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-As filed with the Securities and Exchange Commission on November 2, 2000
Registration No. 333-45812
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3 Pre-Effective Amendment No. 2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FASTCOMM COMMUNICATIONS CORPORATION
(Name of Small Business Issuer in its Charter)
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VIRGINIA 54-1289115
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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45472 HOLIDAY DRIVE
DULLES, VIRGINIA 20166
TELEPHONE: (703) 318-7750
(Address and telephone number of principal executive offices)
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MARK H. RAFFERTY COPIES TO:
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CHIEF FINANCIAL OFFICER THOMAS G. AMON, ESQ.
FASTCOMM COMMUNICATIONS CORPORATION ROBERT D. MIKLAUTSCH, ESQ.
45472 HOLIDAY DRIVE M. CATHERINE LATORRE, ESQ.
DULLES, VIRGINIA 20166 SOKOLOW, DUNAUD, MERCADIER & CARRERAS LLP
TELEPHONE: (703) 318-7750 770 LEXINGTON AVE, SIXTH FLOOR
(Name, address and telephone number NEW YORK, NEW YORK 10021
of agent for service) TELEPHONE: (212) 935-6000
(Counsel for Registrant)
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Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to a dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Shares to be registered Amount to be maximum maximum Amount of
registered offering aggregated registration
(1) price per offering price fee
share(2) (3)
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Common Shares, par value $.01 per share 10,925,434 $2.42 $26,439,550 $6,980
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(1) Shares of common stock that may be offered pursuant to this
Registration Statement include 4,375,000 shares issuable upon
exercise of 3,500 units of Prepaid Warrants and upon exercise of
related warrants. For purposes of estimating the number of shares
of common stock to be included in this Registration Statement, we
included (i) 3,500,000 shares, representing 200% of the number of
shares of common stock issuable upon exercise of the Prepaid
Warrants determined as if the warrants were converted in full at
the conversion price of $2.0 as of September 8, 2000;
plus (ii) 875,000 shares, representing 200% of the number of shares
of common stock issuable in lieu of a 4% premium payable on the
Prepaid Warrants based on a price of $2.0 per share. Pursuant to
Rule 416 under the Securities Act, this Registration Statement also
covers an indeterminate
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number of additional shares as may be issued as a result of
adjustments by reason of any stock split, stock dividend or similar
transaction.
(2) Based on the average of the high and low prices of the Common Stock
on the OTC Bulletin Board on September 8, 2000.
(3) Estimated solely for the purpose of calculating the amount of the
registration fee and based, pursuant to Rule 457.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
FastComm Communications Corporation
CROSS REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K Showing Location in Prospectus of
information required by Items of Form S-3.
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Item Number and heading in Form
S-3 Registration Statement Caption or Location in Prospectus
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1. Forepart of the Registration Forepart of the Registration Statement;
Statement and Outside Front Cover Outside Front Cover Page of Prospectus
Page of Prospectus
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2. Inside Front and Outside Back Inside Front and Outside Back Cover Page of
Cover Pages of Prospectus Prospectus
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3. Summary Information and Risk Summary Description of our Business; Certain
Factors Risk Factors
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4. Use of Proceeds Use of Proceeds
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5. Determination of Offering Price Outside Front Cover Page of Prospectus
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6. Dilution Not Applicable
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7. Selling Security Holders Selling Securityholders
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8. Plan of Distribution Outside Front Cover Page of Prospectus; Plan
of Distribution
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9. Description of Securities to be
Registered Description of Securities
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10. Interests of Named Experts and
Counsel Experts
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11. Material Change Not Applicable
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12. Incorporation of Certain
Information by Reference Where you can find more information
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13. Disclosure of Commission Position Not Applicable
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THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THE SELLING SECURITY HOLDERS MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN
WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION
OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 30, 2000
PROSPECTUS
10,925,434 SHARES
FASTCOMM COMMUNICATIONS CORPORATION
COMMON STOCK
This Prospectus relates to 10,925,434 shares (the "Shares" or the
"Offered Shares") of common stock, par value $.01 per share (the "Common
Stock"), of FastComm Communications Corporation, a Virginia corporation (the
"Company"). The Shares have been issued to (i) to certain investors in
connection with the Company's reorganization plan under Chapter 11 of the U.S.
Bankruptcy Act; (ii) to certain former shareholders and debt holders of Cronus
Technology, Inc. ("Cronus") in connection with the Company's acquisition of
Cronus on March 31, 2000; (iii) to a group of private investors in July of
2000; (iv) to a group of private investors represented by The Zanett Securities
Corporation in connection with a private offering on September 8, 2000; and (v)
to an investment banking firm in January, 2000.
The shareholders on page 11 of this prospectus are offering and
selling up to 10,925,434 shares of our common stock. The selling
Securityholders may offer and sell some, all or none of the common stock under
this prospectus. The selling Securityholders may determine the prices at which
they will sell such common stock, which may be at market prices prevailing at
the time of such sale or some other price. In connection with such sales, the
selling shareholders may use brokers or dealers which may receive compensation
or commission for such sales. We will not receive any of the proceeds from the
sale of our commons tock by the selling Securityholders.
Our common stock is publicly traded on the OTC Bulletin Board under
the symbol "FSCX". On September 8, 2000, the closing sales price for one share
of our common stock on the Nasdaq Bulletin Board was $2.42.
THE PURCHASE OF OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE __ OF THIS
PROSPECTUS BEFORE PURCHASING ANY OF OUR COMMON STOCK FROM THE SELLING
SECURITYHOLDERS.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined is this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
YOU SHOULD RELY ONLY UPON THE INFORMATION IN THIS PROSPECTUS. WE HAVE NOT,
AND THE SELLING SECURITYHOLDERS HAVE NOT, AUTHORIZED ANY OTHER PERSON TO
PROVIDE YOU WITH DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT
OR INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON IT. WE ARE NOT, AND THE
SELLING SECURITYHOLDERS ARE NOT, MAKING AN OFFER TO SELL THESE SECURITIES IN
ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. YOU SHOULD ASSUME
THAT THE INFORMATION APPEARING IN THIS PROSPECTUS IS ACCURATE AS OF THE DATE ON
THE FRONT COVER OF THIS PROSPECTUS ONLY. OUR BUSINESS, FINANCIAL CONDITION,
RESULTS OF OPERATIONS AND PROSPECTS MAY HAE CHANGED SINCE THAT DATE.
The date of this Prospectus is October 30, 2000
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WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934. As required by the Securities Exchange Act, we file
reports, proxy statements and other information with the SEC. The reports,
proxy statements and other information can be inspected and copied at the
public reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at regional offices of the
SEC at Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661 and at
Seven World Trade Center, 13th Floor, New York, New York 10048. In addition, we
are required to file electronic versions of these documents through the SEC's
Electronic Data Gathering, Analysis and Retrieval System (EDGAR). The SEC
maintains a World Wide Web site at http:www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC. Copies of such material may also be
obtained at prescribed rates from the Public Reference Section of the SEC, 450
Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549. The
common stock is quoted on the Nasdaq OTC Bulletin Board Market. Information
regarding the trading of our common stock on the Nasdaq OTC Bulletin Board
Market can be obtained from Nasdaq, 9801 Washingtonian Boulevard, Gaithersburg,
Maryland 20878 (202) 496-2500).
We have filed with the SEC a Registration Statement on Form S-3
under the Securities Act of 1933 with respect to the securities being offered
by this Prospectus. As permitted by the rules and regulations of the SEC, this
prospectus does not contain all the information set forth in the Registration
Statement. For further information with respect to us and the offer and sale of
the securities, reference is made to the Registration Statement. Statements
contained in this prospectus concerning the provisions of documents filed with
the Registration Statement as exhibits are necessarily summaries of those
documents, and each such statement is qualified in its entirety by reference to
the copy of the applicable document filed with the SEC. The Registration
Statement may be inspected without charge at the public reference facilities of
the SEC at the addresses contained in the preceding paragraph and copies of all
or any part thereof may be obtained form the SEC at prescribed rates.
Pursuant to the rules of the SEC, we are able to "incorporate by
reference" into this document the information that we have on file with the
SEC. This means that we may disclose important information to you by referring
you to other documents. The information incorporated by reference is considered
to be part of this prospectus. In addition, any later information we file with
the SEC and incorporated by reference will update and supersede the information
referred to or contained in this prospectus. We incorporate by reference the
documents listed below and any future filings we make with the SEC under
section 13a, 13c, 14 or 15(d) of the Exchange Act until this offering has been
completed:
1. Our Annual Report on Form 10-K for the fiscal year
ended April 30, 2000, filed with the Commission
pursuant to Section 13(a) of the 1934 Act; and
2. Our Quarterly Report on Form 10-Q for the fiscal
quarter ended July 29, 2000, filed with the Commission
pursuant to Section 13(a) of the 1934 Act.
