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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 29, 2000
REGISTRATION NO.
----------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
VITECH AMERICA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 65-0419086
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2190 NORTHWEST 89TH PLACE
MIAMI, FLORIDA 33172
(305) 477-1161
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
WILLIAM C. ST. LAURENT With copies to: JAMES M. SCHNEIDER, ESQ.
Vitech America, Inc. JOEL D. MAYERSOHN, ESQ.
2190 Northwest 89th Place Atlas Pearlman, P.A.
Miami, Florida 33172 350 East Las Olas Blvd., Suite 1700
(305) 477-1161 Fort Lauderdale, Florida 33301
Telecopier: (305) 477-1379 (954) 763-1200
Telecopier: (954) 766-7800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, 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. [ ]
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
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====================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock, no par value per share 750,120 $3.94 $2,986,673 $788.48
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TOTAL
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</TABLE>
(1) Shares of common stock set forth in the Calculation of Registration Fee
table, and which may be offered pursuant to this Registration Statement,
includes, pursuant to Rule 416 of the Securities Act of 1933, as amended,
such additional number of shares of the Registrant's common stock that may
become issuable as a result of any stock splits, stock dividends or
similar events.
(2) Estimated solely for the purpose of computing the amount of the
registration fee, based on the average of the high and low sale prices for
the Registrant's common stock as reported on the Nasdaq National Market
System on September 28, 2000, in accordance with Rule 457 of the Securities
Act of 1933, as amended.
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 COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
ii
<PAGE> 3
PROSPECTUS SUBJECT TO COMPLETION DATED SEPTEMBER 29, 2000
750,120 SHARES OF COMMON STOCK
VITECH AMERICA, INC.
The shareholders of Vitech America, Inc. listed in this prospectus are
offering and selling up to 750,120 shares of our common stock. We expect that
shareholders using this prospectus will sell the stock
- in ordinary brokers' transactions;
- in transactions directly with market makers; or
- in privately negotiated sales or otherwise.
The selling security holders will determine when they will sell
shares, and in all cases they will sell shares at the current market price or
at negotiated prices at the time of the sale. We will pay the expenses incurred
to register the shares for resale, but the selling security holders will pay
any underwriting discounts, concessions, or brokerage commissions associated
with the sale of their shares. The selling security holders and any brokers and
dealers that they use may be considered to be "underwriters" within the meaning
of the securities laws, and any commission received and any profits realized by
them on the sale of shares may be considered to be underwriting compensation.
See "Plan of Distribution."
We will not receive any of the proceeds from the sales by selling
security holders. Securities laws and SEC regulations may require selling
security holders to deliver this prospectus to purchasers when they resell
their shares of common stock.
YOU SHOULD CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A
DISCUSSION OF CERTAIN MATTERS THAT SHOULD BE CONSIDERED BY A POTENTIAL
INVESTOR.
THE COMMON STOCK OFFERED OR SOLD UNDER THIS PROSPECTUS HAS NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAVE THESE ORGANIZATIONS DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 2000
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
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Page
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WHERE YOU CAN FIND MORE INFORMATION.................................................................. 2
RISK FACTORS......................................................................................... 3
BUSINESS ............................................................................................ 8
SELLING SECURITY HOLDERS............................................................................. 9
PLAN OF DISTRIBUTION................................................................................. 11
DESCRIPTION OF SECURITIES............................................................................ 12
LEGAL MATTERS........................................................................................ 13
EXPERTS ............................................................................................ 13
INDEMNIFICATION...................................................................................... 13
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE
TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY,
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER
IN SUCH JURISDICTION. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT
IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission ("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 public reference rooms. Our SEC
filings are also available to the public from the SEC's website at
"http://www.sec.gov." The SEC also allows us to "incorporate by reference" the
information we file with them, 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 the
information that we file later with the SEC will automatically update and
supersede this information. We will incorporate by reference the documents
listed below and any future filings we make we will make with the SEC under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
(a) Annual Report on Form 10-K and 10-K/A for the fiscal year ended
December 31, 1999.
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000
and June 30, 2000.
(c) Current Report on Form 8-K dated June 15, 2000.
You may request a copy of these filings, at no cost by writing or
telephoning our chief financial officer at the following address: Vitech
America, Inc., 2190 Northwest 89th Place, Miami, Florida 33172 (305-477-1161).
