
obtained Fusion Capital's prior written consent. This may further impede our
ability to raise additional funding. In addition, because our stock price is
below the floor price of $0.68, we cannot draw funds pursuant to the Fusion
Capital Agreement described in the SEC Documents. If we are unable to obtain
additional financing as needed, we may be required to reduce the scope of our
operations, which will have a material adverse effect on our business.
As of September 30, 2001, we had a cash and cash equivalents balance of
$440,558. We anticipate that our current resources (including the $2 million
proceeds of the first closing of our recent private placement) will be
sufficient to finance our currently anticipated needs for operating and capital
expenditures for the next six months. If the investors in our recent private
placement elect to invest an additional $1,000,000, we anticipate that our
resources would be sufficient to finance our currently anticipated needs for
operating and capital expenditures for the next 12 months. We can, however, give
no assurance that we will receive any additional proceeds from the recent
private placement. We plan on performing further tests on CT-3 during the first
six months of 2002. If the results of these tests are not promising, our ability
to raise additional funds may be adversely affected.
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Risks Related To Our Operations
We have a limited operating history upon which to base an investment decision.
We are a development-stage company and have not demonstrated our ability
to perform the functions necessary for the successful commercialization of any
of our product candidates. The successful commercialization of our product
candidates will require us to perform a variety of functions, including:
o continuing to undertake pre-clinical development and clinical
trials;
o participating in regulatory approval processes;
o formulating and manufacturing products; and
o conducting sales and marketing activities.
Our operations have been limited to organizing and staffing our company,
acquiring, developing and securing our proprietary technology and undertaking
pre-clinical trials and clinical trials of our principal product candidates.
These operations provide a limited basis for you to assess our ability to
commercialize our product candidates and the advisability of investing in our
common stock.
We are in the early stages of developing our technologies and may not succeed in
developing commercially viable products.
To be profitable, we must, alone or with others, successfully
commercialize our technologies. Our technologies 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 developing products
based on innovative or novel technologies. They are also rigorously regulated by
the federal government, particularly the U.S. Food and Drug Administration, or
"FDA," and by comparable agencies in state and local jurisdictions and in
foreign countries. 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, we will
not be able to enter into human clinical trials because of
scientific, governmental or financial reasons, or that we will
encounter problems in clinical trials that will cause us to delay or
suspend development of one of the technologies;
o that the product will be found to be ineffective or unsafe;
o that government regulation will delay or prevent the product's
marketing for a considerable period of time and impose costly
procedures upon our activities;
o that the FDA or other regulatory agencies will not approve a given
product or will not do so on a timely basis;
o that the FDA or other regulatory agencies may not approve the
process or facilities by which a given product is manufactured;
o that our dependence on others to manufacture our products may
adversely affect our ability to develop and deliver the products on
a timely and competitive basis;
o that, if we are required to manufacture our own products, we will be
subject to similar risks regarding delays or difficulties
encountered in manufacturing the products, will require substantial
additional capital, and may be unable to manufacture the products
successfully or in a cost-effective manner;
o that 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; or
o that we will be unable to obtain, or will be delayed in obtaining,
approval of a product in other countries, because 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.
4
Similarly, it is possible that, for the following reasons, we may be
unable to commercialize, or receive royalties from the sale of, any given
technology, even if it is shown to be effective:
o if it is uneconomical;
o if, 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 if others hold proprietary rights that preclude us from
commercializing it;
o if others have brought to market equivalent or superior products;
o if others have superior resources to market similar products or
technologies;
o if government regulation imposes limitations on the indicated uses
of a product, or later discovery of previously unknown problems with
a product results in added restrictions on the product or results in
the product being withdrawn from the market; or
o if it has undesirable or unintended side effects that prevent or
limit its commercial use.
We are dependent on others for the clinical development and regulatory
approvals of our products.
