As filed with the Securities and Exchange Commission on
March 6, 1997
Registration No _______
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
COMTEC INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
New Mexico 72-2456757
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10855 E . Bethany Drive, Aurora, CO 80014
(Address of Principal Executive Offices) (Zip Code)
Employment Contract with Clifford S. Perlman dated May 10, 1995
Employment Agreement with Donald G. Mack dated December 25, 1995
Employment Agreement with Robert Clauson dated May 10, 1996
Employment Agreement with Thomas Moscariello dated May 10, 1996
(Full title of the plan)
Donald G. Mack, President
ComTec International, Inc.
10855 E Bethany Drive
Aurora, Colorado 80014
(Name and address of agent for service.)
(303) 743-7983
(Telephone number, including area code, of agent for service)
COPIES TO:
Dihle & Co. , P.C.
1720 South Bellaire Street Suite 108
Denver, Colorado 80222
Phone (303) 753-4520
Fax (303) 753-4567
Exhibit index on consecutive page 14 Consecutive page 1 of 17
1
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of securities Amount to be Proposed Proposed Amount of
to be registered registered maximum offer- maximum registration fee
ing price per unit aggregate offer-
ing price
___________________ ____________ __________________ ________________ _________________
<S> <C> <C> <C> <C>
Shares of 1,160,000 $0.164 $190,240 $58.00
common stock
$.001 par value,
under
Employment
Agreements
______________________________________________________________________________________
<FN>
(1) Calculated based on Rule 457 (h). Average of the closing bid and asked prices as of
February 12, 1997.
</TABLE>
2
<PAGE>
PROSPECTUS
COMTEC INTERNATIONAL, INC.
.001 Par Common Stock
1,160,000 SHARES OFFERED FOR RESALE
This Prospectus covers 1,160,000 shares of common stock owned by certain
shareholders. ComTec International, Inc., a New Mexico corporation (the
"Company") will not receive any proceeds from the sale of these shares. The
holders of these shares intend to sell their shares directly, through agents,
dealers, or underwriters, in the public market, or otherwise, on terms and
conditions determined at the time of sale by such holders or as a result of
private negotiation between buyer and seller. Expenses of any such sale will
be born by the parties as they may agree. See "Selling Security Holders."
THESE SECURITIES ARE SPECULATIVE, INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE
SUBSTANTIAL DILUTION AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD
THE LOSS OF HIS ENTIRE INVESTMENT. SEE "RISK FACTORS" AND "DILUTION."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is March 3, 1997
3
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement on Form S-8 under
the Securities Act of 1933 as amended (the "Securities Act"), with respect to
the securities offered by this Prospectus. This Prospectus does not contain
all the information set forth in the Registration Statement, certain items of
which are contained in schedules and exhibits to the Registration Statement,
as permitted by the rules and regulations of the Commission.
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Commission. Such
reports and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, DC 20549; 500 W. Madison Street, Suite 1400,
Chicago, Illinois 60661; and 7 World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
The Commission maintains a Web site that contains reports, proxy and
information statements, and other information regarding the Company, which
files electronically with the Commission. The address of this Web site is
"http://www.sec.gov."
NO PERSON HAS BEEN AUTHORIZED BY THE COMPANY TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE HEREBY, 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 OFFERING
IN ANY STATE IN WHICH AN OFFER OR SOLICITATION IS NOT AUTHORIZED BY THE LAWS
THEREOF. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALES MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
Statements and descriptions herein concerning agreements or other documents
filed as exhibits to the registration statement filed in connection with this
Prospectus are necessarily summaries of such documents and are qualified in
their entirety by reference to the completed text of the applicable document
filed with the Commission, which text is incorporated in this Prospectus by
references to such agreements or documents.
