As filed with the Securities and Exchange Commission on March 3, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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NUWAVE TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 22-3387630
(State or Other Jurisdiction (I.R.S. Employer
of Identification No.)
Incorporation or
Organization)
ONE PASSAIC AVENUE, FAIRFIELD, NEW JERSEY 07004 (973) 882-8810
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
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Mr. Gerald Zarin
Chairman of the Board of Directors, President and Chief Executive Officer
One Passaic Avenue, Fairfield, New Jersey 07004
(973) 882-8810
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
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Copies To:
Fredric Klink, Esq.
Dechert Price & Rhoads
30 Rockefeller Plaza
New York, New York 10112
(212) 698-3500
Approximate date of commencement of proposed sale to the public: From
time to time after the Registration Statement becomes effective as determined by
market conditions and the needs of the Selling Stockholder.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, 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 delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------|---------------------|--------------------|-----------------|-------------------
| | Proposed | Proposed |
| | Maximum | Maximum | Amount of
Title of Shares | Amount to | Offering Price | Aggregate | Registration
to be Registered | be Registered(1) | Per Share(2) | Offering Price | Fee(2)
- --------------------------------------|---------------------|--------------------|-----------------|-------------------
| | | |
<S> <C> <C> <C> <C>
Common Stock, $.01 par value | 253,485 shares |$ 3.875 |$ 982,254 |$ 289.76
- --------------------------------------|---------------------|--------------------|-----------------|-------------------
Common Stock, $.01 par value, | | | |
issuable upon the exercise of an | | | |
outstanding warrant | 50,000 shares |$ 3.875 |$ 193,750 |$ 57.16
- --------------------------------------|---------------------|--------------------|-----------------|-------------------
Common Stock, $.01 par value, | | | |
issuable pursuant to a put | 1,069,000 shares |$ 3.875 |$ 4,142,375 |$ 1,222.00
- --------------------------------------|---------------------|-------------------- -----------------|-------------------
Common Stock, $.01 par value, | | | |
issuable upon the exercise of a | | | |
supplemental warrant | 50,000 shares |$ 3.875 |$ 193,750 |$ 57.16
- --------------------------------------|---------------------|--------------------|-----------------|-------------------
Total | 1,422,485 shares |$ 3.875 |$ 5,512,129 |$ 1,626.08
- --------------------------------------|---------------------|--------------------|-----------------|-------------------
</TABLE>
(1) Includes the registration for resale of the following: (i) 253,485 shares
of Common Stock currently issued to the Selling Stockholder; (ii) 50,000
shares of Common Stock issuable upon exercise of a currently outstanding
warrant issued to the Selling Stockholder; (iii) up to 1,069,000 shares of
Common Stock (as such number shall be adjusted for stock splits or
combinations) which may be put to the Selling Stockholder pursuant to a
Private Securities Subscription Agreement dated as of February 6, 1998;
and (iv) 50,000 shares of Common Stock issuable upon exercise of a
supplemental warrant which may be issued to the Selling Stockholder.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) under the Securities Act of 1933,
as amended, based on the average of the high and low prices of the Common
Stock on the Nasdaq SmallCap Market on February 27, 1998.
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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 OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8 (A), MAY DETERMINE.
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<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 3, 1998
PROSPECTUS
NUWAVE TECHNOLOGIES, INC.
1,422,485 SHARES
OF
COMMON STOCK
---------------------
SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGE 4.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
This Prospectus may be used only in connection with the resale, from
time to time, of up to 1,422,485 shares (the "Shares") of common stock, par
value $.01 per share (the "Common Stock"), of NuWave Technologies, Inc.
("NuWave" or the "Company") for the account of the selling stockholder
identified below (the "Selling Stockholder"). See "Selling Stockholder." All of
the Shares covered hereby are to be sold by the Selling Stockholder and includes
the following: (i) 253,485 shares of Common Stock currently issued to the
Selling Stockholder; (ii) 50,000 shares of Common Stock issuable upon exercise
of a currently outstanding warrant (the "Warrant") issued to the Selling
Stockholder; (iii) up to 1,069,000 shares of Common Stock (as such number shall
be adjusted for stock splits or combinations) which may be put to the Selling
Stockholder pursuant to a Private Securities Subscription Agreement dated as of
February 6, 1998 (the "Investment Agreement"); and (iv) 50,000 shares of Common
Stock issuable upon exercise of a supplemental warrant (the "Supplemental
Warrant") which may be issued to the Selling Stockholder. The Selling
Stockholder may sell the Shares from time to time at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. See "Plan of Distribution." The Company will not receive any
proceeds from the sale of the Shares by the Selling Stockholder. The Company has
agreed to bear all of the expenses in connection with the registration of the
Shares.
The Common Stock of the Company is traded on the Nasdaq SmallCap Market
under the symbol "WAVE." On March 2, 1998, the closing price for the Common
Stock of the Company on the Nasdaq SmallCap Market was $3.9375 per share.
This Prospectus may be used by the Selling Stockholder or by any
broker-dealer who may participate in sales of securities covered hereby. The
Selling Stockholder and the brokers and dealers through whom such sales are
effected may be deemed to be underwriters under the Securities Act of 1933, as
amended (the "Securities Act"). The Selling Stockholder will pay all
commissions, transfer taxes, and certain other expenses associated with the
sales of securities by them. Pursuant to the Investment Agreement, the Company
has paid or will pay the expenses of the preparation of this prospectus and
certain other expenses. The Company has also agreed to indemnify the Selling
Stockholder against certain liabilities, including liabilities arising under the
Securities Act.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING MADE HEREBY, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR BY ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO OR SOLICITATION OF ANY PERSON IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION MAY NOT BE LAWFULLY MADE.
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The date of this Prospectus is March 3, 1998
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices located at 7
World Trade Center, New York, New York 10048 and at 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material also may be
obtained at prescribed rates from the Public Reference Section of the Commission
located at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, the
Commission maintains a Web site at http://www.sec.gov that contains reports,
proxy statements and other information regarding registrants that file
electronically with the Commission. The Company's Common Stock is listed on the
Nasdaq SmallCap Market, and reports, proxy statements and other information
concerning the Company may be inspected at the offices of the Nasdaq SmallCap
Market at 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the Shares of Common Stock
offered hereby. This Prospectus does not contain all information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information
regarding the Company and the Shares of Common Stock offered hereby, reference
is hereby made to the Registration Statement and to the exhibits and schedules
filed therewith. Statements contained in this Prospectus regarding the contents
of any agreement or other document filed as an exhibit to the Registration
Statement are necessarily summaries of such documents, and in each instance
reference is made to the copy of such document filed as an exhibit to the
Registration Statement for a more complete description of the matters involved.