We anticipate that we will in the future seek to enter into collaborative
agreements with pharmaceutical companies for the development of, clinical
testing of, seeking of regulatory approval for and commercialization of certain
of our pharmaceutical products. We may in the future grant to our collaborative
partners, if any, rights to license and commercialize any pharmaceutical
products developed under these collaborative agreements and such rights would
limit our flexibility in considering alternatives for the commercialization of
such products. Under such agreements, we may rely on our collaborative partners
to conduct research efforts and clinical trials on, obtain regulatory approvals
for, manufacture, market and commercialize certain of our products. Although we
believe that our collaborative partners will have an economic motivation to
commercialize the pharmaceutical products that they may license, the amount and
timing of resources devoted to these activities generally will be controlled by
each such individual partner. To the extent that we decide not to, or are unable
to, enter into any such collaborative arrangements, significant capital
expenditures, management resources and time will be required to establish and
develop in-house capabilities for the development of, clinical testing of,
seeking of regulatory approval for and commercialization of certain of our
pharmaceutical products. There can be no assurance that we will be successful in
establishing any collaborative arrangements, or that, if established, such
future partners will be successful in commercializing products or that we will
derive any revenues from such arrangements. In addition, if we are unsuccessful
in establishing such future collaborative arrangements, there can be no
assurance that we will be able to establish in-house capabilities for the
development of, clinical testing of, seeking of regulatory approval for and
commercialization of certain of our pharmaceutical products.
We lack manufacturing experience and will rely on third parties to manufacture
our potential products.
We do not have a manufacturing facility. We have contracted with Iris
Pharmaceuticals, Inc. for clinical trial materials for CT-3. While we believe
that this arrangement should provide us with sufficient clinical trial materials
through Phase II human clinical testing, we do not currently have a second
manufacturer of clinical trial materials for commercialization and there can be
no assurance that we will be able to identify and qualify any such
manufacturers, and, if able to do so, that any such manufacturing agreements
will contain terms that are favorable to us, if at all. We have and will rely on
contract manufacturers for the foreseeable future to produce quantities of
products and substances necessary for research and development, pre-clinical
trials, human clinical trials and product commercialization. There can be no
assurance that such products can be manufactured at a cost or in quantities
necessary to make them commercially viable. There can be no assurance that third
party manufacturers will be able to meet our needs with respect to timing,
quantity and quality. If we are unable to contract for a sufficient supply of
required products and substances on acceptable terms, or if we should encounter
delays or difficulties in our relationships with manufacturers, our research and
development, pre-clinical and clinical testing would be delayed, thereby
delaying the submission of products for regulatory approval or the market
introduction and subsequent sales of such products. Any such delay may have a
materially adverse effect on our business, financial condition and results of
operations. Moreover, contract manufacturers that we may use must adhere to
current Good Manufacturing Practice ("GMP") regulations enforced by the FDA
through its facilities inspection
5
program. If the facilities of such manufacturers cannot pass a pre-approval
plant inspection, the FDA pre-market approval of our products will not be
granted. To the extent that we decide not to, or is unable to, enter into
further collaborative arrangements with respect to the manufacture of clinical
trial materials for its products, or in the event that our contract
manufacturing agreement with Iris Pharmaceuticals, Inc. is terminated or proves
to be inadequate for our manufacturing needs, significant capital expenditures,
management resources and time will be required to establish and develop a
manufacturing facility and to assemble a team of professionals with the
technical expertise to perform such manufacturing. There can be no assurance
that we will be able to establish and develop a manufacturing facility and to
assemble a team of professional with the technical expertise to perform
manufacturing and such failure would likely have a materially adverse effect on
us.
We lack sales and marketing experience and will rely on third parties.
We have no experience in sales, marketing or distribution. We do not
anticipate having the resources in the foreseeable future to allocate to the
sales and marketing of our proposed products. Our future success may depend, in
part, on our ability to enter into and maintain such collaborative
relationships, the collaborator's strategic interest in the products under
development, and such collaborator's ability to successfully market and sell any
such products. We intend to pursue collaborative arrangements regarding the
sales and marketing of our products, however, there can be no assurance that we
will be able to establish or maintain such collaborative arrangements, or if
able to do so, that they will have effective sales forces. To the extent that we
decide not to, or are unable to, enter into collaborative arrangements with
respect to the sales and marketing of its proposed products, significant capital
expenditures, management resources and time will be required to establish and
develop an in-house marketing and sales force with technical expertise. There
can also be no assurance that we will be able to establish or maintain
relationships with third party collaborators or develop in-house sales and
distribution capabilities. To the extent that we depend on third parties for
marketing and distribution, any revenues we receive will depend upon the efforts
of such third parties, and there can be no assurance that such efforts will be
successful. In addition, there can also be no assurance that we will be able to
market and sell our product in the United States or overseas.
