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As filed with the Securities and Exchange Commission on February 4, 2000
Registration No. 333-93931
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
CVF TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 87-0429335
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
916 Center Street
Lewiston, New York 14092
(716) 754-7883
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Jeffrey I. Dreben, Chairman, President and Chief Executive Officer
916 Center Street
Lewiston, New York 14092
(716) 754-7883
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
John J. Zak, Esq.
Christine A. Bonaguide, Esq.
Hodgson, Russ, Andrews, Woods & Goodyear, LLP
One M & T Plaza, Suite 2000
Buffalo, New York 14203
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Approximate date of commencement of proposed sale to the public: from time
to time after this Registration Statement becomes effective.
If the only securities on this Form are being offered pursuant to dividend
or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
______________________.
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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. [ ]
Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until 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.
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PROSPECTUS
CVF TECHNOLOGIES CORPORATION
3,070,535 SHARES OF COMMON STOCK
The stockholders of CVF Technologies Corporation listed on page 14 of this
prospectus are offering 3,070,535 shares of our Common Stock. These shares will
have been previously issued upon the conversion of our Series B 6% Convertible
Preferred Stock, as payment of dividends on the Series B Preferred Stock and
upon exercise of Common Stock Purchase Warrants. We will receive no proceeds
from the shares of Common Stock offered by this prospectus.
The selling stockholders may offer their shares at prevailing market prices
in public transactions on The American Stock Exchange or in privately negotiated
transactions. No period of time has been fixed within which the shares may be
offered or sold.
The Common Stock is listed on The American Stock Exchange under the symbol
"CNV".
The address of our principal executive offices is 916 Center Street,
Lewiston, New York 14092 and our telephone number (716) 754-7883.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
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 date of this prospectus is February 3, 2000.
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TABLE OF CONTENTS
RISK FACTORS ............................................................... 5
USE OF PROCEEDS ........................................................... 12
THE COMPANY ............................................................... 12
SELLING STOCKHOLDERS ...................................................... 14
PLAN OF DISTRIBUTION ...................................................... 15
LEGAL MATTERS ............................................................. 16
EXPERTS ................................................................... 16
WHERE YOU CAN FIND MORE INFORMATION ABOUT US .............................. 17
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES ............................ 19
NOTE REGARDING FORWARD-LOOKING STATEMENTS ................................. 21
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus. You must not rely on any information or representations not
contained in this prospectus, if given or made, as having been authorized by us.
This prospectus is not an offer or solicitation with respect to these shares in
any jurisdiction in which such offer or solicitation would be unlawful. The
delivery of this prospectus does not mean that there has been no change in our
affairs or that the information in this prospectus is correct at any time
subsequent to its date.
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RISK FACTORS
An investment in our Common Stock is very risky. You may lose the entire
amount of your investment. Prior to making an investment decision, you should
carefully review this entire prospectus and consider the following risk factors:
WE INVEST IN EARLY STAGE AND START-UP COMPANIES THAT HAVE LIMITED OPERATING
HISTORIES, REQUIRE LONG-TERM INVESTMENT AND MAY NOT GENERATE A RETURN ON OUR
INVESTMENT.
Our business is to acquire significant holdings in early stage and start-up
companies, primarily in the technology area, and to assist in their management.
These companies are subject to various risks common to early-stage and start-up
companies, including lack of a customer base, lack of name recognition and
credibility, the need to hire experienced management and the need to develop and
refine the plan of operation of the business. A number of these companies'
products have only recently been introduced to the market or have not yet been
commercially exploited. Accordingly, several of these companies have limited
operating histories upon which investors can base an evaluation of their
businesses and prospects.
Investments of the kind we make involve a long-term commitment. Early-stage
companies may require three to five years or longer in order to mature and
generate returns to investors. We do not know whether any of our companies will
mature and generate returns or permit us to recoup invested capital. Our ability
to achieve an acceptable rate of return on any particular investment is subject
to a number of risk factors often beyond our control, including increased
competition and lack of market share, quality of management, cyclical or uneven
financial results, technological obsolescence and regulatory delays. As well,
losses on unsuccessful companies are often realized before gains on successful
companies are realized. An investment in our Common Stock is only appropriate
for investors able to make a long-term commitment and with the capacity to
absorb a loss of some or all of their investment.
OUR FINANCIAL RESULTS AND THE STOCK VALUE OF OUR ASSETS ARE DEPENDENT UPON
THE COMPANIES IN WHICH WE INVEST.
The value of our Common Stock is based on the value of the securities of
the companies we invest in and therefore the value of our Common Stock will
increase or decrease with the value of these companies. If the companies in
which we invest are not successful, our financial results will be materially
adversely affected and the value of our assets will decline.
LACK OF MARKET FOR SECURITIES OF COMPANIES IN WHICH WE INVEST.
Our profitability and financial results are dependent on the companies'
activities and financial results. Certain of these companies are consolidated
with us for financial reporting purposes and have not yet achieved profitable
operations. As a result, we have sustained operating losses, on a consolidated
basis, in fiscal years 1996, 1997 and 1998 and expect to incur an operating loss
in fiscal year 1999. We do not know whether we will be able to achieve operating
profitability on a quarterly or annual basis in the future.
