<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 29, 2000.
REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
CELLPOINT INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
3000 HILLSWOOD DRIVE
NEVADA HILLSWOOD BUSINESS PARK
(State or other jurisdiction CHERTSEY, SURREY, KT16 0RS ENGLAND 52-2032380
of +44 1932 895 310 (I.R.S. Employer
incorporation or organization) (Address of principal executive offices) Identification No.)
</TABLE>
3000 HILLSWOOD DRIVE
HILLSWOOD BUSINESS PARK
CHERTSEY, SURREY, KT16 0RS ENGLAND
+44 1932 895 310
ATTENTION: PETER HENRICSSON
(Name and address of agent for service)
With a copy to:
STEVEN R. BERGER, ESQ.
SALANS HERTZFELD HEILBRONN CHRISTY & VIENER
620 FIFTH AVENUE
NEW YORK, NEW YORK 10020
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
--------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
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. / /
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
AMOUNT TO BE PRICE PER AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED SHARE AGGREGATE PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, par value $0.001 per share......... 52,000(1) $5.5625(2) $ 289,250.00 $ 76.36
Common Stock, par value $0.001 per share......... 720,570(3) $5.5625(2) $ 4,008,170.63 $1,058.16
Common Stock, par value $0.001 per share......... 13,250(4) $5.5625(2) $ 73,703.13 $ 19.46
Common Stock, par value $0.001 per share......... 112,500(5) $5.5625(2) $ 625,781.25 $ 165.21
Common Stock, par value $0.001 per share......... 985,481(6) $5.5625(2) $ 5,481,738.06 $1,447.18
Common Stock, par value $0.001 per share......... 210,526(7) $5.5625(2) $ 1,171,050.88 $ 309.16
Common Stock, par value $0.001 per share......... 1,578,947(8) $5.5625(2) $ 8,782,892.69 $2,318.68
Common Stock, par value $0.001 per share......... 100,000(9) $5.5625(2) $ 556,250.00 $ 146.85
TOTAL............................................ 3,773,274 $20,988,836.63 $5,541.05
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
<PAGE>
(FOOTNOTES FROM PRECEDING PAGE)
(1) Shares registered hereunder will become issuable upon the exercise of
warrants issued by the Registrant in an offering made pursuant to Rule 506
under Regulation D pursuant to the Securities Act. The warrants have an
exercise price of $7.49 per share.
(2) Estimated solely for the purposes of calculating the registration fee,
pursuant to Rule 457(c), based on the average bid and asked price of the
Registrant's Common Stock as reported on the NASDAQ National Market on
December 26, 2000.
(3) Shares registered hereunder were issued by the Registrant in an offering
made pursuant to Rule 506 under Regulation D pursuant to the Securities Act.
(4) Shares registered hereunder will become issuable upon the exercise of
warrants issued to the placement agent as compensation for services rendered
in connection with the issuance by the Registrant of shares of common stock
and warrants pursuant to Rule 506 under Regulation D pursuant to the
Securities Act. The warrants have an exercise price of $7.49 per share.
(5) Shares registered hereunder will become issuable upon the exercise of
warrants issued to the placement agent as compensation for services rendered
in connection with the issuance by the Registrant of shares of common stock
and warrants pursuant to Rule 506 under Regulation D pursuant to the
Securities Act. The warrants have an exercise price of $8.89 per share.
(6) Shares registered hereunder were issued by the Registrant in an private
offering made pursuant to Section 4(2) of the Securities Act.
(7) Shares registered hereunder will become issuable upon the exercise of
warrants issued by the Registrant in an offering made pursuant to Rule 506
under Regulation D pursuant to the Securities Act. The warrants have an
exercise price of $11.40 per share.
(8) Shares registered hereunder will become issuable upon the conversion of a
convertible note issued by the Registrant in an offering made pursuant to
Rule 506 under Regulation D pursuant to the Securities Act.
(9) Shares registered hereunder will become issuable upon the exercise of
warrants issued by the Registrant in an offering made pursuant to Section 4
(2) of the Securities Act.
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 THAT 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
CELLPOINT INC.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
ITEM NUMBER OF CAPTION LOCATION OR HEADING IN PROSPECTUS
---------------------- ---------------------------------
<C> <S> <C>
1. Forepart of the Registration Statement and Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages Inside Front and Outside Back Cover Pages
of Prospectus of Prospectus
3. Summary Information, Risk Factors and Ratio Summary Information, Risk Factors
of Earnings to Fixed Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price *
6. Dilution *
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities Being Registered Description of Securities
10. Interest of Named Experts and Counsel *
11. Material Changes Summary Information, Business
12. Incorporation of Certain Information by Incorporation of Information We File with
Reference the SEC
13. Disclosure of Commission Position on Indemnification
Indemnification for Securities Act
Liabilities
14. Other Expenses of Issuance and Distribution Other Expenses of Issuance and Distribution
15. Indemnification of Directors and Officers Indemnification of Directors and Officers
16. Exhibits Exhibits
17. Undertakings Undertakings
</TABLE>
------------------------
* Omitted from Prospectus because item is inapplicable or answer is in the
negative.
<PAGE>
PROSPECTUS REGISTRATION NO. 333 [ - ]
CELLPOINT INC.
3,773,274 SHARES OF COMMON STOCK
------------------
This Prospectus is being used by certain stockholders (the "Selling
Stockholders") of CellPoint Inc. (together with its subsidiaries, unless the
context otherwise requires, the "Company" or "CellPoint") to sell an aggregate
of up to 3,773,274 shares (the "Shares") of the Company's Common Stock, par
value $.001 per share ("Common Stock"). The Selling Stockholders will sell the
Common Stock, from time to time, at prices then attainable, less ordinary
brokers' commissions and dealers' discounts, as applicable. The Shares were
offered and sold to the Selling Stockholders pursuant to private offerings in
which the Shares were not registered with the Securities and Exchange
Commission. The Shares are being offered solely for the account of the Selling
Stockholders and we will receive no part of the proceeds of this Offering. For
more information about the Selling Stockholders, please refer to the sections
entitled "Summary of Offering" and "The Selling Stockholders".
Our Common Stock trades on the NASDAQ National Market ("NASDAQ") under the
symbol CLPT. On December 26, 2000 the last reported sale price per share of
Common Stock was $5.5625.
------------------------
INVESTING IN THE COMMON STOCK INVOLVES RISKS THAT ARE DESCRIBED IN THE "RISK
FACTORS" SECTION OF THIS PROSPECTUS.
------------------------
<TABLE>
<CAPTION>
PROCEEDS TO ISSUER
PRICE TO PUBLIC OR OTHER PERSONS(2)
--------------- -------------------
<S> <C> <C>
Per Share.................................... $ 5.5625(1) (1)(2)
Total...................................... $20,988,837(1) (1)(2)
</TABLE>
------------------------
(1) Estimated, based upon the last reported sale price of our Common Stock on
December 26, 2000.
(2) We will receive no part of the proceeds from the sale of the shares
described in this Prospectus. All proceeds will go to the Selling
Stockholders, and the amount set forth above assumes that all Shares
described in this Prospectus are sold. Our estimated expenses in connection
with this Prospectus are approximately $129,041.
------------------------
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 [ - ], 2000.
<PAGE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING OR SOLICITATION WITH RESPECT
TO THESE SECURITIES BY THE COMPANY TO ANY PERSON WHO MAY BE CONSIDERED TO BE AN
UNDERWRITER OR TO ANY PERSON IN ANY STATE IN WHICH SAID OFFERING OR SOLICITATION
IS NOT AUTHORIZED BY THE LAWS THEREOF OR IN WHICH THE PERSON MAKING SAID
OFFERING OR SOLICITATION IS NOT QUALIFIED TO ACT AS DEALER OR BROKER OR
OTHERWISE TO MAKE SUCH OFFERING OR SOLICITATION.
WE HAVE AGREED TO FILE AMENDMENTS TO THE REGISTRATION STATEMENT OF WHICH
THIS PROSPECTUS IS A PART IN ORDER TO INFORM POTENTIAL PURCHASERS OF THE COMMON
STOCK OF ANY FACTS OR EVENTS ARISING AFTER THE DATE OF THIS PROSPECTUS WHICH ARE
MATERIAL TO SUCH PURCHASER'S INVESTMENT DECISION. WE WILL DISTRIBUTE ANY SUCH
AMENDMENTS TO THIS PROSPECTUS TO THE SELLING STOCKHOLDERS AFTER SUCH AMENDMENT
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
2
<PAGE>
FORWARD-LOOKING STATEMENTS
This Prospectus contains certain "forward-looking statements". We have based
these forward-looking statements on our current expectations and projections
about future events, and they do not relate strictly to historical or current
facts. Our actual results could differ materially from the results discussed in
the forward-looking statements. These forward-looking statements are subject to
risks, uncertainties and assumptions about CellPoint, including, among other
things:
- The rate of market development and acceptance of location and telematics
technologies;
- The unpredictability and length of our sales cycle;
- The limited revenues and significant operating losses we have generated to
date;
- Our ability to achieve adequate levels of revenue to recover our
investment in capitalized software development costs;
- The dependence on the efforts of mobile networks operators;
- The possibility of significant ongoing capital requirements;
- The loss of any significant customer;
- Our ability to secure additional financing as and when necessary;
- Our ability to retain the services of our key management and to attract
new members of the management team; and
- Our ability to effect and retain appropriate patent, copyright and
trademark protection of our products.
We undertake no obligation to update publicly or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events contained or incorporated by reference in this Prospectus might not
occur.
------------------------
We have not authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent information,
you should not rely on it. We are not making an offer to sell these securities
in any jurisdiction where the offer or sale is not permitted. You should assume
that the information appearing in this Prospectus, as well as information we
previously filed with the SEC, is accurate as of the date on the front cover of
this Prospectus only. Our business, financial condition, results of operations
and prospects may have changed since that date.
3
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file reports, proxy statements and other information with the Securities
and Exchange Commission (the "SEC") (our SEC file number is 000-25205). Our SEC
filings are also available over the Internet at the SEC's website at
HTTP://WWW.SEC.GOV. You may also read and copy any document we file at the
public reference facilities maintained by the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
more information on the Public Reference Room and their copy charges. We
maintain a website at http://www.cellpt.com.
IN CONNECTION WITH THIS OFFERING, CERTAIN SELLING STOCKHOLDERS MAY ENGAGE IN
PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK OF THE COMPANY ON NASDAQ
IN ACCORDANCE WITH RULE 103 OF REGULATION M. SEE "PLAN OF DISTRIBUTION".
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" the information we file with
it, which means:
- Incorporated documents are considered part of this prospectus;
- We can disclose important information to you by referring you to those
documents; and
- Information that we file with the SEC will automatically update and
supersede this prospectus.
We incorporate by reference the documents listed below that have been
previously filed with the SEC under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"):
- Annual Report on Form 10-KSB for the fiscal year ended June 30, 2000;
- Quarterly Report on Form 10-QSB for the quarterly period ended
September 30, 2000;
- Current Report on Form 8-K, filed with the SEC on December 12, 2000;
- Definitive Proxy Statement, dated November 6, 2000;
- Description of our Common Stock set forth in our Registration Statement on
Form 10SB, as amended, including any subsequent amendment or report filed
for the purpose of updating such description.
We also incorporate by reference each of the following documents that we
will file with the SEC after the date of this prospectus but before all the
common stock offered by this prospectus has been sold:
- Reports filed under Sections 13(a) and (c) and 15(d) of the Exchange Act;
and
- Definitive proxy or information statements filed under Section 14 of the
Exchange Act in connection with any subsequent stockholders' meeting.
You may request a copy of any filings referred to above, at no cost, by
contacting us at the following address:
CellPoint Inc.
3000 Hillswood Drive
Hillswood Business Park
Chertsey, Surrey KT16 0RS
England
Attn: Investor Relations
4
<PAGE>
SUMMARY INFORMATION
THE FOLLOWING SUMMARY CONTAINS BASIC INFORMATION ABOUT OUR BUSINESS AND THIS
OFFERING. IT MAY NOT CONTAIN ALL THE INFORMATION THAT IS IMPORTANT TO YOU. YOU
SHOULD READ THIS ENTIRE PROSPECTUS, INCLUDING "RISK FACTORS" AND OUR
CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES INCORPORATED BY REFERENCE
INTO THIS PROSPECTUS, BEFORE DECIDING TO INVEST IN SHARES OF COMMON STOCK.
OUR BUSINESS
CellPoint Inc. and its subsidiaries promote, market, develop, offer, sell,
support and distribute digital cellular, or GSM (Global System for Mobile
Communications, "GSM") technologies and applications for mobile phone location
services and telematics. We are primarily an enabler of location technology and
services for mobile phones and other mobile devices. Location services for
mobile phones are made possible by combining location technology, a location
services platform (similar to an operating system) and applications to deliver
various location services. Our operating system also supports our telematics
terminals to enable telemetry services with broad industrial scope.
CellPoint is an end-to-end provider of location services. Our location
technology enables users to determine the position of a cellular telephone or
object in unmodified GSM cellular networks. The primary location service
applications include resource management of mobile workforce assets, friend-
finding relative to one's own location, personal security services and fleet
management and vehicle tracking for security, including positioning and tracking
for recovery in the event of theft. In the resource and fleet management
application, companies can view and track their mobile service personnel over
the Internet. Information services can include location-sensitive traffic
reports, weather, and concierge information services such as the location of the
nearest hotel, restaurant or repair shop. Emergency applications could include
locating persons making emergency calls, roadside assistance in the event of
vehicle breakdown or location of a disabled or impaired person who may be lost
or missing.
Unwire, our telematics subsidiary, focuses on the worldwide marketing,
support, development, distribution and sales of our technologies and products
for telematics. Telematics involves wireless remote management and control of
machines and equipment. The field of applications spans all industries and
includes, for example, logistics, alarm management, elevator systems, vending
machines, container management, meter reading, fleet management, vehicle
monitoring and remote control, quality control, cash and ATM terminals, gate and
door management, security, supervision and service information.
As used herein, "we", "us", "our" and "the Company" refer to CellPoint Inc.
and its subsidiaries, collectively; "CellPoint" refers to our wholly-owned
subsidiaries, CellPoint Systems AB in Sweden, CellPoint Europe Limited in
England and CellPoint Systems SA (Pty) Ltd. In South Africa; and "Unwire" refers
to our wholly-owned subsidiary, Unwire AB.
OUR ADDRESS
We were originally organized on February 28, 1997, as Technor
International, Inc., a corporation organized under the laws of the State of
Nevada, pursuant to the provisions of General Corporation Law of the State of
Nevada. On October 4, 1999, we changed our corporate name to "CellPoint Inc." in
order to generate wider name recognition in the business and financial
communities. Our Common Stock trades on the NASDAQ National Market under the
symbol CLPT.