Except for the historical information contained herein, the matters
discussed in this prospectus under "Risk Factors", in addition to certain
statements contained elsewhere in this prospectus or in our filings under the
Securities Exchange Act of 1934, (the "Exchange Act"), are "Forward-Looking
Statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 and are thus prospective. Such forward-looking statements are subject
to risks, uncertainties and other factors which could cause actual future
results or trends to differ materially from future results or trends expressed
or implied by such forward-looking statements. The most significant of such
risks, uncertainties and other factors are discussed in this prospectus under
"Risk Factors" and prospective investors are urged to carefully consider such
factors. Updated information will be periodically provided by us as required by
the Securities Act and the Exchange Act. We, however, undertake no obligation
to publicly release the results of any revisions to such forward-looking
statements which may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
This prospectus is part of a Registration Statement we filed with the
SEC. You should rely only on the information and representations provided in
this prospectus. We have authorized no one to provide you with different
information. We are not making offers for the securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.
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RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider the risks described below, based on our business and
the industry in which we operate, together with all of the other information
included in this prospectus, before deciding whether to invest in our common
stock. The occurrence of any of the following risks could harm our business,
financial condition or results of operations. In such case, the trading price
of our common stock could decline, and you may lose all or part of your
investment. The risks and uncertainties described below are not exhaustive.
Additional risks and uncertainties not presently known to us, or that we
currently consider immaterial, may also harm our business.
FACTORS RELATING TO US
WE HAVE GONE FROM PROFITABILITY IN 1998 TO A NET LOSS IN 1999 AND THERE IS NO
ASSURANCE THAT WE WILL BE PROFITABLE IN THE FUTURE.
During 1999, we experienced a substantial decrease in net sales from
$195.3 million to $100.4 million and a substantial decrease of net income from
$17.9 million to a net loss of $21.1 million. These decreases were principally
related to the devaluation of the Brazilian currency, the Real, and the related
economic conditions in Brazil. During 1999, we relied and currently we rely
upon significant borrowings to finance our working capital requirements. We may
operate in a negative cash flow from operations position for the foreseeable
future. There are no assurances that we will be profitable or operate in a cash
flow positive position.
WE ARE HIGHLY LEVERAGED AND WE MAY NOT BE ABLE TO OBTAIN ADDITIONAL CAPITAL ON
ACCEPTABLE TERMS.
As of June 30, 2000, we had outstanding indebtedness from third party
lenders of $69.9 million, of which $58.5 million is convertible into our common
stock. $67.7 million of our outstanding indebtedness is due on or before June
30, 2001. We will be required to repay this indebtedness, including any
unconverted portion, either through internally generated funds or third party
financing or through refinancing of the indebtedness with the lenders. Our
ability to repay the indebtedness from internally generated funds or through
refinancing will depend in part upon our future performance which will be
subject to economic, financial, and other factors, many of which are beyond our
control. Any ability to access third party financing to repay this indebtedness
will also be substantially dependent on conditions in the financial markets
which are subject to fluctuations and factors outside of our control. Adequate
funds may not be available when needed or may not be available on terms
favorable to us. If additional funds are raised by issuing equity securities or
related instruments with conversion or warrant features, dilution to our
existing shareholders may result. If funding is insufficient, we may be
required to delay, reduce the scope of or eliminate some or all of our
expansion programs or we may default under our existing indebtedness, any of
which would harm our business. The level of our indebtedness affects:
- our vulnerability to adverse economic and industry conditions;
- our ability to obtain additional financing for future working capital
expenditures, general corporate and other purposes; and
- the dedication of a substantial portion of our future cash flow from
operations to the payment of principal and interest on indebtedness,
thereby reducing the funds available for operations and future
business opportunities.
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WE EXPECT OUR QUARTERLY RESULTS WILL CONTINUE TO FLUCTUATE AND THIS FLUCTUATION
COULD CAUSE OUR STOCK PRICE TO DECLINE RESULTING IN INVESTOR LOSSES.
Our industry generally has been subject to seasonality and to
significant quarterly and annual fluctuations in operating results. Our
operating results have been subject to such fluctuations. Our quarterly net
sales and operating results have varied significantly as a result of, among
other things:
- historical seasonal purchasing patterns and the general economic
climate in Brazil;
- the volume and timing of orders received during a quarter;
- variations in sales mix;
- delays in production schedules;
- new product developments or introductions;
- availability of components;
- changes in product mix and pricing; and
- product reviews and other media coverage.