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The majority of the companies in which we invest are private companies and,
as such, our investments are not readily marketable. As such, we may not be able
to sell our investment in these companies at an acceptable price or at all.
THERE ARE SEVERAL TECHNOLOGY-RELATED RISKS WHICH MAY APPLY TO US AND THE
COMPANIES IN WHICH WE INVEST.
The companies in which we have invested and companies in which we may in
the future invest are developing products that will likely require significant
additional development, testing and financial support prior to
commercialization. We do not know whether such products will be successfully
developed, can be capable of being produced in commercial quantities at
reasonable costs or can be successfully marketed. The likelihood of our
long-term success must be considered in light of the expenses, difficulties and
delays frequently encountered in connection with the development of new
technology and the competitive environments of the technology industry.
Summarized below are certain risks generally applicable to companies in the
technology industry.
The Industries of the Companies in Which We Have Invested Are Subject to
Rapid Change. The markets for many of products of the companies in which we have
invested are generally characterized by rapid and significant technological
advancements, the frequent introduction of new products utilizing new
technologies, changes in customer needs and demands and evolving industry
standards. The adoption of new technologies or industry standards can render
their products obsolete and unmarketable. This presents substantial risks for us
because their products typically have lengthy development and sales cycles.
These companies also may not be successful in developing and marketing
enhancements to their products or in developing new products that respond to
technological changes, evolving industry standards or customer requirements.
They may also experience difficulties with new products, and their enhancements
or new products may not adequately address the requirements of the marketplace
or achieve any significant degree of market acceptance.
The Companies in Which We Have Invested Operate in Highly Competitive
Industries. The markets for the products of the companies in which we have
invested are intensely competitive. Many of the current and potential
competitors of these companies have longer operating histories and substantially
greater financial, technical and marketing resources and name recognition.
Current or potential competitors may develop products comparable or superior to
those developed by these companies or adapt more quickly than them to new
technologies, evolving industry standards, new product introductions or changing
customer requirements.
The Products of the Companies in Which We Have Currently Invested May
Contain Defects Which Could Lead to Product Liability Claims by Third Parties.
Many of the products offered by the companies in which we have invested may
contain design defects that are difficult to detect and correct. We do not know
whether errors will be found in new products after commencement of commercial
shipments or, if discovered, whether we will be able to successfully correct
such errors in a timely manner or at all. In addition, despite testing, some
design defects or errors may only become apparent in the products after they
have been shipped, which could result in loss of or delay in market acceptance
of these products. Alleviating such errors and failures in these products could
require significant
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expense. Moreover, the reputational harm resulting from product errors and
failures would be damaging to their business.
The Companies in Which We Have Invested May be Subject to Fluctuations in
Operating Results and Their Products Typically Have Lengthy Sales Cycles.
Companies in the technology industry typically experience significant
fluctuations in quarterly or annual results caused by a number of factors.
Products are often included as part of a complex and time-consuming bid process
that is subject to numerous delays and approvals that are beyond our control.
For these and other reasons, the sales cycles associated with the products of
these companies are often lengthy and subject to significant delays. To the
extent that implementation of their products is delayed for any reason, the
ability of these companies to recognize revenue with respect to any contract may
be impaired, which in turn could materially adversely affect their quarterly or
annual operating results. Quarterly sales and operating results also depend
generally on the volume and timing of orders within the quarter. The tendency of
sales in the technology industry to occur late in fiscal quarters and the
ability of these companies to fill orders received within the quarter, all of
which are difficult to forecast and manage, could have a material adverse effect
on their quarterly and annual results. Operating results are also affected by
the mix of distribution channels through which products are sold, the mix of
products, the mix of international and North American revenues, regulatory
changes, foreign currency exchange rates, the timing and level of capital
expenditures of customers and general economic conditions. As a result, the
magnitude of quarterly fluctuations may not become evident until late in, or
after the close of, a particular quarter. The operating expenses of these
companies are based in part on expectations as to future revenue levels and to a
large extent may be fixed in the short term; therefore, a shortfall in quarterly
sales could lead to a quarterly operating loss.
We and the Companies in Which We Have Invested May be Subject to Year 2000
Business Risks. Many existing computer programs use only two digits to identify
a year in the date field. These programs were designed and developed without
considering the impact of the upcoming change in the century. If not corrected,
many computer applications could fail or create erroneous results by or at the
year 2000. The "year 2000" issue affects virtually all companies and
organizations. We and, to our best knowledge, the companies in which we have
invested, are currently identifying year 2000 issues related to internal
systems. We do not know whether we or any of these companies will experience
unanticipated material costs caused by undetected errors or defects in internal
systems. Delays in the implementation or a failure to identify year 2000 issues
could result in material adverse consequences including delays in the delivery
or sale of products. In addition to internal systems, the products of these
companies may contain undetected errors or defects stemming from the year 2000
issue. We do not know whether their products contain such undetected errors or
that a product will be able to function when it is integrated with noncompliant
products, including third party hardware and software.
The customers of these companies are also impacted by the year 2000 issue.
Should customers and potential customers be required to allocate substantial
resources to resolve their specific year 2000 problems, then they could
experience a reduced demand for their products and services.
WE MAY NEED ADDITIONAL FINANCING IN ORDER TO CONTINUE OPERATIONS.