The Registration Statement, including the exhibits and schedules thereto, may be
inspected and copied at the locations described above.
REPORTS TO SECURITY HOLDERS
The Company furnishes its stockholders with annual reports containing
audited financial statements. In addition, the Company is required to file
periodic reports on Forms 8-K, 10-QSB and 10-KSB with the Commission and make
such reports available to its stockholders.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996 filed with the Commission on March 31, 1997;
2. The Company's Quarterly Reports on Form 10-QSB for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997 filed with the
Commission on May 15, 1997, August 14, 1997 and November 14, 1997,
respectively;
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3. The Company's Current Report on Form 8-K regarding the Company's change
of auditors and sale of securities to ProFutures Special Equities Fund,
L.P. filed with the Commission on February 18, 1998;
4. The Company's Current Report on Form 8-K regarding the Company's Annual
Meeting of Shareholders and Election of Directors filed with the
Commission on June 6, 1997; and
5. The description of the Company's Common Stock contained in the
Registration Statement on Form 8-A filed under the Exchange Act with the
Commission on April 25, 1996, including any amendment or report filed for
the purpose of updating such description.
All documents filed by the Company pursuant to Section 13 (a), 13 (c),
14 or 15 (d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Shares offered hereby, shall be
deemed to be incorporated by reference in this Prospectus and made a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this Prospectus shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained therein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein or in
any Prospectus Supplement modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference herein (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into such documents). Requests for such copies should be directed, if
by mail, to Jeremiah F. O'Brien, Chief Financial Officer, Nuwave Technologies,
Inc., One Passaic Avenue, Fairfield, New Jersey 07004, or, if by telephone, to
(973) 882-8810.
PROSPECTUS SUPPLEMENTS
Pursuant to the Investment Agreement, on February 11, 1998, the Selling
Stockholder acquired 253,485 shares of Common Stock and the Warrant for 50,000
shares of Common Stock. Under the Investment Agreement, the Selling Stockholder
may be required to purchase from the Company pursuant to a put up to a total of
1,069,000 shares of Common Stock in tranches. Further, if certain conditions are
met, the Supplemental Warrant will be issued to the Selling Stockholder. Upon
each purchase of shares of Common Stock pursuant to a put or upon the issuance
of the Supplemental Warrant, the Company will supplement this Prospectus to
reflect such purchase or issuance.
THE COMPANY
The Company, a development stage enterprise organized in July 1995, was
formed to develop, manufacture and market products which improve picture quality
in set-top boxes, televisions, VCRs, camcorders and other video devices by
enhancing and manipulating video signals, and facilitate the production of
sophisticated consumer and professional videos. The television,
telecommunications and computer markets are converging and, in the process,
redefining the way their constituencies interact.
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The Company believes that video display is the common denominator of that
interaction, and that the products it has developed and is developing will allow
it to participate in the growth of the converging market.
The Company already has produced fully operational prototypes of (1) an
analog video processor which significantly enhances video picture quality (the
"AVP"), (2) another video enhancement device which combined the AVP with
digitally based frame extrapolation video noise reduction circuits for use in
National Television Standard Codes or Phase Alternate Lines (the "Magic Card"),
and (3) a time base corrector providing for analog to digital conversion and the
synchronization of up to 3 video sources (the "NUWAVE Dual TBC"). The Company
also has produced an initial prototype of a video editing "studio" mounted on
printed circuit boards (the "NUWAVE Ministudio"). The AVP, the Magic Card, the
NUWAVE Dual TBC and the NUWAVE Ministudio are called the "Initial Products."
In addition to the Initial Products, the Company, using its Advanced
Engineering Group, created the "NUWAVE Video Processor." The Advanced
Engineering Group also developed a separate proprietary software product
("Softsets") which provides end users and manufacturers who use the NUWAVE Video
Processor in their products with an option to manipulate the attributes of video
images to their own taste or standards. For example, the manufacturer of a
set-top box who includes the NUWAVE Video Processor and Softsets in its product
could offer viewers the ability to select predetermined optimum video parameters
for "Sports," "Movies," "Drama" or other predesignated programming from their
remote control. Additionally, program providers or other transmitters can encode
their signal so that a receiving device containing the NUWAVE Softsets and
enhanced NUWAVE Video Processor will automatically adjust its video parameters
to a predetermined value when the signal is received. The encoded signal can
also be included in the actual programming.
The Company's principal offices are located at One Passaic Avenue,
Fairfield, New Jersey 07004 and the Company's telephone number is (973)
882-8810.
RISK FACTORS
The information about the Company included or incorporated by reference
herein contains forward looking statements that involve risks and uncertainties,
including the risks detailed below. The Shares of Common Stock offered hereby
involve a high degree of risk and prospective purchasers should carefully
consider the following factors.
Development Stage Enterprise; Absence of Operating History
The Company is a development stage enterprise. It has had only a
limited operating history and has not sold any of its products to date. Since
its inception in July 1995, the Company has been engaged primarily in raising
funds, directing, supervising and coordinating its Advanced Engineering Group
and Rave Engineering Corporation ("Rave") in the continuing development of the
AVP, the NUWAVE Dual TBC, the NUWAVE Ministudio, the Magic Card, the NUWAVE
Video Processor and the Softsets, pre-marketing and more recently the
commencement of comprehensive program for manufacturing and marketing the NUWAVE
Video Processor and the recruitment of management and technical personnel,
including members of the Advanced Engineering Group.
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The Company's prospects must be considered in light of the risks
associated with the establishment of a new business in the evolving electronic
video industry, as well as further risks encountered in the shift from
development to commercialization of new products based on innovative technology.
There can be no assurance that the Company will be able to generate revenues or
achieve profitable operations.
No Revenues; Accumulated Deficit; Anticipated Future Losses
To date, the Company has had no operating revenue and does not
anticipate any operating revenue until such time, if ever, as its relevant
technology and one or more of its products are completely developed,
manufactured in commercial quantities and available for commercial delivery.
There can be no assurance that the Company's technology and products, if
developed and manufactured, will be able to compete successfully in the
marketplace and/or generate significant revenue. The Company anticipates
incurring significant costs in connection with the development of its
technologies and proposed products and there is no assurance that the Company
will achieve sufficient revenues to offset anticipated operating costs. As of
September 30, 1997, the Company incurred an accumulated deficit of $8,380,196.