4
<PAGE>
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
<S> <C>
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE............................................... 3
RISK FACTORS............................................... 4
SELLING SECURITY HOLDERS................................... 9
PLAN OF DISTRIBUTION....................................... 10
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES............. 10
</TABLE>
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE
There are incorporated in this Prospectus by reference the following
documents which have been filed with the Commission:
(a) Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1996, filed pursuant to Section 13(a) of
the Exchange Act; and
(b) Company's quarterly reports on Form 10-Q for the fiscal
quarters ended September 30, 1996 and December 31, 1996;
Company's Current Report on Form 8-K dated August 14, 1996
and September 12, 1996 and all other reports, if any, filed
by the Company pursuant to Section 13(a) of the Exchange Act
since the end of the fiscal year ended June 30, 1996.
(c) The description of Company's Class A common stock
contained in the Registration Statement on Form 8-A
declared effective by the Commission on July 8, 1984
under Section 12 of the Exchange Act, including any
amendment or report filed for the purpose of updating
such description.
All documents filed by the Company pursuant to Section 13(a), 13 (c), 14 and
15(d) of the Exchange Act after the date hereof and prior to the termination
of the offering of the shares offered hereby, shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Documents incorporated by reference herein may be obtained, without charge,
upon written or oral request to:
ComTec International, Inc.
10855 E Bethany Drive
Aurora, Colorado 80014
(303) 743-7983
Attention: Corporate Secretary
5
<PAGE>
RISK FACTORS
The purchase of the shares offered hereby involves a high degree of risk.
Prospective investors should carefully consider the following factors, among
others set forth in this Prospectus, before making a decision to purchase the
shares.
Risk Factors Relating to the Company
Limited Capitalization and Lack of Working Capital. The Company has limited
capitalization and is dependent upon the proceeds of private and public
offerings to continue as a going concern, implement its business plan, and in
completing its targeted acquisitions. As of June 30, 1996, the audited
results of the Company indicated assets of $2,377,075 and negative working
capital of $1,300,149. Subsequent to fiscal year end June 30, 1996, and by
December 31, 1996, the Company's assets have increased to $4,197,126 and its
deficit working capital increased to a negative $1,654,821. Included in the
June 30, 1996 financial statements and recorded as an offset to stockholders'
equity is a media advertising contract in the amount of $1,950,000 of which
$1,300,00 has been prepaid by the Company.
Although the Company will endeavor to finance its working capital needs
through additional debt or equity financing, there is no assurance that this
financing can be obtained on terms acceptable to the Company. In addition,
any debt financing may require the Company to mortgage, pledge, or
hypothecate its assets. Furthermore, as of June 30, 1996, the Company was in
default covering certain notes payable to related parties and short-term
notes and there is no guarantee that even if the future debt or equity
financing is secured future defaults can or will be cured. As of June 30,
1996, $65,835 of related party notes payable, $170,347 of short-term notes
and $620,000 of long term debt was in default and remains in default as of
the date of this Prospectus.
All during 1996 and to the date of this Prospectus, the Company has had and
continues to have a substantial need for working capital to cure prior loan
defaults, close various acquisitions, and for normal operating expenses
associated with the Company continuing as a going concern. The Company is
currently in discussions with one or more companies for a private and/or
public debt and equity financing package(s).
New Business Venture. Although management of the Company has had extensive
experience in the communications industry, the Company itself has recently
been restructured and has only a limited history of operations. The Company
first began generating revenues in July 1995 as a result of the acquisition
of John Sandy Productions Inc. The Company has not yet realized any
operating profits and does not anticipate any operating profits for six to
twelve months, predominately as a result of the significant acquisition
costs, construction build out costs of SMR, and the cost of switching and
satellite uplinking communications equipment. It can be expected that future
operating results will continue to be subject to many of the problems,
expenses, delays, and risks inherent in the establishment of a new business
enterprise, many of which the Company has no control. There can be no
assurance, therefore, that the Company will be able to achieve or sustain
profitability in future periods. Even if the Company's operations eventually
prove to be marginally profitable, the value of the Company's common stock,
and the potential return to investors, could be substantially diminished.