3. Our Quarterly Report on Form 10QA for the fiscal
quarter ended July 29, 2000 filed with the Commission
pursuant to Section 13(a) of the 1934 Act on September
14, 2000.
4. Our current report on Form 8-K filed with the SEC on
September 13, 2000.
5. Our current report on Form 8-K filed with the SEC on
April 14, 2000; and
6. Our current report on Form 8-K A filed with the SEC on
June 14, 2000
7. The description of the Company's Common Stock
registered under the 1934 Act contained in the
Company's Form 8-A filed with the Commission on
September 8, 1988, including any amendments or reports
filed for the purpose of updating such description.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be modified or superceded for the
purposes of this prospectus to the extent that a statement contained in this
prospectus, or in any other subsequently filed document which also is, or is
deemed to be, incorporated by reference, modifies or supersedes that
statement.; Any statement modified or superseded shall not be deemed, except as
modified or superseded, to constitute a part of this prospectus.
You may request a copy of any of the filings incorporated herein by
reference, at no cost, by writing or telephoning Mr. Mark Rafferty, Chief
Financial Officer, at:
FastComm Communications Corporation
45472 Holiday Drive, Suite 3
Dulles, VA 20166
Telephone: (703) 318-7750
You should rely only on the information incorporated by reference
or provided in this prospectus and any prospectus supplement. We have
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authorized no one to provide you with different information. The selling
shareholders are not authorized to make an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of this prospectus or the applicable
prospectus supplement.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain information set forth in this Prospectus includes "forward
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. In addition, from time to time, we may publish
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. In addition, from time to time, we may publish
"forward-looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act or make oral statements that
constitute forward-looking statements. These forward-looking statements may
relate to such matters as anticipated financial performance, future revenues or
earnings, business prospectus, projected ventures, new products, anticipated
market performance and similar matters. The words "budgeted," "anticipate,"
"project," "estimate," "expect," "may," "believe," "potential" and similar
statements are intended to be among the statements that are forward looking
statements. Because these statements reflect the reality of risk and
uncertainty that is inherent in our business, actual results may differ
materially from those expressed or implied by such forward-looking statements.
You are cautioned not to place undue reliance on these forward-looking
statements, which are made as of the date hereof.
The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements. In order to comply with the terms
of the safe harbor, we caution you that a variety of factors could cause our
actual results to differ materially from the anticipated results or other
expectations expressed in our forward-looking statements. These risks and
uncertainties, many of which are beyond our control, include, but are not
limited to those set forth under the caption "Risk Factors" on page 4 and in
our filings with the SEC.
We undertake no obligation to release publicly any revisions to the
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect unanticipated events or developments.
We will provide without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any or all of the documents
incorporated herein by reference (not including exhibits to the information
that is incorporated by reference unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporated). Requests should be directed to FastComm Communications
Corporation, 45472 Holiday Drive, Dulles, Virginia 20166, (703) 318-7750,
Attention: Investor Relations.
No person has been authorized to give any information or to make
any representation other than those contained in, or incorporated by reference
into, this Prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company or any Selling Securityholders. This Prospectus does not constitute an
offer to sell or solicitation of an offer to buy, nor shall there be any sale
of these Shares by anyone, in any state in which such offer, solicitation, or
sale would be unlawful prior to the registration or qualification under the
securities laws of any state, or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make such offer or solicitation. Neither delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication that
there has been no change in the information herein or the affairs of the
Company since the date hereof.
SUMMARY DESCRIPTION OF OUR BUSINESS
INTRODUCTION
FastComm Communications Corporation (the "Company" or "FastComm") designs,
develops and manufactures signaling gateway products that bridge the gaps that
exist between incompatible communications networks, integrated access devices
that serve as advanced voice/data/video/data convergence routers for enterprise
and carrier users, IBM data center products, and protocol converters
specifically designed for Unisys environments. FastComm also provides advanced
internet protocol and data solutions over Frame Relay and xDSL such as
voice/data integrated access devices (IAD's) and routers.
The Company's goal is to provide customers with leading edge technology and a
cost-effective means of incorporating these technologies into existing or new
networks. FastComm is positioning itself at the forefront of the evolving
converged networks with a customer base that includes domestic and
international corporations, carriers, internet service providers, competitive
local exchange carriers, and State and Federal government agencies.
The Company targets business customers and designs its products for volume
sales through third party resellers such as network product and service
dealers, systems integrators, telephone carriers and original equipment
manufacturers. These resellers form a primary distribution channel for the
Company and also provide installation and maintenance support services.
The Company was incorporated as MicroTel, Inc. under the laws of the
Commonwealth of Virginia in May 1983. The Company changed its name to Data
Safe Incorporated in February 1984; to Electronic Vaults, Inc., in August
1984; and to FastComm Communications Corporation, in October 1987.
During the fiscal year ended April 30, 1997, the Company acquired Comstat
Datacomm Corporation, ("CDC or Comstat"), a Georgia corporation engaged in the
data communications business.
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In May 1998, FastComm obtained an exclusive license from KG Data Systems, Inc.,
("KG Data") to manufacture, market and sell that firm's ChanlComm(R) product
line, a replacement for channel attached front end processors in IBM based
mainframe networks. Effective March 31, 1999, FastComm acquired all of the
assets and assumed certain liabilities of KG Data. This business is now
internally identified as the Mainframe Communications Division. (See Item 7)
On March 31, 2000, the Company completed its acquisition of substantially all
of the assets and certain liabilities of Cronus Technology, Inc., ("Cronus") a
privately held Illinois corporation that designs, manufactures and sells system
compatibility solutions to the telecommunications industry. The Company
believes that the Cronus acquisition provides it with a series of signaling
gateway products that may be sold to multinational telecommunications
corporations at gross margins significantly greater than the frame relay
product line. Further, Cronus has 22 experienced software engineers which can
allow the Company to significantly expand its research and development
activities which could lead to more efficient product development. (See Item 7)
The Company's shares are quoted on the OTC Bulletin Board under the symbol
FSCX.OB.
DESCRIPTION OF BUSINESS
FASTCOMM'S PRODUCTS.
FastComm's suite of products include:
Signaling Gateway Product Family
The FastComm line of signaling gateways bridges the gap between incompatible
communications networks, enabling seamless communication between in-band to
in-band, in-band and out-of-band networks and out-of-band to out-of-band SS7,
ISDN, and xGCP networks. There are 4 products in the signaling gateway product
line:
- SignalPath(TM) 230 (SP-230) is a 52 T1/E1 signaling gateway allowing
communication between in-band and out-of-band networks or between networks
supporting different out-of-band protocols. As a signaling gateway supporting
multiple national SS7 and in-band variants, the SP-230 could extend the
softswitch architecture to foreign markets immediately.
- SP-201 is a 4 T1/E1 variant of the SP-230.
- TSC-100 is a 24 T1/E1 signaling gateway allowing communication between
different variants of in-band signaling.
- MUX-100 is an analog to digital converter. Protocol conversion is an
available option.
Integrated Access Devices (IAD's) Product Family
Integrated Access Devices aggregate multiple traffic types (i.e. voice/fax, IP,
video, etc.) onto a single access port or circuit. The FastComm IADs consist
of the following two products:
- MetroLAN(TM) family of IADs is ideal for remote office/branch office
environments. Supports up to 3 analog voice/fax ports, Ethernet, and up to 3
physical ports with extensive IP/legacy support.
- GlobalStack(TM) is a modular IAD that complements the MetroLAN(TM) for medium
to large and central site environments. Supports up to 60 compressed digital
voice/fax channels or 6 voice interfaces, Ethernet and a variety of serial data
interfaces (i.e. V.35, X.21, V.24, T1/FT1, E1/N*64kbps, and/or 56/64kbps
CSU/DSUs).
Data Center Products Family
The Data Center product family is geared toward providing data routing
capability for IP and legacy communications.
- ChanlComm(R) provides the IBM mainframe user with the ability to perform high
speed SNA/SCLC/Bisync and LAN communications without the need for a traditional
front-end processor or costly software products such as NCP or SSP.
- QUICK II(TM) is an integrated router, protocol converter and terminal server
all in one easy to manage compact chassis, for attaching Unisys Poll Select
devices into IP networks.
- MonoFRAD(TM) is a data router supporting a Network and a single User port.
- RingFRAD(TM) is a data router supporting a Token Ring, a Network port and up
to 4 User ports.
- WEBrouter(TM) is a compact, low cost Internet/Intranet router supporting
Ethernet and a single Network port.
- EtherFRAD(TM) is a family of integrated IP and legacy data routers supporting
Ethernet, a Network port and up to 5 User ports.