As a result of these and other factors, our operating results could
fall below the expectations of securities analysts and investors in future
periods. If this happens, the market for our stock would likely decrease. Our
common stock has traded from a historical high of $21.25 to a historical low of
$3.75. Our historical financial performance is not necessarily a meaningful
indicator of future results.
WE MAY NOT BE SUCCESSFUL AS AN INFORMATION TECHNOLOGY SOLUTIONS PROVIDER.
In 1999 we began to diversify our sales mix by offering technology
services and solutions in addition to hardware and software sales. The
technology solutions and services business in Brazil is extremely competitive
and involves different operating risks than the sale of computer products and
peripherals. It is uncertain whether our technology services and solutions
business will be able to perform in a way we have anticipated. You should
consider our prospects based on the risks, expenses and difficulties frequently
encountered in the operation of a new business segment in a rapidly evolving
industry characterized by intense competition. If we are not be able to
profitably grow this portion of our business our operating results would be
affected.
WE DEPEND ON KEY PERSONNEL FOR OUR OPERATIONS AND MAY NOT BE ABLE TO FIND
ADDITIONAL PERSONNEL IF NEEDED.
We are dependent upon the efforts and abilities of senior management,
including Georges C. St. Laurent III, Chairman of the Board and Chief Executive
Officer, and William C. St. Laurent, President and Chief Operating Officer. The
loss or unavailability of the services of these individuals could harm our
business. We have obtained key-person life insurance in the amount of $2.0
million on the life of each of Messrs. St. Laurent. In addition, our ability to
attract and retain highly skilled personnel is critical to our operations. If
we are unable to attract and retain personnel with necessary skills when
needed, our business and expansion plans could be materially adversely
affected.
WE DEPEND ON OUR TAX-EXEMPT STATUS IN BRAZIL.
Under Brazilian state law, our operating subsidiary in Brazil,
Microtec, is currently exempt from the payment of state import duties, state
sales tax, and state services tax through 2005. Additionally, Microtec is
exempted from the payment of Brazilian federal income tax through 2007,
provided that we meet certain budgeted production goals. The normal rate of
federal taxation on a non-exempt basis is 33%. In the event that we are unable
to extend this tax-exempt status, our after-tax earnings would decline by the
amount of the tax benefit, which may be substantial. In addition, earnings
derived from tax exemption benefits cannot be
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distributed as dividends to the U.S. parent company in U.S. Dollars and are
segregated for capital reserves and offsetting accumulated losses in accordance
with Brazilian law.
WE DEPEND ON OUR SUPPLIERS FOR QUALITY COMPONENTS FOR OUR MANUFACTURING
PROCESS.
We purchase all of our parts from third party suppliers. Reliance on
suppliers involves several risks, including:
- defective parts which can adversely affect the reliability and
reputation of our products;
- a shortage of components and reduced control over delivery schedules
which can adversely affect our manufacturing efficiencies; and
- increases in component costs which can adversely affect our
profitability.
We have several single-source supplier relationships, either because
alternative sources are not available or the relationship is advantageous due
to performance or price. If our third party suppliers are unable to provide
timely and reliable supply, we could experience manufacturing delays or
inefficiencies which may adversely affect our results of operations.
WE DEPEND ON CREDIT SALES AND THERE ARE RISKS ASSOCIATED WITH CUSTOMER LENDING.
Our customer credit activities expose us to significant risks. At June
30, 2000, our outstanding exposure to customer credit risk was approximately
$102.7 million. In 1999, approximately 90% of our net sales were made on
credit. Our results of operations would be materially and adversely affected if
demand for customer credit falls, if Brazilian Government policies curtail our
ability to extend credit or to fund our extensions of credit or if customers
fail to timely pay their accounts receivable when due. There can be no
assurance that the allowances for doubtful accounts reserved by us will be
sufficient to cover actual losses.
WE HAVE ONLY ONE MANUFACTURING FACILITY.
All of our products are manufactured in our one facility in Brazil. In
the event this facility were to experience substantial damage or our operations
there were disrupted, we may be required to suspend manufacturing operations or
retain third party manufacturers. Any prolonged suspension or disruption of our
manufacturing operations could have a material adverse effect on us and our
results of operations.