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Each of the companies in which we have invested generally requires
additional capital to meet its business plans. We intend to actively assist
these companies in obtaining additional capital, from either our own resources
or other participants. To meet such capital requirements, we will consider
additional public or private financing (including the issuance of additional
equity securities). We also require additional capital to invest in new
companies. We do not know whether additional funding will be available or, if
available, that it will be available on terms acceptable to us. Several of these
companies rely on our financial support, which includes the accrual of interest
on debt instruments, and without additional financial support from us or other
investors, may cease operations.
WE ARE DEPENDENT ON THE ONGOING SERVICES OF CERTAIN OF OUR EXECUTIVES, THE
LOSS OF WHOM COULD HAVE A DETRIMENTAL EFFECT ON THE MARKET PRICE OF OUR STOCK.
Our plan of business development and our day-to-day operations rely heavily
on the experience of Jeffrey Dreben, the Chairman of the Board, President and
Chief Executive Officer, and Robert Nally, the Chief Operating Officer, Chief
Technology Officer, Secretary and Treasurer, neither of whom have signed
employment agreements with us. The loss of either of them could adversely affect
the success of our operations and strategic plans and, consequently, have a
detrimental effect on the market price of our stock. Our success will also
depend on our and the ability of the companies in which we have invested to
attract and retain highly qualified management and technical personnel. We do
not know whether we or those companies will be successful in attracting and
retaining qualified personnel as necessary, and the failure to do so could have
a material adverse effect on us.
CERTAIN OF THE COMPANIES IN WHICH WE HAVE CURRENTLY INVESTED ARE SUBJECT TO
VARIOUS ENVIRONMENTAL LAWS AND REGULATIONS WITH WHICH THEY MUST COMPLY.
Certain of the operations of the companies in which we have invested are
subject to various comprehensive laws and regulations related to protection of
the environment. Such laws and regulations, among other things, regulate the
nature of treatment that these companies can provide. Because these companies
provide their customers with services designed to protect the environment by
cleaning and removing materials or substances at their customers' sites that
must be properly handled, recycled or, in some cases, removed for proper
disposal, these companies are subject to regulations which impose liability on
persons involved in handling, processing or transporting hazardous materials.
These requirements may also be imposed as conditions of operating permits or
licenses that are subject to renewal, modification or revocation. These laws and
regulations have become and are likely to continue to become increasingly
stringent. Existing laws and regulations, and new laws and regulations, may
require these companies to modify, supplement, replace or curtail their
operating methods at costs which may be substantial without any corresponding
increase in revenues. In addition, the demand for certain of their environmental
services may be adversely affected by the amendment or repeal of federal, state
or provincial laws and regulations.
THERE IS A RISK THAT THE VALUE OF TRADEMARKS AND OTHER PROPRIETARY RIGHTS
OWNED BY THE COMPANIES IN WHICH WE HAVE INVESTED COULD BE DIMINISHED BY IMPROPER
USE BY OTHERS.
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We believe our success and competitive position depend significantly upon
the proprietary technology owned by the companies in which we have invested.
These companies generally rely on a combination of patent, trademark and trade
secret laws and non-disclosure agreements and other contractual provisions to
establish, maintain and protect their proprietary rights, all of which afford
only limited protection. Certain of them have patents and registered trademarks
and pending patent and trademark applications which cover certain aspects of
their technology and business. We do not know whether any pending or future
patent or trademark applications will be granted in respect of these companies'
technology and business or whether any current or future patents or trademarks
will be challenged, invalidated or circumvented or whether the rights granted
under such patents or trademarks will provide competitive advantages to these
companies. In addition, until recently, these companies have not generally
sought patent protection for their products. Their inability to adequately
protect their proprietary rights could have a material adverse effect on us.
Moreover, effective patent and trade secret protection may be unavailable or
limited in certain foreign countries, making greater the possibility of
misappropriation of proprietary technology. The steps these companies have taken
to protect their proprietary technology may not prevent misappropriation of such
technology and such protections may not preclude competitors from developing
products with functionality or features similar to their products.
Although we do not believe that any of these companies are infringing the
intellectual property rights of others, claims of infringement are becoming
increasingly common as the number of products and competitors in the technology
industry grows, the functionality of products in different industry segments
overlaps, and legal protections, including patents, are applied to products made
by their competitors. Third parties may assert that the products of the
companies in which we have invested infringe, or may infringe, the proprietary
rights of third parties. The defense of any such claims, with or without merit,
could be time consuming, result in costly litigation and diversion of technical
and management personnel, cause product shipment delays or require these
companies to develop non-infringing technology or enter into royalty or
licensing agreements. Such royalty or licensing agreements, if required, may not
be available on terms acceptable to us or at all.
WE MAY NOT PAY DIVIDENDS ON OUR COMMON STOCK.
To date, we have not paid any cash dividends on our Common Stock, and we do
not intend to do so in the foreseeable future. Rather, we intend to use any
future earnings to fund our operations and the growth of our business.
IN ORDER TO FINANCE FUTURE ACQUISITIONS, WE MAY BE REQUIRED TO RAISE
ADDITIONAL FUNDS BY ISSUING SECURITIES ON TERMS WHICH WOULD DILUTE YOUR INTEREST
IN US.