SIGNALPATH 230
The SignalPath 230 (SP 230) is an advanced signaling protocol converter
designed to solve signaling compatibility problems that exist between
communications networks. Different types of communications protocols, both
in-band and out-of-band, exist globally making communications between such
networks impossible. The SP 230 breaks down the communications barriers
presented by these different protocols and enables a seamless flow of
information across any network. The SP 230 can interface with switches and
gateways provided by Cisco, Lucent, Nortel, Siemens, Ericsson, Alcatel and
others. As a signaling gateway supporting multiple national SS7 and in-band
variants, the SP-230 could extend the softswitch architecture to foreign
markets immediately.
METROLAN
The MetroLAN router combines analog voice from switches, PBXs, key systems,
telephones, and the public telephone network with LAN/legacy data & multimedia
and transports it over switched or dedicated digital networks. MetroLAN
satisfies the needs of small office/branch offices that require optimum phone
line performance. With FastComm's routing software, three analog voice ports,
two data equipment serial interfaces and an Ethernet port, the MetroLAN is the
perfect solution for voice/fax/data and video applications. The MetroLAN is
compliant with FRF.11, supporting voice compression (with silence suppression)
which allows up to 3 compressed voice channels to be transported in less than
30Kbps. Bandwidth is dynamically allocated between voice/video/data so that LAN
traffic may continually adapt to fill the unused bandwidth.
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GLOBALSTACK
The GlobalStack-EX voice/fax/data/video router combines digital and analog
voice from switches, PBXs, key systems, and remote telephones with LAN/legacy
data and transports it over switched or dedicated digital networks. With
digital T1, E1, ISDN BRI and PRI interfaces, frame relay interfaces for data
equipment, an Ethernet port, and FastComm's routing software, the
GlobalStack-EX is the perfect solution for integrating voice/fax/data and
multimedia throughout the enterprise network. The GlobalStack-EX satisfies
large regional and central site office and POP locations where a confluence of
communication mediums converge. The GlobalStack-EX is compliant with FRF.11,
supporting voice compression (with silence suppression) and allows up to 30
voice channels to be transported in less than 300Kbps. Bandwidth is dynamically
allocated between voice/video/data so that LAN traffic may continually adapt to
fill the unused bandwidth.
CHANLCOMM(R) MAINFRAME COMMUNICATIONS PROCESSOR
During fiscal 1999, the Company began to market the ChanlComm(R) product family
as a replacement for the front end processor ("FEP") in IBM mainframe computer
networks. The ChanlComm(R) takes its name from being "channel attached" to a
main computer, bypassing the typical front end processor installed to handle
communications lines. This product is now shipping with serial (SDLC)
interfaces for wide area network lines (point to point and multidrop). The
product development plan includes the addition of a direct frame relay
interface, full IP routing, along with other capabilities and protocols. The
current 16 port capacity will be expanded to at least 256 ports this fiscal
year. In certain applications, the ChanlComm(R) at the host computer will
communicate with FastComm IADs or routers at remote sites, creating "pull
through" business for the Company.
QUICK PRODUCT LINE
The Quick II targets Unisys A and C-series mainframe customers who have been
using legacy CP2000 equipment. Unisys sells and supports the Quick II to
customers who require cost-effective network solutions for communication
between legacy mainframe, peripheral and LAN applications. FastComm supports
over 100 protocol variations which legacy equipment users depend on for
seamless operations.
New Product Development
The Company invests heavily in research and development and expects such
investment to continue.
Recorded expenses for research and development have been as follows:
Fiscal year 2000 $2,966,000 46% of revenue
Fiscal year 1999 $2,388,000 51% of revenue
Fiscal year 1998 $2,255,000 25% of revenue
The Company's ability to anticipate changes in technology, industry standards
and communications service provider offerings, and its ability to develop and
introduce new and enhanced products on a timely basis that are successful in
the market will be a significant factor in the Company's competitive position
and in its prospects for growth. Management believes that the future success of
the Company depends on its ability to continue to enhance its products, improve
product performance and functionality and to develop new products that address
emerging markets. Management believes that significant expenditures for
research and development will continue to be required.
To bring a product to market quickly, any design may be done entirely
internally, externally, jointly with another firm, or from licensed technology.
Larger companies, with greater engineering resources and more internal
expertise, may be able to develop a larger portion of their products without
outside technology. Elimination of licensing fees or royalties could provide
them a cost advantage.
Research and development project schedules for high technology products are
inherently difficult to predict, and there can be no assurance that the Company
will achieve its expected initial shipment dates of products in development.
The timely availability of new and enhanced products is critical to the success
of the Company. Delays in availability of these new products, or lack of market
acceptance of such products, could adversely affect the Company.
CERTAIN RISK FACTORS
Before you invest in shares of our common stock, you should be
aware that there are various risks involved in an investment, including those
described below. We urge you to carefully consider these risk factors, together
with all of the other information included in this prospectus and the
information incorporated in this prospectus by reference, before you decide to
invest in shares of our common stock. In addition, this Prospectus and the
documents incorporated herein by reference contain certain "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Such forward-looking statements, which are often
identified by words such as "believes", "anticipates", "expects", "estimates",
"should", "may", "will", and "similar" expressions, represent the Company's
expectations or beliefs concerning future events. Numerous assumptions, risks
and uncertainties, including the factors set forth below, could cause actual
results to differ materially from the results discussed in the forward looking
statements.
WE HAVE A HISTORY OF LOSSES AND MAY EXPERIENCE FUTURE LOSSES
We have incurred net losses of $6,817,000 $5,550,000 and $9,089,000 for the
years ended April 30, 2000, 1999 and 1998, respectively. We incurred a loss of
$1,848,288 for the fiscal quarter ended July 29, 2000. These losses are
primarily attributable to sales levels insufficient to meet the costs
associated with the development and marketing of new products in an emerging
technology and to litigation costs and costs associated with the Chapter 11
Bankruptcy described below. Sales levels have been negatively impacted by
delays in product development, delays on the part of the carriers to offer
frame relay services and once offered, incorrect carrier pricing for frame
relay services. The Company actively participates in industry forums that
promote frame relay and ATM services. Further, the Company upgraded and
expanded it sales, marketing and engineering organizations, while decreasing
its general and administrative overhead. The Company is focused on acquisitions
and partnership arrangements
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intended to expand its technology base and increase sales. There can be no
assurance that the Company will generate sufficient revenues to meet expenses
or to operate profitably in the future.
WE RECENTLY EMERGED FROM BANKRUPTCY.
On June 2, 1998, the Company filed a voluntary petition for reorganization
under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy
Court for the Eastern District of Virginia. This filing was a direct result of
enforcement activities by a judgment creditor. All litigation related to this
matter has now been settled. On March 30, 1999, the Company's Plan of
Reorganization was approved by the Bankruptcy Court and the Company emerged
from Chapter 11. The Plan of Reorganization became effective on April 12, 1999.
The Plan provides for cash and debenture payments equal to 100% of each allowed
claim plus interest. The positions of all common shareholders were preserved.
The Chapter 11 Bankruptcy filing had a negative impact on the Company's sales,
its relationships with vendors and its ability to hire and retain qualified
employees, among other areas.
WE ARE ENGAGED IN A HIGHLY COMPETITIVE BUSINESS.
The market for networking systems is extremely competitive. In most of the
markets in which we compete our competitors are more established, benefit from
greater market recognition and have greater financial, technological,
production and marketing resources than we do. Competition could become even
more intense if new companies enter the market or if our existing competitors
expand their product lines. We compete on the basis of product features and
capabilities, performance and price. An increase in competition could have an
adverse effect on our operating results, both in terms of lost market share and
revenues and required investments in research and development and sales and
marketing in order to remain competitive. There can be no assurance that we
will be able to make technological advances or that we will have sufficient
resources to fund the necessary research and development, marketing and sales
efforts that will enable us to profitably compete in our markets. On June 2,
1998, the Company filed a voluntary petition for reorganization under Chapter
11 of the federal bankruptcy laws in the United States Bankruptcy Court for the
Eastern District of Virginia. This filing was a direct result of enforcement
activities by a judgment creditor. All litigation related to this matter has
been settled. On March 30, 1999, the Company's Plan of Reorganization was
approved by the Bankruptcy Court and the Company emerged from Chapter 11 on
April 12, 1999. The Plan provides for cash and debenture payments equal to 100%
of each allowed claim plus interest. The positions of all common shareholders
were preserved. This filing had a negative impact on sales during the 1999
fiscal year and, at this time, the Company is unable to predict the effect this
filing and the subsequent reorganization will have on its ability to compete in
its marketplace.
WE RELY ON A LIMITED NUMBER OF KEY EMPLOYEES.