Consequently, an investment in the Company is highly speculative and no
assurance can be given that purchasers of the shares of common stock offered
hereby will realize any return on their investment or that purchasers will
not lose their entire investment. The Company was restructured on May 10,
1995 as a result of an acquisition of all of the assets of Keystone Holding
Corp. And therefore has very limited operating history and revenues.
Activities to date have been limited to acquiring John Sandy Productions,
Inc., a Colorado corporation engaged in film and video production and
broadcast of live and taped sporting events; an Acquisition Agreement to
acquire Commercial Communications Inc., an operating SMR corporation located
in Wyoming; four Acquisition Agreements to acquire an interest in over 4,700
SMR channels and related
6
<PAGE>
technology; organizational efforts; and obtaining initial financing. The
Company must be considered in its early phase of development embarking upon
a new venture. Prospective investors should be aware of the difficulties
encountered by such enterprises, as the Company faces all the risks inherent
in any new business, including the limited operating history and intense
competition present in the telecommunications industry. The likelihood of
success of the Company must be considered in light of such problems,
expenses, and delays frequently encountered in connection with the operation
of a new business and the competitive environment in which the Company will
be operating.
General Risks of Business; No Independent Marketing Studies. The Company has
formulated its business plans and strategies based on certain assumptions of
the Company's management regarding the size of the market for wireless
communications services (with the Company plans to offering certain key
markets within the United States), the Company's anticipated share of the
market, and the estimated prices for and acceptance of the Company's
services. Although these assumptions are based on the best estimates of
management, there can be no assurance that these assessments will prove to be
correct. No independent marketing studies have been conducted on behalf of
or otherwise obtained by the Company, nor are any such studies planned.
Dependence on Key Personnel. The Company's success depends to a significant
extent upon the continued service, efforts, and expertise of its senior
management, Messrs. Perlman, Mack and Moscariello. One of the Company's
subsidiaries is entirely dependent upon the management efforts and expertise
of Mr. Santucci. The Company depends heavily upon the skill and contacts of
Mr. Mack in acquiring operating companies and related technologies, SMR
channels, and SMR operators, along with their ability to evaluate, acquire,
and maintain Company assets. The Company also depends heavily upon the
expertise of Mr. Santucci as it relates to all film and video production, as
well as live and taped broadcast services and its endeavor into interactive
games and Internet applications. The Company also depends heavily upon the
skills of Mr. Moscariello in the administration of the Company's business
combined with their knowledge and expertise in handling all sales and
marketing efforts, project cost analysis, and coordination and comparison of
pricing to industry competitors. A loss of the services of any of these
individuals could adversely affect the conduct of the Company's business. In
such event, the Company would be required to obtain other personnel to manage
and operate the Company, and there can be no assurance that the Company would
be able to employ a suitable replacement for any such individuals, or that a
replacement could be hired on terms which are favorable to the Company. The
Company currently maintains no key man insurance on the lives of any of its
officers or directors.
Intense Competition. There are numerous nationally and internationally-known
corporations and entities which are engaged in the type of business proposed
to be engaged in by the Company. Competition for asset acquisitions,
management, and customer base in the telecommunications and wireless
communications industries is intense. Most of these competitors have a
substantially greater financial and personnel resources than the Company.
Accordingly, the Company will be at a competitive disadvantage vis-a-vis its
competitors.
Lack of Dividends. The Company has paid no dividends on its common stock to
date, and there are no plans to pay any in the foreseeable future. Initial
earnings which the Company may realize, if any, will be retained to finance
growth of the Company. Any future dividends, of which there can be no
assurance, will be directly dependent upon the earnings of the Company, its
financial requirements, and other factors.
