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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 20, 2000
REGISTRATION NO. 333-91547
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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A.C.L.N. LIMITED
(Exact name of Registrant as specified in its charter)
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CYPRUS 4412 NOT APPLICABLE
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(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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A.C.L.N. LIMITED
166 Mechelse Steenweg
2018 Antwerp, Belgium
(Address of principal place of business)
ALDO LABIAD
President and Chief Executive Officer
A.C.L.N. LIMITED
166 Mechelse Steenweg
2018 Antwerp, Belgium
011-32-3-233-1647
(Name, address, and telephone number of principal
executive offices and agent for service)
Copies to:
ROBERT STEVEN BROWN, ESQ.
GERARDO A. LAPETINA, ESQ.
BROCK SILVERSTEIN LLC
800 Third Avenue, 21st Floor
New York, New York 10022-4611
(212) 371-2000 / (212) 371-5500 (Telecopy)
[email protected]
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Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.
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, check the following box. /X/
If this Form is filed to register additional securities 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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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 the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
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PROSPECTUS
A.C.L.N. LIMITED
874,742 ORDINARY SHARES
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This is an offering of an aggregate of 874,742 ordinary shares of
A.C.L.N. Limited, a Cyprus corporation, from time to time by the selling
shareholders named herein. Of these ordinary shares,
- 610,254 shares were issued and sold to selling shareholders in
connection with a private placement of securities exempt from the
registration requirements of the Securities Act of 1933,
consummated by us in September 1999,
- 22,438 shares were issued to Fairfax Communications, Inc. in
connection with a letter agreement, dated June 20, 1998, relating
to investor and public relations services,
- 122,050 shares are issuable upon the exercise of warrants issued
to Spencer Trask Incorporated, the placement agent, in connection
with the private placement, and
- 120,000 shares are issuable upon the exercise of warrants issued
to Cruttenden Roth Incorporated, the underwriter of our initial
public offering consummated by us in June 1998.
We will not receive any of the proceeds from the sale of the ordinary
shares offered by our selling shareholders.
Our ordinary shares are listed on the Nasdaq National Market under the
symbol "ACLNF". On January 18, 2000, the last reported sales price of our
ordinary shares on the Nasdaq National Market was $19.00 per share.
THE SECURITIES OFFERED HEREBY INVOLVE RISKS WHICH ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 6 OF THIS PROSPECTUS.
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 selling shareholders may from time to time offer and sell their
ordinary shares directly or indirectly through agents or dealers at market
prices or on other sale terms determined by them. To the extent required, we
will disclose in a prospectus supplement the names of any agent or dealer,
applicable commissions or discounts and any other required information with
respect to any particular offer. See "Plan of Distribution."
THE DATE OF THIS PROSPECTUS IS JANUARY 20, 2000
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TABLE OF CONTENTS
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Prospectus Summary.............................................................. 3
Our Company....................................................... 3
The Offering...................................................... 5
Risk Factors.................................................................... 6
Use of Proceeds................................................................. 13
Market for Our Ordinary Shares.................................................. 13
Selling Shareholders............................................................ 15
Description of Placement Agent's and Underwriter's Warrants..................... 19
Description of Capital Stock.................................................... 21
Plan of Distribution ........................................................... 21
Disclosure of SEC Position on Indemnification for Securities Act Liabilities.... 22
Legal Matters................................................................... 22
Experts......................................................................... 22
Where You Can Find More Information............................................. 22
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This prospectus contains and incorporates by reference certain forward
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995 with respect to our business, financial condition, and
results of operations, including, without limitation, statements under the
captions "Business" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our annual and quarterly reports. These
forward looking statements reflect our plans, expectations, and beliefs and,
accordingly, are subject to certain risks and uncertainties. We cannot guarantee
that any of such forward looking statements will be realized. Factors that may
cause actual results to differ materially from those contemplated by such
forward looking statements include, among others, the factors discussed in the
section of this prospectus entitled "Risk Factors."
2
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PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
OUR COMPANY
We arrange for the shipment of automobiles from several European ports
to North and West Africa and the Middle East. A majority of the automobiles that
we transport are sold by independent used automobile dealers to individuals who
travel from various parts of Africa and the Middle East specifically to purchase
a used automobile. Our customers include people from countries of our ports of
destination and their neighboring countries. The services we provide include
only the shipment of the vehicles, stevedoring and customs clearance. Presently,
the principal ports of destination for vessels we charter are located in Angola,
Egypt, Guinea, Nigeria, Tunisia and Ivory Coast.
The availability of automobiles is limited in North and West Africa and
the Middle East due to the lack of significant automobile manufacturing and
import restrictions, such as tariffs, among other factors. Purchasers of
automobiles in these regions often fly to Europe to purchase used automobiles at
large established used automobile markets located there. These markets have
formed over the past several decades primarily because of a beneficial tax
environment, proximity to shipping lanes and the availability of used
automobiles of the make and model most actively sought by African and Middle
Eastern purchasers, particularly Japanese automobiles.
Once an individual purchases an automobile, the purchaser and the
dealer arrange shipping to a port near the purchaser's country of residence.
Purchasers then have a choice of shipping companies which can arrange shipment
to the port of destination in Africa and the Middle East. To our knowledge, we
are currently the only company in Brussels to offer "freight collect" service.
"Freight collect" refers to our practice of collecting all shipping fees upon
delivery in our port of destination. Other shipping companies which provide
similar shipping services require that fees be prepaid. We offer "freight
collect" service at approximately the same cost as regular prepaid freight.
We believe that demand for our services will continue to increase as,
and if, the following factors occur:
- the economic relationships between European and African and Middle
Eastern nations continue to develop,
- the standard of living continues to improve in Africa and the Middle
East,
- the size of the middle class in Africa and the Middle East increases,
- the national governments of our served markets continue to make
significant expenditures on their transportation infrastructures, and
- countries in Africa and the Middle East continue to reduce trade
barriers, such as tariffs on imported automobiles.
Accordingly, we believe that the demand for used automobiles will continue to
increase throughout Africa and the Middle East.
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Our operating strategy is to maximize the flexibility of our operations
and to focus primarily on limiting fixed costs. Accordingly, we are currently
negotiating to purchase two specialized automobile carrying vessels, which we
believe will be used primarily to ship automobiles to our ports of destination.
OUR EXPANSION STRATEGY INCLUDES THE FOLLOWING ELEMENTS:
INCREASE VOLUME OF AUTOMOBILES SHIPPED. We intend to capitalize upon
the following factors to increase the volume of automobiles we ship:
- our long-standing relationships in the automotive and shipping
industries,
- favorable trends in demand in Africa and the Middle East for
automobiles from Europe, and
- opportunities to open additional operations in other ports to
increase the volume of automobiles we ship.
