As filed with the Securities and Exchange Commission on
June 25, 1997
SEC 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 75-2456757
(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)
Consulting Agreement with Premier Financial Services dated
November 15, 1994
(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) 627-8367
(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 20
<PAGE>
- ------------------------------------------------------------------
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of securities Amount to be Proposed Proposed Amount of
to be registered registered maximum offering- maximum registration fee
price per unit aggregate offer-
ing price
- ------------------- ------------ ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Common stock 1,184,346 $.09 $106,591 $32
- --------------------------------------------------------------------------------------
common stock,
$.001 par value,
under Consulting
Agreement
- --------------------------------------------------------------------------------------
<FN>
(1) Calculated based on Rule 457 (h). Average of the closing bid ($.08) and asked
prices ($.10) as of June 24, 1997.
</TABLE>
2
<PAGE>
PROSPECTUS
COMTEC INTERNATIONAL, INC.
.001 Par Value Common Stock
1,184,346 SHARES OFFERED FOR RESALE
This Prospectus covers 1,184,346 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 June 25, 1997
3
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission
(the "Commission"), Washington, D.C., a Registrations Statement on
Form S-8 under the Securities Ace 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.
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<PAGE>
TABLE OF CONTENTS
Page
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE.................................................. 3
RISK FACTORS.................................................. 4
SELLING SECURITY HOLDERS...................................... 10
PLAN OF DISTRIBUTION.......................................... 10
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES................ 10
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-KSB 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-QSB for the fiscal
quarters ended September 30, 1996, December 31, 1996 and
March 31, 1997; Company's Current Report on Form 8-K
dated August 14, 1996, September 12, 1996, and May 12,
1997 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) 627-8367
Attention: Corporate Secretary
-3-
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<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 offering 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 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 has not yet recorded any
significant revenues from operations. 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: (1) in the Company's major endeavor, acquisition
agreements to acquire an interest in over 4,700 SMR channels and
related technology; and formation of a Colorado Corporation,
American Wireless Network, Inc. on December 3rd, 1996, now a wholly
owned subsidiary, to facilitate the SMR channel operational and
build out functions; (2) organizational efforts; (3) obtaining
initial and construction financing; recent lateral
-4-
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<PAGE>
ventures including (4) formation of TTI Communications, Inc., a
Colorado Corporation, on February 11th 1997 as a 70% subsidiary of
the Company; and (5) the formation of International Media Group,
Inc. on March 20, 1997 as a wholly owned subsidiary. TTI
Communications, Inc. is engaged in reselling long distance
telephone time via wholesale distribution of prepaid phone cards to
convenience stores for retail distribution. International Media
Group, Inc. was organized to market the rental of portable
indoor/outdoor giant LED video screens to advertisers. 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 and Mack. 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 his ability to evaluate,
acquire, and maintain Company assets. The Company also depends
heavily upon the skills of Mr. Perlman in the administration of the
Company's business combined with his 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 (one year under pending regulations) may
sell, every three months, those securities in brokerage
transactions in an
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<PAGE>
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.
Recent Increase in Authorized Shares. The following amendment to
the Articles of Incorporation was adopted by the Shareholders of
the corporation on March 28, 1997 in the manner prescribed by the
New Mexico Business Corporation Act:
V. Article 5(A) of the articles of incorporation is hereby
amended to read in its entirety as follows:
A) Authorized Shares: The aggregate number of shares
which the corporation shall have authority to issue is 110,000,000
shares. One Hundred Million (100,000,000) shares shall be
designated "Common Stock", and shall have a par value of $.001.
Ten Million (10,000,000) shares shall be designated "Preferred
Stock", and shall have a par value of $.001 per share, and shall be
issued for such consideration, expressed in dollars, as the Board
of Directors may from time to time, determine.
The recent increase (a 100% increase in both authorized common and
authorized preferred stock) in authorized common and preferred
shares creates potential for substantial future dilution of
existing shareholder positions through future issuance of common
stock by the Company which could decrease the book value and market
price of the Company's common stock.
Recent Shareholder Authorization for Recapitalization. On March
28, 1997 the Shareholders of the Company approved a proposal to
give the Company's Board of Directors authority to institute a
reverse stock split of from 3 for 1 to 100 for 1 at the discretion
of the Board of Directors until December 31, 1997. Such a reverse
stock split, if instituted, could adversely effect the market value
of the shares since the market price of the shares may not
proportionately follow the ratio of any potential reverse stock
split. A future reverse stock split also creates potential for
substantial future dilution of existing shareholder positions since
a reverse stock split would in effect increase available shares for
future issuance of common stock by the Company which could decrease
the book value and market price of the Company's common stock.