FACTORS RELATING TO OUR INDUSTRY
WE HAVE LOST MONEY IN THE PAST DUE TO THE FLUCTUATION OF THE REAL AND WE ARE
NOT HEDGED TO PROTECT OURSELVES FROM FUTURE CURRENCY LOSSES.
The relationship of the Real to the value of the U.S. Dollar have
affected, and may in the future affect, our financial condition and results of
operations. Principally all of our sales and receivables are denominated in the
Real, while our operating results and payables are recorded in U.S. Dollars.
The highest hedge coverage we have had at any one time only met 20% of our
exposure. Currently, we are not engaged in hedging activities and we are not
hedged against currency risks. Any significant devaluation, such as occurred
during the first quarter of 1999, of the Real relative to the U.S. Dollar will
have a material adverse effect on our operating results and financial
condition.
WE ARE SUBJECT TO ECONOMIC, POLITICAL AND SOCIAL CONDITIONS IN BRAZIL.
The Brazilian economy has been characterized by high rates of
inflation and economic, political and social instability. This has resulted in
frequent and occasionally drastic intervention by the Brazilian government. The
Brazilian government's actions to address instability and effect other policies
have often
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involved wage and price controls as well as other measures, such as tariffs,
exchange controls, freezing bank accounts, imposing capital controls, seizing
assets and limiting imports into Brazil. Changes in policy and other political,
economic or social developments could have a material adverse effect on us.
CONTINUOUS AND RAPID TECHNOLOGICAL ADVANCES AND EVOLVING INDUSTRY STANDARDS
CHARACTERIZE OUR PRODUCTS AND SERVICES.
In order to remain competitive, we must respond effectively to
technological changes by continuing to enhance and improve our existing
products and services to incorporate emerging or evolving standards. We must
also successfully develop and introduce new products and services that meet
customer requirements. We can not assure you that we will successfully develop,
market, or support these products and services or that we will respond
effectively to technological changes or new product announcements or
introductions by others which may adversely affect our financial results. Also,
as a result of technological changes, all or a portion of our inventory may be
rendered obsolete.
WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY.
The markets in which we compete are highly competitive. We compete
with, and will compete with, numerous international, national, and regional
companies, many of which have significantly larger operations and greater
financial, marketing, human, and other resources than us. Competitors in the
computer hardware market include internationally recognized companies such as
IBM, Acer, Dell, Hewlett Packard and Compaq. We also compete with other small
manufacturers of computer equipment sold on what is known as the "gray market"
in Brazil. Gray market manufacturers are able to offer lower prices because of
the avoidance of import duties and other taxes, and the avoidance of necessary
software licensing fees. Additionally, we compete in the systems integration
market with internationally recognized systems integrators such as IBM, EDS and
Unisys. We may not successfully compete in any market in which we conduct or
may conduct operations.
FACTORS RELATING TO THE OFFERING
A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK WILL BE ELIGIBLE FOR SALE IN
THE NEAR FUTURE, WHICH COULD CAUSE THE MARKET PRICE FOR OUR COMMON STOCK TO
DECLINE.
Sales of substantial amounts of our common stock in the public market
or the appearance that a large number of shares is available for sale, could
adversely affect the market price for our common stock. In addition to the
adverse effect a price decline could have on holders of our common stock, a
decline would likely impede our ability to raise capital through the issuance
of additional shares of our common stock or other equity securities. As of the
date of this prospectus, there were 560,284 shares of our common stock
outstanding that are not subject to lock-up but which will be eligible for sale
into the public market under Rule 144. We have issued and outstanding options
and warrants to purchase an aggregate of 5,937,378 shares of our common stock
at exercise prices between $6.50 and $22.73 per share. The existence of such
options and warrants may adversely affect the terms under which we could obtain
additional equity capital and adversely affect the market price of our common
stock. Additionally, we have 4,501,903 shares of our common stock that may be
issued pursuant to the conversion of certain convertible notes. Upon their
conversion, 1,688,836 of the shares will be eligible for immediate resale
pursuant to a resale registration statement filed by us.
WE ARE AT RISK OF SECURITIES CLASS ACTION LITIGATION AS A RESULT OF OUR STOCK
PRICE VOLATILITY.