Although the Company anticipates deriving some revenue from the sale of its
NUWAVE Video Processor and related products and its Softsets within the next 12
months, no assurance can be given that these products will be successfully
marketed or even completely developed and tested for commercial use during such
period, and the Company has projected its expenses based on the assumption that
it will receive no revenues from the sale of its products during the next 12
months. Even if revenues are derived from the sale or license of the Company's
products, the Company will continue to incur substantial losses for at least the
next 9 months. Included in such losses are research and development expenses,
marketing costs, manufacture and assembly, and general and administrative
expenses. Inasmuch as the Company will continue to have high levels of operating
expenses and will be required to make significant expenditures in connection
with its continued research and development activities, the Company anticipates
that such losses will continue until such time, if ever, as the Company is able
to generate sufficient revenues to support its operations.
Significant Capital Requirements; Dependence on Available Cash; Need
for Additional Financing
The Company's capital requirements in connection with its development
activities have been and will continue to be significant. The Company has been
dependent upon the proceeds of sales of its securities to private investors to
fund its initial development activities. On February 11, 1998, the Company
received net proceeds of approximately $915,000 from the sale of Common Stock to
the Selling Stockholder pursuant to the Investment Agreement. Under the terms of
the Investment Agreement, the Company, subject to certain conditions, has the
right to draw up to $5,000,000 in cash by putting shares of Common Stock to the
Selling Stockholder from time to time for the next two years. The decision to
make draws and the timing and amount of such draws are solely at the Company's
discretion, subject to certain conditions. The Company anticipates, based on its
current proposed plans and assumptions relating to its operations, that it has
sufficient cash to satisfy the estimated cash requirements of the Company for
the next 12 months. In the event of unanticipated expenses, delays or other
problems, the Company might be required to either utilize the equity financing
available under the Investment Agreement or seek additional funding elsewhere.
In addition, in the event that the Company receives a larger than anticipated
number of initial purchase orders upon introduction of the Softsets or the
NUWAVE Video Processor products, it may require resources greater than its
available cash or than are otherwise available to the Company. In such event,
the Company may be required to raise additional capital. There can be no
assurance that such additional capital will be available to the Company if
needed, on commercially reasonable terms, or at all. The inability to obtain
additional financing, when
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needed, would have a material adverse effect on the Company, including possibly
requiring the Company to curtail or cease operations. To the extent that any
future financing involves the sale of the Company's equity securities, the
Company's then existing stockholders could be substantially diluted.
New Concept; Uncertainty of Market Acceptance; Lack of Marketing Experience
The technology and products currently being developed by the Company
utilize new concepts and designs in video imagery and processing. The Company's
prospects for success will therefore depend on its ability to successfully sell
its products to key manufacturers and distributors who may be inhibited from
doing business with the Company because of their commitment to their own
technologies and products. As a result, demand and market acceptance for the
Company's technologies and products is subject to a high level of uncertainty.
The Company currently has limited financial, personnel and other resources to
undertake the extensive marketing activities that will be necessary to market
its technology and products once their development is completed. There is no
assurance that any of the Company's potential customers will enter into any
arrangements with the Company. There is no assurance that the Company's
marketing efforts will be successful.
Dependence on Third-Party Design Changes
Commercialization of the NUWAVE Video Processor and sale to
manufacturers of the relevant video equipment will require such manufacturers to
adopt new circuit configurations to accommodate the relevant chip in their
products. Although the Company expects that manufacturers wishing to utilize the
NUWAVE Video Processor will make such modifications based on the benefits
derived from the improved performance of their products and the relative
simplicity of such modifications, there is no assurance that the necessary
modifications will be adopted widely, or at all. Additionally, the cost of such
modifications may inhibit or prevent their adoption. The failure of designers
and manufacturers to make such modifications would have a material adverse
effect on the Company's ability to sell and/or license the relevant products.
License
A portion of the technology from which the Company's Initial Products
were derived is licensed to the Company pursuant to an Exclusive Worldwide
License Agreement dated July 21, 1995 (the "License Agreement") with Rave. The
License Agreement provides that Rave will receive minimum aggregate payments of
royalties and Development Fees, as defined in the development agreement between
the Company and Rave dated July 21, 1995 (the "Development Agreement"), of
$65,000 per month (the "Rave Minimum Payments"). If Rave does not receive the
Rave Minimum Payments, Rave has the option of electing to make the License
Agreement non-exclusive. If such payments are not made and Rave exercises its
option to make the License Agreement non-exclusive, it could have a material
adverse effect on the Company's operations. The License Agreement also provides
for the payment of royalties based on the net sales of the licensed products and
technology as well as any sublicensing fees paid to the Company (the
"Royalties"). If the Company fails to pay the Royalties, Rave has the option to
terminate the License Agreement.
Uncertainty of Product and Technology Development; Need for Product Testing;
Technological Factors
The Company originally anticipated devoting significant resources to
the final commercial development of its Magic Card (which combines the analog
based NUWAVE Video Processor with
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digitally based enhancements). However, with the introduction and initial
favorable reception of the NUWAVE Video Processor and the Softsets, the Company
determined to devote substantially all of the personnel and economic resources
it would have devoted to the Magic Card to the marketing of the NUWAVE Video
Processor and the Softsets. The Company believes this will give it the
opportunity to further refine the Magic Card based on its experience with the
NUWAVE Video Processor and market reaction. Because the final commercial
development of the Magic Card will be based in large part on the Company's
experience in marketing the NUWAVE Video Processor, the Company cannot predict
when, if at all, it will finalize commercial development of the Magic Card or
commence marketing it.
Product development efforts, with respect to all of the Company's
proposed products, are subject to all of the risks inherent in the development
of new technology and products (including unanticipated delays, expenses,
technical problems or difficulties, as well as the possible insufficiency of
funding to complete development). There can be no assurance as to when, or
whether, such developments will be successfully completed. No assurance can be
given that the products can be developed in commercially salable form within the
projected development schedule. If the Company, either through its Advanced
Engineering Group or Rave, is unable to complete its development activities with
respect to the Company's proposed products, it would have to complete
development through third parties. Although the Company presently believes it
has sufficient resources to complete development of these products, there is no
assurance that the Company will be able to complete such development in a timely
manner, or at all, or that it could enter into economically reasonable
arrangements for the completion of such products by third parties. In connection
with the development of commercially salable prototypes, the Company must
successfully complete a testing program for the products before they can be
marketed. Unforeseen technical problems arising out of such testing could
significantly and adversely affect the Company's ability to manufacture a
commercially acceptable version. In addition, the Company's success will depend
upon its technologies and proposed products meeting acceptable cost and
performance criteria and upon their timely introduction into the marketplace.