Preferred Stock Authorized and Issued. The recently amended
Articles of Incorporation of the Company pursuant to a shareholder
vote held March 28, 1997, authorize the issuance of a maximum of
10,000,000 shares of Preferred Stock of which 1,000,000 shares have
been designated any 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. 420,000 Series A Preferred shares have been
issued in connection with a purchase contract for 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 general discussions and inquiries related to potential
private funding, 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
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<PAGE>
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 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 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.
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<PAGE>
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 no
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, 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.
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<PAGE>
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.
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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)(2)
- ---------- ------------------------- -------------- -------------- ------------------
<S> <C> <C> <C> <C>
Premier Consultant 1,184,346 1,184,346 0%
Financial
Services,
Inc.
<FN>
(1) Based on 51,886,490 shares outstanding as of May 30, 1997
</TABLE>
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.
-10-
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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-KSB 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 report on Form 10-QSB for the
fiscal quarter ended September 30, 1996, December 31,
1996 and March 31, 1997, Registrant's Current Reports on
Form 8-K dated August 25, 1995, December 15, 1995, August
14, 1996, September 12, 1996; and May 12, 1997 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 1,184,346 shares of common stock in
lieu of cash compensation to a consultant. 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
consultant had sufficient information about the Company.
13
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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 Consulting Agreement with Premier Financial
Services, Inc. dated November 15, 1997 17
5.1 Opinion Regarding Legality 20
23.1 Consent of Legal Counsel
(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 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.
14
<PAGE>
(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 June 25, 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 June 25, 1997
Clifford S. Perlman Date
President, Chief Executive
Officer, Acting Chief Financial
Officer, and Director
s/Donald G. Mack June 25, 1997
Donald G. Mack Date
Director and
s/Clifford S. Perlman Secretary June 25, 1997
Clifford S. Perlman Date
16
<PAGE>
Exhibit 4.3
CONSULTING AGREEMENT
THIS FINDER/CONSULTING AGREEMENT (hereafter referred to as
Agreement) is made and entered into as of the 15th day of November,
1994 by and between PREMIER FINANCIAL SERVICES, a Colorado Corp.
(hereafter referred to as "the Consultant") and KEYSTONE HOLDING
CORP., a Colorado Corp. (hereafter referred to as "the Company").
WITNESSETH THAT
WHEREAS, the Company desires the Consultant to provide
services in assisting the Company in meeting its business
objectives;
AND
WHEREAS, the parties hereto desire to enter into this
Agreement upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual
promises, covenants and consideration contained herein, the
sufficiency of which is hereby acknowledged, the parties hereby
agree and covenant as follows:
1. SERVICES
Consultant agrees to use its best efforts to assist the Company in
obtaining the following: 1) a merger/acquisition with a "Public
Shell Company"; 2) private or public equity/debt financing, via a
placement structure of the Company's choice; 3) obtaining
acquisitions and merger candidates; 4) Market makers, broker
support and assistance with the visibility of the Company's stock
in the public markets; 5) Public Relations as it relates to the
public markets and any industry that the Company may engage in both
now and in the future.
2. COMPENSATION
The Company agrees to compensate the Consultant as follows:
A. In the event of a merger/acquisition with a "Public Shell
Company" an amount equal to FIFTEEN (15%) PERCENT of the shares
received by Keystone Holding Corp. in any such merger/acquisition
of "Free Trading" common stock registered under an S-8 registration
or any other registration that would allow the shares being issued
hereunder to become freely tradable shares. In addition to the
shares issued in Paragraph 2.A., a warrant fee to be paid in the
form of Class "A" Common Stock Purchase Warrants (as described in
Exhibit "A") in the amount of 2% (TWO PERCENT) of the shares
received by Keystone Holding Corp. in any such merger/acquisition
and the underlying common shares shall have similar registration
rights as mentioned above.
B. In the event of equity financing, for which the Consultant
is the contact, referral, or initiating source, a cash fee in the
amount of 10% (TEN PERCENT) of the gross funding proceeds. In
addition to the cash compensation, the Company shall pay the
Consultant a warrant fee in the amount of 5% (FIVE PERCENT) of the
gross funding proceeds to be paid in the form of Class "A" Common
Stock Purchase Warrants as described in Exhibit "A";
3. EXPENSES
The Company shall pay all expenses related to any funding. Such
expenses shall include but not be limited to travel and
entertainment charges, telephone charges, copying charges,
overnight mail charges, and any professional fees or expenses
related to any funding shall be mutually agreed upon by both the
Consultant and the Company prior to being incurred.