Securities class action litigation is often brought against a company
following a decline in the market price of its securities. This risk is
especially acute for us because companies in our industry have experienced
greater than average stock price volatility in recent years and, as a result,
have generally been subject to a greater number of securities class action
claims than companies in other industries. We may in the future be the target
of similar litigation. Securities litigation could result in substantial costs
and divert management's
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attention and resources, and could seriously harm our business. Also, while we
are a U.S. corporation with executive offices in Florida, our principal
operations are conducted by our Brazilian subsidiary. For the foreseeable
future, a substantial portion of our assets will be held or used outside the
U.S. Consequently, enforcement by investors of civil liabilities under the
federal securities laws may be adversely affected.
WE EXPECT TO EXPERIENCE VOLATILITY IN OUR STOCK PRICE.
The market for securities of companies in our industry historically
has been more volatile than the market for stocks in general. Within the last
15 months, the price of our stock has fluctuated between $3.75 and $12.875. The
price of our common stock may be subject to wide fluctuations in response to:
- quarter-to-quarter variations in operating results;
- vendor additions or cancellations;
- creation or elimination of funding opportunities;
- favorable or unfavorable coverage of us or our officers by the press;
and
- the availability of new products, technology, or services.
OUR PRINCIPAL SHAREHOLDERS EXERCISE SIGNIFICANT INFLUENCE.
Our principal shareholders together beneficially own approximately 35%
of the outstanding shares of our common stock. Accordingly, our principal
shareholders are able to exercise significant influence over the election of
our Board of Directors and the outcome of all matters submitted to a vote of
our shareholders. Pursuant to our agreement, Gateway Computers may acquire
control of us through an option they have to enter into a merger agreement with
us which expires on September 16, 2001. If Gateway exercises their option they
will be able to elect our entire Board of Directors and control the outcome of
all matters submitted to a vote of our shareholders.
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BUSINESS
THE COMPANY
We are a leading manufacturer and marketer of computer products,
peripherals and software to business, governmental and individual customers in
Brazil. Our diversified family of products includes desktop and notebook
personal computers, workstations, network servers, networking equipment,
peripherals and software. We sell our own branded products and are the
exclusive distributor of Gateway computer products in Brazil.
We provide integrated information technology solutions for our
corporate and governmental customers. We recently introduced a group of
integrated solutions for specific vertical markets in response to the growing
need for client-server distributed computing solutions in Brazil. Our turn-key
business solutions include computer and networking hardware, software, Internet
connectivity and support service.
We believe that we are well positioned to capitalize on the
opportunities in the Brazilian marketplace based upon our:
- Strong brand awareness. Our primary brand, Microtec, has
existed since 1982 and is one of the most widely recognized
and respected brands in technology in Brazil today. We
believe our well known brand helps drive demand for our
computer products and turn-key information technology
solutions. We believe that the strength of the Microtec brand
also facilitates the introduction of new products and
provides co-branding opportunities with companies such as
Gateway.
- Significant management experience in the Brazilian market.
Our management team has substantial experience with
prevailing business customs, regional and national tax
policies, marketing dynamics and economic conditions in
Brazil which we believe provide us with significant
competitive advantages.
- Gateway relationship. We enjoy a broad strategic relationship
with Gateway Companies, Inc., a leading direct seller of
personal computers. Our strategic relationship with Gateway
allows us access to a globally recognized brand and provides
us with assistance in vendor and supply relationships,
purchasing, engineering, brand development, logistics,
financing, and strategic development of the Brazilian market.
- National direct distribution network in Brazil. We strive to
attain a direct relationship with the end users of our
products and services through various channels including
commissioned network representatives, our own retail stores,
focused on account teams in government and corporate markets,
telemarketing, and Internet commerce. We believe that
interfacing directly with end-users promotes customer loyalty
and fosters brand awareness. The direct end-user
relationships also allow us to maintain, monitor and update
database information about our customers and their current
and future information technology products and service needs,
which can be used to shape future product offerings and
support services.
- Substantial installed base of business and governmental
customers. For 1999 approximately 70% of our net sales were
derived from business and governmental customers. We believe
that this customer base affords us additional opportunities
to expand sales of our higher margin business system
integration solutions.