Our principal business address and telephone numbers are Kronborgsgrand 7,
164 46 Kista, Sweden, telephone +46 (0)8 5947-4900, facsimile
+46 (0)8 35 87 90. We also maintain executive offices at 3000 Hillswood Drive,
Hillswood Business Park, Chertsey, Surrey, KT16 0RS, England,
5
<PAGE>
telephone +44 1932 895 310. The Company maintains a website at www.cellpt.com.
Information contained in our website is not a part of this Prospectus.
RECENT DEVELOPMENTS
On August 28, 2000, Unwire announced a contract with PhoneTrans AG of
Germany, pursuant to which PhoneTrans has committed to purchase a minimum of
24,000 telematics terminals from Unwire over 29 months. The purchase price under
the contract is expected to aggregate $8,000,000. In the vending machine
marketplace, Unwire's terminals will automatically notify owners of low stock
levels, saving companies time and money by ensuring stock levels are always
there. Unwire will earn revenues from the sale of hardware, consulting services
and application license fees.
On September 8, 2000, Unwire announced its agreement with ItsMobile of
Ireland to provide telematics terminals for vending machines in Europe. The
purchase price under the contract is expected to aggregate $2,800,000 in
revenues. Unwire's terminals will notify owners automatically of low stock
levels and will provide such owners with remote management information for the
vending machines.
On September 27, 2000, Unwire and CellPoint announced a contract with Car
Tracking Company Ltd. of Thailand. This contract combines Unwire's
purpose-designed in-vehicle telematics terminals with CellPoint's location
technology to provide security and fleet management for police and government
vehicles in Thailand. The contract is expected to aggregate $12,000,000 in
revenues over three years.
On October 9, 2000, we announced a commercial agreement with EuroTel
Praha Ltd. of the Czech Republic for our Mobile Location Services platform and
applications. EuroTel, using CellPoint's latest location-based service
technology, is able to offer its customers our Resource Manager service based on
their current mobile phones and SIM cards.
On December 6, 2000, we completed a private placement with Castle Creek
Technology Partners LLC ("Castle Creek"). In such transaction, we issued to
Castle Creek 6% convertible notes in the aggregate principal amount of
$10,000,000 and five-year warrants to purchase up to 210,526 shares of the
Company's Common Stock. The convertible notes are due September 30, 2002, and
may be prepaid prior to such date upon the satisfaction of certain conditions
(including the issuance of additional warrants). The convertible notes may be
converted at the rate of $25.00 per share until June 4, 2001; on or after
June 5, 2001, the convertible notes may be converted into shares of our Common
Stock at a rate equal to the lesser of (a) $25.00 per share, and (b) 90% of the
average of the five lowest Volume Weighted Average Prices of our Common Stock
during the 20 consecutive trading days ending on the trading day immediately
prior to the conversion date. The warrants are exercisable initially at $11.40
per share. The conversion ratio of the notes and the exercise price of the
warrants are also subject to anti-dilution adjustments. See "Description of
Securities--Castle Creek Convertible Notes and Warrants".
THE SELLING STOCKHOLDERS
This Prospectus relates to the registration of the resale of 3,773,274
shares of our Common Stock, beneficially owned by certain of the Company's
stockholders (the "Selling Stockholders"). Of the shares covered by this
Prospectus, 898,320 are being registered for sale by purchasers in a private
placement through Madison Securities in 1999, 985,481 are being registered for
sale by the former stockholders of Unwire, 100,000 shares are being registered
for sale upon exercise of warrants held by M&S Trust Company, and 1,789,473 are
being registered for sale upon the conversion of the notes and exercise of the
warrants held by Castle Creek. The shares owned by the Selling Stockholders who
purchased their shares in the 1999 private placement through Madison Securities
were previously registered in a registration statement that became effective on
August 4, 2000 and amended on December 27, 2000.
6
<PAGE>
The shares still owned by such Selling Stockholders which were previously
registered are being included in this Prospectus for the Company's purposes of
including all shares of selling stockholders in one prospectus. Upon the
effectiveness of this Prospectus, the previous registration statement will be
terminated.
We do not know when or if the Selling Stockholders will exercise their
warrants or convert their notes or whether the Selling Stockholders will sell
any of the Shares. See "The Selling Stockholders" and "Plan of Distribution".
THE OFFERING
The Shares offered pursuant to this Prospectus are shares of our Common
Stock beneficially owned by the Selling Stockholders. We will not receive any
proceeds from the sale of the Shares by the Selling Stockholders, except to the
extent that any of the Selling Stockholders exercise their warrants and elect to
pay the exercise price in cash.
7
<PAGE>
RISK FACTORS
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER
THE RISKS DESCRIBED BELOW BEFORE YOU DECIDE TO BUY OUR SHARES. IF ANY OF THE
FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, RESULTS OF OPERATIONS AND
FINANCIAL CONDITION WOULD BE LIKELY TO SUFFER. IN THAT CASE, THE MARKET PRICE OF
OUR COMMON STOCK COULD DECLINE, AND YOU COULD LOSE ALL OR PART OF YOUR
INVESTMENT.
RISKS RELATED TO OUR BUSINESS
OUR LIMITED OPERATING HISTORY MAKES EVALUATION OF OUR BUSINESS AND PROSPECTS
DIFFICULT.
We have only a limited operating history on which you can base an evaluation
of our business and prospects. While we have generated limited revenues since
July 1999, we cannot assure you that we will generate sufficient revenues to
fund our operations or that we will be profitable at such level of operations.
Our business and prospects must be considered in light of the risks,
uncertainties, expenses and difficulties frequently encountered by companies in
their early stages of development, particularly companies in new and rapidly
evolving markets, such as the market for positioning services.
WE HAVE A HISTORY OF LOSSES AND WE ANTICIPATE SIGNIFICANT FUTURE LOSSES.
For the year ended June 30, 2000, we had aggregate commercial revenues of
$915,478. We incurred a loss of ($11,787,375) for fiscal year 2000, as compared
to a loss of ($2,873,479) for the fiscal year ended June 30, 1999. If we were to
record profits, we do not anticipate paying dividends on our Common Stock in the
foreseeable future.
WE MAY NEED ADDITIONAL FINANCING FOR OUR FUTURE CAPITAL NEEDS WHICH MAY NOT
BE AVAILABLE ON FAVORABLE TERMS, IF AT ALL.
We are likely to need additional cash in order to implement our strategies,
including cash for (i) payment of increased operating expenses; and
(ii) further implementation of our business strategies. We may raise such
additional capital through additional public or private financings, as well as
borrowings and other resources. While we have no commitments in place as of the
date of this Prospectus, we are actively negotiating with several investment
banks to undertake a financing. To the extent that additional capital is raised
through the sale of equity or equity-related securities, the issuance of such
securities could result in dilution to our stockholders.
Furthermore, the perceived risk of dilution or any actual dilution
occasioned by the convertible notes and warrants issued to Castle Creek, could
make it difficult for us to obtain additional financing because potential
investors may decline to invest in light of the risk of dilution, or may require
that their investment be on terms at least as favorable as the terms of the
convertible notes and warrants issued to Castle Creek. In addition, our ability
to engage in additional financing is curtailed by the arrangements made with
Castle Creek. We have agreed that for a six-month period from the date that this
registration statement becomes effective, we will not, except with respect to
certain strategic transactions, issue any privately placed equity or equity-like
securities. Furthermore, until December 5, 2001, we have agreed that in the
event we issue any privately-placed securities to any third-parties, Castle
Creek shall have the right to exchange its convertible notes and warrants for
any or all of the securities offered to such third-party. Both of these
restrictions place significant burdens on our ability to raise additional
financing and may cause potential investors to decline to invest or only invest
on terms that are not sufficient to satisfy our capital requirements.
We cannot be assured that we will have access to the capital markets in the
future, or that financing will be available to us on acceptable terms to satisfy
our cash requirements. If we cannot obtain the necessary capital, our business
and financial condition will be materially and adversely affected. In such
event, we may be required to curtail operations significantly or to obtain funds
8
<PAGE>
through entering into arrangements with collaborative partners or others that
may require us to relinquish rights to certain of our assets that we would not
otherwise choose to do.
WE DEPEND HEAVILY ON OUR KEY PERSONNEL, AND OUR INABILITY TO RETAIN THEM
COULD ADVERSELY AFFECT OUR BUSINESS.
Our success will depend, in part, on the continued availability of our
senior management team, particularly Peter Henricsson, President and Chief
Executive Officer, Lynn Duplessis, Vice President, Lars Persson, Chief Executive
Officer of CellPoint Europe Limited, and Lars Wadell, Chief Financial Officer.
We have employment agreements with each of these executive officers.
Mr. Henricsson and Ms. Duplessis are husband and wife. The loss of any of these
key employees could have a material adverse effect on our business and
prospects. We believe that all commercially reasonable efforts have been made to
minimize the risks that might arise should any of our key personnel depart from
the Company. We do not maintain any key man life insurance with respect to any
of our executive employees.
AN INVESTMENT IN OUR COMPANY MUST BE CONSIDERED SPECULATIVE.
We cannot assure you that you will realize a return on your investment or
that our stockholders will not lose their investments in our Company in their
entirety. In the event we are forced to dissolve or commence insolvency
proceedings, any proceeds from the liquidation of our assets will be distributed
to our stockholders only after the satisfaction of the claims of our creditors.
Your ability to recover all or any portion of an investment in our capital stock
will depend upon the amount of the dissolution proceeds.
WE MAY NOT BE ABLE TO MANAGE OUR EXPANDING OPERATIONS EFFECTIVELY.
We are currently experiencing a period of rapid expansion. Due to the
limited deployment of our services to date, the ability of our systems and
operations to connect and manage a substantially larger number of customers
while maintaining adequate performance is unproven. In addition, rapid growth is
likely to place a strain on managerial and operational resources. To accommodate
this growth, we must accomplish the following:
- implement new or upgraded operating and financial systems, procedures and
controls in many different locations;
- expand customer service, billing and other related support systems;
- devise and implement new advertising and marketing campaigns focused on
the CellPoint brand and certain of new products and services; and
- obtain sufficient resources or additional capacity from network operators.
We may not succeed with these efforts. Our failure to accomplish these goals
in an efficient manner could cause expenses to grow and revenues to decline or
grow more slowly than expected, and could otherwise have a material adverse
effect on our business, financial condition and results of operations.
WE HAVE NOT YET ACHIEVED FULL MARKET ACCEPTANCE OF OUR PRODUCTS.
We are currently implementing commercial operations of the CellPoint System.
Our first commercial agreement was signed in April 1999 with Tele2, a GSM
network operator in Sweden, for positioning services for GSM telephones. Tele2
launched commercial services in Sweden for positioning of mobile phones based on
the CellPoint System in November 1999. We announced a commercial agreement where
France Telecom Mobiles will license CellPoint's location platform and one
location services application, Resource Manager. A commercial agreement was
announced on October 9, 2000 with EuroTel Praha Ltd. of the Czech Republic for
our Mobile Location Services Platform and
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applications. Further strategic alliances are in place to co-market new services
internationally, such as with Yahoo Sverige AB, where Yahoo! has branded
CellPoint's Finder! product as Yahoo! Find-A-Friend, and with Matrix Vehicle
Tracking (Pty) Ltd. for deploying vehicle tracking and fleet management services
with purpose-designed terminals. We have begun to receive contract revenues from
these initial contracts. Though we are marketing the CellPoint System throughout
Europe and Asia, we cannot assure you that we will be successful in procuring
additional contracts, or that the contracts obtained will be profitable. We also
cooperate with numerous cellular industry suppliers including application
developers and cellular phone and SIM card manufacturers. We are seeking
additional strategic alliances for distribution and marketing channels to sell
the positioning and telematics services for GSM cellular phones and proprietary
hardware terminals to end-users.
We cannot assure you that the CellPoint System will achieve a significant
degree of market acceptance, and that acceptance, if achieved, will be sustained
for any significant period or that product life cycles will be sufficient (or
substitute products developed) to permit the Company to recover start-up and
other associated costs. Failure of the CellPoint System to achieve or sustain
market acceptance could have a material adverse effect on our business,
financial conditions, and results of operations.
OUR SALES CYCLES ARE LONG AND OUR REVENUE IS UNPREDICTABLE.
Our products and services are complex and it typically takes a cellular
network operator a significant amount of time to reach a decision to purchase
them. We may spend a significant amount of time, effort and expense during a
particular period that does not yield any orders during that period or at all.
If orders or payments are delayed, then it may be difficult to meet cash flow
requirements or obtain credit. Furthermore, deployment of services by a network
operator may take several months. A delay in sales of our products could cause
operating results to vary significantly from projected results. The sales of
services by the network operators will depend on how quickly the network
operator is able to roll-out mobile location service. Since we have no control
over the timing of the roll-out and since we have limited revenue history, it is
particularly difficult to predict revenue and operating results. If the timing
and magnitude of sales are not accurately predicted, then it may be difficult to
meet customers' delivery requirements. These problems could impede our growth,
restrict our ability to take advantage of new opportunities, and ultimately have
a material adverse effect on our financial condition.
WE MAY HAVE DIFFICULTY IDENTIFYING AND FINANCING SUITABLE ACQUISITIONS,
JOINT VENTURES OR STRATEGIC ALLIANCES, AND THOSE THAT WE DO COMPLETE COULD
ADVERSELY AFFECT OPERATING RESULTS.
As part of our business strategy, senior management reviews potential
acquisitions, joint ventures and strategic alliances that may complement or
expand existing business or increase revenues. We may not be able to identify
appropriate joint ventures, acquisitions or alliances or be able to finance
these transactions successfully once identified. Any failure to identify or
finance future transactions may impair our growth.
Any acquisitions that are not completed will be accompanied by the risks
commonly encountered with acquisitions of companies, such as the difficulty of
integrating the operations and personnel of the acquired businesses, the
potential disruption of our business, the assumption of unexpected liabilities
relating to the acquired assets, the imposition and maintenance of common
standards, controls, procedures and policies and the impairment of relationships
with employees and customers as a result of difficulties arising out of
integration. Furthermore, the value of any business acquired may be less than
the amount paid for it if, for example, there is a decline in the position of
that business in the relevant market in which it operates or there is a decline
in that market generally.
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WE MAY ENCOUNTER DIFFICULTIES IN IMPLEMENTING OUR BUSINESS STRATEGY.