If we fail to adequately protect or enforce our intellectual property rights or
secure rights to patents of others, the value of our intellectual property
rights would diminish.
Our success, competitive position and future revenues will depend in part
on our ability and the abilities of our licensors to obtain and maintain patent
protection for our products, methods, processes and other technologies, to
preserve our trade secrets, to prevent third parties from infringing on our
proprietary rights and to operate without infringing the proprietary rights of
third parties. We cannot predict:
o the degree and range of protection any patents will afford us
against competitors including whether third parties will find ways
to invalidate or otherwise circumvent our patents;
o if and when patents will issue;
o whether or not others will obtain patents claiming aspects similar
to those covered by our patents and patent applications; or
o whether we will need to initiate litigation or administrative
proceedings which may be costly whether we win or lose.
Our product candidates could infringe the proprietary rights of other
parties. If our products, methods, processes and other technologies infringe the
proprietary rights of other parties, we could incur substantial costs and we may
have to:
o obtain licenses, which may not be available on commercially
reasonable terms, if at all;
o redesign our products or processes to avoid infringement;
o stop using the subject matter claimed in the patents held by others;
o pay damages; or
6
o defend litigation or administrative proceedings which may be costly
whether we win or lose, and which could result in a substantial
diversion of our valuable management resources.
We rely on technologies that are licensed from third parties.
We have entered into certain agreements with, and licensed certain
technology and compounds from, third parties. We have relied on scientific,
technical, clinical, commercial and other data supplied and disclosed by others
in entering into these agreements and will rely on such data in support of
development of certain products. Although we have no reason to believe that this
information contains errors of omission or fact, there can be no assurance that
there are no errors of omission or fact that would materially adversely affect
the future approvability or commercial viability of these products.
We may incur substantial liabilities and may be required to limit
commercialization of our products in response to product liability lawsuits.
The testing and marketing of medical products entail an inherent risk of
product liability. 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. If we
cannot successfully defend ourselves against product liability claims, we may
incur substantial liabilities or be required to limit commercialization of our
products. Our inability to obtain sufficient product liability insurance at an
acceptable cost to protect against potential product liability claims could
prevent or inhibit the commercialization of pharmaceutical products we develop,
alone or with corporate collaborators. We, or any corporate collaborators, may
not be able to obtain insurance at a reasonable cost, if at all. Even if our
agreements with any future corporate collaborators entitle us to indemnification
against losses, such indemnification may not be available or adequate should any
claim arise.
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.
Risks Related to Our Securities
We have been delisted from Nasdaq, and the resulting market illiquidity could
adversely affect our ability to raise funds.
On August 22, 2001, our securities were delisted from trading on Nasdaq.
Since then, any trading in the securities has been conducted on the National
Association of Securities Dealers' "Electronic Bulletin Board." This could
affect adversely the liquidity of our securities, not only in terms of the
number of securities that can 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. This may 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, our
delisting could adversely affect our ability to raise funds.
In addition, our common stock is a "penny stock." Broker-dealers who sell
penny stocks must provide purchasers of these stocks with a standardized
risk-disclosure document prepared by the SEC. This document 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
7
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. 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 stock price is, and we expect it to remain, volatile, which could limit
investors' ability to sell stock at a profit.
The volatile price of our stock makes it difficult for investors to
predict the value of their investment, to sell shares at a profit at any given
time, or to plan purchases and sales in advance. A variety of factors may affect
the market price of our common stock. These include, but are not limited to:
o publicity regarding actual or potential clinical results relating to
products under development by our competitors or us;
o delay or failure in initiating, completing or analyzing pre-clinical
or clinical trials or unsatisfactory design or result of these
trials;
o achievement or rejection of regulatory approvals by our competitors
or us;
o announcements of technological innovations or new commercial
products by our competitors or us;
o developments concerning proprietary rights, including patents;
o developments concerning our collaborations;
o regulatory developments in the United States and foreign countries;
o economic or other crises and other external factors;
o period-to-period fluctuations in our revenue and other results of
operations;
o changes in financial estimates by securities analysts; and
o sales of our common stock.