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SELLING SECURITY HOLDERS
William St. Laurent, our president, and Wolf Partners, LP, a
partnership controlled by Mr. St. Laurent, entered into five separate exchange
agreements. Each selling security holder was the owner of global medium term
notes issued by Technology Acceptance Corporation, a Cayman Island's special
purpose corporation. Mr. St. Laurent agreed to exchange shares of our common
stock owned by him or Wolf Partners, LP in exchange for a total of $5.1 million
of Technology Acceptance Corporation medium term notes. We have agreed to file
a registration statement to cover all of the common stock exchanged with the
selling security holders under the exchange agreements.
Technology Acceptance Corporation is a special purpose corporation
formed to acquire and hold designated accounts receivable received from us and
to issue collateralized notes to third party's investors as part of a
securitization program. Through December 1998, we sold approximately $140
million of our accounts receivable to this corporation under the program. As a
result of the devaluation of the Real in January 1999, the securitization
program became in default. As a result, we no longer sell accounts receivable
to the special purpose corporation other than pursuant to our repurchase
obligation under the program. We expect that the program will remain in default
and the global medium term notes will self-amortize over the life of the
receivable portfolio held by Technology Acceptance Corporation.
On August 14, 2000, we entered into an agreement with The Equity
Group. The Equity Group will provide us with financial consulting services. As
consideration, we granted The Equity Group options to purchase 20,000 shares of
our common stock at an exercise price of $5.50 per share. The options expire on
August 14, 2005. We agreed to register the shares underlying the options.
On July 19, 2000, we entered into a subscription and debt conversion
agreement with Chembro America, Inc. and Newton and Assoc. Under the terms of
the agreement, we issued 4,653 shares of our common stock in exchange for the
conversion of $25,588 of indebtedness, which we owned to Chembro and Newton. We
agreed to register the shares of common stock issued under the conversion
agreement.
We entered into an agreement with Gerard Klauer Mattison & Co., Inc.
to provide certain investment banking services for a transaction that we
completed on September 16, 1999 with Gateway Companies, Inc. Pursuant to the
terms of the investment banking agreement, Gerard Klauer Mattison & Co., Inc.
is to receive approximately $1.5 million in an investment banking fee for
services rendered in such transaction. Gerard Klauer Mattison & Co., Inc. has
agreed to receive shares of our common stock in lieu of the cash payment. In
November 1999, we issued 200,000 shares to Gerard Klauer Mattison & Co., Inc.
as payment for $1.3 million of the fee. In September 2000, we issued 40,000
shares of our common stock as payment for the remaining balance. We agreed to
register the shares for resale.
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The shares listed below represent all of the shares which the selling
security holders currently own.
<TABLE>
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NUMBER OF SHARES SHARES OWNED
NAME OF SELLING SECURITY HOLDER SHARES OWNED BEING OFFERED AFTER OFFERING
------------------------------- ------------ ------------- --------------
<S> <C> <C> <C>
RH Driehaus Foundation 285,750 285,750 --
Deltec Asset Management 307,143 307,143 --
David Palmisano 28,572 28,572 --
Iseri Pension/Profit Sharing 48,000 48,000 --
Marc Iseri 16,000 16,000 --
The Equity Group, Inc. 20,000(1) 20,000 --
Chembro America, Inc. 3,490 3,490 --
Newton & Assoc. 1,165 1,165 --
Gerard Klauer Mattison & Co., Inc. 40,000 40,000 --
</TABLE>
-----------
(1) Includes 20,000 shares of common stock underlying options to purchase
shares of our common stock at $5.50 per share.
We will pay all costs and expenses related to sale and delivery of the
shares, the registration statement and prospectus. We will not pay selling
commissions and expenses associated with any sale by the selling security
holders.
No selling security holder is or has been an officer, or held any
position with us, nor have there been any material relationships between the
selling security holders and us during the past three years.
10
<PAGE> 14
PLAN OF DISTRIBUTION
The selling security holders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling security holders may use any one or more of the
following methods when selling shares:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated transactions;
- short sales;
- broker-dealers may agree with the selling security holders to
sell a specified number of such shares at a stipulated price
per share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The selling security holders may also sell shares under Rule 144 under
the Securities Act, if available, rather than under this prospectus.
The selling security holders may also engage in short sales against
the box, puts and calls and other transactions in our securities or derivatives
of our securities and may sell or deliver shares in connection with these
trades. The selling security holders may pledge their shares to their brokers
under the margin provisions of customer agreements. If a selling security
holder defaults on a margin loan, the broker may, from time to time, offer and
sell the pledged shares.