Our success depends to a significant degree upon the continued contributions of
our management, marketing, engineering and technical personnel, many of whom
would be difficult to replace. In addition, as we continue to develop the
ChanlComm product line, we will need to attract and retain additional qualified
personnel. There is intense competition for qualified personnel in our
industry, and there can be no assurance that we will be able to attract and
retain the qualified personnel necessary for the development of our business.
Loss of the services of any of our key employees would be detrimental to our
development. We do not have "key man" life insurance on any of our officers or
directors. On June 2, 1998, the Company filed a voluntary petition for
reorganization under Chapter 11 of the Federal bankruptcy laws in the United
States Bankruptcy Court for the Eastern District of Virginia. As a direct
result of this filing, the Company has suffered the loss of certain key
employees. To date, the Company has been able to refill some of these
positions. At this time, the Company is unable to predict the long-term effect
this filing will have on its ability to attract and retain key employees.
WE MUST BE ABLE TO ADAPT TO CHANGES IN PROTOCOL AND OTHER TECHNOLOGY.
New Data Protocols may be developed that could displace the protocols currently
supported in Company products, requiring additional software development to
sustain the viability of those products. An announcement of such new protocols
could have a negative effect on sales of older designs, as users hesitate to
install equipment based on existing designs until they have evaluated the new
ones. There can be no assurance that the Company would have the necessary
resources, particularly the knowledgeable employees, to implement new protocols
in a timely manner. Such failure to develop adequate products in response to
new technology could adversely affect the Company's profitability. Asynchronous
Transfer Mode (ATM) is a new technology for transmitting digital information,
including voice and data, over a public or private network. Telephone companies
and other operators of public network are deploying ATM in their backbone
segments. If the ATM technology becomes much less expensive, ATM services could
become economically more attractive than frame relay services that currently
are involved in the bulk of the Company's business. If ATM were to become more
popular than frame replay, the Company would need to develop new products,
retrain its employees, and educate its sales and distribution channel partners.
There can be no assurance that the Company will have the resources necessary to
develop appropriate products in a timely manner.
WE MUST INTRODUCE NEW PRODUCTS TO COMPETE.
The Company's future revenue is dependent on its ability to successfully
develop, manufacture and market products. In this regard, future growth is
dependent on the Company's ability to timely and successfully develop and
introduce new products, establish new distribution channels, develop
affiliations with leading market participants which facilitate product
development and distribution, and market existing and new products with service
providers, resellers, channel partners, and others. The introduction of new or
enhanced products requires the Company to manage the transition from older
products in order to minimize disruption in customer ordering patterns, avoid
excessive levels of older product inventories and ensure that adequate supplies
of new products can be delivered to meet customer demand. In addition, as the
technical complexity of new products increases, it may become increasingly
difficult to introduce new products quickly and according to schedule. There
can be no assurance that the Company will successfully manage the transition to
new products or that the Company's research and development efforts will result
in commercially successful new technology and products in the future.
WE MAY NEED TO SEEK ADDITIONAL CAPITAL TO FULFILL OUR BUSINESS PLAN.
8
<PAGE> 9
The Company's ability to make future capital expenditures and fund the
development and launch of new products, are dependent on existing cash and
demands on cash to support inventory for the Company's products and the
Company's return to profitability. The timing and amount of the Company's
future capital requirements can not be accurately predicted, nor can there be
any assurance that debt or equity financing, if required, can be obtained on
acceptable terms. There can be no assurance that the company will have cash
available in the amounts and at the times needed.
SOME COMPONENTS OF OUR PRODUCTS ARE AVAILABLE TO US ONLY FROM A LIMITED NUMBER
OF SUPPLIERS.
Certain components used in our products are currently available from only one
source and other of the components are available from only a limited number of
suppliers. Although we have generally been able to obtain adequate supplies of
components to date, our inability to develop alternative sources if and as
required in the future, or to obtain sufficient sole source or limited source
components as required, could result in delays or reductions in product
shipments. Certain products that are or may in the future be marketed with or
incorporated into our products are supplied by or under development by third
parties. These third parties may be the sole suppliers of such products. While
the Company believes there are a number of suitable manufacturers, there can be
no assurance that current or alternative sources will be able to supply all of
our demands on a timely basis. Also, an unanticipated interruption in supply
could have a short-term effect on our business. It will not be economically
practical for the Company to develop its own manufacturing capacity in the
foreseeable future.
WE ARE DEPENDENT ON PATENTS AND PROPERTY RIGHTS TO PROTECT OUR POSITION IN THE
INDUSTRY.
The Company's success depends in part upon its technological expertise and
proprietary product designs. The Company relies upon its trade secret
protection efforts and, to a lesser extent, upon patents and copyrights to
protect its proprietary technologies. There can be no assurance that these
steps will be adequate to deter misappropriation or infringement of its
proprietary technologies or that the Company's competitors will not
independently develop technologies that are substantially equivalent or
superior to the Company's technology. In addition, the laws of some foreign
countries do not protect the Company's proprietary rights to the same extent as
do the laws of the United States. Further, given the rapid evolution of
technology and uncertainties in intellectual property law, there can be no
assurance that the Company's current or future products will not be determined
to infringe proprietary rights of others. Should the Company be sued for patent
infringement, there can be no assurance that the Company will prevail, or, if
required by such litigation, that it will be able to obtain the requisite
licenses or rights to use such technology on commercially reasonable terms. In
addition, any litigation, regardless of the outcome, could result in
substantial costs to the Company.
WE COULD BE AFFECTED BY GOVERNMENTAL RESTRAINTS OR CHANGES IN GOVERNMENTAL
POLICY.
The Company's products are subject to regulation by the Federal Communications
Commission (the "FCC"), and each of the Company's products must typically be
tested before it can be introduced into the market. Any inability of the
Company's products to conform to FCC regulations or any failure of the
Company's products to meet FCC testing requirements could delay the
introduction of the Company's products into the market, impact the Company's
relationships with its OEMs and otherwise adversely affect the Company. Foreign
authorities often establish telecommunications standards different from those
in the United States, making it difficult and more time-consuming to obtain the
required regulatory approvals. Any significant delay in obtaining such
regulatory approvals could have an adverse effect on the Company's operating
results. Furthermore, changes in such laws, regulations, policies or
requirements could affect the demand for the Company's products or result in
the need to modify products, which may involve substantial costs or delays in
sales and could have an adverse effect on the Company's future operating
results.
OUR OUTSTANDING SHARES MAY BE DILUTED.
A substantial number of shares of Common Stock are or will be issuable by the
Company upon the exercise of warrants and options which the Company has issued,
which could result in dilution to a Shareholder's percentage ownership interest
in the Company and could adversely affect the market price of the Common Stock.
On September 8, 2000, there were issued and outstanding a total of 26,388,699
shares of Common Stock. If all convertible debentures, warrants and stock
options which the Company has issued were deemed converted and exercised, as
the case may be, as of that date, there would be issuable approximately
36,163,229 shares of Common Stock. The sale or availability for sale of a
significant number of shares of Common Stock in the public market could
adversely affect the market price of the Common Stock. The availability to the
Company of additional equity financing, and the terms of any such financing,
may also be adversely affected by the foregoing.
OUR BUSINESS IS SUBJECT TO POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS AND WE
MAY NOT BE ABLE TO MANAGE OUR GROWTH EFFECTIVELY.
A significant portion of the Company's sales are derived from products shipped
against firm purchase orders received in each fiscal quarter and from products
shipped against firm purchase orders released in that quarter. Unforeseen
delays in product deliveries or the closing of sales, introduction of new
products by the Company or its competitors, fluctuations in customer capital
expenditures or other conditions affecting the networking industry or the
economy during any fiscal quarter could cause quarterly revenue and net
earnings to vary greatly. Further, the Company schedules some production of its
products and budgets expenses based on forecasts of sales, which are difficult
to predict. The Company's manufacturing procedures are designed to assure rapid
response to customer demand, but may, in certain circumstances, create risk of
excess or inadequate inventory if orders do not match forecast. Moreover,
shortages or delays in the supply of manufacturing components at shipments at
acceptable prices could adversely affect the Company's ability to meet
scheduled product shipments in any particular quarter, which could materially
affect the Company's operating results. Because a substantial portion of
customer orders are filled within the fiscal quarter of receipt, and because of
the ability of customers to revise or cancel orders and change delivery
schedules without significant penalty, quarter to quarter revenues and, to a
greater degree, net earnings, may be subject to greater variability and less
predictability.
WE MUST RESPOND QUICKLY TO TECHNOLOGICAL CHANGES.