There can be no assurance the technologies and proposed products will
satisfactorily perform the functions for which they are designed, that they will
meet applicable price or performance objectives or that unanticipated technical
or other problems will not occur which would result in increased costs and/or
material delays in their development.
Unconditional Obligation to Share Sublicense Fees
The Company has entered into an Agency Agreement with Prime Technology,
Inc. ("Prime") which provides that Prime will be the Company's exclusive agent
for entering into sublicenses with respect to the products and technology
licensed to the Company pursuant to the License Agreement and will assist the
Company in the development and implementation of a sublicensing program. Subject
to certain minimum sales requirements, the Agency Agreement provides for the
payment to Prime of 35% to 45% of net sublicense fees received by the Company
along with certain additional payments. To the extent payments to Prime are
based on sublicensing payments made to the Company, the Agency Agreement
provides that such payments must be made regardless of whether the relevant
sublicense is entered into through Prime's efforts or by the Company itself. The
unconditional obligation to pay Prime a portion of such sublicensing fees may
have an adverse effect on the Company's ability to enter into profitable
sublicensing arrangements with respect to the products and technology licensed
to the Company pursuant to the License Agreement or adversely affect its ability
to set competitive sublicense fees for those products.
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Dependence on Third-Party Development and Manufacturing
The Company does not contemplate that it will directly manufacture any
of its products. It intends to contract with third parties to manufacture its
proposed NUWAVE Video Processor and Softsets, and related retail products. It
also may license to third parties the rights to manufacture the products, either
through direct licensing, original equipment manufacturer arrangements or
otherwise.
The Company will be dependent on third parties for the manufacture of
the application specific integrated circuit ("ASIC")-based NUWAVE Video
Processor and related products as well as future products it may choose to
commercialize. Although the Company has entered into an agreement with a
potential manufacturer of its NUWAVE Video Processor ASIC chip, there can be no
assurance that such manufacturer will dedicate sufficient production capacity to
satisfy the Company's requirements within scheduled delivery times, or at all.
Failure or delay by the Company's suppliers in fulfilling its anticipated needs
would adversely affect the Company's ability to develop and market its products.
In addition, the Company will be dependent on third party vendors for many of
the components necessary for the final assembly of its ProWave Division products
and its anticipated retail products. The Company may have difficulty in
obtaining contractual agreements with the suppliers of such materials due to,
among other things, possible material shortages or possible lack of adequate
purchasing power. While management believes that these components are available
from multiple sources, it anticipates that the Company will obtain certain of
them from a single source, or limited number of sources, of supply. In the event
that certain of such suppliers are unable or unwilling to provide the Company
with such components on commercially reasonable terms, or at all, delays in
securing alternative sources of supply would result and could have a material
adverse effect on the Company's operations.
Competition
The markets that the Company intends to enter are characterized by
intense competition, and, particularly with respect to the market for video,
editing, production and processing products, significant price erosion over the
life of a product. The Company's products will directly compete with those of
numerous well-established companies, such as Sony Electronics, Inc., Panasonic
Division of Matsushita Electric Industrial Co., Motorola, Inc., Mitsubishi
International Corp. and Phillips Electronics, NV, which design, manufacture
and/or market video technology and other products. All of these companies have
substantially greater financial, technical, personnel and other resources than
the Company and have established reputations for success in the development,
licensing, sale and service of their products and technology. Certain of these
competitors dominate their industries and have the necessary financial resources
to enable them to withstand substantial price competition or downturns in the
market for video products.
Rapid Changes to Industry Standards; Product Obsolescence
The markets for the technology and products being developed by the
Company are characterized by rapid changes and evolving industry standards often
resulting in product obsolescence or short product life cycles. As a result,
certain companies may be developing technologies or products of which the
Company is unaware which may be functionally similar, or superior, to some or
all of those being developed by the Company. As a result of all of the above,
the ability of the Company to compete will depend on its ability to complete
development and introduce to the marketplace in a timely and cost-competitive
manner its proposed products and technology, to continually enhance and improve
such products and technology, to adapt its proposed products to be compatible
with specific products manufactured by others, and to successfully develop and
market new products and technology. There is no assurance that the Company will
be able to compete successfully, that its competitors or future competitors will
not develop technologies or products that render the Company's products and
8
<PAGE>
technology obsolete or less marketable or that the Company will be able to
successfully enhance its proposed products or technology or adapt them
satisfactorily.
Enforceability of Patents and Similar Rights; Possible Issuance of
Patents to Competitors; Trade Secrets
To the extent practicable, the Company has filed or intends to file
U.S. patents and/or copyright applications relating to certain of its proposed
products and technologies either on its own behalf (or on behalf of Rave with
respect to products and technology licensed pursuant to the License Agreement)
and to file corresponding applications in key industrial countries worldwide. In
April 1996, the Company filed on behalf of Rave two patent applications for its
Randall connector system and received one patent in respect thereof in November
1997 and the second patent in respect thereof in January 1998.
In July 1996, the Company filed for a patent on behalf of Rave with
respect to AVP. In January 1998, an initial denial was received from the patent
examiner's office based on similarity to an existing patent. The Company has
filed a response to the examiner more thoroughly identifying the difference
between the Company's application and the patent previously granted. Although
the Company believes its patent application is unique and has patentable claims,
no assurance can be given that a patent will be obtained. The Company is also in
the process of finalizing four additional patent applications (two with regard
to its NUWAVE Video Processor and two with regard to its Softsets) and expects
to file these applications by the end of April 1998. Although the Company
believes that each of these applications contains patentable claims, there is no
assurance that any patents will be granted. If granted, there is no assurance
that any patent will afford the Company commercially significant protection of
its technology or that the Company will have adequate resources to enforce its
patents. Because the Company also intends to license and/or sell its technology
and products in foreign markets, it intends to seek foreign patent protection.
With respect to foreign patents, the patent laws of other countries may differ
significantly from those of the United States as to the patentability of the
Company's products or technology. Moreover, the degree of protection afforded by
foreign patents may be different from that in the United States. Patent
applications in the United States are maintained in secrecy until patents issue,
and since publication of discoveries in the scientific or patent literature
tends to lag behind actual discoveries by several months, the Company cannot be
certain that it will be the first creator of inventions covered by any patent
applications it makes or the first to file patent applications on such
inventions.