Broker-dealers engaged by the selling security holders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling security holders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser) in
amounts to be negotiated. The selling security holders do not expect these
commissions and discounts to exceed what is customary in the types of
transactions involved.
The selling security holders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
We are required to pay all fees and expenses incident to the
registration of the shares, including fees and disbursements of counsel to the
selling security holders. We have agreed to indemnify the selling security
holders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
11
<PAGE> 15
DESCRIPTION OF SECURITIES
GENERAL
As of the date of this prospectus, our articles of incorporation
authorize us to issue 60,000,000 shares of common stock, no par value, and
3,000,000 shares of preferred stock, no par value (the "Preferred Stock"). As
of the date hereof, there were outstanding 20,504,626 shares of common stock
and no shares of Preferred Stock.
COMMON STOCK
Each shareholder has the right to one vote per share on all matters
which require their vote. Holders of common stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of
funds legally available therefore. In the event of a liquidation, dissolution,
or winding up of Vitech, holders of common stock are entitled to share ratably
all assets remaining after payment of liabilities. Holders of common stock have
no preemptive rights and have no rights to convert their common stock into any
other securities.
PREFERRED STOCK
Our preferred stock may be issued in one or more series, the terms of
which may be determined at the time of issuance by the Board of Directors,
without further action by shareholders, and may include voting rights
(including the right to vote as a series on particular matters), preferences as
to dividends and liquidation, conversion rights, redemption rights, and sinking
fund provisions. The issuance of any such preferred stock could adversely
affect the rights of the holders of common stock and, therefore, reduce the
value of the common stock. The ability of the Board of Directors to issue
preferred stock could discourage, delay, or prevent a takeover of Vitech.
NASDAQ NATIONAL MARKET
Our common stock is traded on the Nasdaq National Market under the
symbol "VTCH".
TRANSFER AND WARRANT AGENT AND REGISTRAR
Our transfer agent and registrar for the common stock is American
Stock Transfer & Trust Company, 40 Wall Street, New York, New York 10005.
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<PAGE> 16
LEGAL MATTERS
The validity of the issuance of the securities offered hereby will be
passed upon for the Company by Atlas Pearlman, P.A., Fort Lauderdale, Florida.
Atlas Pearlman own 14,430 shares of common stock.
EXPERTS
The audited Consolidated Financial Statements of Vitech America, Inc.,
as of December 31, 1998 and 1999, and for each of the three fiscal years in the
period ended December 31, 1999, incorporated by reference into this prospectus,
have been audited by Pannell Kerr Forster PC, independent certified public
accountants, as indicated in their report with respect thereto, and
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving said reports.
INDEMNIFICATION
The Articles of Incorporation of the Company provide that every
director and every officer of the corporation, every former director and former
officer of the corporation, and every person who may have served at the request
of the corporation as a director or officer of another corporation in which the
corporation owns shares of capital stock or of which it is a creditor, and the
heirs, executors, administrators, and assignors of all of the above persons
shall be indemnified by the corporation for expenses actually and necessarily
incurred by him in connection with the defense of any action, suit, or
proceeding to which he may be a party by reason of his being or having been a
director or officer of the corporation or of such other corporation regardless
of whether or not he continues to be a director or officer at the time of
incurring such expenses, except with respect to matters as to which he shall be
finally adjudged in such action, suit, or proceeding to be liable for
negligence or misconduct in the performance of his duty. The rights of
indemnification set forth in the Articles of Incorporation shall not be
exclusive of any other rights to which such person may be entitled by law or
otherwise.
The provisions of the Florida Business Corporation Act that authorize
indemnification do not eliminate the duty of care of the director and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Florida law. In addition,
each director will continue to be subject to liability for: (a) violations of
criminal laws, unless the director had reasonable cause to believe his conduct
was lawful or had no reasonable cause to believe his conduct was unlawful; (b)
deriving an improper personal benefit from a transaction; (c) voting for, or
assenting to, an unlawful distribution; and (d) willful misconduct or conscious
disregard for the best interests of the Company in a proceeding by, or in the
right of, the Company to procure a judgment in its favor or in a proceeding by,
or in the right of, a shareholder. The statute does not effect the director's
responsibilities under any other law.