4. INDEMNIFICATION
The Company shall indemnify the Consultant from any liability, with
respect to any funds raised by information derived from the
Company, and considered to be factual by the Consultant. In
addition, the Company shall indemnify the Consultant, with respect
to any financial obligations or debts incurred by the Company.
s/PFG s/DGM
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INITIALS INITIALS
17
<PAGE>
5. TERM
The term of this Agreement shall be for a period of TWO (2) YEARS,
such that the Consultant shall have the first right of refusal to
perform the services provided for herein for the Company. The
Company, upon a NINETY (90) DAY advanced notice in writing and
delivered to the Consultant via the United States Postal Service
may terminate this Agreement. Any contacts or referrals, made
through the Consultant which would result in any funding, merger,
or the like during the term of this Agreement, will result in
compensation to the Consultant as noted herein.
6. PAYMENT
All compensation is to be paid as follows:
The cash which shall become due under this Agreement shall be paid
as follows: 1) In full per the terms of this Agreement no later
than forty-eight (48) hours after said funds from the private
transaction are confirmed by the Company's bank to be paid and
cleared funds; or 2) In the event of an escrow, all fees shall be
paid in full per the terms of this Agreement upon the Closing of
any escrow; 3) Any other fees relating to Public Relations, Market
makers and broker support and market assistance in general shall be
paid on a project by project basis. Those fees and payment shall
be mutually negotiated between the parties at the time the services
are needed by the Company and paid per those negotiations and
attached and made an addendum of this Agreement.
7. ADDITIONAL FEES
The Company is free to negotiate with parties referred to it by the
Consultant, as concerns additional service fees or retainers. Any
such agreed upon fees will not affect the compensation due to the
Consultant under the terms of this Agreement.
8. BINDING AFFECT
This Agreement, and its terms and provisions, shall be binding and
inure to the benefit of the parties, their successors,
administrators, executives, and assigns, except as otherwise noted
herein.
9. COMPLETE AGREEMENT
This Agreement sets forth all the covenants, agreements, conditions
and understandings between the parties hereto, as to the subject
matter hereof, and is intended to fully compensate the Consultant
for services and efforts on behalf of the Company. This Agreement
can not be modified or changed except by a written instrument
executed by all of the parties hereto.
10. CONSTRUCTION
This Agreement shall be construed in accordance with and be
governed by the laws of the State of Colorado. In the event of a
dispute the prevailing party shall have the right for reimbursement
of reasonable attorney fees from the non-prevailing party.
IN WITNESS WHEREOF, the parties hereto have set their hands as of
the day and year first above written.
ACKNOWLEDGED:
PREMIER FINANCIAL SERVICES KEYSTONE HOLDING CORP.
s/Phillip F. Grey s/Donald G. Mack
- ------------------------------ ------------------------------
Name: Phillip F. Grey Name: Donald G. Mack
Title: PRESIDENT Title: PRESIDENT
18
<PAGE>
EXHIBIT "A"
DESCRIPTION OF WARRANTS
The Class "A" Common Stock Purchase Warrant
(the "Warrants")
Each Class "A" warrant entitles the holder to purchase one Share of
common stock at $1.00 per share during a period commencing from the
date of issuance and ending twenty-four months after the date of
issuance. Upon the exercise of the $1.00 Class "A" common stock
purchase warrant, one Share of common stock and one Class "B"
common stock purchase warrant shall be issued to the purchaser,
which entitles the holder to purchase one Share of common stock at
$1.50 per share during a period commencing from the date of
issuance and ending twenty-four months after the date of issuance
of said Class "B" common stock purchase warrant. The Company has
the right to redeem the Warrants upon 30 days written notice, at
$0.01 per Warrant, beginning sixty days from the date of issuance.
The Common Stock and Warrant will be separately transferable
commencing 30 days after the date of issuance.
s/PFG s/DGM
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INITIALS INITIALS
19
<PAGE>
=================================================================
Dihle & Co., P.C.
1720 Bellaire St, Ste 108 w Denver, CO 80222 w (303) 753-4520
=================================================================
June 25, 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 June
25, 1997.
The Registration Statement covers the registration of 1,184,346
shares (the "Shares") of common stock, .001 par value per share, of
ComTec International, Inc., a New Mexico corporation for sale by
certain Consultants of ComTec International, Inc. described in the
Registration Statement (the "Consultant's Shares").
We have examined such corporate records, consulting service
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 consulting 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,
Dihle & Co., P.C.
20