In order to fund our growth, we will need to obtain financing through an
additional offering of our equity securities or by incurring indebtedness. Such
funds may not be available on terms acceptable to us. Furthermore, future
investors may seek and obtain, and we may be required to offer, investment terms
which are substantially better than those granted to existing investors. The
issuance of securities on such terms would dilute the interests of existing
stockholders.
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PURSUANT TO OUR AUTHORITY TO DESIGNATE AND ISSUE SHARES OF OUR STOCK AS WE
DEEM APPROPRIATE, OUR BOARD OF DIRECTORS MAY ASSIGN RIGHTS AND PRIVILEGES TO
CURRENTLY UNDESIGNATED SHARES WHICH COULD ADVERSELY AFFECT YOUR RIGHTS AS A
COMMON STOCKHOLDER.
Our authorized capital consists of 50,500,000 shares of capital stock of
which 125,000 shares are undesignated preferred stock. Our Board of Directors,
without any action by the stockholders, may designate and issue the undesignated
preferred shares in such classes or series as it deems appropriate and establish
the rights, preferences and privileges of such shares, including dividends,
liquidation and voting rights. The ability of our Board of Directors to
designate and issue such undesignated shares could impede or deter an
unsolicited tender offer or takeover proposal. Further, the issuance of
additional shares having preferential rights could adversely affect the voting
power and other rights of holders of Common Stock.
POTENTIAL CURRENCY FLUCTUATION BETWEEN THE U.S. DOLLAR AND THE CANADIAN
DOLLAR, AND OTHER CURRENCY FLUCTUATIONS, COULD ADVERSELY AFFECT US.
Although our consolidated financial statements are reported in U.S.
dollars, a significant portion of the sales and operating costs of the companies
in which we have currently invested are denominated in Canadian dollars.
Significant long term fluctuations in relative currency values could adversely
affect our results of operations. In particular, we may be adversely affected by
the weakening of the U.S. dollar against the Canadian dollar. International
sales by these companies also entail risks associated with currency
fluctuations. As international sales increase, risks associated with currency
fluctuations may increase. Given the number of currencies that may be involved,
the constantly changing currency exposures and the substantial volatility of
currency exchange rates, we cannot predict the effect of exchange rate
fluctuations upon future operating results of these companies. Neither we nor
any of these companies engage in hedging transactions to cover currency
exposure.
OUR STOCK PRICE AND THE STOCK MARKETS MAY EXPERIENCE VOLATILITY.
In recent years, the stock markets have experienced extreme price and
volume fluctuations and market prices for securities of many companies have
experienced wide fluctuations, not necessarily related to the operating
performance of such companies. Further, from time to time, the market price of
our Common Stock has been affected and may continue to be affected by various
factors, including announcements of new investments; major announcements by the
companies in which we have currently invested and new commercial products,
product licenses or patents; the development of proprietary rights by these
companies or their competitors; actual or anticipated variations in our
operating results due to a number of factors including, among others, the level
of development expenses, change in financial estimates by securities analysts,
and conditions and trends in the information and environmental technologies
areas; general market conditions; and other factors. As a result, it is possible
that our operating results will be below the expectations of market analysts and
investors, which likely would have an adverse effect on the prevailing market
price of our Common Stock. The prevailing market price of our Common Stock may
also be adversely affected by future sales of our Common Stock by current
stockholders. We cannot predict the effect, if any, that sales of our Common
Stock or the availability of such shares for sale will have on the market prices
prevailing from time to time. Nevertheless, the
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possibility that substantial amounts of our Common Stock may be sold in the
public market may adversely affect prevailing market prices for our Common Stock
and could impair our ability to raise capital though the sale of our equity
securities.
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USE OF PROCEEDS
We will not receive any proceeds from the sale of the Common Stock by the
selling stockholders.
THE COMPANY
Business.
We are in the business of selecting, developing and managing early stage
and start-up companies that exploit proprietary or other unique technologies. We
try to acquire significant holdings in these companies to assist in their
management and to finance their growth by assisting them in obtaining additional
capital, either from us or other sources.
We have interests in the following operating companies: Biorem Technologies
Inc., Healthy Elements, Gemprint Corporation, Solaria Research Enterprises Ltd.,
Dantec Corporation, Petrozyme Technologies Inc., Ecoval Inc., TurboSonic
Technologies Inc. and RDM Corporation.
Biorem is an Ontario corporation based in Waterloo, Ontario, Canada that
develops, manufactures and sells industrial bioremediation and biofilter
technology products for a variety of industrial applications, including
remediation of organic toxic chemicals in soil and ground water, treatment of
industrial waste streams and odor elimination at composting, rendering and food
processing plants. We own a 69% interest in Biorem.
Healthy Elements is an Ontario partnership operating retail stores and an
online site which offer natural health and food products, nutritional
supplements and health services, including naturopathic and homeopathic medicine
and chiropractic services, as well as products manufactured by Ecoval. We own a
61% economic interest and a 69.25% voting interest in Elements through our
wholly-owned subsidiary, Grand Island Marketing, Inc.
Gemprint is an Ontario corporation that develops and sells diamond and
precious gem identification technology products and services to the retail and
wholesale jewelry markets. These products and services allow diamonds and other
gems to be uniquely identified non-invasively using a low power laser imaging
system proprietary to Gemprint. We own a 67% interest in Gemprint.