The markets for the Company's products are characterized by continuous
technological change, evolving industry standards and frequent product
introductions. Such changes in the market may adversely affect the Company's
ability to sell its products. The Company's ability to anticipate changes in
technology, industry
9
<PAGE> 10
standards and to develop and introduce new and enhanced products on a timely
basis that are successful in the market, will be significant factors in the
Company's competitive position and its prospects for growth. Moreover, if
technologies or standards supported by the Company's products or carrier
service offerings based on the Company's products become obsolete or fail to
gain widespread commercial acceptance, the Company's business may be adversely
affected. As a result, Management believes that significant expenditures for
research and development will be required in the future. Research and
development project schedules for high technology products are inherently
difficult to predict and there can be no assurance that the Company will
achieve its expected initial shipment dates for products in development.
Because timely availability of new and enhanced products is critical to the
success of the Company, delays in availability of these products, or lack of
market acceptance of such products, could adversely affect the Company.
OUR STOCK MAY BE SUBJECT TO SIGNIFICANT VOLATILITY.
The Company's common shares have been subject to substantial market price
volatility, some of which has occurred when there have been variations between
the Company's actual or anticipated financial results and the expectations of
that of the financial community and in the aftermath of public announcements by
the Company and its competitors. Further, the stock market has experienced
extreme price and volume fluctuations from time to time which have affected the
market price of many technology companies in particular and which have often
been unrelated to the operating performance of these companies. These broad
market fluctuations, as well as general economic conditions, may adversely
affect the market price of the Company's common shares. The Company's shares
are currently quoted on the NASDAQ OTC Bulletin Board.
OTHER FACTORS
The Company further cautions that the factors referred to above and those
referred to as part of particular forward looking statements may not be
exhaustive, and that new risk factors emerge from time to time in its rapidly
changing business. Further, the Company's independent auditors have included a
paragraph in their opinion which indicates that, based on recent operating
losses, along with existing working capital and accumulated deficits, there is
substantial doubt about the Company's ability to continue as a going concern.
The Company does not undertake to update any forward looking statements it may
make or has made on its behalf to reflect changes it its expectations or
assumptions or the risks and uncertainties referred to.
USE OF PROCEEDS
We will not receive any proceeds form the sale of the Offered
Shares by the Selling Securityholders. If Warrants held by certain of the
Selling Securityholders are exercised, we may receive up to $7,293,000,
reflecting the total exercise price of the Warrants. If any or all of these
warrants held by the Selling Shareholders are exercised, we intend to use the
net proceeds for general corporate purposes and for working capital.
SELLING SECURITYHOLDERS
Certain of the shares of common stock being offered by certain
Securityholders are issuable (i) upon exercise of the prepaid and incentive
warrants, (ii) as interest on the prepaid warrants, or (iii) upon exercise of
the related warrants. For additional information about the prepaid warrants,
see "Description of Securities. Warrants and Debentures" We are registering the
shares in order to permit the selling Securityholders to offer these shares for
resale from time to time. Except for the ownership of the Prepaid Warrants and
the Incentive Warrants, these selling Securityholders have not had any material
relationship with us within the past three years. The other shares being
offered were issued to the Selling Securityholders in connection with the
acquisition of Cronus Technology, Inc., funding of the Company's Bankruptcy
Reorganization Plan, in a private placement in July 2000 and to an investment
banking firm for investment banking services.
The table below lists the Selling Securityholders and other
information regarding the beneficial ownership of the common stock by each of
the selling Securityholders. The second column lists, for each selling
Securityholder, the number of shares of common stock and related warrants that
are issuable to the selling Securityholders as of September 14, 2000, assuming
exercise of all prepaid warrants, accrued interest and the exercise of all
warrants held by such Selling Securityholder on that date, without regard to
any limitations on conversions or exercise. Because conversion of the Prepaid
Warrants issued to certain selling Securityholders is based on a formula that
depends on a number of factors, (i) the number of shares that will actually be
issued upon conversion may vary from the 4,375,000 shares being offered by this
prospectus and (ii) the numbers listed in the second column may fluctuate from
time to time. The fourth column assumes the sale of all the shares offered by
each selling shareholder.
We determined the number of shares of common stock to be offered
for resale by this prospectus by agreement with the Selling Securityholders and
in order to adequately cover the number of shares required. Our calculation of
the number of shares to be offered for resale is based on a conversion price of
$2.00 per share with respect to the Prepaid Warrants.
In accordance with the terms of a Registration Rights Agreement
with the holders of the Prepaid Warrants, this prospectus covers the resale of
200% of the number of shares of common stock issuable upon conversion of the
prepaid warrants determined as if the prepaid warrants were converted in full
at the assumed conversion price of $2.00.
10
<PAGE> 11
<TABLE>
<CAPTION>
===========================================================================================
Common Shares
Number of Shares Owned After Offering
Name and Address of Beneficially Owned (1) Common Shares Percentage of
Selling Securityholder Prior to Offering Offered Hereby Number Outstanding
---------------------- --------------------- -------------- ------ -----------
-------------------------------------------------------------------------------------------
REORGANIZATION
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Frederick Brader 333 333 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Gregory Danowski 66,668 66,668 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Charles Deslaurier 10,000 10,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Roy Flinchum 16,667 16,667 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Dennis Fortin 20,000 20,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Debbie Gill 333 333 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Joseph Hines 66,668 66,668 - 0 - - 0 -
-------------------------------------------------------------------------------------------
David Minker 6,668 6,668 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Stuart Sloane 2,668 2,668 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Paul Trowell 83 83 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Sophia Vongphakdy 666 666 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Khan Vongphakdy 666 666 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Pheng Keophila 1,000 1,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Leo Miller 6,666 6,666 - 0 - - 0 -
-------------------------------------------------------------------------------------------
SUSQUEHANNA
-------------------------------------------------------------------------------------------
Capital Ventures Int'l (2) 397,234 397,234 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Castle Creek Partners (2) 19,735 19,735 - 0 - - 0 -
-------------------------------------------------------------------------------------------
CHESAPEAKE
-------------------------------------------------------------------------------------------
Andrew Schultz 69,000 69,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
C Richard Lehnert IRA 22,500 22,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Edward Rayder 50,000 50,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Harland McWilliams 25,000 25,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Jack Kneafsey 93,750 93,750 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Robert Pearson 37,500 37,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Peter C. Madsen 140,000 140,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
KAUFMAN BROS, L.P. (3) 200,000 200,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Gordon Turner 67,500 67,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Scott Kasprowicz 50,000 50,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 12
<TABLE>
<CAPTION>
===========================================================================================
Common Shares
Number of Shares Owned After Offering
Name and Address of Beneficially Owned (1) Common Shares Percentage of
Selling Securityholder Prior to Offering Offered Hereby Number Outstanding
---------------------- --------------------- -------------- ------ -----------
-------------------------------------------------------------------------------------------
REORGANIZATION
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
S. M. Franzblau 37,580 37,580 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Joseph Koch 13,800 13,800 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Henry O. Jackson 3,950 3,950 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Henry O. Jackson & Mattie
R. Jackson JTWRO 1,000 1,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Lydia A. Williams 500 500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Chesapeake Securities
Research Corporation 3,586 3,586 - 0 - - 0 -
-------------------------------------------------------------------------------------------
JULY 2000 PLACEMENT
-------------------------------------------------------------------------------------------
Masha M. Adamantiades 22,500 22,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Peter Cohn 15,000 15,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Jacquelyn A. Colligan 150,000 150,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Raymond James &
Associates, Inc. custodian
FBO Gregory Danowski IRA
#72724115 45,000 45,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Gail Ellenbogan TTEE 15,000 15,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Ibriham I. Elwan 109,500 109,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Linda Guyer 15,000 15,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Bear Stearns Custodian for
Elaine Goldstein IRA #1 15,000 15,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Bear Stearns Custodian for
Elaine Goldstein IRA #2 15,000 15,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Bear Stearns Custodian for
Elaine Goldstein IRA #3 15,000 15,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Infrastructure Capital
Group, Ltd. 75,000 75,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Joseph C. Koch 28,800 28,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Gerald W. Lazaroff 75,000 75,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Cindy M. Latendresse
Gregory J. Martin 7,500 7,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Bear Stearns Custodian for
Harland D. McWilliams IRA 13,500 13,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Bear Stearns Custodian for
Harland D. McWilliams Roth IRA 16,500 16,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Mark Newman 7,500 7,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
George E. Pardonnet 37,500 37,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Bear Stearns Custodian for
Edward A. Rayder IRA 7,500 7,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Jurgen Schnepel 45,000 45,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Betty Schultz 7,500 7,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Tracy Schultz 7,500 7,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Khalid A. Shadid 7,500 7,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 13
<TABLE>
<CAPTION>
===========================================================================================
Common Shares
Number of Shares Owned After Offering
Name and Address of Beneficially Owned (1) Common Shares Percentage of
Selling Securityholder Prior to Offering Offered Hereby Number Outstanding
---------------------- --------------------- -------------- ------ -----------
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Allan Sperber 4,500 4,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
James A. Tanski 75,000 75,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Mark G. Tanski 75,000 75,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Bear Stearns Custodian for