In January 1999, we began shipping to a new port in the Ivory Coast,
and we have recently opened operations in two additional ports in Africa.
ACQUIRE SPECIALIZED VESSELS. We are currently negotiating to purchase
two used specialized automobile carrying vessels which we expect will be used
primarily for delivery of our automobiles to ports of destination in Tunisia and
will be operated by an independent vessel management company. If we are able to
negotiate successfully for the purchase of these vessels, and there can be no
assurance of that, we believe we will achieve significant savings over current
shipping arrangements.
REPLICATE MODEL ELSEWHERE. We believe that there are opportunities
globally to replicate our business model of facilitating the transportation of
automobiles from developed to developing countries. Consumers in developed
nations are replacing automobiles after increasingly shorter ownership periods
while in developing nations demand has increased for certain models and makes
supported by dealer networks and replacement part inventory infrastructures. We
intend to explore potential joint ventures, acquisitions or other business
arrangements aimed at replicating our business model in other markets.
RECENT DEVELOPMENTS. On November 12, 1999, we entered into a three year
strategic alliance with the Hyundai Motor Company. Under the terms of the
agreements, we will have the exclusive right to ship used cars sold in Hamburg,
Germany, Bremerhaven, Germany, Rotterdam, Netherlands and Amsterdam, Netherlands
to ports we serve in Africa.
OUR HISTORY AND STRUCTURE
We began operations in 1978 by shipping automobiles from Antwerp,
Belgium to Tunisia. We were incorporated under the laws of Cyprus on February
16, 1993 under the name "Hemswell Holdings Co. Ltd.," were renamed "C.L.N.
Limited" on March 1, 1996, and were subsequently renamed "A.C.L.N. Limited" on
June 7, 1996. We acquired all of the capital stock of C.L.N., S.A.M., a Monaco
corporation, on January 1, 1995. CLN was incorporated on March 23, 1988 to carry
on the operations of Continent Levant Lines, which began operations in 1978. On
June 26, 1998, we undertook an initial public offering in the United States.
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THE OFFERING
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Securities offered by the
selling shareholders ................................ 874,742 of our ordinary shares from time to time by the
selling shareholders named herein. Of these ordinary shares,
610,254 shares were issued and sold to selling shareholders in
connection with a private placement of securities exempt from
the registration requirements of the Securities Act
consummated by us in September 1999; 22,438 shares were issued
to Fairfax Communications, Inc. in connection with a letter
agreement, dated June 20, 1998, relating to investor and
public relations services; 122,050 shares are issuable upon
the exercise of warrants issued to Spencer Trask Incorporated,
the placement agent in connection with that private placement,
and 120,000 shares are issuable upon the exercise of warrants
issued to Cruttenden Roth in connection with our initial
public offering in June 1998.
Listing or Quotation of Common Stock................. Our ordinary shares currently trade on the Nasdaq National
Market under the symbol "ACLNF".
Risk Factors......................................... An investment in our ordinary shares is speculative and
involves a high degree of risk. Before making an investment,
you should carefully read this entire prospectus and consider
the information under the heading "Risk Factors," which begins
on page 6.
Use of Proceeds...................................... We will not receive any proceeds from the sale of the ordinary
shares offered by our selling shareholders. To the extent that
any warrants are exercised, we may receive the exercise price
for the ordinary shares we issue. See "Description of the
Placement Agent's and Underwriter's Warrants." The proceeds,
if any, will be used for working capital purposes.
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RISK FACTORS
An investment in our ordinary shares is speculative and involves a high
degree of risk. Before making an investment, you should carefully read this
entire prospectus and consider the following risk factors.
POLITICAL INSTABILITY
Our ports of destination are located in North and West Africa and the
Middle East. Recently, these and neighboring regions have experienced some
political instability. Our business is affected by the political, economic and
military conditions in these and neighboring countries. As a result of political
instability at any ports of destination or in other regions, we may be
restricted or prohibited from utilizing these ports, which could have a material
adverse effect on our business, prospects, financial condition and results of
operations. Further, in the event of any instability, we may be restricted or
prohibited from transferring revenues from these countries. In this event, our
business, prospects, financial condition and results of operations, including
our working capital, could be materially adversely affected. While we continue
to monitor the political stability of the countries in which our ports of
destination are located, there can be no assurance that these efforts will be
beneficial to us or will prevent us from suffering any of such consequences.
RESTRICTIONS ON TRANSFERABILITY OF DEPOSITED FUNDS
In accordance with the requirements of generally accepted accounting
principles in the United States, we recognize revenues at the time the
automobiles reach their ports of destination. However, we generally do not
receive the fees collected by our shipping agents until three to four months
following delivery of the automobiles. Fees collected when the automobiles are
delivered are deposited in local banks where an average period of three to four
months is required to process the funds by the local central banking systems in
accordance with local currency exchange regulations. Although we evaluate the
transactional speed and reliability of the central banking systems and the
political stability of the countries of our ports of destination, shifting
political and economic conditions, as well as changes in trade and currency
exchange regulations, may impair our ability to transfer deposited shipping
fees, which could have a material adverse effect on our business, prospects,
financial condition and results of operations.
DEVELOPMENT OF LOCAL SUPPLY OF USED AUTOMOBILES
In the event that a sufficient supply of used automobiles develops in
any of the markets we serve or a market which we may serve in the future, demand
for our services in these markets may decrease substantially, which could have a
material adverse effect on our business, prospects, financial condition and
results of operations.
RISK OF INCREASED PRICES AND CONTINUED SUPPLY OF USED AUTOMOBILES
We are dependent upon the relatively inexpensive prices of used
automobiles and the continued supply and availability of them in Europe. If the
prices of used automobiles in Europe increase substantially in the future or the
supply of these automobiles in Europe decreases substantially in the
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future, our business, prospects, financial condition and results of operations
could be materially adversely affected.
INCREASED AVAILABILITY OF AFFORDABLE NEW AUTOMOBILES
New automobiles are generally too expensive for most consumers in North
and West Africa and the Middle East. This is due, in part, to the lack of
significant automobile manufacturing in these regions and the high cost of
import tariffs. There can be no assurance that new manufacturers will not begin
automobile production in these regions or that tariffs on the import of new
automobiles will not be reduced. Either of these events could result in the
increased availability of affordable new automobiles, reducing the demand for
our services.