We will not be able to control many of these factors, and we believe that
period-to-period comparisons of our financial results will not necessarily be
indicative of our future performance.
In addition, the stock market in general, and the market for biotechnology
companies in particular, has experienced extreme price and volume fluctuations
that may have been unrelated or disproportionate to the operating performance of
individual companies. These broad market and industry factors may seriously harm
the market price of our common stock, regardless of our operating performance.
Trading in our stock over the last 12 months has been limited, so investors may
not be able to sell as much stock as they want at prevailing prices.
The average daily trading volume in our common stock was approximately
27,000 shares and the average daily number of transactions was approximately 20
over the last 12 months. If limited trading in our stock continues, it may be
difficult for investors to sell their shares in the public market at any given
time at prevailing prices. Also, the sale of a large block of our securities
could depress the price of our securities to a greater degree than a company
that typically has higher volume of trading of securities.
Because holders of our Series A preferred stock have rights superior to those of
the holders of our common stock, in certain circumstances holders of our common
stock may be adversely affected.
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 may result in
8
substantial dilution to the common stockholders and could adversely affect the
prevailing market price of our securities.
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 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 securities.
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.
Sale of shares of our common stock to Fusion Capital may cause dilution, and
sale of those shares by Fusion Capital could cause the price of our common stock
to decline.
Under an equity-line-of-credit arrangement, Fusion Capital has committed
to purchasing $6,000,000 of our common stock. Our stock price is currently below
the $0.68 minimum required in order for us to be able to sell shares of our
common stock to Fusion, but if in the future our stock price exceeds this
minimum, we may elect to sell shares of our common stock to Fusion under the
equity-line-of-credit arrangement. In addition, Fusion Capital recently waived
the $0.68 minimum and on November 30, 2001, purchased from us under the
equity-line-of-credit arrangement 416,667 shares of our common stock at a price
per share of $0.24, representing an aggregate purchase price of $100,000.
The purchase price for the common stock to be issued to Fusion Capital
under our common stock purchase agreement with Fusion Capital will fluctuate
based on the closing price of our common stock. Fusion Capital may at any time
sell none, some or all of the shares of common stock purchased from us.
Depending upon market liquidity at the time, sale by Fusion of shares we issue
to them could cause the trading price of our common stock to decline. Sale of a
substantial number of shares of our common stock by Fusion, or anticipation of
such sales, could make it more difficult for us to sell equity or equity related
securities in the future at a time and at a price that it might otherwise wish
to effect sales.
The existence of the agreement with Fusion Capital to purchase shares of our
common stock could cause downward pressure on the market price of our common
stock.
Both the actual dilution and the potential for dilution resulting from any
sales of our common stock to Fusion Capital could cause holders to elect to sell
their shares of our common stock, which could cause the trading price of our
common stock to decrease. In addition, prospective investors anticipating the
downward pressure on the price of our common stock due to the shares available
for sale by Fusion Capital could refrain from purchases or effect sales in
anticipation of a decline of the market price.
USE OF PROCEEDS
We will not receive any proceeds from any sales of the shares.
9
SELLING SHAREHOLDERS
On December 3, 2001, we issued in a private placement to certain
investors, 8,333,318 shares of our common stock and issued to the investors
warrants to acquire a further 8,333,318 shares of our common stock. We also
issued to the placement agent in the private placement, Joseph Stevens &
Company, Inc., warrants to acquire 833,331 shares of our common stock. (These
transactions are described in our Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 6, 2001.)
On August 1, 2001, we agreed to issue 35,000 shares of our common stock to
each of BH Capital Investments, L.P. and Excalibur Limited Partnership in return
for their commitment to provide us with $3.5 million of financing in connection
with an asset purchase for which we had submitted a bid. We subsequently issued
those shares but ultimately did not purchase those assets. In issuing these
shares, we relied on the exemption from registration provided by Regulation D of
the Securities Act.
The table below sets forth information as of January 29, 2002, regarding
the beneficial ownership of shares of common stock by the selling shareholders.