Insofar as indemnification for liabilities arising under the 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 SEC, 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 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 Act and
will be governed by the final adjudication of such issue.
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<PAGE> 17
PART II
II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.* [UPDATE]
<TABLE>
<S> <C>
Registration Fees - Securities and
Exchange Commission $ 1,000
Cost of Printing and Engraving $ 1,000
Legal Fees and Expenses $ 5,000
Accounting Fees and Expenses $ 5,000
Miscellaneous $ 3,000
--------
Total $ 15,000
</TABLE>
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation of the Company provide that every
director and every officer of the corporation, every former director and former
officer of the corporation, and every person who may have served at the request
of the corporation as a director or officer of another corporation in which the
corporation owns shares of capital stock or of which it is a creditor, and the
heirs, executors, administrators, and assignors of all of the above persons
shall be indemnified by the corporation for expenses actually and necessarily
incurred by him in connection with the defense of any action, suit, or
proceeding to which he may be a party by reason of his being or having been a
director or officer of the corporation or of such other corporation regardless
of whether or not he continues to be a director or officer at the time of
incurring such expenses, except with respect to matters as to which he shall be
finally adjudged in such action, suit, or proceeding to be liable for
negligence or misconduct in the performance of his duty. The rights of
indemnification set forth in the Articles of Incorporation shall not be
exclusive of any other rights to which such person may be entitled by law or
otherwise.
The provisions of the Florida Business Corporation Act that authorize
indemnification do not eliminate the duty of care of the director and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Florida law. In addition,
each director will continue to be subject to liability for: (a) violations of
criminal laws, unless the director had reasonable cause to believe his conduct
was lawful or had no reasonable cause to believe his conduct was unlawful; (b)
deriving an improper personal benefit from a transaction; (c) voting for, or
assenting to, an unlawful distribution; and (d) willful misconduct or conscious
disregard for the best interests of the Company in a proceeding by, or in the
right of, the Company to procure a judgment in its favor or in a proceeding by,
or in the right of, a shareholder. The statute does not effect the director's
responsibilities under any other law.
II-1
<PAGE> 18
ITEM 16. EXHIBITS
a. The exhibits constituting part of this registration statement
are:
(5.1) Opinion of Atlas Pearlman, P.A. concerning legality of shares being
registered pursuant to the Registration Statement.
(10.1) Exchange Agreement between RH Driehaus Foundation and William St.
Laurent
(10.2) Exchange Agreement between Deltec Asset Management and Wolf Partners,
LP and Georges St. Laurent
(10.3) Exchange Agreement between David Palmisano and William St. Laurent
(10.4) Exchange Agreement between Marc Iseri Pension/Profit Sharing and
William St. Laurent
(10.5) Exchange Agreement between Marc Iseri and William St. Laurent
(10.6) Option Agreement with the Equity Group, Inc. dated August 18, 2000
(10.7) Subscription and Debt Conversion Agreement dated July 19, 2000 between
and among Vitech America and Chembro America, Inc. and Newton & Assoc.
(23.1) Consent of Pannell Kerr Forster PC.
(23.3) Consent of Atlas Pearlman, P.A., counsel for the Company, is included
in an opinion filed in Exhibit 5.1
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement which includes
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.
(b) 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.
(c) 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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officer, 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
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-2
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Miami,
State of Florida on this 29 day of September, 2000.
VITECH AMERICA, INC.
By: /s/ WILLIAM C. ST. LAURENT
---------------------------------
William C. St. Laurent, President
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ GEORGES C. ST. LAURENT, III Chairman of the Board of Directors September 29, 2000
-------------------------------- and Chief Executive Officer
Georges C. St. Laurent, III (Principal Executive Officer)
/s/ WILLIAM C. ST. LAURENT President, Chief Operating Officer September 29, 2000
-------------------------------- And Director
William C. St. Laurent
/s/ EDWARD A. KELLY Chief Financial Officer September 29, 2000
-------------------------------- (Principal Accounting Officer)
Edward A. Kelly
/s/ H.R. SHEPHERD Director September 29, 2000
--------------------------------
H.R. Shepherd
Director
--------------------------------
Francisco Suarez Warden
/s/ WILLIAM ROBIN BLACKHURST Director September 29, 2000
--------------------------------
William Robin Blackhurst
</TABLE>
II-3