Although we intend to pursue a strategy of aggressive product marketing,
development and distribution, implementation of this strategy will depend in
large part on our ability to (i) establish a significant customer base and
maintain favorable relationships with those customers, (ii) effectively
introduce acceptable products to our customers, (iii) obtain adequate financing
on favorable terms to fund our business strategy, (iv) maintain appropriate
procedures, policies, and systems, (v) hire, train, and retain skilled
employees, and (vi) continue to operate in the face of increasing competition.
If we are unable to achieve any or all of these goals, we will not be able to
successfully implement our business strategy, which could have a material
adverse effect on our results of operations and financial condition.
THE PERFORMANCE OF OUR PRODUCTS COULD RESULT IN PRODUCT LIABILITY FOR OUR
BUSINESS OR PRODUCT RECALLS.
We are responsible for product performance and liabilities of our products
based on our core technology. We currently have product liability insurance, but
there can be no assurance that we will be able to obtain additional insurance or
maintain such insurance on acceptable terms that such insurance will provide
adequate coverage against potential liabilities. We face a business risk of
exposure to product liability, claims for consequential damages and other claims
in the event that the use of our technology and services or the failure of our
technology to perform in accordance with specifications is alleged to result in
adverse effects. We cannot assure you that we will avoid significant product
liability exposure or that insurance coverage will be available in the future on
commercially reasonable terms, or at all. A loss of insurance coverage or the
assertion of a product liability claim or claims would likely materially
adversely affect our business, financial condition and results of operations.
While we have taken, and will continue to take, what we believe are appropriate
precautions, there can be no assurance that we will avoid significant liability
exposure. An inability to obtain product liability insurance at acceptable cost
or to otherwise protect against potential product liability claims could prevent
or inhibit the marketing and distribution of the CellPoint System.
WE MAY BE UNABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS AND
MAY BE SUBJECT TO CLAIMS ALLEGING INFRINGEMENT OF THE INTELLECTUAL PROPERTY
RIGHTS OF OTHERS.
We cannot be certain that the steps we have taken to protect our
intellectual property rights will be adequate to deter misappropriation of
proprietary information or prevent others from independently developing or
offering similar products or services. Given the global reach of mobile
communications, trademarks and other forms of intellectual property could be
displayed in countries that offer less intellectual property protection than the
United States, Sweden, South Africa and the United Kingdom. Furthermore,
although we have and expect to have confidentiality and non-competition
agreements with our employees, suppliers and manufacturers, no assurances can be
made that such arrangements will be adequate to protect our trade secrets and
intellectual property rights. We are not aware of any infringement by our
technology on the proprietary rights of others and have not received any notice
of claimed infringement. However, we have not conducted any investigation as to
possible infringement. In addition, we cannot be sure that a third-party will
not assert an infringement claim in the future, or if asserted, that we will be
able to successfully defend against any such claim. Any such misappropriation or
claim could have a material adverse effect on our future financial results
and/or our ability to operate the business.
A FEW STOCKHOLDERS OWN A SUFFICIENT NUMBER OF SHARES OF OUR COMMON STOCK CAN
EXERT A MAJOR INFLUENCE ON MAJOR DECISIONS TO BE TAKEN BY OUR STOCKHOLDERS.
Mr. Henricsson and Ms. Duplessis, the founders of the Company, beneficially
own together approximately 19.1% of our issued and outstanding shares of Common
Stock. Novel Electronics Systems & Technologies, Ltd., the company from whom we
purchased the core technology, beneficially owns approximately 24.1% of our
issued and outstanding shares of Common Stock. Mr. Henricsson and Ms. Duplessis
are not shareholders of Novel. Because of such ownership, Mr. Henricsson,
Ms. Duplessis and Novel together could have a major influence on the election of
all members of the Board of Directors of the Company and determine our corporate
action. Stockholders are not entitled to accumulate their votes for the election
of directors or otherwise.
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RISKS RELATED TO OUR INDUSTRY
IF WE DO NOT RESPOND EFFECTIVELY AND ON A TIMELY BASIS TO RAPID
TECHNOLOGICAL CHANGES AND CHANGES IN CUSTOMER NEEDS, WE MAY LOSE SALES.
The mobile industry is characterized by rapidly changing technologies,
industry standards, customer needs and competition, as well as frequent new
product and service introductions. We will need to maintain technological
competitiveness, achieve market acceptance and meet an expanding range of
customer requirements in order to attract and retain customers and manage
customer data effectively.
Our services are integrated with mobile devices and must also be compatible
with the networks of mobile network operators. We may not be successful in
developing and marketing, on a timely and cost-effective basis, new services
that respond to technological changes, evolving industry standards including
GPRS and UMTS, or changing customer requirements. Our ability to grow and
achieve profitability will depend, in part, on our ability to accomplish the
following in a timely and cost-effective manner:
- effectively use and integrate new mobile technologies;
- continued development and maintenance of technical expertise;
- develop applications to adapt to new mobile systems and personal devices;
- influence and respond to emerging industry standards and other changes;
- effectively market our services; and
- develop innovative services that continue to satisfy the needs of our
customers.
We cannot assure you that we will be able to achieve these goals and our
failure to do so could have a material adverse effect on our future financial
results and/or ability to operate the business.
THERE IS NO ESTABLISHED MARKET FOR LOCATION SERVICES.
The success of our business depends heavily on the development of a market
for mobile location products and services. Since this market is new, and its
potential is uncertain, there can be no assurances that it will develop or be
sustained for a period sufficient to recover start-up and other associated
costs. In order to be successful, we need mobile network operators to launch and
maintain mobile location services utilizing our location services platform and
location applications. Although we intend to market our products aggressively,
we cannot assure you that network operators will accept our products or that
consumers will purchase mobile location services from their network operators.
If significant sales of location services do not develop, our financial
condition and results of operations may suffer.
OUR SUCCESS DEPENDS ON ESTABLISHING AND MAINTAINING RELATIONSHIPS WITH, AND
OBTAINING SUFFICIENT CAPACITY FROM MOBILE NETWORK OPERATORS.
The primary source of our location services revenue is based on the volume
of subscribers using our services through a mobile network operator. Our success
depends heavily on the success of mobile network operators in pricing and
marketing new location services to their customers. If one or more network
operators are unable to gain location services subscribers, then our earnings
may suffer. We also depend on mobile network operators to provide uninterrupted
service and we will not be able to satisfy our customers' needs if the network
operators fail to provide the required level of service, including bandwidth. In
addition, our expenses may increase and profitability could be materially
adversely affected if network operators were to increase the prices of their
services. Some network operators are, or could become, competitors and, if they
become competitors, they may refuse to provide their services to us or only
provide them to us on less advantageous terms. This could have a material
adverse effect on our future financial results and/or our ability to operate the
business.
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OUR BUSINESS COULD SUFFER IF MOBILE DEVICES ARE NOT WIDELY ADOPTED FOR
INTERNET-BASED SERVICES.
The success of our business depends in part on the acceptance by the market
of mobile devices as a method of accessing the Internet. There are a number of
technological and market barriers to the widespread use of mobile devices for
this purpose. These barriers include limited display capability, difficulty of
data input, slower connection speeds, lack of acceptable security technologies,
concerns over privacy and inconsistent quality of service.
ACTUAL OR PERCEIVED HEALTH RISKS ASSOCIATED WITH THE USE OF MOBILE PHONES
COULD REDUCE THE NUMBER OF MOBILE USERS.
We are aware of recent concerns expressed that there may be risks associated
with the effects of electromagnetic signals from mobile handsets and
transmission masts, which serve as antennae for transmitting radio signals.
While there is currently no substantiated link between radio waves and long-term
health issues, the actual or perceived risk of mobile communications devices and
masts could affect us through a reduction in the number of mobile handset users
or a reduction in the average usage per mobile subscriber.
COMPETITION COULD HARM OUR BUSINESS.
The markets for the location and telematics services offered by us are
becoming increasingly competitive. If we are unable to either respond adequately
to the competitive challenges we face or establish a sustainable competitive
advantage, we may lose market share or be forced to lower prices to unprofitable
levels. In addition, we have a number of existing and potential competitors,
located in various service categories, and may be unable to predict or plan
adequately for the strategies of competitors. Accordingly, we may be unable to
respond quickly or adequately to the changes in the marketplace brought on by
new service offerings and the marketing and promotional efforts of existing or
new competitors.
As many of our agreements with mobile network operators are non-exclusive,
competitors may use the same networks in competition with us. It may be possible
for competitors to develop technologies, products and services that are more
effective than our technologies, products and services or that could render our
technology, products and services obsolete and non-competitive. Competitors
could include mobile network operators, software developers, systems
integrators, media companies and Internet portals. Many potential competitors
have significantly greater financial, technical, marketing and other resources
than we have. No assurances can be made that existing competitors or other
companies will not provide services that could be more attractive to consumers
or companies than those provided by us or that we will be able to respond
adequately to the competitive challenges we face. Additional information
regarding competition is described under "Business--Competition".
WE ARE DEPENDENT ON INTERNATIONAL SALES, AND OUR BUSINESS IS SUBJECT TO THE
LOCAL BUSINESS RISKS IN EACH COUNTRY IN WHICH WE DO BUSINESS.
We anticipate that a significant portion of the revenue from the sale of our
location services and telematics products and services will be derived from
customers located outside of the United States. Our sales and operations could
be subject to certain risks of international trade, including tariffs and other
barriers, difficulties in staffing and managing foreign subsidiary and branch
operations, currency exchange risks and exchange controls, potentially adverse
tax consequences and the possibility of difficulty in accounts receivable
collection. Any of these factors could adversely affect our business, financial
condition and results of operations.
Our products may be subject to foreign government standards and regulations
that are continually being amended and may vary from country to country.
Although we will endeavor to satisfy foreign technical and regulatory standards,
there can be no assurance that the CellPoint System or the Unwire telemetry
terminals will comply in all respects with such government standards and
regulations, or
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changes thereto, or that it will be cost effective for us to redesign our
products to comply with such standards or regulations. Our inability to design
or redesign products to comply with foreign standards could have a material
adverse effect on our business, financial condition and results of operations.
FLUCTUATIONS IN THE VALUE OF FOREIGN CURRENCIES COULD RESULT IN CURRENCY
EXCHANGE LOSSES.
Our products and services are sold in currencies other than the U.S. Dollar,
which makes the management of currency fluctuations difficult and exposes us to
risks. Fluctuations in the value of foreign currencies relative to the U.S.
Dollar could cause us to incur currency exchange losses. The risk will increase
to the extent international revenue increases. The effect of exchange rate
fluctuations on future operating results cannot be predicted. We have no
experience in entering into currency hedging contracts, and if we use hedging to
try to manage any future foreign currency exposure, we may incur hedging-related
losses.
NEW LAWS AND REGULATIONS THAT IMPACT OUR INDUSTRY COULD INCREASE COSTS OR
REDUCE OPPORTUNITIES TO EARN REVENUE.
We are currently subject to certain regulations specifically aimed at
e-commerce and Internet-related services in addition to regulations applicable
to businesses in general. In the future, however, we may become subject to
further regulation by local or national regulatory authorities including, among
other issues, in relation to e-commerce and taxation. Concerns about personal
privacy could also result in regulations limiting the use of mobile location
services. For example, the European Union has issued a revised
telecommunications data protection directive that covers advanced location
systems such as the CellPoint System. The revised directive provides that
location data may only be used with the consent of the subscriber and that
subscribers and users must be provided with a simple means of temporarily
denying the processing of their location data. The revised directive, which is
not expected to take effect in Europe until 2002, may affect the extent to which
network operators are able to use the CellPoint System. In addition to
regulations covering CellPoint, the network operators that supply us with
capacity are subject to laws and regulations that could cause them to increase
our costs or reduce our ability to continue selling and supporting our services.
RISKS RELATED TO THIS OFFERING
OUR SHARES MAY EXPERIENCE EXTREME PRICE AND VOLUME FLUCTUATIONS.
The market price for our Common Stock may fluctuate significantly in
response to a variety of reasons, some of which are beyond our control:
- variations in quarterly operating results;
- changes in financial estimates by securities analysts;
- changes in market valuation of our competitors or perceived competitors;
- changes in market valuation of companies in the telecommunications
industry;
- announcements by us of significant contracts, acquisitions, strategic
partnerships, joint ventures or capital commitments;
- additions or departures of key personnel;
- sales of common stock or termination of stock transfer restrictions; and
- fluctuations in trading volume, which are particularly common among high
technology companies.
In addition, the stock market has, from time to time, experienced significant
price and volume fluctuations that have affected the market prices for
securities generally.
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Our Common Stock is currently traded on the NASDAQ National Market. Although
we believe that we will continue to meet the criteria necessary to maintain such
listing, there can be no assurance that we will meet the criteria to continue
such listing. To the extent that we do not maintain such listing, our
stockholders could find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, our Common Stock. In addition, failure to
maintain a listing for our Common Stock may make our Common Stock ineligible for
use as, or make our Common Stock substantially less attractive as, collateral
for margin and purpose loans, for investment by financial institutions under
their internal policies or state legal investment laws, as consideration in the
financing of future acquisitions of businesses or assets by us, and for issuance
by us in future capital-raising transactions.
UNDER THE TERMS OF CONVERTIBLE NOTES AND WARRANTS SOLD IN DECEMBER 2000, IF
THE MARKET PRICE OF OUR COMMON STOCK FALLS AND REMAINS LOW, OUR STOCKHOLDERS
COULD EXPERIENCE SUBSTANTIAL DILUTION UPON CONVERSION OF SUCH NOTES OR EXERCISE
OF SUCH WARRANTS, AND SUCH DILUTION COULD CAUSE FURTHER DIMINUTION OF THE PRICE
OF OUR COMMON STOCK AND COULD MAKE IT MORE DIFFICULT FOR US TO OBTAIN ADDITIONAL
FINANCING.
The Castle Creek notes are convertible into an aggregate of 400,000 shares
of our Common Stock, if they are converted before June 5, 2001. If converted on
or after June 5, 2001, they are convertible at the lesser of (i) $25 per share,
and (ii) 90% of the average of the five lowest Volume Weighted Average Prices of
the Common Stock during the 20 consecutive trading days ending on the trading
day immediately prior to the date of determination. If the market price of our
Common Stock is generally lower than $25 per share, we will be required to issue
to the holders of the notes substantially more than 400,000 shares upon
conversion. The lower the market price of Common Stock at the time of
conversion, the greater the number of shares are issuable upon such conversion.