Solaria is an Ontario corporation based in Waterloo, Ontario, Canada that
develops, manufactures and sells high-efficiency, programmable
microprocessor-based electronic controllers for direct current motors used in
battery powered industrial vehicles. We own a 74.67% interest in Solaria.
Dantec is an Ontario corporation based in Waterloo, Ontario, Canada that
develops, manufactures and sells advanced process control technologies,
primarily to the food processing industry. We own a 54% interest in Dantec.
Petrozyme is an Ontario corporation based in Guelph, Ontario, Canada that
develops and sells proprietary technologies for the treatment of petroleum-based
wastes and for petroleum recovery to the petroleum production and refining
industries. We own a 50% interest in Petrozyme.
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Ecoval is a Quebec corporation based in Montreal, Quebec, Canada and
develops, manufactures and sells a range of all-natural, environmentally safe
fertilizers, herbicides, fungicides, insecticides and growth regulants under the
"Nature's Glory" brand. We own a 27% interest in Ecoval.
TurboSonic Technologies, through its Ontario subsidiary based in Waterloo,
Ontario, Canada, develops, manufactures and sells high performance air pollution
control systems and nozzle products which utilize Turbosonic's proprietary
technologies to a range of industries worldwide. We own an indirect 13% interest
in Turbosonic principally through our ownership of shares of its Canadian
subsidiary which are exchangeable for shares of Turbosonic.
RDM is an Ontario corporation based in Waterloo, Ontario, Canada that
develops and sells technologies which enable secure and accurate payments over
the Internet through electronic checks and check reading and imaging devices for
point of sale paper check transactions. We own an 18% interest in RDM.
The Form of Our Investments.
We negotiate the form that our investment will take with each company,
taking into account the financing needs of the company, our ability to play an
active role in the business in collaboration with the business' existing
management team, the potential for significant rates of return on our investment
and tax considerations. We generally will not invest in a company unless we can
exert some degree of influence on its operations. Our investments may take the
form of debt (with or without conversion features), debt with warrants to
acquire common shares or debt with participation in cash flow or earnings,
preferred shares (with or without conversion features) or common shares. Some of
our investments may involve a combination of these features.
Our Investments.
Each of the companies in which we have currently invested has its own
business plan and financial reporting systems. Each has also completed the
development of its original products, has set up markets and distribution
channels, has sold products and has put management teams in place and/or is
currently working to strengthen and expand its management teams. Most are also
working to improve their marketing capabilities. Additional capital required by
these companies is primarily for expansion of sales and marketing and
continuation of research and development to enable them to realize their
commercial potential over the next three to five years. As is common with
early-stage technology companies, these companies have historically operated at
a loss or at a break-even. Most are expected to operate at a loss for the
foreseeable future. Some may show losses due to substantial investment in
research and development. Thus, these companies will require additional
financing from us or other sources in order to continue operations.
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SELLING STOCKHOLDERS
The following table sets forth the number of shares of Common Stock owned
by the selling stockholders as of February 3, 2000 and after giving effect to
this offering. We will not receive any proceeds from the sale of the Common
Stock by the selling stockholders.
Because the selling stockholders may offer all, some or none of their
Common Stock, we cannot provide a definitive estimate as to the number of shares
that they will hold after such offering and the following table has been
prepared on the assumption that all shares of Common Stock offered under this
prospectus will be sold.
<TABLE>
<CAPTION>
Shares Beneficially Number of Shares Shares Beneficially
Owned Before Offered by Owned After
Name Offering Selling Shareholder Offering
<S> <C> <C> <C> <C>
The Shaar Fund Ltd. 2,968,717 2,968,717 (1) 0
Amin I. Ismail 20,364 20,364 (2) 0
Avalon Research Group Inc. 81,454 81,454 (3) 0
<FN>
(1) Represents 215,384 shares issuable upon exercise of Warrants, 2,333,333
shares issuable upon conversion of the Series B Preferred Stock and a
maximum of 420,000 shares issuable as payment of dividends on the Series B
Preferred Stock.
(2) Represents 20,364 shares issuable upon exercise of a warrant granted as a
finders fee on the offering of the Series B Preferred Stock (a "Broker's
Warrant").
(3) Represents 81,454 shares issuable upon exercise of a warrant granted as a
finders fee on the offering of the Series B Preferred Stock (a "Broker's
Warrant").
</TABLE>
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PLAN OF DISTRIBUTION
We are registering the shares offered by this prospectus on behalf of the
selling stockholders. As used in this section, the term "selling stockholders"
includes donees, pledgees, transferees and other successors in interest selling
shares they receive from a selling stockholder after the date of this
prospectus. We will pay all costs and expenses in connection with the
preparation of this prospectus and the registration of the shares offered by it.
Any brokerage commissions and similar selling expenses attributable to the sale
of shares will be borne by the selling stockholders.
The selling stockholders may sell shares at various times in one or more
types of transactions (which may include block transactions) on The American
Stock Exchange, in negotiated transactions, through put or call options
transactions relating to the shares, through short sales of shares or a
combination of such methods of sale, at market prices prevailing at the time of
sale or at negotiated prices. These transactions may or may not involve brokers
or dealers. The selling stockholders have advised us that they have not entered
into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the shares, nor is there an underwriter or
coordinating broker acting in connection with the proposed sale of shares by the
selling stockholders.