Based on Rave's experience in the video industry, that of the Company's
own officers and directors with technical backgrounds and who are familiar with
the patent process and patent searches made in connection with the patent
application being filed for the Company's NUWAVE Video Processor, the Company
believes that its products do not infringe the patents or other proprietary
rights of third parties and is not aware of any patents held by its competitors
or others that cover the same technology used in the Company's products or that
will prevent, limit or otherwise interfere with the Company's ability to make
and sell its products. However, it is possible that competitors in both the
United States and foreign countries, many of which have substantially greater
resources and have made substantial investments in competing technologies, may
have applied for, or may in the future apply for and obtain, patents which have
an adverse impact on the Company's ability to make and sell its products. In
addition, because of the developmental stage of the Company, claims that the
Company's products infringe on the proprietary rights of others are more likely
to be asserted after commencement of commercial sales incorporating the
Company's technology. There can also be no assurance that competitors will not
infringe the Company's patents. Defense and prosecution of patent suits, even if
successful, are both costly and time consuming. An adverse outcome in the
defense of a patent suit could
9
<PAGE>
subject the Company to significant liabilities to third parties, require
disputed rights to be licensed from third parties or require the Company to
cease selling its products.
The Company also relies on unpatented proprietary technology, and there
can be no assurance that others may not independently develop the same or
similar technology or otherwise obtain access to the Company's unpatented
technology. To protect its trade secrets and other proprietary information, the
Company requires employees, consultants, advisors and collaborators to enter
into confidentiality agreements. There can be no assurance that these agreements
will provide meaningful protection for the Company's trade secrets, know-how or
other proprietary information in the event of any unauthorized use,
misappropriation or disclosure of such trade secrets, know-how or other
proprietary information. If the Company is unable to maintain the proprietary
nature of its technologies, the Company could be adversely affected.
Control by Management and Prime
The officers of the Company own 455,000 shares of Common Stock (not
including currently exercisable options for 330,000 shares of Common Stock) or
approximately 8.12% of the Company's outstanding shares of Common Stock, and
Prime (21.6% of the capital stock of which is owned by Mr. David Kwong, a
director of the Company, 21.6% of which is owned by Rave and 16.1% of which is
owned by Mr. Ted Wong, a former director of the Company) beneficially owns
1,090,000 shares of Common Stock or approximately 19.5% of the Company's
outstanding shares of Common Stock. Such officers and Prime are therefore in a
position to significantly influence the election of the Company's directors and
thereby select the management, and direct the policies, of the Company.
No Dividends
The Company has paid no cash dividends to date. Payment of dividends on
the Common Stock is within the discretion of the Board of Directors and will
depend upon the Company's earnings, its capital requirements and financial
condition, and other relevant factors. The Company does not currently intend to
declare any dividends on its Common Stock in the foreseeable future. Currently,
the Company plans to retain any earnings it receives for development of its
business operations.
Limitation on Tax Loss Carryforwards
At December 31, 1996, the Company had available unused net operating
loss carryforwards ("NOLs") aggregating approximately $2,784,502 to offset
future taxable income. The unused net operating loss carryforwards expire in
various years from 2010 to 2011. Under Section 382 of the Internal Revenue Code
of 1986, as amended (the "Code"), utilization of prior NOLs is limited after an
ownership change, as defined in such Section 382, to an amount equal to the
value of the loss corporation's outstanding stock immediately before the date of
the ownership change, multiplied by the federal long-term tax-exempt rate in
effect during the month that the ownership change occurred. The Company may be
subject to limitations on the use of its NOLs as provided under Section 382.
Accordingly, there can be no assurance that a significant amount of the
Company's existing NOLs will be available to the Company. In the event that the
Company achieves profitability, as to which there can be no assurance, such
limitation would have the effect of increasing the Company's tax liability and
reducing the net income and available cash resources of the Company in the
future.
10
<PAGE>
Limitation on Liability of Directors and Officers
The Certificate of Incorporation of the Company provides that (i) the
Company will indemnify any director, officer, employee or agent of the Company
with respect to actions, suits or proceedings relating to the Company and (ii)
subject to certain limitations, a director shall not be personally liable for
monetary damages for breach of his fiduciary duty. In addition, the Company has
entered into an indemnification agreement with each of the directors of the
Company, which provides that the director is entitled to indemnification to the
fullest extent permitted by law. Such indemnification will cover all expenses,
liabilities, judgments, penalties, fines and amounts paid in settlement which
are incurred or imposed upon the director if the director is a party, threatened
to be made a party to any action, suit or proceeding of any kind by reason of
the fact that such person served or serves as a director of the Company or
served as a director, officer, employee or agent with any other enterprise at
the request of the Company.
General
Because of these and other factors, past financial performance should
not be considered an indicator of future performance. Investors should not use
historical trends to anticipate future result and should be aware that the
trading price of the Company's Common Stock may be subject to wide fluctuations
in response to quarter-to-quarter variations in operating results, general
conditions in the computer, video and telecommunications industries, changes in
earnings estimates and recommendations by analysts and other events.
USE OF PROCEEDS
The proceeds from the sale of the Selling Stockholder's Shares will
belong to the Selling Stockholder. The Company will not receive any of the
proceeds from such sale(s) of the Shares.
DETERMINATION OF OFFERING PRICE
This Prospectus may be used from time to time by the Selling
Stockholder to offer the Shares registered hereby for resale. The offering price
of such Shares of Common Stock will be determined by the Selling Stockholder and
may be based on market prices prevailing at the time of resale, at prices
relating to such prevailing market prices, or at negotiated prices.
11
<PAGE>
SELLING SECURITY HOLDERS*
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock by the Selling Stockholder as of March
2, 1998. The Shares are being registered to permit public secondary trading of
the Shares, and the Selling Stockholder may offer the Shares for resale from
time to time. See "Plan of Distribution." Upon the completion of the offering
and assuming the sale by the Selling Stockholder of all the Shares of Common
Stock available for sale under this Prospectus, the Selling Stockholder shall
not own more than 1% of the outstanding Common Stock of the Company.
The Shares offered by this Prospectus may be offered from time to time
by and for the account of the Selling Stockholder named below.
<TABLE>
<CAPTION>
Common Stock Common Stock
Name and Address Beneficially Owned Common Stock Beneficially Owned
of Selling Stockholder Prior to Offering (1) to be Sold After Offering (2)
- ---------------------------------- ------------------------- ------------------- --------------------
<S> <C> <C> <C>
Profutures Special Equities
Fund, L.P. 253,485 253,485 0
1310 Highway 620 South
Suite 200
Austin, Texas 78734
- ------------------------------------
</TABLE>
(1) Does not include (i) 50,000 shares of Common Stock issuable upon exercise
of the Warrant, (ii) 1,069,000 shares of Common Stock (as such number
shall be adjusted for stock splits or combinations) which may be put to
the Selling Stockholder pursuant to the Investment Agreement and (iii)
50,000 shares of Common Stock issuable upon exercise of the Supplemental
Warrant which may be issued to the Selling Stockholder.