Furthermore, the number of shares of Common Stock issuable upon the exercise of
the warrants or conversion of the notes is subject to increases in the event
that we issue or sell shares of our Common Stock or other securities convertible
into shares of our Common Stock for no consideration or for a price, or at an
exercise price, less than the market price of our Common Stock on the date such
securities are issued or sold. Because of these terms, holders of our Common
Stock face the risk that their holdings will be substantially diluted by the
issuance of additional shares of common stock upon the exercise of the warrants
and the conversion of the notes.
The perceived risk of dilution or any actual dilution occasioned by the
notes and warrants may cause our stockholders to sell their shares, which could
contribute to the further diminution of the value of our Common Stock. In
addition, the significant downward pressure on the trading price of our Common
Stock could encourage certain investors to engage in short sales, which could
further decrease the market price of our Common Stock.
From time to time holders of shares of our Common Stock, including the
Selling Stockholders, may be engaged in short sales, short sales against the
box, puts and calls and other hedging transactions in our Common Stock, and may
sell and deliver the shares in connection with such transactions or in
settlement of securities loans. Such transactions could contribute to diminution
of the value of our Common Stock.
WE MAY BE REQUIRED TO REDEEM THE NOTES WE SOLD TO CASTLE CREEK AT A TIME AND
ON TERMS THAT ARE NOT OPTIMAL IN THE CIRCUMSTANCES OF OUR BUSINESS AT THE TIME.
If the conversion price of the notes or the exercise price of the warrants
issued to Castle Creek are adjusted such that more than 2,109,717 shares are
issuable, we will at such time be required to obtain stockholder approval of
such issuance. Furthermore, unless the closing bid price of our Common Stock
exceeds $11.00 per share on each of the ten consecutive trading days ending on
the earlier of the date we mail our proxy materials to our stockholders for or
next annual meeting or October 31, 2001, then we must ask our stockholders to
vote upon and approve the sale of the notes and the warrants, including the
issuance of more than 2,109,717 shares upon the exercise of the warrants and
conversion of the notes. If our stock price is less than $7.00 per share for any
ten consecutive trading days during
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the period commencing on April 5, 2001 and ending on the date that all the
outstanding notes have been converted and all the warrants have been exercised
or expired, then we will be required to hold a special meeting of stockholders
at which our stockholders will be asked to approve the sale of the notes and the
warrants, including the issuance of more than 2,109,717 shares upon the exercise
of the warrants and conversion of the notes. If such stockholder approval is
required and is not obtained, we will be required to redeem the notes at a rate
equal to 120% of the principal amount being prepaid, plus all accrued and unpaid
interest on such amount. Such redemption may require us to obtain additional
financing at a time or on terms that are not desirable, may preclude us from
using our resources in ways which would be more advantageous to us, and may
adversely affect our cash position. Any of these factors could adversely affect
our business, financial condition and results of operations.
SALES OF SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK COULD ADVERSELY
AFFECT OUR STOCK PRICE.
As a result of the limited trading market for our Common Stock and the large
number (relative to such trading markets) of shares of our Common Stock
available for sale in the public market pursuant to Rule 144 under the
Securities Act, sales by our stockholders of our Common Stock in the public
market could materially adversely affect the prevailing market price for our
Common Stock and could impair our ability to raise capital through offerings of
our equity securities. Any such sales could materially adversely affect the
then-prevailing market price for our Common Stock or the ability of our
stockholders to sell their shares.
CERTAIN ANTI-TAKEOVER PROVISIONS MAY PRODUCE RESULTS DISFAVORED BY OUR
STOCKHOLDERS.
Our Articles of Incorporation permit us, without further stockholder action,
to issue up to 3,000,000 shares of preferred stock, having such rights and
preferences as our Board of Directors may determine. In addition, our Articles
and Amended and Restated By-laws contain various provisions that, under certain
circumstances, could make it more difficult for a third party to gain control of
the Company (e.g., by means of a tender offer), prevent or substantially delay
such a change of control, discourage bids for our Common Stock at a premium, or
otherwise adversely affect the market price of our Common Stock.
USE OF PROCEEDS
We will not receive any proceeds from the sale of any of the Shares by the
Selling Stockholders. Some of the Shares included in this Prospectus have not
yet been issued, but are issuable upon the exercise of warrants held by certain
of the Selling Stockholders, which warrants have exercise prices ranging from
$7.49 to $20.00.
In connection with the exercise of such warrants, each warrant holder may
elect to pay the exercise price by (i) cash or check or (ii) net issuance; i.e.,
cashless exercise. To the extent that a warrant holder elects the net issuance
method, we would not receive any cash as a result of such exercise. To date, the
holders of warrants originally issued in 1999, have exercised their warrants to
purchase 94,750 shares of our Common Stock by the net issuance method, resulting
in the issuance of 63,594 shares of Common Stock. We also received proceeds of
$149,800 from the holders who paid their exercise price in cash for the purchase
of 20,000 shares. We have used these proceeds for our working capital.
Additional proceeds, if any, that we receive from the exercise of the warrants
will be used for working capital.
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BUSINESS
POSITIONING TECHNOLOGY AND LOCATION SERVICES (CELLPOINT)
We focus on the worldwide marketing, development, support, distribution and
sales of the CellPoint technologies and applications for digital cellular
positioning and communication. Our positioning technology, location services
platform and the applications of the technology are collectively marketed under
the name, the "CellPoint System". The current existing applications are marketed
under the names "Resource Manager", "Finder!", "iMate" and "Personal Security".
The CellPoint System enables users to determine the position of a cellular
telephone or mobile device, such as a Personal Digital Assistant (PDA), for use
in a broad range of consumer and business applications. The primary location
service applications today include resource management of mobile workforce
personnel, friend finding relative to one's own location, personal security
services and information services. In the resource and fleet management
application, companies can view and track their mobile service personnel over
the Internet. Information services include location-sensitive traffic reports,
weather, and concierge information services such as the location of the nearest
hotel, restaurant, bank machine or repair shop. Emergency applications could
include locating persons making emergency calls, roadside assistance in the
event of vehicle breakdown or location of a disabled or impaired person who may
be lost or missing. Friend-finding allows users to maintain buddy lists and view
the location of pre-defined, consenting individuals relative to their own
location, send messages to these people or call them. Personal security services
offer added security to people in higher risk occupations such as night security
guards, chauffeurs, tax collectors, health care personnel, postal delivery
persons and couriers.
INDUSTRY OVERVIEW
We believe that location services will play a key role in the mobile
Internet and mobile commerce, and that the location component will be a
cornerstone in the majority of mobile Internet use. There has been an explosive
growth of wireless communications and the Internet, with mobile telephony being
the fastest growing technology of all time. Mobile Internet access will offer
corporate and mass-market utility in saving time and money. Merrill Lynch
(WIRELESS INTERNET, June 5, 2000) projects 1.5 billion people will have wireless
access to the Internet by 2005. Most experts agree that more people will access
the Internet from mobile devices than from fixed computers before 2005.
Mobile operators are facing increased competition, lower revenues per user
through falling prices and churn among subscribers from one operator to another.
Voice services alone have become a commodity service. The key to unlocking
further value in the operators' investments in network infrastructure is through
offering unique value-added services to attract more customers and more airtime
use per customer. Services such as voice mail, pre-paid subscriptions and short
message service (SMS) are value-added service offerings beyond voice that are
also becoming commonplace. Location services can offer operators new value-added
services to unlock new revenue potential and differentiate operators from their
competitors.
The industry for mobile location services is still very much in its infancy,
but new wireless services are an explosive growth area. It has taken longer than
we expected for this industry to "take off", but most experts agree that growth
is about to accelerate to massive proportions. We believe that 70% - 80% of
mobile phone users will employ location services by 2005, and that the location
component is key to using the Internet from mobile devices. Location services
for mobile users offer broad utility, and can be grouped into four categories:
management and tracking, information, entertainment and security. While the
industry is very new, we expect that commercial services with a strong business
case for management and service applications will be the first to enter the
market, but the mass market services including information and entertainment
services will be much larger over time. We have developed applications that span
all four key application areas.
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COMPANY HISTORY
Effective February 28, 1999, CellPoint acquired technology and intellectual
property rights from Novel Electronic Systems & Technologies ("Novel") for the
core GSM positioning technology originally developed in South Africa. We own the
technology, and have the right to use it worldwide, with the exception of
sub-Saharan Africa where such rights were acquired by Wasp SA (Pty) Ltd., a
corporation organized under the laws of South Africa ("Wasp SA"). Prior to
acquiring the technology, we had licensed it from Wasp International (Pty) Ltd.
("Wasp") the company that developed the initial technology used within the GSM
networks for positioning and telematics. We also purchased 100% of Wasp, the
business of which consists only of a development team and tools used in the
development of proprietary GSM positioning and telematics technologies (Wasp has
subsequently been renamed as CellPoint Systems S.A. (Pty) Ltd. ("CellPoint SA").
We acquired 10% of Wasp SA, which is the South African corporation with rights
to the GSM technology in sub-Saharan Africa.
The GSM positioning technology was originally commercialized by Wasp and
Matrix Vehicle Tracking (Pty) Ltd., a corporation organized under the laws of
South Africa ("Matrix"), and has been in commercial use in South Africa for
almost four years. There are more than 20,000 commercial users of the technology
in South Africa. We have entered into a cooperation agreement with Matrix
whereby Matrix will make available to us its knowledge and know-how regarding
GSM positioning applications, strategies and service delivery.
APPLICATIONS
RESOURCE MANAGER. Our Resource Manager is a valuable tool for fleet and
personnel managers such as service and repair companies, sales organizations,
courier and shipping agencies, coach companies, taxi services, car rental
agencies, delivery firms, railroad companies, etc., that want to manage their
mobile resources and assets more effectively. The communication and positioning
system will help fleet owners to optimize routes and allocate resources.
Customers of these organizations can also benefit from increased information
being made available to them through the delivery of new location services, such
as when to expect a delivery, installation or service repair person. While we
believe that the potential cost savings for fleet owners and personnel managers
using the CellPoint System are significant, we have not had extensive experience
yet in the commercial use of these products.
Our first commercial agreement was signed in April 1999 with Tele2, a GSM
network operator in Sweden, for positioning services for GSM mobile phones. This
is a significant contract in that it constitutes the first commercial use of the
technology outside of South Africa. We will receive revenue percentage
participation with the operator based on a sliding scale, such that a higher
percentage is received for the first few thousand users, and that percentage is
reduced beyond higher volume users of the technology. Further, we will receive
minimum monthly payments regardless of the number of users. Tele2 launched
commercial services in Sweden for positioning of mobile phones based on the
CellPoint System in November 1999. Through June 30, 2000, we received $536,306
in revenues from the Tele2 contract.
On July 28, 1999, we signed an agreement with France Telecom Mobiles for the
purchase of a system for an evaluation project of our CellPoint positioning
technology and services for commercial fleet management. The CellPoint System
has been installed and undergone technical testing since March 1999 to provide
location technology and related services in France. A commercial testing phase
commenced in September 1999. Revenues commenced during the evaluation project
with further revenues to be billed pursuant to a commercial agreement entered
into on July 13, 2000 where France Telecom Mobiles will license CellPoint's
location platform and one location services application, Resource Manager.
France Telecom Mobiles has not yet disclosed the date of commercial launch of
the new location services enabled by CellPoint.
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On October 9, 2000, we announced a commercial agreement with EuroTel
Praha Ltd. of the Czech Republic for our Mobile Location Services platform and
applications. EuroTel, using CellPoint's latest location-based service
technology, is able to offer its customers our Resource Manager service based on
their current mobile phones and SIM cards.
FINDER! Finder! is designed for and targeted to the mass consumer market.
It allows users to maintain buddy lists and view the location of pre-defined,
consenting individuals relative to their own location, send messages to these
people or call them. We believe Finder! offers both entertainment value as well
as practical value for business users.
On May 4, 2000, we entered into an agreement with Yahoo! We have agreed with
Yahoo! to co-market a person-to-person locator service for mobile phones in
specified countries in Europe. The service will be called "Yahoo!
Find-A-Friend". Using our Finder! technology, Yahoo! Find-A-Friend allows users
to pinpoint the location of the friend or colleague they are trying to contact.
The service can easily be bundled with pre-paid network packages sold by mobile
network operators as an added value feature to maintain customer loyalty and
attract new subscribers. Our Finder! and Yahoo! Find-A-Friend can be used
anywhere in the world where there is a GSM network in place.
IMATE. iMate addresses the broadest range of needs in mass-market mobile
use. iMate is both a full-featured information service for mobile users and a
powerful content collector and integrator. Information can be sourced from any
number of websites or databases. Internet content and geographical information
is delivered to users based on their location. Content delivered includes
weather and traffic reports to personal navigation, proximity services, and
concierge services. Information is structured in a navigable hierarchy to
optimize ease of use. Through the integrated use of mobile device positioning
and profiling, the user has a very powerful and user friendly tool to simplify
everyday life or to get more out of a visit to an unfamiliar area.
PERSONAL SECURITY. This service is based on our core positioning technology
and allows personalized user profiles in case of emergency or threat. In a
distressed situation, the user may press predefined buttons on the mobile phone.
The phone sets up a voice call to an alarm center and sends positioning
information for the caller to the alarm center via CellPoint's location services
platform. The caller's position is shown to the operator on a digital map. Each
user makes an action plan when he or she subscribes to the service. The action
plan can contain medical information about blood type or allergies, contact
persons at work or home and other information such as hazardous cargo the person
may be transporting. With this information at hand, the emergency operator has
the caller's location and a much better chance to provide the distressed person
with the appropriate assistance.
STANDARDS
A wide assortment of standard cellular telephones and WAP ("Wireless
Application Protocol") telephones support the CellPoint technology today. We
believe that more than 90% of the cellular phones sold in Europe this year are
compatible with the CellPoint technology and location services. As GSM standards
open up for competition between system layers in location-based systems, a clear
division between location platforms and location applications will develop over
time. CellPoint provides systems in all layers--the positioning technology, the
middleware and the location applications--and provides open interfaces for third
party development. Operating entirely within GSM, Internet and WAP standards,
CellPoint's location technology and services platform require no network add on
or overlay and work in any GSM network regardless of infrastructure vendor or
vendors, allowing for worldwide roaming capabilities.
We contribute to the setting of standards through our membership and
participation in the WAP forum (we also hold the Secretary position for Location
Services), ETSI (European Telecommunications Standards Institute, "ETSI") and
the Location Interoperability Forum (LIF) where
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we chair the Mobile Location Protocol/Application Programming Interface
(MLP/API) definition group.
The United States Federal Communications Commission (the "FCC") adopted a
ruling in June 1996 (Docket No. 94-102) that mandates all cellular telephone
carriers to provide location information on all 911 calls by October 2001. We
believe that other countries may mandate similar requirements in the future.