Thomas T. Taylor Roth IR 15,000 15,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
David T. Washington 15,000 15,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Congruent International 12,378 12,378 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Safa Alkateb 1,858 1,858 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Dennis Falkosky 402 402 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Pheng Keophila 658 658 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Rob Long 829 829 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Mason Myers 2,049 2,049 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Sophia Vongphakdy 916 916 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Kahn Vongphakdy 781 781 - 0 - - 0 -
-------------------------------------------------------------------------------------------
CRONUS ACQUISITION - 0 - - 0 -
-------------------------------------------------------------------------------------------
Kameran Ahari 4,382 4,382 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Ramon Bautista 876 876 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Thomas Biggar 439 439 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Lisa Brady 1,753 1,753 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Anibal Brito 656 656 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Pam Clark 1,433 1,433 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Maureen Costantino 1,752 1,752 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Maike Daniels 2,629 2,629 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Diana Darlington 876 876 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Bruce Druetzler 2,632 2,632 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Matt Feid 175 175 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Michael Fenton 1,053 1,053 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Bill Ferguson 10,803 10,803 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Cheryl Ferguson 526 526 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Steve Gerling 1,744 1,744 - 0 - - 0 -
-------------------------------------------------------------------------------------------
George Glass 15,120 15,120 - 0 - - 0 -
-------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
===========================================================================================
Common Shares
Number of Shares Owned After Offering
Name and Address of Beneficially Owned (1) Common Shares Percentage of
Selling Securityholder Prior to Offering Offered Hereby Number Outstanding
---------------------- --------------------- -------------- ------ -----------
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Darlene Greenhaw 13,149 13,149 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Julie Householder 1,228 1,228 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Amir Izadpanah 876 876 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Snehalata Kamat 876 876 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Joe Kintz 1,753 1,753 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Jeff Koon 3,507 3,507 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Shirley Kozler 876 876 - 0 - - 0 -
-------------------------------------------------------------------------------------------
David Kruse 175 175 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Debahsis Dundu 876 876 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Glenda Lang 526 526 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Thanh Luu 3,507 3,507 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Daniel Lyman 876 876 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Jim Marsan 2,629 2,629 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Furman McCormick 2,629 2,629 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Mary McIntosh 350 350 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Michael Miller 3,507 3,507 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Jerry Montigny 1,753 1,753 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Ed Nardi 2,629 2,629 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Bill Nelson 1,753 1,753 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Chris Olson 175 175 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Ardalan Ossareh 13,149 13,149 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Kevin Owen 876 876 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Frank Ponturo 1,753 1,753 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Bill Prekker 3,210 3,210 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Charlie Prince 3,507 3,507 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Valeri Reynolds 876 876 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Mark Rivenburg 286 286 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Eric Scholz 876 876 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Janet Seecharan 175 175 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Ramarghavan Srinivasan 876 876 - 0 - - 0 -
-------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
===========================================================================================
Common Shares
Number of Shares Owned After Offering
Name and Address of Beneficially Owned (1) Common Shares Percentage of
Selling Securityholder Prior to Offering Offered Hereby Number Outstanding
---------------------- --------------------- -------------- ------ -----------
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Steve Thomas 2,629 2,629 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Nicholas Turner 4,382 4,382 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Roy Wainwright (4) 110,169 110,169 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Chetan Desai 1,053 1,053 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Anita Freling 88 88 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Martin Coakley 70 70 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Denise Gerling 43 43 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Dale Glover 614 614 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Damon Hovington 35 35 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Barbara Kritlow 175 175 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Cynthia Richardson 18 18 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Huy Vu 175 175 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Michael Zhang 35 35 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Loren Eaton (4) 29,912 29,912 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Debbie Sherwood 70 70 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Marshall Martin 175 175 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Venogopal Eyyuni 1,753 1,753 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Randall Flinn (4) 91,857 91,857 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Dhru Desai (4) 725,037 725,037 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Steven Smith (4) 501,046 501,046 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Peter Mahida (4) 552,273 552,273 - 0 - - 0 -
-------------------------------------------------------------------------------------------
William Dawson (6) 777,366 777,366 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Ajay Malawade 350 350 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Patrick Sherlock 7,013 7,013 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Raj Dave 57,061 57,061 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Richard L. Abrahams 26,300 26,300 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Ribert R. Bellick 80,650 80,650 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Chris L. Gust 80,650 80,650 - 0 - - 0 -
-------------------------------------------------------------------------------------------
CTI Telecom, Inc. (5) 400,000 400,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
J.A. Sunkel (6) 29,289 29,289 - 0 - - 0 -
-------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 16
<TABLE>
<CAPTION>
===========================================================================================
Common Shares
Number of Shares Owned After Offering
Name and Address of Beneficially Owned (1) Common Shares Percentage of
Selling Securityholder Prior to Offering Offered Hereby Number Outstanding
---------------------- --------------------- -------------- ------ -----------
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William F. Ferguson (6) 11,716 11,716 - 0 - - 0 -
-------------------------------------------------------------------------------------------
George Chen (6) 36,611 36,611 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Richard L. Abrahams, 78,844 78,844 - 0 - - 0 -
Trustee of th R.L.A 1993 Trust
u/a/d 11/10/93 (7)
-------------------------------------------------------------------------------------------
ZANNET SECURITIES Corp. (8)
-------------------------------------------------------------------------------------------
The Zanett Securities L.P. (8) 437,500 437,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
The Zanett Lombardier Fund
L/P/ (8) 1,468.750 1,468.750 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Zanett Lombardier Fund II, 156,250 156,250 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Goldman Sachs Performance
Partners, L.P. (8) 1,031,250 1,031,250 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Goldman Sachs Performance
Partners (offshore) L.P. (8) 843,750 843,750 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Samuel L. Milbank (8) 62,500 62,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Heriot Holdings, Ltd. (8) 62,500 62,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Harlow Enterprises, Inc. (8) 62,500 62,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Parkland Limited (8) 62,500 62,500 - 0 - - 0 -
-------------------------------------------------------------------------------------------
Bruno Guazzoni (8) 625,000 625,000 - 0 - - 0 -
-------------------------------------------------------------------------------------------
</TABLE>
1) Beneficial ownership is determined in accordance with the rules and
regulations of the SEC and generally includes consideration of voting or
investment power with respect to the securities at issue. Information with
respect to beneficial ownership is based upon information as of September 8,
2000, and assumes that there is outstanding an aggregate of 26,388,699 shares
of common stock, not including treasury shares. Except as otherwise indicated
in the footnotes below, and subject to community property laws where
applicable, we believe, based upon information furnished by selling
Securityholders, that the persons named in this table have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by them.
(2) In April 1997, the Company issued $3,000,000 in 5.0% convertible debentures
due April 2001 to a group of accredited investors. In May 1997, the Company
issued $2,000,000 in 5% convertible debentures due May 2001 to these same
investors. These debentures were convertible in shares of common stock and
warrants to purchase common stock. Each warrant had a strike price set at 125%
of the market price of the Company's common stock at the time of conversion.
During 2000 and 1999, holders of the debentures converted $224,684 and
$1,073,310 of debentures and accrued interest into 274,911 and 1,652,717 shares
of common stock, respectively. In November 1999, the Company issued additional
warrants to debenture holders on the condition that the original warrants
issued as part of the debenture offering be converted. In connection 416,969
warrants were issued to participating in this program. These warrants have a
term expiring on December 10, 2000, and an exercise price of $2.50 per warrant.
The shares underlying these warrants are being registered hereby.
(3) In January 2000, the Company executed an agreement with an investment
banking firm to provide investment banking and advisory services through August
31, 2001. As consideration for these service the Company issued warrants to
purchase up to 200,000 shares of the Company's common stock at an exercise
price of $7.50 per share. The warrants are exercisable at any time from
February 1, 2000 to January 31, 2003.
(4) Represents shares of common stock issued to these individuals in
satisfaction of indebtedness owed to the individuals by Cronus Technology, Inc.
(5) On March 31, 2000, the Company acquired substantially all of the assets and
assumed certain liabilities of Cronus Technology Inc. ("Cronus") for
approximately $9,300,000 of the purchase price was funded through the issuance
of 3,700,000 shares of the Company's common stock and approximately $300,000
was paid in cash. Cronus manufactures and sells telecommunications equipment
and provides consulting services for satellite telecommunications planning. The
purchase and debt assumption agreements related to the Cronus acquisition
obligate the Company to issue up to 1,225,000 additional common shares if the
fair value of its common stock has not reached $7.30 per share prior to the
one-year anniversary date of these agreements. The Company will determine the
purchase price adjustment when, and if, it issues any additional common shares.