(2) Assumes the sale by the Selling Stockholder of all the shares of Common
Stock available for sale under this Prospectus.
The Selling Stockholder has not had any material relationship with the
Company or any of its affiliates within the past three years other than as a
result of the ownership of Common Stock or as a result of entering into the
Investment Agreement.
The Shares offered hereby by the Selling Stockholder have been acquired
or will be acquired pursuant to the Investment Agreement and/or upon exercise of
the Warrant and/or Supplemental Warrant. In accordance with the Investment
Agreement, the Company agreed to register the Shares for resale by the Selling
Stockholder to permit such resales from time to time in the market or in
privately-negotiated transactions. The Company will prepare and file such
amendments and supplements to the registration statement as may be necessary in
accordance with the rules and regulations of the Securities Act to keep it
effective for a period of approximately two years.
The Company has agreed to bear certain expenses (other than broker
discounts and commissions, if any) in connection with the registration
statement.
- --------
* This page will be modified with a Prospectus Supplement to reflect the number
of shares of Common Stock acquired by the Selling Stockholder pursuant to the
Investment Agreement, the Warrant or the Supplemental Warrant.
12
<PAGE>
PLAN OF DISTRIBUTION
All or a portion of the Shares offered hereby by the Selling
Stockholder may be delivered and/or sold in transactions from time to time on
the over-the-counter market, on the Nasdaq SmallCap Market, in negotiated
transactions, or a combination of such methods of sale, at market prices
prevailing at the time, at prices related to such prevailing prices or at
negotiated prices. The Selling Stockholder may effect such transactions by
selling to or through one or more broker-dealers, and such broker-dealers may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Stockholder. The Selling Stockholder and any
broker-dealers that participate in the distribution may under certain
circumstances be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions received by such broker-dealers and any
profits realized on the resale of Shares by them may be deemed to be
underwriting discounts and commissions under the Securities Act. The Selling
Stockholder may agree to indemnify such broker-dealers against certain
liabilities, including liabilities under the Securities Act. In addition, the
Company has agreed to indemnify the Selling Stockholder with respect to the
Shares offered hereby against certain liabilities, including, without
limitation, certain liabilities under the Securities Act, or, if such indemnity
is unavailable, to contribute toward amounts required to be paid in respect of
such liabilities.
Any broker-dealer participating in such transactions as agent may
receive commissions from the Selling Stockholder (and, if they act as agent for
the purchaser of such Shares, from such purchaser). Broker-dealers may agree
with the Selling Stockholder to sell a specified number of Shares at a
stipulated price per share, and, to the extent such a broker-dealer is unable to
do so acting as agent for the Selling Stockholder, to purchase as principal any
unsold Shares at the price required to fulfill the broker-dealer commitment to
the Selling Stockholder. Broker-dealers who acquire Shares as principal may
thereafter resell such Shares from time to time in transactions (which may
involve crosses and block transactions and which may involve sales to and
through other broker-dealers, including transactions of the nature described
above) in the over-the-counter market, in negotiated transactions or otherwise
at market prices prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive from the purchasers of such
Shares commissions computed as described above. To the extent required under the
Securities Act, a supplemental prospectus will be filed, disclosing (a) the name
of any such broker-dealers; (b) the number of Shares involved; (c) the price at
which such Shares are to be sold; (d) the commissions paid or discounts or
concessions allowed to such broker-dealers, where applicable; (e) that such
broker-dealers did not conduct any investigation to verify the information set
out or incorporated by reference in this Prospectus, as supplemented; and (f)
other facts material to the transaction.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the resale of Shares may not
simultaneously engage in market making activities with respect to the Common
Stock of the Company for a period of two business days prior to the commencement
of such distribution. In addition and without limiting the foregoing, the
Selling Stockholder will be subject to applicable provisions of the Exchange
Act, and the rules and regulations thereunder, including, without limitation,
Regulation M, which provisions may limit the timing of purchases and sales of
shares of the Company's Common Stock by the Selling Stockholder.
The Selling Stockholder will pay all commissions and certain other
expenses associated with the sale of securities by them. The Shares offered
hereby are being registered pursuant to contractual obligations of the Company,
and the Company has paid the expenses of the preparation of this Prospectus.
13
<PAGE>
LEGAL MATTERS
The legality of the shares of Common Stock offered hereby has been
passed upon for the Company by Dechert Price & Rhoads, New York, New York.
EXPERTS
The balance sheets of the Company as of December 31, 1996 and 1995, and
the statements of operations, stockholders' equity and cash flows for the period
from July 17, 1995 (inception) to December 31, 1995 and for the year ended
December 31, 1996, incorporated by reference in this Prospectus and in the
related Registration Statement, have been incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
TRANSFER AGENT
The Transfer Agent and Registrar for the Common Stock is American Stock
Transfer & Trust Company, 40 Wall street, New York, New York 10005.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth various costs and expenses of the
Company in connection with the sale and distribution of the Shares being
registered. All of the amounts shown are estimates except for the Securities and
Exchange Commission Registration Fee.
Securities and Exchange Commission Registration Fee $ 1,626.08
Legal Fees and Expenses $ 20,000.00
Accounting Fees and Expenses $ 1,000.00
Other Expenses $ 1,000.00
Total Expenses $ 23,626.08
Item 15. Indemnification of Directors and Officers.
Section 145(a) of the General Corporation Law of the State of Delaware
(the "Delaware Code") grants corporations the power to indemnify any person who
was or is a party to any action, suit or proceeding by reason of the fact that
the person was or is a director or officer against expenses, judgments, fines
and settlement amounts actually and reasonably incurred by the person in
connection with such action, suit or proceeding. The indemnification is
contingent on the fact that the person acted in good faith and in a manner he
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
reasonable cause to believe his conduct was unlawful.
Section 145(b) of the Delaware Code grants corporations the power to
indemnify any person who was or is a party to any action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of the
fact that the person was or is a director or officer against expenses actually
and reasonably incurred by the person in connection with the defense or
settlement of such action or suit. The person must meet the same applicable
standard of conduct as in Section 145(a), except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation.
Section 102(b)(7) of the Delaware Code permits a corporation to include
in its certificate of incorporation a provision eliminating or limiting the
personal liability of a director to the corporation or its stockholders for
monetary damages arising out of a breach of his fiduciary duty as a director.