DEPENDENCE UPON ECONOMIES OF PORTS OF DESTINATION
Our industry has historically been affected by general economic
downturns and currency fluctuation in the countries of the ports of destination
we serve. During the years ended December 31, 1997 and 1998, our principal ports
of destination were located in Angola, Egypt, Guinea, Nigeria and Tunisia. In
January 1999, we began making shipments to the Ivory Coast. During the three
months ended March 31, 1999, our percentage of sales by ports of destination
were as set forth below:
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AS OF MARCH 31,
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PORT OF DESTINATION 1997 1998 1999
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Angola 0 0 0
Egypt 12 15 12
Guinea 31 12 17
Ivory Coast 8 12 10
Nigeria 14 13 12
Tunisia 35 48 49
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AVAILABILITY OF SPECIALIZED VESSELS FOR CHARTER
The vessels which we are negotiating to purchase will be capable of
carrying only a small percentage of the number of automobiles we transport on an
annual basis. For the balance of our shipment, we charter vessels on a
voyage-by-voyage basis on the spot market and we do not have any long-term
agreements with respect to its charters. The specialized vessels we charter are
generally utilized to transport new automobiles from southern Europe to northern
Europe prior to when we charter these vessels. We take advantage of the excess
capacity these vessels have on their return trips. In the event that demand in
northern Europe for automobiles manufactured in southern Europe should decrease
or these automobiles are transported by alternative means, the availability of
specialized automobile transport vessels could be reduced, which would require
us to seek alternative sources of cargo space at costs which may be
substantially greater than those we currently pay. In this event, our business,
prospects, financial condition and results of operations could be materially
adversely affected.
RISK ASSOCIATED WITH THE PURCHASE OF USED VESSELS
We are currently negotiating to purchase two used specialized
automobile carrying vessels which are each approximately 15 years old. We
estimate that the useful lives of these vessels will be
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approximately 25 to 30 years. In general, expenditures necessary for maintaining
a vessel in good operating condition increase as the age of the vessel
increases. Furthermore, second-hand vessels typically carry very limited
warranties with respect to their condition in comparison to warranties available
for a newer vessel. Due to improvements in engine technology, older vessels are
typically less fuel efficient than the more recently constructed vessels.
Changes in governmental regulations, safety or other equipment standards may
require expenditures for alterations or the addition of new vessels. There can
be no assurance that we will be able to purchase the vessels we are negotiating
for.
POSSIBLE CATASTROPHIC LOSS AND LIABILITY; INSURANCE
The operation of any sea-going vessel carries an inherent risk of
catastrophic marine disasters, mechanical failure, collisions and property
losses to the vessel. If we acquire the two vessels that we are negotiating to
purchase, our business will be affected by the risk of environmental accidents,
cargo loss or damage, business interruption due to political action in foreign
countries, labor strikes and adverse weather conditions, all of which could
result in the loss of revenues or increased costs. We will maintain insurance
consistent with industry standards against these risks. There can be no
assurance, however, that all our risks will be adequately insured against, that
any particular claim will be covered or that we will be able to procure adequate
insurance coverage at commercially reasonable rates in the future. In
particular, more stringent environmental and other regulations may result in
increased costs for, or the lack of availability of, insurance against the risks
of environmental damage, pollution, any other damages asserted against us or the
loss of income resulting from a vessel being removed from operations.
NO LIABILITY INSURANCE ON CHARTERED VESSELS
We do not maintain liability insurance to cover shipments by chartered
vessels. Although the owners of chartered vessels maintain insurance on the
shipments and their contents and the purchasers of the transported automobiles
generally insure against the risk of loss of their automobiles during
transportation, there can be no assurance that our failure to maintain any
insurance will not have a material adverse effect on our business, prospects,
financial condition and results of operations.
COMPETITION
We compete with, and will compete with, numerous shipping agents,
national shipping companies, local and regional companies and various land-based
transporters of automobiles. Many of our competitors have significantly larger
operations and greater financial, marketing, human and other resources than we
do. No assurance can be given that we will continue to compete successfully in
any market in which we conduct, or may conduct, operations.
There can be no assurance that additional competitors with expertise
similar or superior to ours will not enter the markets in which we operate.
There are low barriers to entry for potential competitors due to the fact that
our business does not require substantial personnel, the ownership or long-term
charters of vessels or contractual relationships with any of the used automobile
dealerships located in Europe. There can also be no assurance that our current
or future competitors will not offer a "freight collect" service similar to
ours. In any of these events, our business, prospects, financial condition and
results of operations could be materially adversely affected.
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WORKING CAPITAL RISK ASSOCIATED WITH GROWTH
We recognize revenues at the time of delivery of the automobiles to the
ports of destination. Although our agent receives payment of the fee at the time
the purchaser takes possession of the automobile, we not receive collected fees
generally until three to four months following delivery of the automobiles. As a
result, a substantial portion of our working capital consists of cash that is
restricted as to withdrawal at various central banks. In the event of future
rapid growth of our operations, an increased amount of our working capital would
be so restricted, which may limit our ability to further expand our operations
into new markets and could have a material adverse effect on our business,
prospects, financial condition and results of operations.
RISKS ASSOCIATED WITH TRANSPORT OF AUTOMOBILES TO FOREIGN COUNTRIES ON A
"FREIGHT COLLECT" BASIS
Our transport of automobiles on a "freight collect" basis exposes us to
the risk of losses resulting from customers defaulting on their obligation to
pay for the transportation of the automobiles upon delivery. To date, we have
not suffered any material losses in this regard since the cost of the maritime
transport of an automobile is low in comparison to the purchase price paid by
the customer for the automobile and we have generally been able to recoup all or
a portion of our losses resulting from customer defaults by reselling the
automobiles. However, there can be no assurance that we will not suffer material
losses as a result of such defaults in the future. In the event that such losses
should increase substantially, we may be required to modify our current business
practice of shipment on a "freight collect" basis, which may make our services
less attractive to potential customers.
CREDITWORTHINESS OF CUSTOMERS
Our ability to collect fees at our ports of destination is influenced
in part by the creditworthiness of the purchasers of the used automobiles.
Although we have not suffered any material losses in this regard, as, and if, we
expand and our customer base grows accordingly, there can be no assurance that
the overall creditworthiness of our customers will not decrease, which may
increase the risk that our customers will default on their obligation to pay for
the transport of the automobiles upon delivery. In the event that the overall
creditworthiness of our customers should decrease, we may experience increased
difficulty collecting fees due at our ports of destination, which could
materially affect our business, prospects, financial condition and results of
operations.