The selling stockholders may sell shares directly to purchasers or to or
through broker-dealers, who may act as agents or principals. These
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders and/or purchasers of the shares. This
compensation may be in excess of customary commissions.
We have agreed to indemnify certain of the selling stockholders and other
persons against certain liabilities in connection with the offering of the
shares, including liabilities arising under the Securities Act. Certain selling
stockholders have agreed to indemnify us and other persons against certain
liabilities in connection with the offering of the shares, including liabilities
arising under the Securities Act.
The selling stockholders and any broker-dealers that act in connection with
the sale of shares might be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act, and any commissions received by such
broker-dealers and any profit on the resale of the shares they sell while acting
as principals might be deemed to be underwriting discounts or commissions under
the Securities Act.
Because selling stockholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, they will be subject to the
prospectus delivery requirements of the Securities Act. We have informed them
that the anti-manipulative provisions of Regulation M promulgated under the
Securities Exchange Act of 1934, as amended, may apply to their sales in the
market.
Selling stockholders also may sell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act, provided
they meet the criteria and conform to the requirements of that Rule.
15
<PAGE> 16
LEGAL MATTERS
Legal matters relating to the validity of the shares offered by this
prospectus will be passed upon for us by Hodgson, Russ, Andrews, Woods &
Goodyear LLP, Buffalo, New York.
EXPERTS
Ernst & Young LLP, our independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-KSB for the year
ended December 31, 1998, as set forth in their report on those financial
statements. Our consolidated financial statements are incorporated by reference
into this prospectus in reliance on Ernst & Young LLP's report given on their
authority as experts in accounting and auditing.
16
<PAGE> 17
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
Federal securities law requires us to file information with the Securities
and Exchange Commission concerning our business and operations. Accordingly, we
file annual, quarterly and special reports, proxy statements and other
information with the Commission. You can inspect and copy this information at
the Public Reference Room maintained by the Commission at Judiciary Plaza, 450
5th Street, N.W., Washington, D.C. 20549.
You can receive additional information about the operation of the
Commission's Public Reference Facilities by calling the Commission at
1-800-SEC-0330. The Commission also maintains a website at that contains
reports, proxy and information statements and other information regarding
companies that, like us, file electronically with the Commission.
This prospectus is part of a registration statement on Form S-3
(Registration No. 333-93931) that we filed with the Commission under the
Securities Act, registering the shares. As permitted by the rules and
regulations of the Commission, this prospectus does not contain all of the
information in the registration statement and its exhibits. The statements
contained in this prospectus or in any document incorporated by reference as to
the contents of any contract or any other document are not necessarily complete.
We qualify any statement by reference to the copy of such contract or document
filed as an exhibit to the registration statement.
The Commission allows us to "incorporate by reference" information that has
been filed with it, which means that we can disclose important information to
you by referring you to the other information we have filed with the Commission.
The information that we incorporate by reference is considered to be part of
this prospectus, and related information that we file with the Commission will
automatically update and supersede information we have included in this
prospectus. We also incorporate by reference any future filings we make with the
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended, until the selling stockholders sell all of their shares
or until their registration rights expire. The following are specifically
incorporated herein by reference:
1. Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998;
2. Quarterly Reports on Form 10-QSB for the quarters ended March 31, 1999,
June 30, 1999 and September 30, 1999;
3. The description of Common Stock included under the caption "Securities to
be Registered" in our registration statement on Form 10-SB, File No.
000-29266, dated February 12, 1997 (as amended on February 26, 1997, May
30, 1997 and August 22, 1997), including any amendments or reports filed
for the purpose of updating such description.
You (and any of your beneficial owners) can request a free copy of the
above filings or any filings subsequently incorporated by reference into this
prospectus by writing or calling us at the following address:
CVF Technologies Corporation
Attention: Jeffrey I. Dreben
916 Center Street
Lewiston, New York 14092
(716) 754-7883
17
<PAGE> 18
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement or amendment to this prospectus.
We have not authorized anyone else to provide you with different information or
additional information. Selling stockholders are offering to sell, and seeking
offers to buy, shares only in jurisdictions where offers and sales are
permitted. You should not assume that the information in this prospectus, or any
supplement or amendment to this prospectus, is accurate at any date other than
the date indicated on the cover page of such documents.
18
<PAGE> 19
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Article VIII of our bylaws provides for the indemnification of our officers
and directors to the extent authorized by the Nevada Revised Statutes. Section
78.7502(1) of the Nevada Revised Statutes allows us to indemnify any person made
or threatened to be made a party to any action, except an action by us or in our
right, by reason of the fact that he or she is or was a director, officer,
employee or agent of, or is or was serving at our request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement, actually and reasonably
incurred in connection with the action, suit or proceeding if the person acted
in good faith and in a manner which he or she reasonably believed to be in or
not opposed to our best interests, and, with respect to any criminal proceeding,
had no reasonable cause to believe the conduct was unlawful. Article VIII of our
charter provides for indemnification of such a person to the full extent
provided by the Nevada Revised Statutes, as amended from time to time.