Such provision shall not eliminate or limit the liability of a director with
respect to any of the following: (i) breach of the director's duty of loyalty to
the corporation or its stockholders; (ii) acts or omissions not made in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) liability for unlawful dividends paid or an unlawful stock purchase or
redemption pursuant to Section 174 of the Delaware Code; or (iv) transactions
from which the director derived an improper personal benefit.
Article Seventh of the Company's Certificate of Incorporation provides
that "the Corporation shall, to the fullest extent permitted by the provisions
of ss.145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, indemnify any and all persons whom it shall
have the power to indemnify under said section from and against any and all of
the expenses, liabilities, or other matters referred to, in or covered by said
section, and the indemnification provided for
II-1
<PAGE>
herein shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of such a person."
Item 16. Exhibits
4.1 Form of Common Stock Certificate (incorporated by reference to Exhibit
4.1 to the Company's Amendment No. 2 to Registration Statement on Form
SB-2 filed with the Commission on July 3, 1996).*
4.2 Registration Rights Agreement, dated February 6, 1998, between NuWave
Technologies, Inc. and ProFutures Special Equities Fund, L.P.
(incorporated by reference to Exhibit 4.1 to the Company's Current
Report on Form 8-K filed with the Commission on February 18, 1998).*
5 Opinion of counsel to the Company concerning the legality of the
securities being offered. **
10.1 Private Securities Subscription Agreement, dated as of February 6,
1998, between NuWave Technologies, Inc. and ProFutures Special
Equities Fund, L.P. (incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K filed with the Commission on
February 18, 1998).*
10.2 Warrant, dated February 6, 1998, executed by NuWave Technologies, Inc.
in favor of ProFutures Special Equities Fund, L.P., to purchase up to
50,000 shares of Common Stock, par value $.01 per share, of NuWave
Technologies, inc. (incorporated by reference to Exhibit 10.2 to the
Company's Current Report on Form 8-K filed with the Commission on
February 18, 1998).*
23 Consent of Coopers & Lybrand L.L.P.**
24.1 Special Power of Attorney for Lyle Gramley.**
24.2 Special Power of Attorney for Joseph A. Sarubbi.**
24.3 Special Power of Attorney for Edward Bohn.**
- ----------------
* The exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such exhibits is a reference
to the copy of the exhibit heretofore filed with the Commission, to which
there have been no amendments or changes.
** Filed with this Registration Statement.
Item 17. Undertakings
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
II-2
<PAGE>
(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 this Registration
Statement or any material change to such information 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the provisions described under Item 15 above, or otherwise, the
Company has been advised that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted against
the Company by such director, officer or controlling person in connection with
the securities being registered, the Company 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.
(c) 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 Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all 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 Fairfield, New Jersey on March 3, 1998.
NUWAVE TECHNOLOGIES, INC.
By: /S/ GERALD ZARIN
---------------------------------
GERALD ZARIN
PRESIDENT, CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
- --------- -------- ----
<S> <C> <C>
/s/ GERALD ZARIN PRESIDENT, CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE MARCH 3, 1998
- --------------------------------- OFFICER (PRINCIPAL EXECUTIVE OFFICER)
GERALD ZARIN
/s/ JEREMIAH F. O'BRIEN CHIEF FINANCIAL OFFICER AND SECRETARY (PRINCIPAL MARCH 3, 1998
JEREMIAH F. O'BRIEN FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING OFFICER)
* DIRECTOR MARCH 3, 1998
- ---------------------------------
LYLE GRAMLEY
* DIRECTOR MARCH 3, 1998
- ---------------------------------
ED BOHN
* DIRECTOR MARCH 3, 1998
- ---------------------------------
JOSEPH A. SARUBBI
*By: /S/ JEREMIAH F. O'BRIEN
--------------------------------
JEREMIAH F. O'BRIEN
ATTORNEY-IN-FACT
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
Exhibit Number Description of Exhibit Page Number
- -------------- ---------------------- -----------
4.1 Form of Common Stock Certificate (incorporated
by reference to Exhibit 4.1 to the Company's
Amendment No. 2 to Registration Statement on
Form SB-2 filed with the Commission on July 3,
1996).*
4.2 Registration Rights Agreement, dated February
6, 1998, between NuWave Technologies, Inc. and
ProFutures Special Equities Fund, L.P.
(incorporated by reference to Exhibit 4.1 to
the Company's Current Report on Form 8-K filed
with the Commission on February 18, 1998).*
5 Opinion of counsel to the Company concerning
the legality of the securities being offered.**
10.1 Private Securities Subscription Agreement,
dated as of February 6, 1998, between NuWave
Technologies, Inc. and ProFutures Special
Equities Fund, L.P. (incorporated by reference
to Exhibit 10.1 to the Company's Current Report
on Form 8-K filed with the Commission on
February 18, 1998).*
10.2 Warrant, dated February 6, 1998, executed by
NuWave Technologies, Inc. in favor of
ProFutures Special Equities Fund, L.P., to
purchase up to 50,000 shares of Common Stock,
par value $.01 per share, of NuWave
Technologies, inc. (incorporated by reference
to Exhibit 10.2 to the Company's Current Report
on Form 8-K filed with the Commission on
February 18, 1998).*
23 Consent of Coopers & Lybrand L.L.P.**
24.1 Special Power of Attorney for Lyle Gramley.**
24.2 Special Power of Attorney for Joseph A.
Sarubbi.**
24.3 Special Power of Attorney for Edward Bohn.**
- ------------------
* The exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such exhibits is a reference
to the copy of the exhibit heretofore filed with the Commission, to which
there have been no amendments or changes.
** Filed with this Registration Statement.
March 3, 1998
NuWave Technologies, Inc.
One Passaic Avenue
Fairfield, New Jersey 07004
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to NUWAVE Technologies, Inc., a Delaware
corporation (the "Company"), in connection with the filing by the Company of a
registration statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") on March 3, 1998 for the
purpose of registering under the Securities Act of 1933, as amended, an
aggregate of 1,422,485 shares (the "Shares") of common stock of the Company, par
value $.01 per share (the "Common Stock"), all of which Shares are to be sold by
ProFutures Special Equities Fund, L.P. (the "Selling Stockholder"). The Shares
being registered comprise of the following: (i) 253,485 shares of Common Stock
issued to the Selling Stockholder (the "Initial Shares") pursuant to a Private
Securities Subscription Agreement dated as of February 6, 1998 (the
"Subscription Agreement") by and between the Company and the Selling
Stockholder; (ii) 50,000 shares of Common Stock issuable upon exercise of a
warrant (the "Warrant") dated February 6, 1998 and issued to the Selling
Stockholder pursuant to the Subscription Agreement; (iii) up to 1,069,000 shares
of Common Stock (the "Put Shares") which may be put to the Selling Stockholder
pursuant to the Subscription Agreement; and (iv) 50,000 shares of Common Stock
issuable upon exercise of a supplemental warrant (the "Supplemental Warrant")
which may be issued to the Selling Stockholder pursuant to the Subscription
Agreement.