ADDITIONAL FINANCING REQUIREMENTS
Based on our operating plan, we believe that the net proceeds of a
recently-completed private offering, together with anticipated revenues from
continuing operations, will be sufficient to satisfy our anticipated capital
requirements for at least the next 12 months. Our belief is based on what we
believe are reasonable assumptions, but there can be no assurance that these
assumptions will be correct. In addition, contingencies may arise which may
require us to obtain additional capital. Accordingly, there can be no assurance
that these resources will be sufficient to satisfy our capital requirements for
this period. If additional capital is required, there can be no assurance that
we will be able to obtain additional capital on a timely basis, on favorable
terms or at all.
DEPENDENCE UPON KEY PERSONNEL
We are dependent upon the efforts, abilities and relationships of
Joseph J. H. Bisschops, our Chairman of the Board of Directors, and Aldo Labiad,
our President, Chief Executive and Operating Officer and Managing Director. We
have entered into an employment agreement with Mr. Labiad which
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terminates on December 3l, 2002. We currently have no employment agreement with
Mr. Bisschops. The loss or unavailability of the services of either of Messrs.
Bisschops or Labiad for any significant period of time could have a material
adverse effect on our business, prospects, financial condition and results of
operations. We have obtained, and are the sole beneficiary of, key-person life
insurance in the amounts of $2,000,000 and $1,000,000 on the lives of Messrs.
Bisschops and Labiad, respectively, and intend to keep such insurance in effect
until at least June 2001. There is no assurance that this insurance will
continue to be available on reasonable terms, or at all, or that the insurance
proceeds will be sufficient to compensate us for the loss or unavailability of
their services or fund our efforts to find a suitable replacement officer.
LIMITED MANAGEMENT RESOURCES
Our anticipated growth is expected to place a significant strain on our
managerial, operational and financial resources. To manage this growth, we will
be required to significantly expand our operational and financial systems and
increase, train and manage our work force. Our ability to attract and retain
skilled personnel is critical to our operations and expansion. We face
competition for such personnel from many types of businesses, including shipping
lines, freight forwarding companies and other established organizations, many of
which have significantly larger operations and greater financial, marketing,
human and other resources than we do. There can be no assurance that we will be
successful in attracting and retaining qualified personnel on a timely basis, on
competitive terms or at all. In the event that we are not successful in
attracting and retaining such personnel, our business, prospects, financial
condition and results of operations may be materially adversely affected.
Further, we anticipate that it will take time to integrate additional skilled
individuals into our operations and to build a cohesive and efficient workforce.
CONTROL BY MANAGEMENT
Joseph J. H. Bisschops, our Chairman of the Board of Directors,
beneficially owns approximately 6,291,301 ordinary shares. Mr. Bisschops has,
therefore, the ability to control the election of our directors and the outcome
of all issues submitted to a vote of our shareholders.
ENFORCEMENT OF LEGAL JUDGMENTS
We are a Cyprus corporation. Since all of our directly and indirectly
owned assets are located outside of the United States, any judgment obtained in
the United States against us may not be enforceable outside the United States.
We have been informed by our legal counsel in Cyprus, Economides, Patsalides &
Co., that there is doubt as to the enforceability of civil liabilities under the
Securities Act and the Securities Exchange Act of 1934, as amended, in original
actions instituted in Cyprus. Economides, Patsalides & Co. has further advised
us that, subject to certain conditions, exceptions, and time limitations, courts
in Cyprus may enforce foreign judgments (including those obtained in the United
States) for liquidated amounts in civil matters, including (although there is no
express authority relating thereto) judgments for such amounts rendered in civil
actions under the United States federal securities laws, obtained after due
trial before a court of competent jurisdiction (i.e., a court which has
jurisdiction on grounds recognized under Cypriot conflicts of law rules for the
purposes of enforcement of judgments) provided certain conditions are met.
Economides, Patsalides & Co. has further advised us that we might be allowed to
raise any counterclaim which it might have raised had the action originally been
brought before the courts of Cyprus, unless this counterclaim was in issue
before and had previously been decided by a United States court.
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We have expressly submitted to the jurisdiction of the State of
New York and United States Federal courts sitting in the City of New York for
the purpose of any suit, action or proceeding arising out of a
recently-completed private offering and have appointed Brock Silverstein LLC,
800 Third Avenue, 21st Floor, New York, New York 10022, as agent to accept
service of process in any action of this kind.
NO CASH DIVIDENDS; DIVIDENDS GENERALLY DENOMINATED IN CYPRUS POUNDS
We have never paid cash dividends on our ordinary shares. We do not
anticipate paying cash dividends in the foreseeable future, but intend to retain
future earnings, if any, for reinvestment in our business. Any future
determination to pay cash dividends will be at the discretion of our Board of
Directors and will be dependent upon our financial condition, results of
operations, capital requirements and any other factors as our Board of Directors
deems relevant. In addition, the declaration of dividends by our Board of
Directors requires shareholder approval, which may reduce, but not increase, the
amount recommended by the Board. In the event cash dividends are declared in the
future, they will generally be paid in Cyprus pounds, and as such there can be
no assurance that the dividends will be exchangeable for U.S. dollars at market
rates of exchange, or at all, unless such dividends are paid in respect of
securities owned by non-Cyprus residents and paid for with certain non-Cyprus
currencies.
RESTRICTIONS ON TRANSFER; SHARES ELIGIBLE FOR FUTURE SALE
There can be no assurance that we will be able to maintain the
registration statement, of which this prospectus is a part, continuously
effective for the sale of the ordinary shares under the Securities Act. If we
are able to do so, there will be substantial restrictions on the transferability
of our ordinary shares and each investor in this offering will only be able to
sell our ordinary shares under an exemption from such registration requirements.
In the event that the registration statement, of which this prospectus
is a part, does not stay effective, the sale, or availability for sale, of a
substantial number of our ordinary shares in the public market after this
offering in accordance with Rule 144, or otherwise, could materially adversely
affect the market price of the ordinary shares and could impair our ability to
raise additional capital through the sale of our equity securities or debt
financing. The availability of Rule 144 to the holders of our restricted
securities would be conditioned on, among other factors, the availability of
certain public information concerning us. Of the 8,810,254 ordinary shares
currently outstanding, 7,610,254 are "restricted securities" as that term is
defined in Rule 144 and may, under certain circumstances, be sold without
registration under the Securities Act.