Possible Rule 144 Sales and Market Overhang. A majority of the Company's
presently outstanding shares of common stock are "restricted securities"
within the meaning of the Securities Act and may hereafter be sold in
compliance with Rule 144 promulgated thereunder. Rule 144 provides, among
other things, and subject to certain limitations, that a person holding
restricted securities for period of two years may sell, every three months,
those securities in brokerage transactions in an amount equal to 1% of the
Company's outstanding common stock or the average weekly trading volume
during the four weeks preceding the sale, whichever amount is greater.
Possible sales of the Company's common stock pursuant to Rule 144 may, in the
future, have a depressive effect on the price of the Company's common stock,
should a market develop.
7
<PAGE>
Preferred Stock Authorized. The Articles of Incorporation of the Company
authorize the issuance of a maximum of 5,000,000 shares of Preferred Stock of
which 1,000,000 shares have been designated by the Company's Board of
Directors as Series A $1.00 Stated Value Convertible Preferred, non-voting
shares, convertible at $10.00 per share; 1,500,000 shares have been
designated as Series B $5.00 Stated Value Convertible Preferred, non-voting
shares, convertible at the rate of one share of the Company's common stock
for each share of Series B Preferred Stock; and 1,500,000 shares have been
designated as Series C $10.00 Stated Value Convertible Preferred, non-voting
shares, convertible at $10.00 per share. Although no Preferred Stock has
been issued or is outstanding as of the date of this Prospectus, 420,000
Series A shares are authorized to be issued in connection with the purchase
of certain real property by the Company and the potential exits that
additional shares of Preferred Stock may be issued or designated at the
option of the Company to acquire SMR properties, satisfy corporate
obligations, finance growth, and further capitalize the Company. Other than
the Company's current private offering of Series B Preferred Stock and that
which is disclosed herein, there is no current plan to issue any additional
shares of Preferred Stock in the foreseeable future. The terms of a series
of Preferred Stock could operate to the significant disadvantage of holders
of outstanding common stock. Such terms can include, among others,
preferences at to voting, dividends, and distributions on liquidation.
Moreover, the issuance of Preferred Stock in certain circumstances could have
the effect of delaying, deterring, or preventing a change in control of the
Company.
Government Regulation. The telecommunications industry, SMR industry, and
the wireless communications industry, and the wireless communications
industry are currently subject to government regulations as specified by the
Federal Communications Commission ("FCC") and the Communications Act of 1934.
The Company intends to comply with such regulations as required.
Risk Factors Relating to the Offering
Securities Offered by Selling Security Holders. The common stock being
offered hereby are owned by the Selling Security Holders. The Company will
not receive any proceeds from the sale of common stock by the Selling
Security Holders.
Arbitrary Offering Price. The Selling Security Holders have determined the
initial offering price of their shares. The offering price does not
necessarily have any relationship to the value of the Company or its
underlying assets, and should not be considered as an indication of the
actual value of the Company's common stock.
Possible Volatility of Stock Prices; Penny Stock Rules. The over-the-
counter markets for securities such as the Company's common stock
historically have experienced extreme price and volume fluctuations during
certain periods. These broad market fluctuations and other factors, such as
new service and product developments and trends in the Company's industry and
the investment markets generally, as well as economic conditions and
quarterly variations in the Company's results of operations, may adversely
affect the market price of the Company's common stock. The Company's common
stock is quoted on the OTC Bulletin Board. If the Company's common stock is
not eligible to be included on NASDAQ for quotation, the common stock is
subject to rules adopted by the Commission regulating broker-dealer practices
in connection with transactions in "penny stocks." Penny stocks generally
are equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on NASDAQ,
provided that current price and volume information with respect to
transactions in such securities is proved by the exchange or the NASDAQ
system). Unless an exemption from the definition of a "penny stock" is
available, any broker engaging in a transaction in the Company's common stock
is required to provide any customer with a risk disclosure document,
disclosure of market conditions, if any, disclosure of the compensation of
the broker-dealer and its salesperson in the transaction, and monthly
accounts showing the market values of the Company's common stock held in the
customer's account. The bid and offer quotation and compensation information
must be provided prior to effecting the transaction and must be contained on
the customer's confirmation. It may be anticipated that a number of brokers
may be unwilling to engage in transactions in the Company's common stock
because
8
<PAGE>
of the need to comply with the "penny stock" rules. Consequently, these
rules may affect the ability of broker-dealers to sell the Company securities
and also may affect the ability of purchasers of the shares offered hereby to
sell their shares in the secondary market.