Even without such additional regulations, we believe that many cellular carriers
are interested in providing new value-added services incorporating cellular
location such as the services available from CellPoint.
SYSTEM COMPONENTS
CellPoint is an end-to-end developer, supplier and enabler of location
technology and services. CellPoint provides systems in all layers--the location
technology, the middleware and the location applications. CellPoint's location
technologies utilize standard GSM functionality that is already supported by all
major GSM infrastructure suppliers today. The main component of the technology
is the CellPoint Mobile Location System. This third generation location platform
supports our location technology, provides open interfaces aligned with third
generation standards and is designed to support all or most location
technologies expected to reach commercial success in the future. It is through
this platform that all operations and services run.
The Mobile Location System provides a generic location and messaging
platform that can be shared by several different applications, such as Finder!,
iMate or Resource Manager. The application servers utilize the Mobile Location
System through an Application Programmers Interface (APIs), which enables
location of a mobile terminal using a uniform protocol that is independent of
the type of location provider used. CellPoint also makes the API available to
other application developers who can then deliver their location-based services
through CellPoint's platform. There are a number of third party developers
already doing this, which will provide us with even more applications which the
GSM operators can offer their subscribers. A positioning server is attached to
the Mobile Location System, as are the map servers, dedicated terminal servers
and other databases.
The CellPoint System utilizes:
- A standard, unmodified GSM cellular network;
- Proprietary server system, the CellPoint Mobile Location System, (server
hardware and software) interacting with the GSM cellular network
operator's system, placed at the operator's site, at CellPoint's premises
or third party premises;
- A standard GSM cellular phone, WAP phone other GSM mobile device;
- Application software; and
- The Internet.
The server consists of a number of computers that manage the traffic between
the GSM network and the application software. It is designed to handle large
quantities of messages used in complex applications. The Mobile Location System
manages the communication processes, including routing of messages, calculation
of positions, database management and bi-directional message confirmation.
Remote billing features are also integrated. The CellPoint Mobile Location
System is fully scaleable and provides carrier-grade availability.
Application software has been developed based on market and customer driven
principles. Normally these applications provide a graphical or text interface to
display positions on a computer terminal or mobile phone and can also present
information relative to another person's position. Tracking features are also
supported as well as remote updating of message text for defined users.
Information services relative to a user's location are also supported through
application software.
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BUSINESS STRATEGY AND COMMERCIAL APPLICATIONS
Our business strategy is to provide location services technology, enabling
platforms and location service applications in target markets around the world.
We begin with installing the CellPoint location services platform with a GSM
cellular network operator. The network operator, or a third party, will then
market the chosen location services as value-added services offered to the
end-users of the cellular network. We earn revenues through (i) percentage or
fixed price participation in the revenue streams resulting from the new services
offered by the network operator, (ii) sale of tiered licenses to network
operators, such as a fixed price for the first 50,000 users with increases for
additions of 100,000, 500,000 and 1,000,000 users, (iii) usage revenues from
service providers, based on transaction volumes or time frames, (iv) sale of the
CellPoint System to strategic partners where partners are licensed to operate
the technology in a specified geographic area, (v) advertising revenues for
Internet applications, (vi) consulting and professional services, and
(vii) programming interfaces.
We are currently running pilot projects and technology evaluations with
cellular network providers for positioning services throughout Europe and other
parts of the world. We cannot assure our stockholders that any of these pilot
projects will result in the execution of definitive contracts for its products
and services. We cannot rely on the anticipated revenue from these projects to
meet our current growth and expense projections. There can be no assurance that
the CellPoint System will achieve a significant degree of market share, and that
such acceptance, if achieved, will be sustained for any significant period or
that life cycles of that technology will be sufficient (or substitute products
available) to permit us to recover start-up and other associated costs.
We are also cooperating with numerous companies of all sizes in the areas of
marketing and sales, distribution, application development, standards setting,
systems integration and installation and support.
COMPETITION
The wireless industry continues to undergo rapid change, and competition is
intense and is expected to increase. We are aware that other companies and
businesses market, promote and develop technologies and products which could be
competitive with or are functionally equivalent to those which we have. We
expect that companies or businesses which may have developed or are developing
such technologies and products, as well as other companies and businesses that
have the expertise which could encourage them to develop and market competitive
products and technologies, may attempt to develop technologies and products
directly competitive with ours. Many of these competitors have greater financial
and other resources than we have.
Although we believe that the CellPoint System is unique, there can be no
assurances that other companies will not introduce similar or more advanced
technologies. The location services market can be divided into three parts,
(i) the location technology, (ii) the location services platform and (iii) the
applications. We are very active in all three areas.
TECHNOLOGY. There are two different types of positioning technologies:
handset-based and network-based. Our technology was originally handset-based
positioning technology, but we have also developed a unique integrated
network-based solution. Our positioning technologies are all software-based with
no need for hardware overlays or add-ons to an operator's network.
Network-based solutions can be divided into overlay systems and integrated
solutions. Most companies have pursued overlay systems. These systems are very
costly and time-consuming to implement, since they require hardware changes
and/or add-ons to the network. We are not aware of the implementation of a
commercial overlay system to date. Most companies in the industry pursued
network-based overlay system location technology solutions subsequent to a
mandate by the FCC in the United States in 1996. The FCC mandate requires that
all mobile phones be positioned by October 2001, irrespective of the type or
vintage of phone. This led companies to pursue network-based
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overlay location technologies. In September 2000, we announced a network-based
solution to position any cellular phone in a GSM network, regardless of age of
the phone or network infrastructure supplier. This new technology developed by
us is an integrated software only solution for network-based positioning and now
extends our location service applications to all mobile GSM users.
Handset-based technologies can require new model phones, programmed SIM
cards or use of WAP phones to be positioned. Our positioning technology was
originally developed out of the need to track stolen cars. The concept was to
utilize information that was already in existence in a GSM network and have a
"smart terminal" that could gather sufficient information from the network and
allow a server system to calculate the location very quickly.
In November 1998, we announced the capability to position normal cellular
phones. The technology from the special terminals could now be utilized in
normal mobile phones with a standard SIM card containing a program developed by
CellPoint, which opened up a vast market for us for new location services.
Location services for normal mobile phones are the focus of our developments and
service offerings today. This type of handset-based technology is in commercial
operation with MTN in South Africa, Tele2 in Sweden, EuroTel in the Czech
Republic and France Telecom, in each case delivered by us. CT Motion, a location
services developer in Israel, claims to have a handset-based positioning
technology implemented with Partner Network in Israel.
We believe that the technology and applications offered by CellPoint have
distinct advantages over other systems currently being marketed by other
companies. For instance, another handset-based solution is built on Global
Positioning System (GPS) which uses satellites to determine an X,Y position. GPS
requires free line of sight to a minimum of 3 satellites. We view GPS not as a
competing technology but rather complementary to our offerings. We use GPS in
our telematics terminals today, but as an optional accessory rather than the
only technology for positioning. GPS provides excellent location coordinates,
but our engineers' research has shown that it is insufficient as a stand-alone
solution for location services for mobile phones.
Network-assisted GPS enhances GPS availability but it is widely accepted
that it still is not sufficient for mass commercial location services because
users demand functionality 100% of the time. GPS phones will start to become
commercially available in 2001, albeit as a very limited percentage (projected)
of the total mobile device market and more of a niche solution. We support GPS
today and will continue to do so in the future, as we view GPS as an excellent
complement to the CellPoint System.
LOCATION SERVICES PLATFORM. We view ourselves primarily as enablers of
location technology and services. Our location services platform is the
"middleware" in the total solution. It is fully GSM compliant, thus works with
all GSM networks, regardless of infrastructure supplier, and it also works in
multi-vendor infrastructure environments. We believe that there will be multiple
positioning technologies available in the future and no single one will be most
suitable in all cases. Consequently, our Location Services Platform will support
all or most positioning technologies expected to reach commercial success.
Middleware vendors, such as SignalSoft, Ericsson and Airflash have begun to
market location platform solutions. Many others are expected to come to market
in the future, but we believe that our ability to offer an end-to-end solution
to GSM operators will give us a significant time advantage in deploying our
platform. We also intend to cooperate with these companies to increase the
number of applications being offered to the operators.
APPLICATIONS. Today, we have several applications for commercial use. We
also have open API's (Application Programmers Interface) available to partners
that are developing location-based applications. We will continue to develop
further applications on our own and some in cooperation with third parties. We
expect that in the next few years that hundreds of applications will be
delivered via our platform, with the majority being developed by other companies
using our API's.
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TELEMATICS (UNWIRE)
INDUSTRY OVERVIEW
Telematics involves wireless remote management and control of machines and
equipment. In other words, machines send each other messages over a mobile
network without the need for human intervention. For example, electricity meters
can send in usage readings rather than requiring someone to come to your house,
vending machines can send messages indicating that they are low on products,
cars can send automatic messages to emergency services when an airbag is
deployed. The field of applications spans all industries and includes, for
example, logistics, alarm management, elevator systems, vending machines,
container management, meter reading, fleet management, vehicle monitoring and
remote control, quality control, cash and ATM terminals, gate and door
management, security, supervision and service information. Telematics services
combined with our location technology can also be used to monitor location,
speed, rpm, distance traveled, time at certain locations, fuel tank content and
consumption of fuel.
HISTORY
On February 29, 2000, we acquired all of the capital stock of Unwire. Unwire
develops systems and equipment for GSM positioning and telematics and holds
unique patents for positioning. We paid the purchase price by issuing to the
stockholders of Unwire an aggregate of 1,075,000 shares of Common Stock with a
market value of approximately $72.2 million. We registered 25% of the shares
issued to the former stockholders of Unwire in a registration statement filed
with the SEC on August 4, 2000. We are registering all such shares that were not
sold pursuant to such registration statement, as well as the balance of the
Shares issued to the former stockholders of Unwire, in this Prospectus.
APPLICATIONS
Unwire focuses on the worldwide marketing, support, development,
distribution and sales of the Company's technologies for telematics. Unwire's
hardware terminals, the UP-100, UP-200, GT-1 and GT-3 are GSM telematics
terminals that are installed in various industrial equipment, vehicles or
machinery with associated application software to manage the operation of the
terminals.
The hardware terminals used for industrial and in-vehicle applications
contain a GSM module. These terminals are built to be installed in vehicles and
withstand the harsh in-vehicle operating environment, or in industrial
environments without constant supervision by personnel. Terminals have
input-output devices for telematics functions. One version of the terminal used
in positioning applications also includes an optional GPS that is a satellite
tracking technology that complements GSM tracking technology. Unwire's products
also utilize our proprietary technology in the positioning calculations.
Unwire's GSM terminals can also be programmed to activate by remote control
when, for example, someone reports an item missing, presses a distress button,
or when a conventional alarm is triggered. The terminals can also be
pre-programmed for movement restriction applications, such as to indicate when a
vehicle passes certain limits, for example, being driven on board a ferry or
crossing a country border. Tabulation for maintenance purposes can be
pre-programmed, such as when an industrial garage door has been opened a certain
number of times and thus requires maintenance. The terminal can monitor the
performance of a system and automatically send an alarm if performance is
deteriorating. The remote configuration will allow the customer to locate an
asset, lock doors on a vehicle, make its lights flash, shut off fuel injection,
etc. as well as automatically trigger service calls on a wide variety of
industrial equipment. These telematics terminals can be installed at the point
of manufacture or after the fact.
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Rental companies (e.g., of machinery, vehicles, equipment and containers)
can use Unwire's technology and applications for surveillance and allocation
purposes. Additionally, they can use the remote control feature to shut off
ignition and fuel, lock doors, etc., in case a customer misuses the equipment or
does not return the vehicle. Fleet managers can realize these same benefits. In
case of theft, the vehicle can also be located and recovered.
SYSTEM COMPONENTS
The microprocessor-controlled telematics terminals contains a GSM unit and
has a number of inputs and outputs for customized uses. It consists of a GSM
transmitter and receiver, a computer circuit board, memory and backup battery
power. The battery provides auxiliary power in the event that the primary power
source is disconnected. In the case of positioning, the antenna is very small
and does not need to be mounted visibly, in the open or at the exterior, so the
units can be completely concealed and hidden in the asset or vehicle. Unwire
also has a more advanced version of the terminals, with a broader range of GSM
functions and additional satellite capability, making it more flexible for
extensive fleet management services.
The Unwire telematics platform is the same core platform used in the
CellPoint System which consists of a number of computers that manage the traffic
between the GSM network and the application software. It is designed to handle
large quantities of messages used in complex applications. The telematics
platform manages the communication processes, including routing of messages,
database management and bi-directional message confirmation. Remote billing
features are also integrated. Point-to-point connections are also available,
though an integrated solution using the CellPoint System delivers capacity for
large-scale implementations.
BUSINESS STRATEGY AND APPLICATIONS
Unwire's business strategy is to provide telematics technology, terminals
and applications in target markets around the world. Telematics services are
marketed directly to larger industrial users, either directly or through systems
integrators, and the GSM terminals are programmed for specific applications such
as ventilation system management, container management or for remote management,
supervision and control of security systems or automatic door systems.
Instructions are programmed in the telematics terminals in advance, allowing for
performance of a multitude of tasks from a remote location. Other telematics
applications being marketed include wireless remote management and control of
machines and equipment, such as for alarm management, elevator systems, vending
machines, container management, meter reading, fleet management, quality
control, cash and ATM terminals, gate and door management, security, supervision
and service information.
Revenues are realized from (i) sale of telematics terminals, (ii) licensing
fees on application software, (iii) professional services such as consulting,
education and development, (iv) usage revenues, (v) revenue sharing on phone
line usage, and (vi) programming interfaces.
On August 28, 2000, Unwire announced a contract with PhoneTrans AG of
Germany, pursuant to which PhoneTrans has committed to purchase a minimum of
24,000 telematics terminals from Unwire over 29 months. The purchase price under
the contract is expected to aggregate $8,000,000. In the vending machine
marketplace, Unwire's terminals will automatically notify owners of low stock
levels, saving companies time and money by ensuring stock levels are always
there. Unwire will earn revenues from the sale of hardware, consulting services
and application license fees.
On September 8, 2000, Unwire announced its agreement with ItsMobile of
Ireland to provide telematics terminals for vending machines in Europe. The
purchase price under the contract is expected to aggregate $2,800,000 in
revenues. Unwire's terminals will notify owners automatically of low stock
levels and will provide such owners with remote management information for the
vending machines.