In addition to the foregoing adjustment, the acquisition agreements provide for
the adjustment of the purchase price based upon an audit of
16
<PAGE> 17
Cronus as at December 31, 1999. This audit resulted in a downward adjustment of
net worth and a corresponding reduction of shares due the former Cronus
shareholders by 812,460 shares. The shares distributed to the former
shareholders of Cronus and being sold hereby reflect this reduction on a
prorata basis. In September the Company received a notice from William Dawson,
the Selling Cronus Stockholder's Agent objecting to this adjustment and to
certain aspects of the BDO audit. The Company has responded to this notice by
stating that these objections are not permitted under the terms of the
acquisition agreements and, in any event are clearly erroneous. Mr. Dawson has
stated his intent to pursue these claims; if he does, the Company intends to
vigorously object to any such claims. There is also included in the shares
registered hereby, on a prorated basis, 555,000 shares which are being held in
escrow pending resolution of any post-closing claims by the Company against
Cronus. On September 28, 2000, the Company submitted claims in excess of
$150,000, which if decided in its favor would reduce the number of shares to be
issued out of escrow in an indeterminable amount.
(6) Includes the following shares issued to these individuals in connection
with the satisfaction of indebtedness owed to them by Cronus: William Dawson
533,472 common shares and 88,912 shares underlying stock purchase warrant;
William F. Ferguson 10,042 common shares and 1,674 shares underlying stock
purchase warrant; George Chen 31,381 common shares and 5,230 shares underlying
stock purchase warrant; J.A. Sunkel 78,844 common shares and 4,184 shares
underlying stock purchase warrant. The agreements relating to the retirement of
indebtedness provides for the issuance of additional shares of FastComm common
stock have not achieved a certain price level on or before March 31, 2001. Such
shares, if any, will be registered by Post-effective amendment to the
Registration Statement.
(7) Represents shares issued to this trust in settlement of indebtedness of
Cronus owed to the Trust in the amount of $500,000 plus accrued interest to
March 31, 2000. The debt satisfaction agreement between the Company and the
Trust provides for the issuance of additional shares, if the price per share of
the Company's common stock does not achieve a certain level on or before March
31, 2001. Such shares, if any, will be registered by post-effective amendment
to the Registration Statement.
(8) Represents pro rata share of 200% of the number of Shares issuable under
Prepaid Warrants, the shares underlying certain Incentive Warrants and shares
underlying a Placement Agents warrant - see "Description of Securities -
Warrants and Debentures." On September 8, 2000, the Company sold 3,500 units at
$1,000 per unit to a group of accredited investors. Each unit consists of a
prepaid common stock purchase warrant ("Prepaid Warrant") and an incentive
warrant ("Incentive Warrant") to acquire additional shares of common stock in
the Company. The Prepaid Warrant is convertible at the option of the holder
into that number of shares of common stock determined by dividing $1,000 by the
lesser of $2.00 or the average of the five lowest closing bid prices for the
ten trading day period prior to conversion. The Prepaid Warrant earns interest
at a rate of 4% payable in common stock. Each Incentive Warrant allows the
holder to purchase 250 shares at $2.50 per share. The Incentive Warrants have a
five year term and are exercisable immediately. The Company paid a placement
fee of $350,000 and issued to the placement agent warrants to purchase 437,500
shares of stock at an exercise price of $2.50 per share. The placement agent
for this transaction was The Zanett Securities Corporation.
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 50,000,000 shares of common
stock, $.01 par value per share, of which 26,388,699 shares were outstanding at
September 8, 2000, fully paid and non-assessable prior to this offering. There
were 3,500,346 options outstanding under the Company's Stock Option Plan as at
that date.
COMMON STOCK
The holders of common stock are entitled to one vote for each share held
of record in the election of directors and with respect to all other matters to
be voted on by stockholders. Holders of shares of common stock do not have
cumulative voting rights. Therefore, the holders of more than 50 percent of
such shares voting for the election of directors can elect all of the
directors. The holders of common stock are entitled to receive dividends when,
as and if declared by the Board of Directors out of legally available funds. In
the event of liquidation, dissolution or winding up of FastComm Communications
Corporation, the holders of common stock of liquidation, dissolution or winding
up of FastComm Communications, the holders of common stock are entitled to
share ratably in all assets remaining available for distribution after payment
of liabilities and after provision has been made for each class of stock, if
any, having preference over the common stock. Holders of shares of common
stock, as such, have no conversion, preemptive or other subscription rights,
and there are no redemption provisions applicable to the common stock. The
rights of the holders of common stock are subject to any rights that may be
fixed for holders of preferred stock, when and if any preferred stock is
issued. All of the shares of common stock currently outstanding are duly
authorized, validly issued, fully paid and non-assessable.
WARRANTS AND DEBENTURES
In connection with its reorganization under Chapter 11 of the Federal
Bankruptcy Act, the Company issued debentures, totaling $2,490,357 issued to
unsecured creditors. The debentures are convertible into common stock of the
Company between the first and fourth anniversary of the effective date of the
Plan. The debentures are convertible at the average of the closing price of the
Company's common stock for the ten consecutive trading days ending on the
trading day immediately prior to conversion. The debentures bear interest at
7.5%, payable in common stock of the Company. If not converted sooner, all
debentures must be converted to common stock by April 2003. The Company has the
right, at anytime, to redeem for cash at par value all of the outstanding
debentures plus any accrued interest. Each debenture holder had the additional
right to surrender the entire debenture to the Company on April 12, 2000 and
receive cash equal to 15% of the holder's original allowed claim plus interest.
As at September 8, 2000 there were $767,602 debentures outstanding.
There are currently outstanding 6,067,143 warrants to purchase common
stock, including those warrants issued on September 8, 2000 in a private
placement to a group of accredited investors represented by The Zanett
Securities Corporation.. Each warrant entitles the registered holder to
purchase one share of our common stock, $.01 par value, at exercise prices
ranging from $2.00 to $7.50 per share, exercisable at various times until
September, 2005.
In January 2000 the Company issued warrants to purchase 200,000 shares of
its common stock to Kaufman Bros, LLP, an investment banking firm. These
17
<PAGE> 18
warrants are exercisable at a price of $7.50 per share for a period of three
years and contain standard anti-dilution and other provisions.
On September 8, 2000, FastComm Communications Corp. ("FastComm")
completed a Private Placement of $3,500,000 of its securities with a group of
accredited investors represented by Zanett Securities Corporation ("Zanett")
New York, New York, acting as Placement Agent. The offering consisted of 3,500
Units, each Unit consisting of (i) a Prepaid Common Stock Purchase Warrant,
(the "Prepaid Warrants"), which entitles the holder thereof to acquire such
number of shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), as is equal to One Thousand Dollars ($1,000) divided by the
Exercise Price set forth in the Prepaid Warrants, and (ii) an additional
warrant, to acquire shares of Common Stock (the "Incentive Warrants"). In
addition, the Company granted to the Purchasers, an option to purchase an
additional 3,500 Units on the same terms and conditions and with such changes
as are stated herein exercisable during the period starting on February 1, 2001
and ending on November 1, 2001 (the "Option"). The shares of Common Stock
issuable upon exercise of or otherwise pursuant to the Prepaid Warrants and the
Incentive Warrants are referred to herein as the "Warrant Shares." The Prepaid
Warrants, the Incentive Warrants and the Warrant Shares are collectively
referred to herein as the "Securities" and each of them may individually be
referred to herein as a "Security."
Contemporaneous with the execution and delivery of the Securities
Agreement, the parties entered into a Registration Rights Agreement, pursuant
to which the Company agreed to provide certain registration rights to the
owners of the Warrant Shares and the Placement Warrants under the Securities
Act and the rules and regulations promulgated thereunder, and applicable state
securities laws.
The Exercise Price of the Prepaid Warrants equals the lower of the Fixed
Exercise Price and the Variable Exercise Price, each in effect as of such date
and subject to adjustment as provided in the Warrant. The "Fixed Exercise
Price" means $2.00 and shall be subject to adjustment as provided in the
Warrant. The "Variable Exercise Price" means, as of any date of determination,
the average of the lowest five (5) Closing Bid Prices for the ten (10)
consecutive trading day period ending on the trading day immediately preceding
the date of determination, provided, however, in no event shall the Variable
Exercise Price exceed the Closing Bid Price on the date of determination
(subject to equitable adjustment for any stock splits, stock dividends,
reclassifications or similar events during such ten (10) day period), and shall
be subject to adjustment as provided herein.
Each Incentive Stock Purchase Warrant allows the holder thereof to
purchase one-half of a share of the Company's Common Stock for each share
purchased by exercise of the Prepaid Warrants at an exercise price of 125% of
the Exercise Price of the corresponding Prepaid Warrant. The Incentive Warrants
are exercisable for a period of five years and carry with them other customary
terms and conditions including anti-dilution protection.