Ordinarily, our ordinary shares issuable upon exercise of options
granted under our stock option plan pursuant to Rule 701 under the Securities
Act prior to our initial public offering, could be sold publicly as long as we
remain a reporting company under the Exchange Act. The 6,391,301 shares
currently held by officers or directors of the Company are subject to an
agreement not to publicly sell, or otherwise dispose of any of our securities
until June 26, 2000 without the prior written consent of Spencer Trask
Incorporated, the representative of the underwriters of our initial public
offering, or privately sell or otherwise dispose of any of our securities during
this period unless the proposed transferee agrees to be bound by the
restrictions on their transfer. The holders of an additional 608,699 ordinary
shares have agreed to such restrictions until December 26, 1999. In addition,
these shareholders, including our executive officers and directors have agreed
not to privately sell or otherwise dispose of our securities during this period
unless the proposed transferee agrees to be bound by such restrictions on
transfer.
11
<PAGE>
SUBSTANTIAL OPTIONS AND WARRANTS RESERVED;
CONTINGENT ISSUANCES OF ORDINARY SHARES
We have reserved 700,000 ordinary shares from the authorized but
unissued shares, for issuance to key employees, officers, directors and
consultants pursuant to our stock option plan. Since June 30, 1999, options
exercisable for an aggregate of 280,000 ordinary shares and warrants exercisable
for up to an aggregate of 168,000 ordinary shares were issued and outstanding.
The existence of any outstanding options issued under our stock option plan and
any other options or warrants may prove to be a hindrance to future financing,
since the holders of such warrants and options may be expected to exercise them
at a time when we would otherwise be able to obtain additional equity capital on
terms more favorable to us. The exercise of any option under our stock option
plan and other options or warrants may cause further dilution to the holders of
our ordinary shares.
SHARE PRICES MAY BE HIGHLY VOLATILE
The market price of our ordinary shares following this offering may be
highly volatile, particularly in light of the low volume in the trading of the
ordinary shares. Factors such as announcements by us or our competitors
concerning acquisitions or dispositions, new procedures, proposed governmental
regulations and general market conditions may have a significant impact on the
market price of our Ordinary Shares. In addition, the stock market has
experienced significant price and volume fluctuations that have particularly
affected the trading prices of equity securities of many companies. These price
and volume fluctuations often have been unrelated to the operating performance
of the affected companies. In the past, following periods of volatility in the
market price of a company's securities, securities class action litigation has
often been instituted. This type of litigation, regardless of the outcome, could
result in substantial costs and a diversion of management's attention and
resources, which could materially adversely affect our business, prospects,
financial condition and results of operations.
RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROSPECTUS
This prospectus contains forward-looking statements regarding the plans
and objectives of management for future operations. The forward-looking
statements included in this prospectus are based on current expectations that
involve numerous risks and uncertainties. Our plans and objectives are based on
a successful execution of our expansion strategy and upon a number of
assumptions, including assumptions relating to the political stability of the
countries in which the we have ports of destination and assumptions that there
will be no unanticipated material adverse change in the our operations or
business. Assumptions relating to the foregoing involve judgments with respect
to, among other things, future economic, political, competitive and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond our control.
Although we believe that our assumptions underlying the forward-looking
statements are reasonable, any of our assumptions could prove inaccurate and,
therefore, there can be no assurance that the forward-looking statements
included in this prospectus will prove to be accurate.
YEAR 2000 COMPLIANCE
Many currently installed computer systems and software products are
unable to distinguish between twentieth century dates and twenty-first century
dates. As a result, many companies' software and computer systems may need to be
upgraded or replaced to comply with such "Year 2000" requirements. Our business
is dependent on the operations of numerous systems that could potentially be
impacted by Year 2000 related problems. Those systems include, among others:
12
<PAGE>
- our internal systems and the entities managing the vessels which we
charter;
- our hardware and software systems we use in managing of our business;
and
- our information technology systems and services that we use, such as
telephone systems and building systems.
We do not utilize extensive computer hardware or software in the
operation of our business. We have internally reviewed the software systems used
in the management of our business. Although we believe that our systems are
designed to be Year 2000 compliant, we use third-party equipment and software
that may not be Year 2000 compliant. Failure of these third-party or currently
owned equipment or software to operate properly with regard to the Year 2000
could require us to incur unanticipated expenses to remedy any problems. We do
not believe that these expenses will have a material adverse impact on our
business, prospects, financial condition and results of operations. We do not
believe that our expenditures to upgrade our internal systems and applications
have been material to our business, prospects, financial condition and results
of operations to date.
We do not presently have a contingency plan for handling Year 2000
problems that are not detected and corrected prior to their occurrence. Our
failure to address any unforeseen Year 2000 issues could adversely impact our
business, prospects, financial condition and results of operations.
USE OF PROCEEDS
We will not receive any proceeds from the sale of our ordinary shares
by the selling shareholders. To the extent that Spencer Trask exercises the
warrants issued pursuant to the placement agency agreement and the consulting
agreement, we will receive the exercise price of $13.38 and $20.07 per ordinary
share, respectively. To the extent that Cruttenden Roth exercises its warrants,
we will receive the exercise price of $16.50 per ordinary share we issue. If
either Spencer Trask or Cruttenden Roth elects to exercise their warrants by
cashless exercise in accordance with the applicable warrant agreements, we will
not receive any cash proceeds as a result thereof. In the event that no warrants
are exercised, we will not receive any proceeds from this offering. We will use
the proceeds, if any, for general working capital purposes.
MARKET FOR OUR ORDINARY SHARES
Our ordinary shares are quoted on the Nasdaq National Market under the
symbol "ACLNF." The following are the low and high closing sales prices by
fiscal quarter for the quarterly periods in which our ordinary shares have been
traded on the Nasdaq National Market.
13
<PAGE>
<TABLE>
<CAPTION>
PERIOD HIGH LOW
- ------ ---- ---
<S> <C> <C>
YEAR ENDING DECEMBER 31, 1998
Period from June 26, 1998 (date of initial trading)
to June 30, 1998 ...................................... $ 10.313 $ 9.875
Three months ended September 30, 1998 ................. 10.938 6.000
Three months ended December 31, 1998 .................. 9.750 6.000
YEAR ENDING DECEMBER 31, 1999
Three months ended March 31, 1999 ..................... 8.125 5.875
Three months ended June 30, 1999 ...................... 17.000 7.500
Three months ended September 30, 1999 ................. 18.000 14.000
Three months ended December 31, 1999 .................. 20.000 14.250
</TABLE>
As of December 31, 1999, 2,331,569 of our ordinary shares were held of
record in the United States by 116 record holders and represented 26.46% of the
total ordinary shares then outstanding. On December 31, 1999, 6,478,685 of our
ordinary shares were held of record outside of the United States by 17 record
holders and represented 73.54% of the total ordinary shares outstanding. Since
certain of these ordinary shares were held by brokers or other nominees, the
number of record holders in the United States are not representative of the
number of beneficial holders or where the beneficial holders are resident.