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On September 27, 2000, Unwire and CellPoint announced a contract with Car
Tracking Company Ltd. of Thailand. This contract combines Unwire's
purpose-designed in-vehicle telematics terminals with CellPoint's location
technology to provide security and fleet management for police and government
vehicles in Thailand. The contract is expected to aggregate $12,000,000 in
revenues over three years.
COMPETITION
We are aware that other companies and businesses market, promote and develop
technologies and products which could be competitive with the Unwire telematics
terminals and applications. There may exist other technologies and products that
are functionally equivalent or similar the Unwire telematics terminals and
applications. We expect that companies or businesses that may have developed or
are developing such technologies and products, as well as other companies and
businesses that have the expertise that could encourage them to develop and
market competitive products and technology, may attempt to develop technology
and products directly competitive with Unwire's. Many of these competitors have
greater financial and other resources than we have.
There can be no assurance that competitors have not or will not succeed in
developing technologies and products that are more effective than any that we
are developing or which would render Unwire's technology and applications
obsolete or noncompetitive. Many of our competitors have substantially greater
experience, financial resources and marketing capabilities than us. Although we
believe that the Unwire products are unique, there can be no assurances that
other companies will not introduce similar or more advanced technologies.
RESEARCH AND DEVELOPMENT
In Fiscal 2000, we spent approximately $1,000,000 on development activity.
We spent approximately $225,000 on research and development activities in Fiscal
1999, as compared to $7,000 spent on research and development in the previous
fiscal year.
The research and development organizations for CellPoint and Unwire are
coordinated between the CellPoint and Unwire subsidiaries in Sweden and South
Africa. Our personnel have substantial experience in the areas of GSM and UMTS
architecture, SS7 signaling, positioning technologies, WAP, Mobile Internet,
Unix and Windows.
Development projects are carried-out in-line with the time-to-market process
that span from pre-studies to first customer application and roll-out. The
process provides activity and documentation guidelines, management decision
points, configuration management, testing and release control. No product or
application development is finalized without a commitment from at least one
operator or customer.
EMPLOYEES
At December 1, 2000, we had 102 full-time employees. We expect to expand
technical and marketing resources across all of our operations by hiring 50
additional full-time staff for CellPoint in the next seven months and 33
additional full-time staff for Unwire in the next seven months for a total of
185 full-time staff by June 30, 2001. None of our employees is represented by a
labor union. We consider our relations with our employees to be very good.
TRADEMARKS AND PATENTS
CellPoint and Unwire are maintaining and building a patent portfolio within
their defined target markets in order to maximize competitiveness and to avoid
infringements on other parties' technical solutions. The existing portfolio
consists of approved location technology patents and a number of filed
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location technology, middleware and application patents. Since 1997, the Company
has applied for several patents for the CellPoint System; most of which are
currently pending; three of which have been accepted. In addition, we have
applied for several additional patents with respect to our CellPoint and Unwire
technologies.
We believe that the complexity involved in developing these technologies
offers considerable protection against similar developments. Both our CellPoint
and Unwire technologies have been under development for five years and are
continually being refined and improved.
PROPERTY
We maintain our executive offices, consisting of 2,500 square feet of rented
furnished office space at 3000 Hillswood Drive, Hillswood Business Park in
Chertsey, KT16 0RS Surrey, England. We pay the equivalent of $31,000 per month
in rent for those facilities. We also occupy completely furnished facilities
consisting of 10,720 square feet of leased office space located at
Kronborgsgrand 7, 164 46 Kista, Sweden. We occupy those facilities on a lease
basis and pay the equivalent of $14,500 per month in rent for those facilities.
The facilities are leased until May 2003. The leased property is covered by a
comprehensive insurance policy covering property, fire, theft, business
interruption, general and liability, legal and litigation. We believe that the
premises will be adequate through the remainder of the lease. Unwire, in Sweden,
occupies 5,000 square feet of leased office space located at Solna Torg 13, 171
45 Solna, Sweden. Unwire occupies such space on a lease basis and pays the
equivalent of $5,100 per month in rent for those facilities. The lease held by
Unwire expires in October 2001. We believe this space will be adequate through
the remainder of the lease.
CellPoint SA occupies 7,800 square feet of leased office space located at
Ibhubezi House, Howick Close, Waterfall Park, Midrand, South Africa. The rent
expense is equivalent to $5,900 per month for those facilities. The lease held
by CellPoint SA expires in May of 2002. The leased property is covered by a
comprehensive insurance policy covering fire, theft, business interruption,
public liability, electronic equipment, office contents, and accident insurance
for staff. We believe this space will be adequate through the remainder of the
lease.
DESCRIPTION OF SECURITIES
We are authorized to issue 22,000,000 shares of Common Stock and 3,000,000
shares of preferred stock. As of December 14, 2000, 10,548,688 shares of our
Common Stock were issued and outstanding and no shares of preferred stock were
outstanding.
COMMON STOCK
The holders of our Common Stock are entitled to one vote for each share held
of record on all matters to be voted on by those stockholders. There is no
cumulative voting with respect to the election of directors of the Company, with
the result that the holders of more than 50% of our Common Stock voted for the
election of directors can elect all of those directors. The holders of our
Common Stock are entitled to receive dividends when, as, and if declared by the
Company's Board of Directors from funds legally available therefor. In the event
of liquidation, dissolution, or winding up of the Company, the holders of our
Common Stock are entitled to share ratably in all assets remaining available for
distribution to them after payment of the Company's liabilities and after
provision has been made for each class of stock, if any, having preference over
our Common Stock. Holders of shares of our Common Stock, as such, have no
conversion, preemptive or other subscription rights, and there are no redemption
provisions applicable to our common stock. All of the outstanding shares of our
Common Stock are fully paid and non-assessable.
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NONCUMULATIVE VOTING
The holders of shares of our Common Stock will not have cumulative voting
rights, which means that the holders of more than 50% of our outstanding Common
Stock, voting for the election of directors of the Company, may elect all of the
directors of the Company to be elected, if they so desire, and, in such event,
the holders of our remaining Common Stock may not be able to elect any of the
Company's directors.
REGISTRATION RIGHTS
Holders of shares of our Common Stock are not entitled to rights with
respect to the registration of such shares under the Securities Act. However, in
connection with our private placement of 1,125,000 shares of our Common Stock in
October and November 1999, we agreed to file a registration statement with
respect to those shares. All such shares were included in a registration
statement that became effective on August 4, 2000, as amended on December 27,
2000, and all such unsold shares are included in this Prospectus. Pursuant to
the acquisition of Unwire, a portion of the shares issued to former stockholders
of Unwire were included in such registration statement, and all such unsold
shares, as well as the balance of the shares issued to the former stockholders
of Unwire, are included in this Prospectus. Upon the effectiveness of this
Prospectus, such prior registration statement will be terminated.
In connection with a $4,000,000 loan made by M&S Trust Company to us in
June 2000, we issued to M&S Trust Company warrants to purchase up to 100,000
shares of Common Stock. Such warrants are exercisable for one year, commencing
on June 26, 2001, at an exercise price of $20.00 per share. We had agreed to
include the shares issuable upon exercise of such warrants in the registration
statement of which this Prospectus forms a part.
Pursuant to a Registration Rights Agreement with Castle Creek, we agreed to
register the shares that may be issuable upon conversion of the notes and the
exercise of the warrants issued to Castle Creek. Of the shares included in this
Prospectus, 1,789,473 shares are registered for the benefit of Castle Creek. In
addition, we agreed to register such number of additional shares as may become
issuable pursuant to the anti-dilution provisions of the notes and the warrants
issued to Castle Creek, and shares issuable pursuant to warrants that we will be
required to issue to Castle Creek upon any prepayment of the notes.
DIVIDENDS
Whether or not we pay any dividends in the future will be determined by our
Board of Directors, in its discretion, and will depend among other things, upon
our earnings, our capital requirements, and our financial condition, as well as
other relevant factors. We have not paid or declared any dividends to date. We
intend to retain any earnings for the operation and expansion of its business
and do not anticipate paying cash dividends in the foreseeable future.
PREFERRED STOCK
We are authorized to issue preferred stock with such designations, rights
and preferences as may be determined from time to time by our Board of
Directors. Accordingly, our Board of Directors is empowered, without stockholder
approval, to issue preferred stock with liquidation privileges, dividend,
conversion, voting, or other rights that could adversely affect the voting power
or other rights of the holders of our Common Stock. In the event of issuance,
our preferred stock could be utilized, under certain circumstances, as a method
of discouraging, delaying or preventing a change in control of the Company.
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CASTLE CREEK CONVERTIBLE NOTES AND WARRANTS
On December 6, 2000, the Company and Castle Creek entered into a Securities
Purchase Agreement, pursuant to which the Company issued to Castle Creek 6%
convertible notes in the aggregate principal amount of $10,000,000 and five-year
warrants to purchase up to 210,526 shares of the Company's Common Stock. The
convertible notes are due September 30, 2002, and may be prepaid prior to such
date upon the satisfaction of certain conditions (including the issuance of
additional warrants).
Interest on the notes is due semi-annually and is payable in cash. The notes
are due September 30, 2002 and are convertible into shares of Common Stock (the
"Conversion Shares"), at the option of the holders thereof, at the rate of $25
per share if converted prior to June 5, 2001, or, if converted on or after
June 5, 2001, at the lesser of (i) $25 per share or (ii) 90% of the average of
the five lowest Volume Weighted Average Prices of the Common Stock during the 20
consecutive trading days prior to the trading day immediately prior to the date
of determination. We have the option to prepay the notes at any time on
45 days' notice at (i) 115% of the principal amount being prepaid plus all
accrued but unpaid interest on such amount, for all prepayments made prior to
June 5, 2001, and (ii) 120% of the principal amount being prepaid plus all
accrued but unpaid interest on such amount, for all prepayments made on or after
June 5, 2001. In the event of such prepayment, we are obligated to issue to the
note holder warrants to purchase that number of shares of Common Stock equal to
5% of the aggregate amount of the note prepaid divided by the Prepayment Market
Price (as such term is defined in the note).
The notes are not convertible and the warrants are not exercisable to the
extent that, after giving effect to such conversion and exercise, the holder
thereof would be the beneficial owner of more than 4.99% of the outstanding
shares of our Common Stock.
The terms of the warrants and the notes prohibit us from issuing more than
an aggregate of 2,109,717 shares of Common Stock upon the conversion of the
notes and exercise of warrants. Because of this limitation, we are not currently
required to obtain stockholder approval under the rules and regulations of the
NASD for the issuance of the warrants, notes or shares of common stock issuable
upon the exercise or conversion thereof. If the conversion price of the notes or
the exercise price or the warrants are adjusted such that more shares would be
issuable, then we will at such time be required to obtain stockholder approval.
If such stockholder approval is required and is not obtained, we will be
required to redeem the notes at a rate equal to 120% of the principal amount
being prepaid, plus all accrued and unpaid interest on such amount. Unless the
closing bid price of our Common Stock exceeds $11.00 per share on each of the
ten consecutive trading days ending on the earlier of the date we mail our proxy
materials to our stockholders for our next annual meeting or October 31, 2001,
then we must ask our stockholders to vote upon and approve the sale of the notes
and the warrants, including the issuance of more than 2,109,717 shares upon the
exercise of the warrants and conversion of the notes. If our stock price is less
than $7.00 per share for any ten consecutive trading days during the period
commencing on April 5, 2001 and ending on the date that all the outstanding
notes have been converted and all the warrants have been exercised or expired,
then we will be required to hold a special meeting of stockholders at which our
stockholders will be asked to approve the sale of the notes and the warrants,
including the issuance of more than 2,109,717 shares upon the exercise of the
warrants and conversion of the notes.
The warrants may be exercised at any time prior to 5:59 p.m. New York City
time on December 5, 2005 at an exercise price of $11.40 per share. The warrants
and the notes are subject to weighted average anti-dilution adjustments, except
for shares issued in connection with strategic transactions, underwritten public
offerings, acquisitions and the Company's Stock Incentive Plan and Stock Warrant
Plan.
28
<PAGE>
The number of shares of Common Stock issuable upon the exercise of the
warrants or conversion of the notes is subject to increases in the event that we
issue or sell shares of Common Stock or other securities convertible into shares
of our Common Stock for no consideration or for a price, or at an exercise
price, less than the market price of our Common Stock on the date such
securities are issued or sold.
Pursuant to the Securities Purchase Agreement, the aggregate number of
Conversion Shares and shares issuable upon exercise of the warrants may not
exceed 2,109,717 shares without approval of the Company's stockholders. In the
event stockholder approval is required but not obtained, the holders of the note
may require the Company to redeem the notes at 120% of their face value plus
accrued interest.
STOCK INCENTIVE PLAN
In February 1998, we adopted a stock incentive plan (as amended, the
"Plan"). Pursuant to the provisions of the Plan, 2,000,000 shares of our Common
Stock are reserved for issuance upon exercise of options. The Plan is designed
to retain qualified and competent officers, employees, and directors.
Our Board of Directors, or a committee thereof, shall administer the Plan
and is authorized, in its sole and absolute discretion, to grant options
thereunder to all eligible employees, including our officers and directors
(whether or not employees). Options will be granted pursuant to the provisions
of the Plan on such terms and at such prices as determined by our Board of
Directors. The exercise price will not be lower than the closing price on the
date the options are issued, or if such price is not available, at the fair
market value as determined by the Board of Directors. Options granted under the
Plan will be exercisable after the period specified in the option agreement.
Options granted under the Plan will not be exercisable after the expiration of
ten years from the date of grant. The Plan will also authorize our Board of
Directors, in its discretion, to make loans to optionees to enable them to
exercise their options. To date, 1,186,000 options have been granted, and 100
have been exercised.
To date, we have not issued any SARs. With respect to Peter Henricsson, we
granted, in Fiscal 1999, no options, and in fiscal 1998, 75,000 options, with an
exercise price of $2.75 per share.
STOCK WARRANT PLAN
In April 2000, we adopted a stock warrant plan (the "Warrant Plan").
Pursuant to the provisions of the Warrant Plan, eligible employees, consultants
and affiliates will be given the opportunity to purchase warrants, which
warrants can be exercised, upon vesting, to purchase shares of our Common Stock.
An aggregate of 1,000,000 shares of our Common Stock have been reserved for
issuance pursuant to the Warrant Plan. The Plan is designed primarily to retain
qualified and competent officers, employees, and directors.
Our Board of Directors, or a committee thereof, shall administer the Plan
and is authorized, in its sole and absolute discretion, to grant options
thereunder to all eligible employees, consultants and affiliates including our
officers and directors (whether or not employees). Warrants will be sold to
eligible persons at prices determined by independent appraisers to be fair
market prices at the time of such sale. Each warrant will have an exercise price
equal to no less than 150% of the closing price of our Common Stock on the date
immediately preceding the date of sale. Each warrant sold pursuant to the
Warrant Plan will be subject to a vesting period as determined by our Board of
Directors, and will expire no later than five years from the date of issuance.