Risk Factors Relating to the Wireless Communications Industry
SMR Acquisition and Implementation Risks. The Company, in connection with
the proposed transactions discussed herein, is seeking to acquire SMR assets
in certain operating territories, and may in the future pursue acquisition
and strategic partnership opportunities in these and other geographic
markets. In light of such geographic expansion, the Company may continuously
reevaluate its build out plans in order to ensure that it applies its
resources in the areas of greatest potential. There can be no assurance that
the Company will successfully consummate any of the proposed transactions,
future acquisitions, or strategic alliances or that it will not readjust its
priorities such that the build out of certain markets may be delayed. The
successful implementation of the SMR systems will depend to a significant
degree upon the Company's ability to lease or acquire sites for the location
of its base station equipment. The site selection process will require the
negotiation of lease or acquisition terms for numerous sites, and will likely
require the Company to obtain zoning variances or other governmental or local
regulatory approvals, and may require FCC and Federal Aviation Administration
approvals, the grant of which are beyond the Company's control Delays in the
site selection process as well as construction delays and other risk factors
referred to in this section could adversely affect the timing of the
implementation of the Company's SMR systems and SMR acquisitions.
Risks of Implementation of Digital Mobile Networks. A key component of the
Company's business strategy is to implement Digital Mobile networks. The
Company does not anticipate commencing a build out of a Digital Mobile
network in the immediate future. Completion of the build out in such markets
is not anticipated to occur for some time after the Company has obtained the
necessary capital for both the proposed transactions and Digital equipment.
There can be no assurance that the Company will be able to implement its
Digital Mobile networks in any of such markets in accordance with its current
implementation plans and financing requirements, or at all. The ability of
the Company to implement Digital Mobile networks in the proposed operating
territories on terms and on a schedule acceptable to the Company may depend
upon further negotiations with certain SMR equipment vendors and other
suppliers for the delivery of infrastructure equipment and services. If the
Company is not able to implement its Digital Mobile networks, the Company
will be unable to provide services competitive with those of other wireless
service providers, which would significantly limit future subscriber growth.
There are currently several SMR systems in commercial operation in the United
States that utilize Digital technology for voice coding, compression, and
transmission using Motorola's integrated Radio System technology, although to
date, call quality has not generally been well received commercially. As a
result, the extent of the potential demand for mobile communications and
other services using the Company's Digital Mobile networks cannot be
estimated with any degree of certainty. In addition, there can be no
assurance that existing customers will be willing to invest in new subscriber
equipment necessary to transfer to its Digital Mobile systems. The success
of the Company's Digital Mobile service could also be affected by matters
beyond its control, such as the future cost of subscriber equipment,
manufacturer delays, system technical or implementation difficulties,
marketing and price strategies of competitors, general economic conditions,
and changes in the regulatory environment as governed by the FCC and other
governmental agencies.
Risks of Developing Technology. In implementing and operating its Digital
Mobile networks, the Company expects to use a digital compression
transmission system that employs a technology known as Frequency and Time
Division Multiple Access ("F-TDMA") technology. F-TDMA allows the splitting
and digital encoding of a single voice channel to carry a number of voice or
data transmissions simultaneously over a channel that previously supported
one conversation at a time. To a limited extent,
9
<PAGE>
the cellular industry has successfully utilized three-times Time Division
Multiple Access ("TDMA"). Private Communications Network ("PCN") is an
emerging technology designed to use up to four-times F-TDMA. PCN provides
for a four-fold increase in capacity that can be implemented in four stages
by employing a combination of TDMA and frequency splitting F-TDMA. Moreover,
the new subscriber units to be used in connection with Digital Mobile
networks are equipped with more features than existing mobile communication
units that have not yet been used on a commercial basis. Complications
associated with Digital Mobile technology and its integration into the
Digital Mobile networks and new subscriber units may arise during
implementation of the Company's own Digital Mobile networks. If technical
difficulties do occur, the Company cannot predict the effect this may have on
the implementation and operation of the Digital Mobile networks or on
customers' perceptions of its services.