Under Section 78.7502(2), a similar standard of care applies to derivative
actions by us or in our right, except that indemnification is limited solely to
expenses (including attorneys' fees) incurred in connection with the defense or
settlement of the action and court approval of the indemnification is required
where the person seeking indemnification has been found liable to us.
In addition, Section 78.751(2) allows us to advance payment of
indemnifiable expenses prior to final disposition of a proceeding. Decisions as
to the payment of indemnification are made by a majority of the Board of
Directors at a meeting at which a quorum of disinterested directors is present,
or by written opinion of special legal counsel or by the stockholders.
Section 78.751(3) provides that the power to indemnify is not exclusive of
any rights granted under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 78.752 of the Nevada Revised Statutes and Section 8.06 of our
Bylaws enable us to purchase and maintain insurance for our present and former
directors, officers, employees and agents. Accordingly, we have provided
liability insurance for each director and officer for certain losses arising
from claims or charges made against him or her while acting in his or her
capacity as our director or officer, including liabilities under federal
securities laws.
Additionally, Article V of our charter limits the liability of our
directors under certain circumstances. Article V states:
A director of the Corporation shall have no personal liability to the
Corporation or its stockholders for damages for breach of fiduciary duty as a
director or officer, except for (a) acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law, or (b) the
payment of distributions in violation of section 78.300 of the Nevada Revised
Statutes.
19
<PAGE> 20
The Registration Rights Agreement, dated as of October 8, 1999, between us
and The Shaar Fund Ltd., contains provisions under which we have agreed to
indemnify the selling stockholders and each underwriter, if any, which
facilitates the disposition of the shares, and their respective officers and
directors and each person who controls any selling stockholder or underwriter,
in certain circumstances against certain liabilities, including liabilities
arising under the Securities Act. Each selling stockholder has agreed (and each
underwriter, if any, shall agree) to indemnify us and our directors, officers
and each person who controls us in certain circumstances against certain
liabilities, including liabilities arising under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling us pursuant to
the foregoing provisions, or otherwise, we have been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
20
<PAGE> 21
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus and in the documents
incorporated by reference in this prospectus are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These forward-looking statements can be
identified by the use of predictive, future-tense or forward-looking
terminology, such as "believes," "anticipates," "expects," "estimates," "may,"
"will" or similar terms. Forward-looking statements also include projections of
financial performance, statements regarding management's plans and objectives
and statements concerning any assumption relating to the foregoing. Important
factors regarding our business, operations and competitive environment which may
cause actual results to vary materially from these forward-looking statements
are discussed under the caption "Risk Factors."
21
<PAGE> 22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with the issuance and distribution of
the shares registered hereby are set forth in the following table:
SEC registration fee $ 2,153.22
AMEX additional listing fee $17,500.00
Legal fees and expenses $25,000.00
Accounting fees and expenses $ 8,000.00
Miscellaneous $ 5,346.78
Total $58,000.00
Item 15. Indemnification of Directors and Officers.
Article VIII of Registrant's bylaws provides for the indemnification of
officers and directors of Registrant to the extent authorized by the Nevada
Revised Statutes. Section 78.7502(1) of the Nevada Revised Statutes allows
Registrant to indemnify any person made or threatened to be made a party to any
action except an action by or in the right of Registrant, by reason of the fact
that he or she is or was a director, officer, employee or agent of Registrant,
or is or was serving at the request of Registrant as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or her in
connection with the action, suit or proceeding if he or she acted in good faith
and in a manner which he or she reasonably believed to be in or not opposed to
the best interests of Registrant, and, with respect to any criminal proceeding,
had no reasonable cause to believe his or her conduct was unlawful. Article VIII
of Registrant's charter provides for indemnification of such person to the full
extent provided by the Nevada Revised Statutes, as amended from time to time.
Under Section 78.7502(2), a similar standard of care applies to derivative
actions, except that indemnification is limited solely to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of the
action and court approval of the indemnification is required where the person
seeking indemnification has been found liable to Registrant.
In addition, Section 78.751(2) allows Registrant to advance payment of
indemnifiable expenses prior to final disposition of the proceeding in question.
Decisions as to the payment of indemnification are made by a majority of the
Board of Directors at a meeting at which a quorum of disinterested directors is
present, or by written opinion of special legal counsel or by the stockholders.
Section 78.751(3) provides that the power to indemnify is not exclusive of
any rights granted under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
II-1
<PAGE> 23
Section 78.752 of the Nevada Revised Statutes and Section 8.06 of
Registrant's Bylaws enable Registrant to purchase and maintain insurance for its
present and former directors, officers, employees and agents. Accordingly,
Registrant has provided liability insurance for each director and officer for
certain losses arising from claims or charges made against him or her while
acting in his or her capacity as a director or officer of Registrant, including
liabilities under federal securities laws.
The above discussion of Registrant's bylaws and Sections 78.7502, 78.751
and 78.752 of the Nevada Revised Statutes is not intended to be comprehensive
and is qualified in its entirety by such bylaws and statute.
Additionally, Article V of Registrant's charter limits the liability of
Registrant's directors under certain circumstances. Article V states:
A director of the Corporation shall have no personal liability to the
Corporation or its stockholders for damages for breach of fiduciary duty as a
director or officer, except for (a) acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law, or (b) the
payment of distributions in violation of section 78.300 of the Nevada Revised
Statutes.