To date, warrants with respect to an aggregate of 374,000 shares have been sold.
TRANSFER AGENT
The Transfer Agent for our Common Stock is U.S. Stock Transfer Corporation,
1745 Gardena Avenue, Suite 200, Glendale, California 91204, telephone
818-502-1404.
29
<PAGE>
THE SELLING STOCKHOLDERS
The persons listed below are the Selling Stockholders:
<TABLE>
<CAPTION>
AMOUNT OF
COMMON STOCK
AMOUNT OF AMOUNT OF TO BE HELD
COMMON STOCK COMMON STOCK AFTER OFFERING
NAME OF SELLING STOCKHOLDER BENEFICIALLY OWNED REGISTERED IS COMPLETE*
--------------------------- ------------------ ------------ --------------
1999 PRIVATE PLACEMENT SELLING STOCKHOLDERS
<S> <C> <C> <C>
Aburano, Timothy and JoEllen........................ 3,125 3,125 0
Amelio, Nick R...................................... 5,625 5,625 0
Anderson, Michael and Florence...................... 2,625 2,625 0
Baffoe, Joseph...................................... 6,023 6,023 0
Batterson, Jeff..................................... 2,893 2,893 0
Bemoras, David...................................... 5,625 5,625 0
Benton, Bruce Declaration of Trust.................. 33,750 33,750 0
Bernstein, Alfred E................................. 5,625 5,625 0
Binder, Jeffrey T................................... 3,000 3,000 0
Bobb, Robert J...................................... 11,000 11,000 0
Bonello, Philip H................................... 5,625 5,625 0
Bones, Daniel....................................... 250 250 0
Bonfitto, Joseph.................................... 11,250 11,250 0
Bjorklund, Craig A. and Mundt, Kelly M.............. 5,625 5,625 0
Bourjaily, Paul and Barbara......................... 5,625 5,625 0
Brent, Jason........................................ 350 350 0
Broderick, Dennis and Barbara....................... 5,625 5,625 0
Broman, Donald Scott................................ 263 263 0
Brophy, Michael F................................... 5,625 5,625 0
Bullough, Shane H................................... 11,250 11,250 0
Capra, Christopher.................................. 8,942 8,942 0
Carlson, Robert..................................... 1,052 1,052 0
Chhabria, Shakuntala Irrevocable Trust.............. 5,625 5,625 0
Clark, James E...................................... 5,625 5,625 0
Clauss, Robert...................................... 5,625 5,625 0
Crawford, Doug...................................... 1,841 1,841 0
Cochrane, Joyce M................................... 5,625 5,625 0
Eugene E. Cook Trust................................ 5,625 5,625 0
Corkhill Insurance Agency Inc....................... 11,250 11,250 0
Craig, Steven J..................................... 11,250 11,250 0
Del Ghingaro, Robert Sr. and Del Ghingaro,
Robert Jr......................................... 2,813 2,813 0
Demnicki, Michael R................................. 5,625 5,625 0
Dale A. Drake, Trustee for Drs. Drake LTD Pension
Plan.............................................. 6,000 5,625 375
Constance Dubois, Trustee........................... 5,625 5,625 0
Dunnett, Richard.................................... 1,052 1,052 0
Egan, John W........................................ 5,625 5,625 0
ELK Realty & Building Co., Inc...................... 5,625 5,625 0
Everett, W. Allan................................... 5,625 5,625 0
Flynn, Thomas....................................... 15,250 15,250 0
Franks, Malcolm..................................... 5,625 5,625 0
Gary C. Garrett Revocable Trust..................... 11,250 11,250 0
Gedelman, Frank..................................... 5,625 5,625 0
Gilpin, Wayne A..................................... 25,000 25,000 0
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
AMOUNT OF
COMMON STOCK
AMOUNT OF AMOUNT OF TO BE HELD
COMMON STOCK COMMON STOCK AFTER OFFERING
NAME OF SELLING STOCKHOLDER BENEFICIALLY OWNED REGISTERED IS COMPLETE*
--------------------------- ------------------ ------------ --------------
1999 PRIVATE PLACEMENT SELLING STOCKHOLDERS
<S> <C> <C> <C>
Gilpin, Marital Trust............................... 5,219 5,219 0
Gleaves, William.................................... 2,104 2,104 0
Gosney, Gregory S................................... 5,625 5,625 0
Hadley, Peter F..................................... 1,406 1,406 0
Hayes, Robert....................................... 11,250 11,250 0
Hein, Curtis........................................ 263 263 0
Hiler, Lawrence..................................... 11,250 11,250 0
John J. Holzer Revocable Living Trust............... 3,625 3,625 0
Hull, Chris......................................... 3,604 3,604 0
Humphrey, Todd...................................... 7,625 7,625 0
Javier, Ramon and Emma.............................. 5,625 5,625 0
Joyner, Courtney K.................................. 5,625 5,625 0
Kilrea, Scott W..................................... 5,625 5,625 0
Kozak, James........................................ 2,630 2,630 0
Kozin, David and Renee.............................. 5,625 5,625 0
Kromelow, Basil..................................... 11,250 11,250 0
Lamphere, Robert G.................................. 15,250 15,250 0
Lee, C. Glenn and Karen............................. 5,625 5,625 0
Lehman, John W...................................... 7,625 7,625 0
Macke, Elmer H...................................... 5,625 5,625 0
Madison Securities Inc.............................. 5,000 5,000 0
Mann, James L....................................... 11,250 11,250 0
Marassa, Robert..................................... 3,682 3,682 0
Martin, Rex......................................... 2,813 2,813 0
MBS Holdings LLC.................................... 11,250 11,250 0
Midwest Investment Group............................ 20,875 20,875 0
Mikels, Ken Wayne................................... 1,315 1,315 0
Miller, Bradford.................................... 5,625 5,625 0
Moore, Gerald and Monica............................ 15,250 15,250 0
Morgan, Scott C..................................... 263 263 0
Morse Sr., James A. Trust........................... 11,250 11,250 0
Morse, Robert J. Trust.............................. 11,250 11,250 0
Moss, Jeff.......................................... 7,890 7,890 0
Muasher, Issa E..................................... 7,625 7,625 0
Mulack, Virginia W.................................. 4,000 4,000 0
Munden, Evelyn Munden Family LP..................... 5,625 5,625 0
Murphy, Dean and Dawn............................... 5,625 5,625 0
Orland, Keith B. and Margaret....................... 5,625 5,625 0
Owens, Michael...................................... 250 250 0
Pederson, William Scott............................. 5,625 5,625 0
Pohl, Michael and Vivian............................ 5,625 5,625 0
Pravecek, Christopher............................... 30,131 30,131 0
Pruitt, John P...................................... 26,875 26,875 0
Prutzman, George W.................................. 1,944 1,944 0
Rasmussen, James E.................................. 8,000 8,000 0
Ridge, James P...................................... 5,625 5,625 0
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
AMOUNT OF
COMMON STOCK
AMOUNT OF AMOUNT OF TO BE HELD
COMMON STOCK COMMON STOCK AFTER OFFERING
NAME OF SELLING STOCKHOLDER BENEFICIALLY OWNED REGISTERED IS COMPLETE*
--------------------------- ------------------ ------------ --------------
1999 PRIVATE PLACEMENT SELLING STOCKHOLDERS
<S> <C> <C> <C>
Robinson, John P.................................... 5,625 5,625 0
Rogers, Shaun....................................... 3,419 3,419 0
Ronald Stone, Trustee, Ronald Stone Insurance
Trust............................................. 16,875 16,875 0
Rosenak, Dave....................................... 2,813 2,813 0
Ryan, Michael TTEE Michael Ryan Revocable Trust..... 5,625 5,625 0
Sanders, Helen McKay................................ 4,625 4,625 0
Saunders, Thomas B. and Karen M..................... 5,625 5,625 0
Scheumann, Dennis................................... 11,250 11,250 0
Schreiber, Marc..................................... 7,031 7,031 0
Shelby Limited Partnership.......................... 5,625 5,625 0
Slevin, John F...................................... 5,625 5,625 0
Smithburg, William D................................ 5,625 5,625 0
Spencer, Robert J................................... 5,625 5,625 0
Sterling CellPoint, LLC............................. 84,250 84,250 0
Stabus, Brain....................................... 1,713 1,713 0
Straus, Richard R................................... 2,500 2,500 0
Tenex Investment Club............................... 11,250 11,250 0
Tenzer, Lee......................................... 8,000 8,000 0
Thompson, Randy..................................... 5,625 5,625 0
Tierney, James and Marita........................... 11,250 11,250 0
Toolamation Inc..................................... 5,625 5,625 0
Trandel, David...................................... 8,260 8,260 0
Tyrone, James....................................... 4,000 4,000 0
Tyrone, James and Nancy............................. 9,250 9,250 0
Unkel, Robert and Mary.............................. 5,625 5,625 0
Weiss, Fred......................................... 5,625 5,625 0
Weiss, Joanna Lee................................... 1,841 1,841 0
Weiss, Joshua....................................... 500 500 0
Wieseneck Enterprises LP............................ 11,250 11,250 0
Wilbers, David L.................................... 5,625 5,625 0
------- ------- ---
TOTAL............................................... 898,695 898,320 375
======= ======= ===
</TABLE>
------------------------
* Assumes all shares covered by this Prospectus are sold.
The shares owned by the 1999 Private Placement Selling Stockholders were
previously registered in a registration statement that became effective on
August 4, 2000 and amended on December 27, 2000. Since such date, the 1999
Private Placement Selling Stockholders sold an aggregate of 494,935 of Common
Stock. The remaining shares owned by the 1999 Private Placement Selling
Stockholders as listed above were previously registered, but are being included
in this Prospectus for the Company's purposes of including all shares of selling
stockholders in one prospectus. Upon the effectiveness of this Prospectus, the
previous registration statement will be terminated.
32
<PAGE>
<TABLE>
<CAPTION>
AMOUNT OF
COMMON
STOCK TO BE
AMOUNT OF COMMON HELD AFTER
STOCK BENEFICIALLY AMOUNT OF COMMON OFFERING IS
NAME OF SELLING STOCKHOLDER OWNED STOCK REGISTERED COMPLETE*
--------------------------- ------------------ ---------------- ------------
<S> <C> <C> <C>
AB Basen................................... 13,023 13,023 0
Carlson, Roger(1).......................... 2,441 2,441 0
Dahlin, Anna............................... 4,651 4,651 0
eRasmus Management AB...................... 36,491 36,491 0
Foretagspartner AB......................... 36,491 36,491 0
Gellberg, Kaj.............................. 9,767 9,767 0
Hoglund, Thomas(2)......................... 465 465 0
Johansson, Kent............................ 9,802 9,802 0
Jundin, Christopher........................ 465 465 0
Jundin, Per(3)............................. 30,210 30,210 0
Jundin, Peter.............................. 2,325 2,325 0
Karl Stockman AB........................... 275,148 127,981 147,167
Ledstiernan Kapitalforvaltning AB.......... 5,581 5,581 0
Ledstiernan BV............................. 36,491 36,491 0
Ledstiernan Business Development AB........ 36,491 36,491 0
Ledstiernan Investment Ltd................. 36,491 36,491 0
Ledstiernan KB............................. 20,466 20,466 0
Ljung, Mats................................ 1,151 1,151 0
Lundberg, Jakob(4)......................... 4,651 4,651 0
Lundberg, Per.............................. 56,657 56,657 0
Lundberg, Sara............................. 4,651 4,651 0
Norra Brofastet I Sundvall AB.............. 36,491 36,491 0
Olesen, Kerstin............................ 5,180 5,180 0
Olesen, Lykke.............................. 5,180 5,180 0
Procuritas Investment Partners (PIP) BV.... 164,211 164,211 0
Rosen, Thomas.............................. 23,611 23,611 0
Soderberg, Bertil.......................... 121,400 121,400 0
Soderberg, Orjan........................... 3,837 3,837 0
Stenhammar, Olof........................... 11,323 11,323 0
Strombom, Krister.......................... 6,102 6,102 0
Unium AB................................... 130,939 130,939 0
Wallon, Michael(5)......................... 465 465 0
--------- ------- -------
TOTAL...................................... 1,132,648 985,481 147,167
========= ======= =======
</TABLE>
* Assumes all shares covered by this Prospectus are sold.
------------------------
(1) Roger Carlson is presently part of Senior Technical Management of Unwire.
(2) Thomas Hoglund was a founder of Unwire. He is presently part of the Senior
Management of Unwire.
(3) Per Jundin was previously the Managing Director of Unwire.
(4) Per Lundberg was previously a member of the Board of Directors of Unwire.
(5) Michael Wallon was a founder of Unwire and has served as the Interim
Managing Director of Unwire. He is presently part of the Senior Management
of Unwire.
33
<PAGE>
With respect to the 1,075,000 shares of Common Stock issued to the Selling
Stockholders in connection with the Unwire acquisition, we registered 268,772 of
those shares pursuant to a registration statement that became effective on
August 4, 2000 and amended on December 27, 2000. The Unwire Selling Stockholders
sold an aggregate of 89,500 shares of common stock pursuant to such registration
statement. We have included the unsold portion of such shares as well as the
balance of the total shares issued to the former stockholders of Unwire in this
Prospectus. Upon the effectiveness of this Prospectus, the previous registration
statement will be terminated.
<TABLE>
<CAPTION>
AMOUNT OF
COMMON
STOCK TO BE
AMOUNT OF COMMON HELD
STOCK BENEFICIALLY AMOUNT OF COMMON AFTER OFFERING IS
NAME OF SELLING STOCKHOLDER OWNED STOCK REGISTERED COMPLETE*
--------------------------- ------------------ ---------------- -----------------
<S> <C> <C> <C>
M&S Trust Company.......................... 100,000 (1) 100,000 0
Castle Creek Technology Partners LLC....... 526,379 (2) 1,789,473 0
------- --------- --
TOTAL...................................... 626,379 1,889,473 0
======= ========= ==
</TABLE>
* Assumes all shares covered by this Prospectus are sold.
------------------------
(1) Such warrants are exercisable for one year, commencing June 26, 2001.