Changing Technologies. Cellular and SMR operators, including the Company,
are currently evaluating or implementing new Digital Mobile technology.
Although Digital Mobile technology is more expensive than analog technology,
Digital Mobile technology will increase the capacity of existing analog
channels and SMR systems and may have certain performance advantages (e.g.,
audio quality and security) over the analog technology currently used by the
Company. If the Company's competitors in any market implement Digital Mobile
technology, they may be able to offer better quality transmissions and have
more customer capacity than the Company in that market at that time. While
the Company intends to implement Digital Mobile technology in the future and
as it deems necessary, there can be no assurance that this technology will be
successfully implemented. In addition, there can be no assurance that the
Company's existing customers will be willing to purchase new subscriber
equipment necessary to utilize Digital Mobile technology even if implemented.
The Company may also face competition from providers of technologies and
services introduced in the future, such as personal communications services
and satellite SMR systems.
Unascertainable Medical Risks. Recent news reports have speculated on
possible medical risks associated with the use of hand-held cellular mobile
telephones. The Company anticipates that initially a majority of the mobile
radios leased and sold by the Company will not be hand-held, but will be
installed in customers' vehicles and operate through an external antenna. To
the Company's knowledge, mobile telephones installed in vehicles have not
been associated with any health risks to users. Like may SMR operators, the
Company also will sell and lease hand-held "push-to-talk" portable radios.
Because of their "push-to-talk" or "simplex" configuration, these radios do
not have constant power emissions like hand-held cellular telephones.
Although it is not aware of any evidence of health risks related to installed
radio equipment or simplex hand-held portable models, the Company recognizes
that the perception that health risks exists may adversely affect the
Company's ability to sell, rent, or service its hand-held portable models.
Regulation. The licensing, operation, and purchase of SMR systems are
regulated by the FCC. The Company currently holds FCC licenses as a
commercial mobile service provider carrier to use SMR radio channels and has
entered into management agreements with respect to other SMR stations. Each
of the Company's licenses is subject to renewal, and there can be no
assurance that licenses will be renewed upon the expiration of their five-
year term. Each license may also be revoked for cause. In addition, there
can be no assurance that management arrangements, such as those by which the
Company intends to operate a large part of its planned system, will continue
to be consistent with FCC rules, regulations, and policies, or that the
Company's management agreements will continue in force. Future changes in
regulation or legislation affecting SMR service or the allocation by the FCC
or Congress of additional spectrum for services that compete with SMR service
could adversely affect the Company's business.
10
<PAGE>
SELLING SECURITY HOLDERS
The shares of common stock are not being offered for the account of the
Company, but rather on behalf of the following Selling Security Holders:
<TABLE>
<CAPTION>
Number of Percentage of
Shares of common stock
common stock to be Owned
Relationship to Owned Prior to Number of after Completion
Name Company Offering Shares Offered of Offering (1)
____________ _________________ ______________ ______________ ________________
<S> <C> <C> <C> <C>
Donald G. President, 2,568,977 175,000 4.8%
Mack Chief Executive
Officer, Acting
Chief Financial
Officer, Director
and principal
shareholder
Clifford Chairman of 1,971,449 175,000 3.6%
Perlman Board of Directors
Robert Former 927,916 320,000 1.2%
Clauson Secretary and
Director
Thomas Director 1,048,042 490,000 1.1%
Moscariello
<FN>
(1) Based on 49,932,947 shares outstanding as of February 13, 1997
(2) During any three month period, sales by Messrs. Mack, and Perlman
individually shall not exceed the greater of (i) one percent (1%) of the
outstanding shares of common stock or (ii) the average weekly reported
volume of trading in the common stock reported through the OTC Bulletin
Board during the four calendar weeks preceding the sale.