The information regarding the selling shareholders' beneficial ownership after
this offering assumes that all the shares of common stock offered by this
prospectus are sold. The presentation is based on the 16,004,599 shares of our
common stock that were outstanding on January 29, 2002.
Number of
shares
included in
Number of Number of this offering
shares outstanding that are Number of Percedntage of
beneficially shares issuable upon shares owned the shares
owned prior to included in exercise of subsequent to owned after
Selling Shareholder this offering this offering warrant this offering this offering
- ------------------- ------------- ------------- ------------- ------------- -------------
Lindsay A. Rosenwald 4,665,904(1) 2,083,333 2,083,333 499,238 3.1%
Neal Ackerman and
Martha Ackerman JT WROS 1,250,000 625,000 625,000 0 --
J. William Doyle 833,332 416,666 416,666 0 --
Louis Reif 833,332 416,666 416,666 0 --
Delaware Charter
Guarantee & TR
F/B/O Howard
Tanning IRA 833,332 416,666 416,666 0 --
Morris Arnston 416,666 208,333 208,333 0 --
Braziel Family
Trust D/T/D
9/7/95, Ronald &
Debra Braziel
Trustees 421,666 208,333 208,333 5,000 *
Industrial
Electronics 416,666 208,333 208,333 0 --
John Dunkin 416,666 208,333 208,333 0 --
R. Craig Fetz 512,940(2) 208,333 208,333 96,274 *
John Goodman 416,666 208,333 208,333 0 --
Stephen & Pilar
Lebovitz JT WROS 416,666 208,333 208,333 0 --
Stephen Lisenby 416,666 208,333 208,333 0 --
Harvey Lustig &
Ronnie Lustig JT
WROS 420,666 208,333 208,333 4,000 *
10
Number of
shares
included in
Number of Number of this offering
shares outstanding that are Number of Percedntage of
beneficially shares issuable upon shares owned the shares
owned prior to included in exercise of subsequent to owned after
Selling Shareholder this offering this offering warrant this offering this offering
- ------------------- ------------- ------------- ------------- ------------- -------------
Nasser & Co. CPA 416,666 208,333 208,333 0 --
Michael Pinney 416,666 208,333 208,333 0 --
Nancy Pudelsky &
David Pudelsky JT
WROS 416,666 208,333 208,333 0 --
Suzanne Schiller 416,666 208,333 208,333 0 --
Lucile Slocum 416,666 208,333 208,333 0 --
Carolyn Taylor 416,666 208,333 208,333 0 --
Gregg Dovolis 208,332 104,166 104,166 0 --
Richard Friedman 212,632(3) 104,166 104,166 4,300 *
Robert Guercio 208,332 104,166 104,166 0 --
Thomas Hashem 208,332 104,166 104,166 0 --
Norman Jacob 208,332 104,166 104,166 0 --
John Kuehn 208,332 104,166 104,166 0 --
Hyman Lezell
Revocable
Inter-Vivos Trust 242,190(4) 104,166 104,166 33,858 *
Delaware Charter
Guarantee & Tr
F/B/O Richard
Pellegrino IRA 208,332 104,166 104,166 0 --
Robert Pellegrino
Profit Sharing Plan 208,332 104,166 104,166 0 --
Ivy Scheinholz 208,332 104,166 104,166 0 --
William Silver 227,007(5) 104,166 104,166 18,675 *
Praful Desai 125,000 62,500 62,500 0 --
George Kimble &
Mary Ellen Kimble
JT WROS 83,332 41,666 41,666 0 --
Joseph Stevens &
Company, Inc. 1,283,331(6) 0 833,331 450,000 2.7%
B.H. Capital
Investments, L.P. 156,756(6) 35,000 0 121,756 --
Excalibur Limited
Partnership 156,756(6) 35,000 0 121,756 --
- --------------------------------------------------------------------------------
* Less than 1%.
(1) Includes 154,350 shares of common stock issuable upon conversion of 47,202
shares of Series A preferred stock convertible within 60 days of January
29, 2002. Also includes 190 shares of common stock held by June Street
Corporation and 190 shares of common stock held by Huntington Street
Corporation. Dr. Rosenwald is the sole proprietor of both June Street
Corporation and Huntington Street Corporation.