14
<PAGE>
SELLING SHAREHOLDERS
The following chart sets forth, as of December 31, 1999, certain
information with regard to the selling shareholders and their beneficial
ownership of our ordinary shares. Other than as set forth elsewhere in this
prospectus, the selling shareholders have had no material relationship with us,
other than as shareholders, during the last three years.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED OWNED
PRIOR TO THE OFFERING AFTER THE OFFERING
--------------------- ------------------
SHARES
OFFERED BY
THIS
SELLING SHAREHOLDERS SHARES PERCENT PROSPECTUS SHARES PERCENT
- -------------------- ------ ------- ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Ann Clemente 938 * 938 0 *
Anthony Polak 1,875 * 1,875 0 *
Barry & Barbara Goldin ** 938 * 938 0 *
Bruce Gomberg 938 * 938 0 *
Carin S. Netter 1,875 * 1,875 0 *
Carol Fatoullah 938 * 938 0 *
Chaya & Sherri Harari ** 938 * 938 0 *
Clare & Gary Stadtmauer ** 1,875 * 1,875 0 *
Cooperative Holding Corporation 938 * 938 0 *
Cruttenden Roth Incorporated 120,000 1.4 120,000 0 *
David S. Tarica 938 * 938 0 *
Davis & Barbara Gaynes ** 938 * 938 0 *
Devora Chasanoff 938 * 938 0 *
Domaco Venture Capital Fund 1,875 * 1,875 0 *
Elaine N. Kelly 938 * 938 0 *
Elisabeth Genzer Revocable Trust 938 * 938 0 *
Ellice Fatoullah 938 * 938 0 *
Elliot L. Fatoullah 938 * 938 0 *
15
<PAGE>
Fairfax Communications, Inc. 22,438 * 22,438 0 *
Frederick B. Polak 1,875 * 1,875 0 *
Joan Grillo 1,875 * 1,875 0 *
Jonathan Rothschild 1,875 * 1,875 0 *
Joseph Werner 938 * 938 0 *
Marc Engelbert 1,875 * 1,875 0 *
Maura M. Kelly 1,875 * 1,875 0 *
Murray & Clare Stadtmauer** 1,875 * 1,875 0 *
Norton F. Hight 1,875 * 1,875 0 *
Paul Millman 938 * 938 0 *
Andrew Grossman Profit Sharing Plan 1,875 * 1,875 0 *
Charles G. Re' Defined Contrib Prof. Shrg. Plan 938 * 938 0 *
Roger R. Marks PS Plan 1,875 * 1,875 0 *
Anthony G. Polak IRA 1,875 * 1,875 0 *
Prudential Securities c/f David Swerdloff IRA 938 * 938 0 *
Jack Polak IRA 1,875 * 1,875 0 *
John S. Gross IRA 1,875 * 1,875 0 *
Kevin Clarke IRA 938 * 938 0 *
Ronald M. Lazar IRA 938 * 938 0 *
Susan Zverin IRA 938 * 938 0 *
Ralph A. Darieno 1,875 * 1,875 0 *
Randall W. Hight 1,875 * 1,875 0 *
RL Capital Partners 3,750 * 3,750 0 *
Robert & Sandra Shapiro ** 938 * 938 0 *
16
<PAGE>
S. Edmond Farber 938 * 938 0 *
Shulamit Reinharz 938 * 938 0 *
Spencer Trask Incorporated 122,050 1.4 122,050 0 *
Steve Roman 938 * 938 0 *
William H. Peterson - William H 1,875 * 1,875 0 *
Peterson Living Trust
Wolfe F. Model 1,875 * 1,875 0 *
C B Wilber Investments LLC 3,750 * 3,750 0 *
Donald F. Farley IRA 1,875 * 1,875 0 *
Donald F. Farley 1,875 * 1,875 0 *
Garfield Associates LLC 9,995 * 9,995 0 *
Katherine L. Meehan 3,750 * 3,750 0 *
Clarex Limited 22,500 * 22,500 0 *
Elmwood Capital LLC 7,500 * 7,500 0 *
Laird Norton Trust Co. 37,500 * 37,500 0 *
Sreekanth Rao 18,215 * 13,215 0 *
Wachovia Diversified Special Values Fund 97,500 1.1 97,500 0 *
Wachovia Special Values Fund
(A Portfolio of the Wachovia Funds) 52,500 * 52,500 0 *
Donald Gross 3,750 * 3,750 0 *
Frank Grobman 1,875 * 1,875 0 *
Anthony R. & Lynn M. Klein ** 1,875 * 1,875 0 *
Charles J. & Aileen R. Sirey ** 1,875 * 1,875 0 *
Robert Harrigan 1,875 * 1,875 0 *
Walter G. Gans 1,875 * 1,875 0 *
Cohanzick Partners, LP 7,500 * 7,500 0 *
17
<PAGE>
David & Sandra Pearce 3,750 * 3,750 0 *
Donald R. Kendall, Jr. 3,750 * 3,750 0 *
Mel Okeon M.D. Med. Corp
Profit Sharing Trust 3,750 * 3,750 0 *
Salomon Smith Barney as IRA Custodian
for Harold S. Gault IRA 7,500 * 7,500 0 *
Professional Edge Fund L.P. 3,750 * 3,750 0 *
Fletcher, Tilton & Whipple P.C.
Profit Sharing Plan & Trust 999 * 999 0 *
Lee O. Hill 999 * 999 0 *
Sweetland LLC 999 * 999 0 *
R&S Limited Partnership 1,875 * 1,875 0 *
Richard S. Incandela
Trust 3,750 * 3,750 0 *
Joseph A. Richman 938 * 938 0 *
Larry & Rebecca Warner** 938 * 938 0 *
Sheffield C. Richey, Jr. 1,875 * 1,875 0 *
David & Ida Stollwerk** 1,875 * 1,875 0 *
Howard Haboush Sr. 18,750 * 18,750 0 *
Lamont Asset Management SA 3,750 * 3,750 0 *
Maerki Baumann & Co AG 3,750 * 3,750 0 *
Robert Hammer 1,875 * 1,875 0 *
Roland Hartmann 1,875 * 1,875 0 *
Ronald & Howard J. Haboush** 1,875 * 1,875 0 *
Royal Crest Home Products 3,750 * 3,750 0 *
Victoria & Mansour Khayyam** 3,750 * 3,750 0 *
William G. Meyer 3,750 * 3,750 0 *
18
<PAGE>
Steven Sura IRA 3,750 * 3,750 0 *
Henry Kolpan 999 * 999 0 *
Chicago Investments Inc. 30,000 * 30,000 0 *
Drax Holdings L.P. 118,125 1.3 118,125 0 *
O. T. Finance, SA 15,000 * 15,000 0 *
Louis R. M. DelGuercio 1,875 * 1,875 0 *
Mark Lebwohl 1,875 * 1,875 0 *
Robert Rice 6,970 * 1,875 0 *
Robert T. Burkhardt MD 1,875 * 1,875 0 *
CGE Associated 3,750 * 3,750 0 *
Donald B. Shackelford 7,500 * 7,500 0 *
GSB Holdings, Inc. 3,750 * 3,750 0 *
J. Brooke Johnston, Jr. 1,875 * 1,875 0 *
M. Manning & Co., Inc. 1,875 * 1,875 0 *
</TABLE>
- --------------------------------------------------
*represents less than 1%
**joint holders with rights of survivorship
DESCRIPTION OF THE PLACEMENT AGENT'S AND UNDERWRITER'S WARRANTS
In connection with a private placement of securities, we issued 122,050
warrants to Spencer Trask, 61,025 of which were issued pursuant to a placement
agency agreement and 61,025 of which were issued pursuant to a consulting
agreement. In connection with our initial public offering, we issued 120,000
warrants to Cruttenden Roth.