</TABLE>
11
<PAGE>
PLAN OF DISTRIBUTION
The Company is paying certain of the expenses of registering the shares of
common stock under the Securities Act, estimated to be $5,000 in the
aggregate, consisting of all costs incurred in connection with the
preparation of the registration statement. In addition, the Selling Security
Holders will pay or assume accounting expenses, brokerage commissions, or
underwriting discounts incurred in the sale of their securities, which
expenses, commissions, or discounts are not being paid or assumed by the
Company.
The Selling Security Holders intend to sell their shares of common stock
directly, through agents, dealers, or underwriters, in the over-the-counter
market, or otherwise, on terms and conditions and at prices determined at the
time of sale by the Selling Security Holders or as a result of private
negotiations between buyer and seller. Expenses of any such sale will be
borne by the parties as they may agree.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 53-11-4.1 of the New Mexico Business Corporation Act and Article 7.05
of the Company's Bylaws permit the Company to indemnify any director,
officer, former director or officer, and certain other persons against
expenses in defense of a suit to which they are parties by reason of such
office, unless they are adjudged in such suit negligent or guilty of
misconduct in the performance of their duties. By the statute,
indemnification is permitted so long as the officer or director acted in good
faith, reasonably believed that his or her conduct was in the corporation's
best interests or at least not opposed to the corporation's best interest,
and had no reasonable cause to believe that his or her conduct was
unlawful. Indemnification is not permitted by statute in connection with a
proceeding charging that the officer or director derived an improper personal
benefit, whether or not involving action in an official capacity, in which
proceeding the officer or director was adjudged liable on the basis that he
or she derived an improper personal benefit.
Insofar, as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.
12
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents in the by Reference.
The following documents are incorporated by reference in this
registration statement:
(a) Registrant's Annual Report on Form 10-K for the fiscal year ended
June 30, 1996, filed pursuant to Section 13(a) of the Securities
Exchange Act of 1934, as amended; and
(b) Registrant's quarterly reports on Form 10-Q for the fiscal quarters
ended September 30, 1996 and December 31, 1996; Registrant's
Current Reports on Form 8-K dated August 25, 1995, December 15,
1995, August 14, 1996 and September 12, 1996; and all other
reports, if any, filed by the Registrant pursuant to Section 13(a)
of the Securities Exchange Act of 1934 since the end of the fiscal
year ended June 30, 1996.
(c) The description of Registrant's Class A common stock contained in
the Registration Statement on Form 8-A declared effective by the
Commission on July 8, 1984 under Section 12 of the Securities
Exchange Act of 1934, including any amendment or report filed for
the purpose of updating such description.
All documents filed by the registrant pursuant to Sections 13(a), 13(c),14,
and 15(d) of the Securities Exchange Act of 1934 after the date of this
registration statement and prior to the filing of a post-effective amendment
to this registration statement which indicates that all securities offered
hereunder have been sold, or which deregisters all securities then remaining
unsold under this registration statement, shall be deemed to be incorporated
by reference in this registration statement and to be a part hereof from the
date of filing of such documents.
Item 4. Description of Securities.
Not applicable; the class of securities to be offered is registered under
Section 12 of the Securities Exchange Act of 1934.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
New Mexico corporate law and Article 7.05 of the Registrant's Bylaws permit
the Registrant to indemnify any director, officer, former director or
officer, and certain other persons against expenses in defense of a suit to
which they are parties by reason of such office, unless they are adjudged in
such suit negligent or guilty of misconduct in the performance of their
duties.
Item 7. Exemption from Registration Claimed.