(2) Includes 89,519 shares of common stock issuable upon conversion of 27,376
shares of Series A preferred stock convertible within 60 days of January
29, 2002.
(3) Includes 4.000 shares of common stock held jointly with another person.
11
(4) Includes 33,510 shares of common stock issuable upon conversion of 10,248
shares of Series A preferred stock convertible within 60 days of January
29, 2002.
(5) Includes 5,700 shares of common stock held jointly with another person and
8,175 shares of common stock issuable upon conversion of 2,500 shares of
Series A preferred stock convertible within 60 days of January 29, 2002.
(6) Includes 450,000 shares of common stock issuable upon exercise of three
warrants exerciseable within 60 days of January 29, 2002.
(7) Includes 77,000 shares of common stock issuable upon exercise of warrants
exerciseable within 60 days of January 29, 2002.
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, 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 NASD
Over-the-Counter Bulletin Board under the symbol "ATLC.OB".
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.
12
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.
EXPERTS
The consolidated financial statements of Atlantic Technology Ventures,
Inc. and subsidiaries (a development stage company) as of December 31, 2000 and
1999, and for each of the years in the three-year period ended December 31,
2000, and for the period from July 13, 1993 (inception) to December 31, 2000,
have been incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG LLP, independent accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
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.
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 233 Broadway, New York, New
York 10279, 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.
COMMISSION'S POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
In the Commission's opinion, indemnification for certain acts of
directors, officers and controlling persons is against public policy, as
expressed in the Securities Act, and is, therefore, unenforceable. If a claim
for indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by a director, officer or controlling person of
Atlantic in the successful defense of any action, suit or proceeding) is
asserted by any Atlantic director, officer or controlling person in connection
with the securities being registered, we will, unless in the opinion of our
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by
Atlantic is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of that issue.
INCORPORATION BY REFERENCE
o 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, 2000;
13
o our Quarterly Reports on Form 10-QSB for the quarters ended March
31, 2001, June 30, 2001, and September 30, 2001;
o our Current Reports on Form 8-K filed January 24, 2001, January 30,
2001, February 5, 2001, March 14, 2001, March 16, 2001, May 16,
2001, May 23, 2001 and December 6, 2001;
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, 350 Fifth Avenue, Suite 5507, New
York, New York 10118, 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.
14
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.
17,569,967 SHARES
ATLANTIC TECHNOLOGY VENTURES, INC.
COMMON STOCK
-----------------------
PROSPECTUS
-----------------------
_________, 2002
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) .......................................$1,112.79
Accounting fees and expenses ...........................................$5,000
Legal fees and expenses.................................................$5,000
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 February 1, 2002.
By: /s/ Frederic P. Zotos
-------------------------------------
Frederic P. Zotos
President and Chief Executive Officer
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
- --------- ----- ----
/s/ Frederic P. Zotos President and Chief February 1, 2002
- -------------------- Executive Officer
Frederic P. Zotos
/s/ Nicholas J. Rossettos Treasurer, Secretary, and February 1, 2002
- -------------------- Chief Financial Officer
Nicholas J. Rossettos
/s/ Steve H. Kanzer Director February 1, 2002
- --------------------
Steve H. Kanzer
/s/ Peter O. Kliem Director February 1, 2002
- --------------------
Peter O. Kliem
/s/ A. Joseph Rudick Director February 1, 2002
- --------------------
A. Joseph Rudick
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) 715-9100 47, Avenue Hoche
FAX (212) 715-8000 75008 Paris
France
February 1, 2002
Atlantic Technology Ventures, Inc.
350 Fifth Avenue
Suite 5507
New York, NY 10118
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 8,403,318 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 8,333,318 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 (those shares, the
"Warrant Shares"; those warrants, the "Warrants").
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 in accordance with the Warrants for consideration equal to
or greater than the par value at the time of the 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 dated March 30, 2001, with respect to the
consolidated balance sheets of Atlantic Technology Ventures, Inc. and
subsidiaries (a development stage company) as of December 31, 2000 and 1999, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
2000, and for the period from July 13, 1993 (inception) to December 31, 2000,
incorporated herein by reference and to the reference to our firm under the
heading "Experts" in the prospectus.
KPMG LLP
Short Hills, New Jersey
February 1, 2002