The following summary of certain provisions of the Spencer Trask
warrant agreement and the Cruttenden Roth warrant agreement does not purport to
be complete and is qualified in its entirety by reference to each of the warrant
agreements and the warrants, including the definitions of certain terms in each
of them.
EXERCISE PRICE
- SPENCER TRASK WARRANTS. Each warrant issued in accordance with the
placement agency agreement and the consulting agreement, when
exercised by its holder, will entitle Spencer
19
<PAGE>
Trask to receive one fully paid and non-assessable ordinary share at
an exercise price of $13.38 and $20.07 per share, respectively.
- CRUTTENDEN ROTH WARRANTS. Each warrant, when exercised by its holder,
will entitle Cruttenden Roth to receive one fully paid and
non-assessable ordinary share at an exercise price of $16.50 per
share.
The exercise price and the number of shares of our ordinary shares issuable upon
exercise of the Spencer Trask and Cruttenden Roth warrants are subject to
adjustment in accordance with their respective warrant agreements.
EXPIRATION DATE
- SPENCER TRASK WARRANTS. The warrants issued to Spencer Trask in
accordance with the placement agency agreement and the consulting
agreement became exercisable on September 24, 1999 and are
exercisable through (in the case of the consulting agreement
warrants) September 24, 2004 and (in the case of the placement agency
agreement warrants) September 24, 2004. The warrants entitle Spencer
Trask to purchase, in the aggregate, 122,050 ordinary shares on a
fully-diluted basis.
- CRUTTENDEN ROTH WARRANTS. The warrants became exercisable on June 26,
1998 and are exercisable through June 26, 2003. The warrants entitle
Cruttenden Roth to purchase, in the aggregate, 120,000 shares of our
outstanding ordinary shares on a fully-diluted basis.
EXERCISE AND PAYMENT PROCEDURES
Cruttenden Roth and Spencer Trask may exercise their respective
warrants by surrendering the warrant certificates to Continental Stock Transfer
& Trust Company, evidencing the warrants to be exercised, along with the
accompanying form of election to purchase, properly completed and executed, and
the payment of exercise price. Spencer Trask and Cruttenden Roth may choose to
pay the exercise price in the form of cash, by a certified or official bank
check payable to the order of A.C.L.N. Limited, or by cashless exercise as
described in each of the warrant agreements. Upon surrender of the warrants,
Continental Stock Transfer will deliver stock certificates representing the
number of whole shares of our ordinary shares to which Spencer Trask is entitled
under the warrants and the warrant agreement. If less than all of the warrants
evidenced by a warrant certificate are exercised, Continental Stock Transfer
will issue a new warrant certificate.
WARRANT HOLDERS DO NOT HAVE COMMON STOCKHOLDER RIGHTS
As holder of the warrants, neither Spencer Trask nor Cruttenden Roth
has the right to vote on matters we submit to our shareholders and right to
receive dividends. In addition, neither Cruttenden Roth nor Spencer Trask will
be entitled to share in our assets in the event of a liquidation, dissolution or
winding up. In the event a bankruptcy or reorganization is commenced by or
against us, a bankruptcy court may hold that unexercised warrants are executory
contracts, subject to rejection by us with approval of the bankruptcy court.
Spencer Trask or Cruttenden Roth may, even if sufficient funds are available,
receive nothing or a lesser amount as a result of any such bankruptcy case than
they would be entitled to if they had exercised their warrants prior to the
commencement of any such case.
20
<PAGE>
WE MUST KEEP THE REGISTRATION STATEMENT EFFECTIVE
We have undertaken to keep the registration statement, of which this
prospectus is a part, continuously effective until the warrants expire or, if
earlier, all of the ordinary shares we issue upon exercise of warrants cease to
be restricted securities. A warrant or our ordinary shares cease to be
restricted securities when such warrant or share, as applicable:
- has been effectively registered under the Securities Act and disposed
of in accordance with the registration statement covering it,
- is distributed to the public pursuant to Rule 144, or
- may be sold or transferred pursuant to Rule 144(k) (or any similar
provision then in force) under the Securities Act or otherwise.
There can be no assurance that we will be able to keep this registration
statement effective.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 20,000,000 ordinary shares,
par value CYP 0.01 per share. On December 31, 1999, there were 8,810,254
ordinary shares outstanding.
ORDINARY SHARES
Each holder of an ordinary share is entitled to one vote, either in
person or by proxy, on all matters that may be voted upon by the owners of our
ordinary shares at a meeting of the shareholders, including the election of
directors. The holders of ordinary shares:
- have equal, ratable rights to dividends from funds legally available,
when as and if declared by our Board of Directors,
- are entitled to share ratably in all of our assets available for
distribution to holders of ordinary shares upon liquidation,
dissolution or winding up of our affairs, and
- do not have pre-emptive rights, and are entitled to one
non-cumulative vote per share on all matters on which shareholders
may vote at all meetings of shareholders.
All issued and outstanding shares of our ordinary shares are fully-paid
and non-assessable.
PLAN OF DISTRIBUTION
The selling shareholders have advised us that they intend to offer
their ordinary shares for sale from time to time in the over-the-counter market
at prices prevailing at the time of sale or in private transactions at
negotiated prices, and without payment of any underwriting discounts or
commissions except that the selling shareholders may pay usual and customary
selling commissions paid to brokers or dealers.