The Company issued a total of 1,160,000 shares of common stock in lieu of
cash compensation to certain of its officers and directors. With respect to
the issuance of these shares, the Company relied on the provisions of Section
4(2) of the Securities Act of 1933, as amended, in that such transactions did
not involve any public offering and the officers and directors had sufficient
information about the Company.
13
<PAGE>
Item 8. Exhibits.
Exhibit Consecutive
Number Exhibit Page Number
4.1 Articles of Incorporation, as amended
(filed as an exhibit to the Registrant's
Registration Statement on Form S-1, No.
82-88530, dated December 20, 1983, and
incorporated herein by reference)
4.2 Bylaws (filed as an exhibit to the
Registrant's Registration Statement on
Form S-1, No. 82-88530, dated December
20, 1983, and incorporated herein by
reference)
4.3 Employment Contract by and between Nattem
USA, Inc. And Clifford S Perlman dated
May 10, 1995 (filed as an exhibit to the
Registrant's Annual Report on Form 10-KSB
for the fiscal year ended June 30, 1995,
and incorporated herein by reference)
4.4 Employment Agreement with Donald G. Mack
dated December 25, 1995 (filed as an exhibit
to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended June 30,
1995, and incorporated herein by reference)
4.5 Employment Agreement with Robert Clauson
dated May 10, 1996 (filed as an exhibit to
the Registrant's Annual Report on Form 10-KSB
for the fiscal year ended June 30, 1996, and
incorporated herein by reference)
4.6 Employment Agreement with Thomas Moscariello
dated May 10, 1996 (filed as an exhibit to the
Registrant's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1996, and
incorporated herein by reference)
5.1 Opinion Regarding Legality ........................ 17
23.1 Consent of Dihle & Co., PC (included with exhibit 5.1)
Item 9 Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) 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;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
14
<PAGE>
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934, that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Aurora, State of Colorado, on March 3, 1997.
COMTEC INTERNATIONAL, INC.
By:/s/Donald G. Mack
_______________________
Donald G. Mack, President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and
dates indicated.
Chairman of the Board
of Directors
/s/ Clifford S. Perlman March 3, 1997
Clifford S. Perlman Date
President, Chief Executive
Officer, Acting Chief Financial
Officer, and Director
/s/ Donald G. Mack March 3, 1997
Donald G. Mack Date
Director and
/s/Thomas Moscariello Secretary March 3, 1997
Thomas Moscariello Date
16
<PAGE>
Dihle & Co., P.C.
1720 Bellaire St, Ste 108, Denver, CO 80222 (800) 737-0632
March 3, 1997
ComTec International, Inc.
108555 East Bethany
Aurora, Colorado, 80014
RE: Registration Statements on Form S-8 File No. 333-
Under Securities Act of 1933 (Exhibit 5.1)
Gentlemen:
We are furnishing this opinion and consent with a view to our filing the same
with the Securities and Exchange Commission (the "SEC") as an exhibit to a
Registration Statement on Form S-8 (the "Registration Statement") to be filed
with the SEC on or about March 6, 1997.
The Registration Statement covers the registration of 1,160,000 shares (the
"Shares") of common stock, .001 par value per share, of ComTec International,
Inc., a New Mexico corporation for sale by certain employees of ComTec
International, Inc. described in the Registration Statement (the "Employee
Shares").
We have examined such corporate records, employment contracts, certificates
and other documents and matters of law as, in our opinion, are necessary or
appropriate to enable us to express the opinion rendered hereby.
We have assumed the genuineness of all signatures, the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy
form and the legal competence of each individual executing a document.
This opinion is limited solely to the laws of the State of Colorado.
Based upon the foregoing we are of the opinion that all of the Offering
Shares have been duly authorized and, as issued in accordance with the
employment contracts filed therewith will be validly issued, fully paid and
non-assessable.
We hereby consent to the reference to this firm in the prospectus included in
the Registration Statement.
Sincerely,
s/Gordon Dihle
Gordon Dihle
Dihle & Co., P.C.
akb