In connection with rendering the opinions hereinafter expressed, we
have examined (i) such matters of law; (ii) such corporate agreements,
instruments, documents and records of the Company; and (iii) such certificates
of public officials and such other documents as we have deemed necessary or
appropriate, including:
(1) a copy of the Articles of Incorporation and By-laws, each as
amended, of the Company;
<PAGE>
NuWave Technologies, Inc.
March 3, 1998
Page 2
(2) an executed copy of the Subscription Agreement;
(3) an executed copy of the Registration Rights Agreement dated as of
February 6, 1998 (the "Registration Rights Agreement") by and between the
Company and the Selling Stockholder;
(4) an executed copy of the Warrant; and
(5) an execution copy of the Supplemental Warrant.
In making such examination and in rendering the opinions set forth
below, we have assumed and relied upon the genuineness of all signatures, the
authenticity of all corporate records, certificates, instruments and documents
submitted to us as originals and the conformity to authentic originals of all
corporate records, certificates, instruments and documents submitted to us as
certified, conformed or photostatic copies. In our examination of such corporate
records, certificates, instruments and documents, we have also, with your
permission, assumed and relied upon the correctness of the factual information
contained therein and the authority of all persons maintaining records or
executing such certificates, instruments, and documents.
We have assumed that the Selling Stockholder has the power and
authority and has taken the action necessary to execute and deliver, and perform
its obligations under, the Subscription Agreement and the Registration Rights
Agreement, that the Subscription Agreement and the Registration Rights Agreement
have been validly executed and delivered by the Selling Stockholder and are
binding on the Selling Stockholder, and that no consent, approval,
authorization, declaration or filing by or with any governmental commission,
board or agency is required for the valid execution and delivery by the Selling
Stockholder of, and performance of its obligations under, the Subscription
Agreement and the Registration Rights Agreement.
On the basis of the foregoing, and subject to the qualifications,
assumptions and exceptions set forth herein, we are of the opinion that:
1. The Initial Shares have been validly issued, fully paid and
non-assessable.
2. Upon valid exercise by the holder of the Warrant of its right
thereunder to purchase the Common Stock of the Company issuable under the
Warrant (collectively, the "Warrant Shares") and the payment by such holder of
the exercise price therefor in accordance with the terms of the Warrant, and
upon the proper issuance of the Warrant Shares, such Warrant Shares will be
validly issued, fully paid and non-assessable.
3. If the Company elects to exercise its right to put the Put Shares to
the Selling Stockholder pursuant to the terms of the Subscription Agreement,
then upon payment by the Selling Stockholder of the full consideration for the
Put Shares in accordance with the terms
<PAGE>
NuWave Technologies, Inc.
March 3, 1998
Page 3
of the Subscription Agreement, and upon the proper issuance of the Put Shares,
such Put Shares will be validly issued, fully paid and non-assessable.
4. When the Supplemental Warrant is issued in accordance with the terms
of the Subscription Agreement and upon valid exercise by the holder of the
Supplemental Warrant of its right thereunder to purchase the Common Stock of the
Company issuable under the Supplemental Warrant (collectively, the "Supplemental
Warrant Shares") and the payment by such holder of the exercise price therefor
in accordance with the terms of the Supplemental Warrant, and upon the proper
issuance of the Supplemental Warrant Shares, such Supplemental Warrant Shares
will be validly issued, fully paid and non-assessable.
This opinion is rendered to the Company in connection with the filing
of the Registration Statement and for no other purpose. We are not members of
the bar of any State other than New York. Accordingly, this opinion is rendered
solely with respect to the laws of the State of New York, the federal law of the
United States of America and the General Corporation Law of the State of
Delaware. We specifically disclaim any obligation to update or supplement this
opinion to reflect any events or state of facts which may hereafter come to our
attention or any changes in statutes or regulations or any court decisions which
may hereafter occur or be issued.
Very truly yours,
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-3 (File No. 0-28606) of our report dated March 26, 1997, on our audits
of the financial statements of NuWave Technologies, Inc. (a development stage
company). We also consent to the reference to our firm under the caption
"Experts."
/s/ Coopers & Lybrand L.L.P.
New York, New York
March 3, 1998
EXHIBIT 24.1
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a Director of
NUWAVE Technologies, Inc., a Delaware corporation (the "Company"), constitutes
and appoints Gerald Zarin and Jeremiah O'Brien, and each of them, his true and
lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign a Form S-3 registration statement for filing with the
Securities and Exchange Commission respecting the registration of shares of
common stock, par value $.01 per share, of the Company, together with any and
all amendments (including post-effective amendments) to such registration
statement, and to file the same with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting such
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 and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that such
attorneys-in-fact and agents, or each of them, may lawfully do or cause to be
done in virtue hereof.
DATED: February 27, 1998
/s/ Lyle Gramley
---------------------------
Lyle Gramley
EXHIBIT 24.2
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a Director of
NUWAVE Technologies, Inc., a Delaware corporation (the "Company"), constitutes
and appoints Gerald Zarin and Jeremiah O'Brien, and each of them, his true and
lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign a Form S-3 registration statement for filing with the
Securities and Exchange Commission respecting the registration of shares of
common stock, par value $.01 per share, of the Company, together with any and
all amendments (including post-effective amendments) to such registration
statement, and to file the same with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting such
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 and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that such
attorneys-in-fact and agents, or each of them, may lawfully do or cause to be
done in virtue hereof.
DATED: February 27, 1998
/s/ Joseph A. Sarubbi
---------------------------
Joseph A. Sarubbi
EXHIBIT 24.3
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a Director of
NUWAVE Technologies, Inc., a Delaware corporation (the "Company"), constitutes
and appoints Gerald Zarin and Jeremiah O'Brien, and each of them, his true and
lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign a Form S-3 registration statement for filing with the
Securities and Exchange Commission respecting the registration of shares of
common stock, par value $.01 per share, of the Company, together with any and
all amendments (including post-effective amendments) to such registration
statement, and to file the same with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting such
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 and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that such
attorneys-in-fact and agents, or each of them, may lawfully do or cause to be
done in virtue hereof.
DATED: February 27, 1998
/s/ Edward Bohn
---------------------------
Edward Bohn