We will apply to list the ordinary shares offered in this prospectus on
the Nasdaq National Market where they are currently listed. We have undertaken
to pay expenses associated with the listing
21
<PAGE>
of our ordinary shares, including, but not limited to, Securities and Exchange
Commission filing fees. We have agreed to indemnify the holders of our ordinary
shares.
DISCLOSURE OF SEC POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our memorandum of association and articles of association provide that
we shall indemnify our directors and officers to the fullest extend permitted
under the laws of Cyprus, including in circumstances in which indemnification is
otherwise discretionary under laws of Cyprus.
Insofar as indemnification for liabilities arising under the Securities
Act may permitted to directors, our officers or controlling persons pursuant to
the foregoing provisions, or otherwise, we have been advised that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933, and is,
therefore, unenforceable.
LEGAL MATTERS
Certain legal matters with respect our ordinary shares offered hereby
will be passed upon for us by Economides, Patsalides & Co., our Cyprus counsel.
EXPERTS
Our financial statements as of December 31, 1996, 1997, and 1998,
incorporated by referenced in this registration statement, have been audited by
BDO International, independent public accountants, as indicated in their report
with respect thereto, and are incorporated by reference in reliance upon the
authority of BDO International as experts in giving their report.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms.
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference the information that we
file with the SEC, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c) or 15(d) of the Securities
Exchange Act of 1934:
a. our annual reports on Form 20-F for the years ended December 31,
1997 and December 31, 1998;
b. our report on Form 6-K for the quarter ended March 31, 1999; and
c. the description of our capital stock contained in our registration
statement on Form 8-A, dated June 4, 1998.
22
<PAGE>
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Christian L. Payne
Vice President, Finance
A.C.L.N. Limited
1299 Ocean Avenue, Suite 900
Santa Monica, California 90401
(310) 393-3790
www.aclnltd.com
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 of ordinary shares by the selling shareholders. If information or
representations are given or made you must not rely on it as if we authorized
it. Neither the delivery of this prospectus nor any sale made hereunder shall,
under any circumstances, create an implication that the information contained or
incorporated by reference herein is correct as of any time subsequent to its
date or that there has been no change in our affairs since such date. This
prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any securities offered hereby in any jurisdiction in which such offer or
solicitation is not permitted, or to anyone whom it is unlawful to make such
offer or solicitation. The information in this prospectus is not complete and
may be changed.
23
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemization of all expenses (subject to future
contingencies) incurred or expected to be incurred by the Company in connection
with the issuance and distribution of the securities being offered hereby (items
marked with an asterisk (*) represent estimated expenses):
<TABLE>
<S> <C>
SEC Registration Fee............................. $ 4,105
Legal Fees and Expenses.......................... $25,000
Accounting Fees and Expenses..................... $25,000
Transfer Agent and Registrar Fees................ $ 1,500
Printing and Engraving Expenses.................. $ 1,500
Miscellaneous.................................... $15,895
Total............................................ $73,000
</TABLE>
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Prior to the consummation of its initial public offering, the Company
entered into an indemnification agreement with each of its then-existing offices
and directors of the Company. Such agreements contain provision which endeavor
to limit the personal liability of the officers and directors, both to the
Company and to its shareholders, for monetary damages, including those resulting
from breaches of certain of their fiduciary duties as directors and officers of
the Company. In particular, such agreements provide that the Company will
indemnify such individuals to the fullest extent permitted by the Commercial
Laws of Cyprus, as such rights shall from time to time be expanded, against all
expense, liability, and loss (including attorneys' fees, judgments, fines,
excise taxes or penalties, and amounts paid in settlement) reasonably incurred
or suffered by the indemnitee as a result of serving as an officer, director,
employee of the Company any affiliate thereof, or any other entity at the
request of the Company. In addition, the indemnitee shall be entitled to the
advancement of expenses of defending any such action in advance of the final
disposition thereof, provided, however, that if the Commercial Laws of Cyprus
require, such indemnitee will deliver to the Company an undertaking to repay the
amounts so advanced if it is ultimately determined by a final non-appealable
judicial decision that such indemnitee is not entitled to be indemnified.
Notwithstanding any provision of such agreement to the contrary, unless
and until the Commercial Laws of Cyprus are amended to broaden the scope of
permitted indemnification, the indemnitee will continue to be subject to
liability for breach of such indemnitee's duty of loyalty to the Company, acts
or omission not in good faith or involving intentional misconduct, knowing
violations of the law, and actions leading to improper personal benefit to such
indemnitee.
In addition, the Company maintains directors' and officers' liability
insurance.
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 foregoing provisions or otherwise, the Company has been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore unenforceable.
II-1
<PAGE>
ITEM 15. EXHIBITS
(a) The following exhibits are filed herewith, or incorporated by
reference herein:
<TABLE>
<CAPTION>
NO. EXHIBIT
--- -------
<S> <C>
4.1 Form of Specimen certificate for shares of Ordinary Shares.**
4.2 Specimen certificate for the Underwriter's Warrants.**
4.3 Warrant Agreement between the Company and Spencer Trask Incorporated.*
4.4 Placement Agency Agreement.*
4.5 Placement Agent's Warrants.*
5.1 Opinion of Economides, Patsalides & Co.*
23.1 Consent of BDO International, independent public accountants.*
23.2 Consent of Economides, Patsalides & Co.*
</TABLE>
- ------------------
*Previously filed.
** Incorporated by reference to the corresponding exhibit filed by the
Registrant with the Registration Statement on Form F-1 (Registration No.
333-8052).
ITEM 16. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement 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.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, 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.
(4) The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the
Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a)
or Section 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
II-2
<PAGE>
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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 or Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the Prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the Prospectus to provide such Interim financial information.
II-3
<PAGE>
SIGNATURES
In accordance with 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 F-3 and has duly caused this
Pre-Effective Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in New York, New York on January
19, 2000.
A.C.L.N. LIMITED
By: /s/ Joseph J. H. Bisschops
---------------------------------------
Name: Joseph J. H. Bisschops
Title: Chairman of the
Board of Directors
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 January 19, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------- -----
<S> <C>
* President, Chief Executive Officer, Operating Officer and
- -------------------------- Director
Aldo Labiad
* Vice President, Chief Financial Officer and Director
- --------------------------
Alex de Ridder
* Vice President of Finance and Investor Relations
- --------------------------
Christian L. Payne
* Director
- --------------------------
Michael S. Doherty
* Director
- --------------------------
Earl Gould
* Director
- --------------------------
Charles L. Brock
II-4
<PAGE>
* Director
- --------------------------
Marina Savva
By: /s/ Joseph J. H. Bisschops
--------------------------
Joseph J. H. Bisschops
Attorney-in-fact
</TABLE>
II-5