The Registration Rights Agreement, dated as of October 8, 1999, between
Registrant and The Shaar Fund Ltd., contains provisions under which Registrant
has agreed to indemnify the selling stockholders and each underwriter, if any,
which facilitates the disposition of the shares, and their respective officers
and directors and each person who controls any selling stockholder or
underwriter, in certain circumstances against certain liabilities, including
liabilities arising under the Securities Act. Each selling stockholder has
agreed (and each underwriter, if any, shall agree) to indemnify Registrant and
its directors, officers and each person who controls Registrant in certain
circumstances against certain liabilities, including liabilities arising under
the Securities Act.
Item 16. Exhibits.
Exhibit No. Description
- ----------- -----------
2(1) Amended and Restated Certificate of Designation of Series B 6%
Convertible Preferred Stock.
4.1(1) Common Stock Purchase Warrant dated October 8, 1999 in favor of
the Shaar Fund Ltd.
4.2(1) Common Stock Purchase Warrant dated October 8, 1999 in favor of
Amin I. Ismail.
4.3(1) Common Stock Purchase Warrant dated October 8, 1999 in favor of
Avalon Research Group Inc.
5(1) Opinion of Hodgson, Russ, Andrews, Woods & Goodyear, LLP.
10.1(1) Securities Purchase Agreement between the Registrant and The
Shaar Fund Ltd dated October 8, 1999.
10.2(1) Registration Rights Agreement between the Registrant and The
Shaar Fund Ltd dated October 8, 1999.
II-2
<PAGE> 24
23.1(2) Consent of Ernst & Young LLP.
23.2(1) Consent of Hodgson, Russ, Andrews, Woods & Goodyear, LLP
(included in Exhibit 5).
24(1) Power of Attorney.
(1) Previously filed, as of December 30, 1999, as an exhibit to Registrant's
registration statement on Form S-3 (Registration No. 333-93931).
(2) Filed herewith.
Item 17. Undertakings.
(a) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than Registrant's payment of expenses incurred or paid by a
director, officer or controlling person of 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,
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.
(b) 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 to: (i) include
any prospectus required by Section 10(a)(3) of the Securities Act; (ii) reflect
in the prospectus any facts or events which, individually or together, represent
a fundamental change in the information in the registration statement; and (iii)
include any additional or changed material information on the plan of
distribution;
(2) To treat, for determining liability under the Securities Act, each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering; and
(3) To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
II-3
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the Town of Lewiston, State of New York, on February 3, 2000.
CVF TECHNOLOGIES CORPORATION
By:/s/ Jeffrey I. Dreben
-----------------------------------
Jeffrey I. Dreben, President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Jeffrey I. Dreben Chairman of the Board, February 3, 2000
- -------------------------- President, Chief Executive
Jeffrey I. Dreben Officer and Director
(Principal Executive Officer)
/s/ Robert Nally* Chief Operating Officer, February 3, 2000
- -------------------------- Chief Technology Officer,
Robert Nally Secretary, Treasurer, Director
/s/ George Khouri* Director February 3, 2000
- --------------------------
George Khouri
/s/ Robert Glazier* Director February 3, 2000
- --------------------------
Robert Glazier
/s/ Robert Miller* Chief Financial Officer February 3, 2000
- -------------------------- (Principal Financial
Robert Miller and Accounting Officer)
</TABLE>
* By: /s/ Jeffrey I. Dreben
-----------------------------------
Jeffrey I. Dreben, Attorney-in-Fact
II-4
<PAGE> 26
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
2(1) Amended and Restated Certificate of Designation of Series B 6%
Convertible Preferred Stock.
4.1(1) Common Stock Purchase Warrant dated October 8, 1999 in favor of
the Shaar Fund Ltd.
4.2(1) Common Stock Purchase Warrant dated October 8, 1999 in favor of
Amin I. Ismail.
4.3(1) Common Stock Purchase Warrant dated October 8, 1999 in favor of
Avalon Research Group Inc.
5(1) Opinion of Hodgson, Russ, Andrews, Woods & Goodyear, LLP.
10.1(1) Securities Purchase Agreement between the Registrant and The
Shaar Fund Ltd. dated October 8, 1999.
10.2(1) Registration Rights Agreement between the Registrant and The
Shaar Fund Ltd. dated October 8, 1999.
23.1(2) Consent of Ernst & Young LLP.
23.2(1) Consent of Hodgson, Russ, Andrews, Woods & Goodyear, LLP
(included in Exhibit 5).
24(1) Power of Attorney.
(1) Previously filed, as of December 30, 1999, as an exhibit to the Registrant's
registration statement on Form S-3 (Registration No. 333-93931).
(2) Filed herewith.
II-5
<PAGE> 1
Exhibit 23.1
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 Registration No. 333-93931) and related
prospectus of CVF Technologies Corporation for the registration of 3,070,535
shares of its common stock and to the incorporation by reference therein of our
report dated March 31, 1999, with respect to the consolidated financial
statements of CVF Technologies Corporation included in its Annual Report (Form
10-KSB) for the year ended December 31, 1998, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
- -----------------------------
Kitchener, Canada
January 26, 2000