(2) This amount represents shares issuable upon conversion of notes and the
exercise of warrants, subject to the limitation that the warrants and the
notes are not exercisable or convertible to the extent that if converted by
the holder, such holder would be the beneficial owner of more than 4.99% of
the outstanding shares of our Common Stock. The 4.99% limitation may not
prevent Castle Creek from converting all of its notes or exercising all of
its warrants in a series of transactions such that the 4.99% limitation does
not prevent Castle Creek from selling more than 4.99% of our Common Stock in
the aggregate. The Castle Creek notes would otherwise be convertible into an
aggregate of 400,000 shares of our Common Stock, if they are converted
before June 5, 2001. If converted on or after June 5, 2001, they are
convertible at the lesser of (i) $25 per share, and (ii) 90% of the average
of the five lowest Volume Weighted Average Prices of the Common Stock during
the 20 consecutive trading days ending on the trading day immediately prior
to the date of determination. If the market price of our Common Stock is
generally lower than $25 per share, we will be required to issue to the
holders of the notes substantially more than 400,000 shares upon conversion.
The lower the market price of Common Stock at the time of conversion, the
greater the number of shares are issuable upon such conversion. Furthermore,
the number of shares of Common Stock issuable upon the exercise of the
warrants or conversion of the notes is subject to increases in the event
that we issue or sell shares of our Common Stock or other securities
convertible into shares of our Common Stock for no consideration or for a
price, or at an exercise price, less than the market price of our Common
Stock on the date such securities are issued or sold. Because of these
terms, holders of our Common Stock face the risk that their holdings will be
substantially diluted by the issuance of additional shares of common stock
upon the exercise of the warrants and the conversion of the notes.
Accordingly, in accordance with our agreement with Castle Creek, we have
included in this Prospectus, an aggregate of 1,789,473 shares, which may
become issuable to Castle Creek upon conversion of the notes and exercise of
the warrants.
34
<PAGE>
PLAN OF DISTRIBUTION
We will not receive any of the proceeds of the sale of the Shares offered
hereby. Some of the Shares included in this Prospectus have not yet been issued,
but are issuable upon the exercise of warrants held by certain of the Selling
Stockholders, which warrants have exercise prices ranging from $7.49 to $20.00.
In connection with the exercise of such warrants, each warrant holder may elect
to pay the exercise price by (i) cash or check or (ii) net issuance; i.e.,
cashless exercise. To the extent that a warrant holder elects the net issuance
method, we would not receive any cash as a result of such exercise. To date, the
holders of warrants for 114,750 shares of our Common Stock have exercised their
warrants, resulting in the issuance of 83,594 shares of Common Stock. While the
majority of the holders of such warrants chose to pay the exercise price by the
net issuance method, we received proceeds of $149,800 from holders that paid
their exercise price in cash. We have used these proceeds for our working
capital. Additional proceeds, if any, that we receive from the exercise of the
warrants will be used for working capital.
The Shares may be sold from time to time to purchasers directly by the
Selling Stockholders. Alternatively, the Selling Stockholders may from time to
time offer the Shares through brokers, dealers or agents who may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders and/or the purchasers of the Shares for whom they may act
as agent. The Selling Stockholders and any such brokers, dealers or agents that
participate in the distribution of the Shares may be deemed to be
"underwriters", and any profits on the sale of the Shares by them and any
discounts, commissions or concessions received by any such brokers, dealers or
agents might be deemed to be underwriting discounts and commissions under the
Securities Act. To the extent the Selling Stockholders may be deemed to be
underwriters, the Selling Stockholders may be subject to certain statutory
liabilities of the Securities Act, including, but not limited to, Sections 11,
12 and 17 of the Securities Act and Rule 10b-5 under the Securities and Exchange
Act of 1934, as amended (the "Exchange Act").
From time to time, the Selling Stockholders may be engaged in short sales,
short sales against the box, puts and calls and other hedging transactions in
our securities, and may sell and deliver the shares in connection with such
transactions or in settlement of securities loans. These transactions may be
entered into with broker-dealers or other financial institutions. In addition,
from time to time, a Selling Stockholder may pledge its shares pursuant to the
margin provisions of its customer agreements with its broker-dealer. Upon
delivery of the shares or a default by a Selling Stockholder, the broker-dealer
or financial institution may offer and sell the pledged shares from time to
time.
The Shares offered hereby may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
Shares may be sold by one or more of the following methods, without limitation:
(a) a block trade in which the broker or dealer so engaged will attempt to sell
the Shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction, (b) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to this
Prospectus, (c) ordinary brokerage transactions and transactions in which the
broker solicits purchasers, (d) an exchange distribution in accordance with the
rules of such exchange, (e) face-to-face transactions between sellers and
purchasers without a broker-dealer, (f) through the writing of options, and
(g) other. At any time a particular offer of the Shares is made, a revised
prospectus or prospectus supplement, if required, will be distributed which will
set forth the aggregate amount and type of Shares being offered and the terms of
the offering, including the name or names of any underwriters, dealers or
agents, any discounts, commissions and other items constituting compensation
from the Selling Stockholders and any discounts, commissions or concessions
allowed or reallowed or paid to dealers. Such prospectus supplement and, if
necessary, a post-effective amendment to the Registration Statement of which
this Prospectus is a part, will be filed with the SEC to reflect the disclosure
of additional information with respect to the distribution of the Shares. In
addition, the
35
<PAGE>
Common Stock covered by this Prospectus may be sold in private transactions or
under Rule 144 rather than pursuant to this Prospectus.
To our knowledge, the Selling Stockholders do not currently have any plans,
arrangements or understandings with any broker, dealer, agent or underwriter
regarding the sale of the Shares. There is no assurance that any Selling
Stockholder will not sell any or all of the Shares offered by him, her or it
hereunder or that any such Selling Stockholder will not transfer, devise or gift
such Shares.
The Selling Stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation,
Regulation M, which may limit the timing of purchases and sales of any of the
Shares by the Selling Stockholders and any other such person. All of the
foregoing may affect the marketability of the Shares and the ability of any
person or entity to engage in market activities with respect to the Shares.
Pursuant to the registration rights set forth in the various subscription
agreements between the Company and the Selling Stockholders, each of the Company
and the Selling Stockholders will be indemnified by the other against certain
liabilities, including certain liabilities under the Securities Act, or will be
entitled to contribution in connection therewith. We have agreed to pay
substantially all of the expenses incidental to the registration, offering and
sale of the Shares to the public other than commissions, fees and discounts of
underwriters, brokers, dealers and agents, transfer taxes and fees and expenses
of Selling Stockholders' counsels.
INDEMNIFICATION
We shall, to the fullest extent permitted by Section 78.7502 of the
Corporation Law of the State of Nevada, as the same may be amended and
supplemented, indemnify under said section any director, officer, employee or
agent from and against any and all expenses, liabilities or other matters
referred in or covered by said section, and the indemnification provided for
herein shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any By-Law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person. We will have the power to purchase and maintain officers' and
directors' liability insurance in order to insure against the liabilities for
which such officers and directors are indemnified pursuant to our Amended and
Restated By-Laws.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT
MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE COMPANY
PURSUANT TO THE FOREGOING PROVISIONS, OR OTHERWISE, THE COMPANY HAS BEEN
INFORMED THAT IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE SECURITIES ACT OF
1933, AS AMENDED, 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, WE WILL, UNLESS IN THE OPINION OF OUR COUNSEL THE
MATTER HAS BEEN SETTLED BY CONTROLLING PRECEDENT, SUBMIT TO A COURT OF
APPROPRIATE JURISDICTION THE QUESTION WHETHER SUCH INDEMNIFICATION IS AGAINST
PUBLIC POLICY AS EXPRESSED IN THE SECURITIES ACT OF 1933, AS AMENDED, AND WILL
BE GOVERNED BY THE FINAL ADJUDICATION OF SUCH ISSUE.
36
<PAGE>
We carry directors' and officers' liability insurance covering losses up to
$3,000,000 (subject to certain deductible amounts).
LEGAL OPINIONS
The law firm of Salans Hertzfeld Heilbronn Christy & Viener, our counsel,
620 Fifth Avenue, New York, New York 10020, has rendered an opinion regarding
the validity of the Shares offered hereby.
EXPERTS
The financial statements of CellPoint for fiscal year ended June 30, 2000
and for fiscal year ended June 30, 1999, audited by BDO Stoy Hayward, have been
so incorporated in reliance on the report of BDO Stoy Hayward, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
37
<PAGE>
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS ON BEHALF OF THE COMPANY NOT
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER
THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR THE SOLICITATION OF AN
OFFER TO BUY, ANY SECURITIES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO
WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
CELLPOINT INC......................... 1
FORWARD-LOOKING STATEMENTS............ 3
WHERE YOU CAN FIND MORE INFORMATION
ABOUT US............................ 4
INCORPORATION OF INFORMATION WE FILE
WITH THE SEC........................ 4
SUMMARY INFORMATION................... 5
RISK FACTORS.......................... 8
USE OF PROCEEDS....................... 16
BUSINESS.............................. 17
DESCRIPTION OF SECURITIES............. 26
THE SELLING STOCKHOLDERS.............. 30
PLAN OF DISTRIBUTION.................. 35
INDEMNIFICATION....................... 36
LEGAL OPINIONS........................ 37
EXPERTS............................... 37
</TABLE>
3,773,274 SHARES
OF
COMMON STOCK
CELLPOINT INC.
COMMON STOCK
---------------------
PROSPECTUS
---------------------
DECEMBER [ - ], 2000
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<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Registration Fees........................................... $ 5,541
Transfer Agent Fees......................................... 1,000
Blue Sky Filing Fees........................................ 1,500
Printing and Mailing........................................ 25,000
Legal Fees.................................................. 30,000
Accounting Fees............................................. 25,000
Listing Fees................................................ 36,000
Other....................................................... 5,000
--------
Total....................................................... $129,041
========
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company shall, to the fullest extent permitted by Section 78.7502 of the
Corporation Law of the State of Nevada, as the same may be amended and
supplemented, indemnify under said section any director, officer, employee or
agent from and against any and all expenses, liabilities or other matters
referred in or covered by said section, and the indemnification provided for
herein shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any By-Law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person. The Company will have the power to purchase and maintain
officers' and directors' liability insurance in order to insure against the
liabilities for which such officers and directors are indemnified pursuant to
its By-Laws.
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<PAGE>
ITEM 16. EXHIBITS
The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<C> <S>
4.1......... Registration Rights Agreement, dated as of February 29,
2000, by and among CellPoint Inc., CellPoint Swedish
Holdings Ltd., and the Sellers named therein (incorporated
by reference to the Company's Current Report on Form 8-K,
filed on March 13, 2000, as amended by Form 8-K/A, filed on
May 15, 2000).
4.2......... Securities Purchase Agreement, dated as of December 6, 2000,
by and among CellPoint Inc. and the Purchaser set forth
therein (incorporated by reference to the Company's Current
Report on Form 8-K, filed on December 12, 2000).
4.3......... Registration Rights Agreement, dated as of December 6, 2000,
by and among CellPoint Inc. and the Initial Investor (as
such term is defined therein) (incorporated by reference to
the Company's Current Report on Form 8-K, filed on December
12, 2000).
4.4......... Convertible Note of CellPoint Inc., dated December 6, 2000,
payable to the order of Castle Creek Technology Partners
LLC, in the aggregate principal amount of $10,000,000
(incorporated by reference to the Company's Current Report
on Form 8-K, filed on December 12, 2000).
4.5......... Stock Purchase Warrant of CellPoint Inc., dated December 6,
2000, with respect to the right of Castle Creek Technology
Partners LLC to purchase an aggregate of 210,526 shares of
common stock of CellPoint Inc. at a price of $11.40 per
share (incorporated by reference to the Company's Current
Report on Form 8-K, filed on December 12, 2000).
5.1......... Opinion of Salans Hertzfeld Heilbronn Christy & Viener
(filed herewith).
23.1........ Consent of Independent Accountants (filed herewith)
23.2........ Consent of Salans Hertzfeld Heilbronn Christy & Viener
(included in their opinion filed as exhibit 5.1)
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to the registration statement: to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Act"), each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE ACT MAY BE
PERMITTED TO DIRECTORS, OFFICERS AND CONTROLLING PERSONS OF THE REGISTRANT
PURSUANT TO THE FOREGOING PROVISIONS, OR OTHERWISE, THE REGISTRANT HAS BEEN
ADVISED THAT IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS,
THEREFORE, UNENFORCEABLE. IN THE EVENT THAT A CLAIM FOR INDEMNIFICATION AGAINST
SUCH LIABILITIES (OTHER THAN THE PAYMENT BY THE REGISTRANT OF EXPENSES INCURRED
OR PAID BY A DIRECTOR, OFFICER OR CONTROLLING PERSON OF THE REGISTRANT IN THE
SUCCESSFUL DEFENSE OF ANY ACTION, SUIT OR PROCEEDING) IS ASSERTED BY SUCH
DIRECTOR, OFFICER OR
II-2
<PAGE>
CONTROLLING PERSON IN CONNECTION WITH THE SECURITIES BEING REGISTERED, THE
REGISTRANT WILL, UNLESS IN THE OPINION OF ITS COUNSEL THE MATTER HAS BEEN
SETTLED BY CONTROLLING PRECEDENT, SUBMIT TO A COURT OF APPROPRIATE JURISDICTION
THE QUESTION WHETHER SUCH INDEMNIFICATION BY IT IS AGAINST PUBLIC POLICY AS
EXPRESSED IN THE ACT AND WILL BE GOVERNED BY THE FINAL ADJUDICATION OF SUCH
ISSUE.
The Company carries directors' and officers' liability insurance covering
losses up to $3,000,000 (subject to certain deductible amounts).
II-3
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and authorized this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly, authorized, in the City of London, England, on December 28, 2000.
<TABLE>
<S> <C> <C>
CELLPOINT INC.
December 28, 2000 By: /s/ PETER HENRICSSON
-----------------------------------------
Peter Henricsson
PRESIDENT AND CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
December 28, 2000 By: /s/ LARS WADELL
-----------------------------------------
Lars Wadell
CHIEF FINANCIAL OFFICER
</TABLE>
In accordance with 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
--------- ----- ----
<C> <S> <C>
/s/ STEPHEN T. CHILDS Director December 28, 2000
------------------------------------
Stephen T. Childs
/s/ LYNN DUPLESSIS Director December 28, 2000
------------------------------------
Lynn Duplessis
/s/ PETER HENRICSSON Director December 28, 2000
------------------------------------
Peter Henricsson
/s/ MATS JONNERHAG Director December 28, 2000
------------------------------------
Mats Jonnerhag
Director
------------------------------------
Bengt Nordstrom
/s/ LARS PERSSON Director December 28, 2000
------------------------------------
Lars Persson
/s/ ALBERT VAN URK Director December 28, 2000
------------------------------------
Albert van Urk
</TABLE>
II-4