Zanett acted as Placement Agent for the offering and received a Placement
Agent fee equal to ten percent (10%) of the purchase price of the sale of Units
and Warrants to purchase up to 437,500 shares of the Company's Common Stock for
an exercise price of $2.50 per share. The Warrants are exercisable for a period
of five years. In addition, Zanett was reimbursed certain costs and expenses of
the offering.
In April 1997, the Company issued $3,000,000 in 5.0% convertible
debentures due April 2001. In May 1997, the Company issued $2,000,000 in 5%
convertible debentures due May 2001. For the first 180 days following the
issuance, the debentures were convertible at the option of the holder into
common stock at a conversion price equal to the average closing bid prices on
NASDAQ for the ten trading days prior to conversion. If the conversion occurred
more than 180 days after the issuance, the conversion price would be the lesser
of 125% of the average closing bid prices on NASDAQ for the ten trading days
prior to the issuance date, or, 90% of the average closing bid prices on NASDAQ
for the ten trading days prior to the conversion date. In addition, if the
conversion occurs more than 180 days after the issuance, the holder will
receive one warrant for every five shares of common stock received upon
conversion of the debentures. If the conversion occurred more than 360 days
from the issuance, the holder will receive one warrant for every 2 1/2 common
shares received upon conversion of the debentures. Each warrant has a strike
price set at 125% of the market price of the Company's common stock at the time
of conversion. During 2000 and 1999, holders of the debentures converted
$224,684 and $1,073,310 of debentures and accrued interest into 274,911 and
1,652,717 shares of common stock, respectively.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is Continental
Transfer & Trust Company, whose address is 2 Broadway, New York, New York,
10004, telephone number (212) 509-4000.
PLAN OF DISTRIBUTION
The Shares are being offered on behalf of the Selling Securityholders,
and, except for the exercise price of certain Warrants, the Company will not
receive any proceeds from the Offering. The Shares may be offered and sold from
time to time by the Selling Securityholders, or by pledges, donees or
transferees of, or other successors in interest to, the Selling
Securityholders, directly to one or more purchasers (including pledges) or
through brokers, dealers or underwriters who may act solely as agents or may
acquire Offered Shares as principals, at market prices prevailing at the time
of sale, at prices related to such prevailing market prices, at negotiated
prices, or at fixed prices, which may be changed. The distribution of the
Offered Shares may be effected in one or more of the following methods: (i)
ordinary brokers' transactions, which may include long or short sales (ii)
transactions involving cross or block trades or otherwise on the NASDAQ OTC
Bulletin Board; (iii) purchases by brokers, dealers or underwriters as
principal and resale by such purchasers for their own account pursuant to this
Prospectus; (iv) "at the market " to or through market makers or into an
existing market for the Common Shares; (v) in other ways not involving market
makers or established trading markets, including direct sales to purchasers or
sales effected through agents; (vi) through transactions in options, swaps or
other derivatives (whether exchange-listed or otherwise), or (vii) any
combination of the foregoing, or by any other legally available means. In
addition, the Selling Securityholders or their successors in interest may enter
into hedging transaction with broker-dealers who may engage in short sales of
Offered Shares in the course of hedging the positions they assume with the
Selling Securityholders. The Selling Securityholders or their successors in
interest may also enter into option or other transactions with broker-dealers
that require the delivery by such broker-dealers of the
18
<PAGE> 19
Offered Shares, which Offered Shares may be resold thereafter pursuant to this
Prospectus.
Brokers, dealers, underwriters or agents participating in the
distribution of the Offered Shares as agents may receive compensation in the
form of commissions, discounts of concessions from the Selling Securityholders
and/or purchasers of the Offered Shares for whom such broker-dealers may act as
agent, or to whom they may sell as principal, or both (which compensation as to
a particular broker-dealer may be less than or in excess of customary
commissions). The Selling Securityholders and any broker-dealers who act in
connection with the sale of Offered Shares hereunder may be deemed to be
"Underwriters" within the meaning of the Securities Act, and any commissions
they receive and proceeds of any sale of Offered Shares may be deemed to be
underwriting discounts and commissions under the Securities Act. Neither the
Company nor any Selling Securityholder can presently estimate the amount of
such compensation. The Company knows of no existing arrangements between any
Selling Securityholder any other Securityholder, broker, dealer, underwriter or
agent relating to the sale of distribution of the Offered Shares.
We have agreed to indemnify the selling security holders and the selling
security holders have agreed to indemnify us, our officers, directors,
employees, agents and controlling persons from certain damages or liabilities
arising out of or based upon any untrue statement or alleged untrue statement
of any material fact contained in or material omission or alleged omission from
the Registration Statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, to the extent such
untrue statement or omission was made in the Registration Statement or other
document in reliance upon information furnished by the indemnifying party.
The legal, accounting and other fees and expenses related to the offer
and sale of the common stock contemplated hereby are estimated to be $50,000
and will be paid by us. We will pay all expenses incurred in connection with
this offering, excluding commissions charged by any broker or dealer acting on
behalf of a selling security holder.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby is being
passed upon by Sokolow, Dunaud, Mercadier & Carreras, New York New York, and
Paris France, counsel to the Company.
EXPERTS
The audited financial statements and supplemental schedule of the
Company have been audited by BDO Seidman, LLP, independent certified public
accountants, whose report (which contains an explanatory paragraph regarding
the Company's ability to continue as a going concern) is incorporated herein by
reference from the Company's Annual Report on Form 10-K. The audited financial
statements of Cronus Communication, Inc. have been audited by BDO Seidman, LLP,
independent certified public accountants, whose report (which contains an
explanatory paragraph regarding the Company's ability to continue as a going
concern) is incorporated herein by reference from the Company's Form 8-K, as
amended. These financial statements and this schedule are incorporated herein by
reference in reliance upon the reports of such independent certified public
accountants given upon their authority as experts in accounting and auditing.
MATERIAL CHANGES
On September 8, 2000, the Company sold 3,500 units at $1,000 per unit to
a group of accredited investors. Each unit consists of a prepaid common stock
purchase warrant ("Prepaid Warrant") and an incentive warrant ("Incentive
Warrant") to acquire additional shares of common stock in the Company. N The
Prepaid Warrant is convertible at the option of the holder into common stock at
a conversion price equal to the lesser of $2.00 or the average of the five
lowest closing bid prices for the ten trading day period prior to conversion.
The prepaid warrant earns interest at a rate of 4% payable in common stock. The
Incentive Warrants allow the holder to purchase one half of one share at a
$2.50 per share. The Incentive Warrants have a five year term and are
exercisable immediately. The Company paid a placement fee of $350,000 and
issued to the placement agent warrants to purchase 438,000 shares of stock at
an exercise price of $2.50 per share. The fee paid and the fair value of the
warrants issued will be recorded as a reduction in paid in capital. The
placement agent for this transaction was The Zanett Securities Corporation.
DISCLOSURE OF COMMISSION'S POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Our amended and restated certificate of incorporation allows us indemnity
to the fullest extent permitted under the Virginia Stock Corporation Act (the
"Act") our directors, officers, employees and agents. We may indemnify them
only if we determine that their conduct did not violate the law.
The Act also permits us to indemnify a director or officer against
judgments, fines, amounts paid in settlement and reasonable expenses of
litigation, except when we bring the case against such director or officer, or
if a case is brought by our shareholders against them on our behalf. We can
indemnify a director or officer if he acted in good faith for a purpose he
reasonably believed to be in the Company's best interests. However, no
indemnification is permitted in an action by the Company's, or its shareholders
on its behalf, in connection with the settlement or other disposition of a
threatened or pending action or in connection with any claim, issue or matter
as to which a director or officer is liable to FastComm, unless a court
determines FastComm should pay a portion. In addition, the Act provides that a
director or officer shall be indemnified if he is successful in the litigation
on the merits or otherwise.
Permitted indemnification as described above may only be made if it is
authorized by our board of directors, in each specific case, based upon a
determination
19
<PAGE> 20
that the applicable standard of conduct has been met or that indemnification is
proper under the Act. The board of directors can authorize indemnification,
either acting as a quorum of disinterested directors or based upon an opinion
by independent legal counsel, of if the shareholders decide that
indemnification if proper because the applicable standard of conduct has been
met. Upon application of the person seeking indemnification, a court may also
award indemnification upon a determination that the standards outlined above
have been met. We may also authorize the advancement of litigation expenses to
a director or officer upon receipt of an undertaking by him to repay such
expenses if it is ultimately determined that he is not entitled to be
indemnified by us.
We have also agreed to indemnify our directors and executive officers
pursuant to indemnification agreements. We will pay all expenses, losses,
claims, damages and liability incurred by our directors or executive officers
for or as a result of action taken or not taken while they were acting as
directors, officers, employees or agents.
Although the indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons as
discussed above, we have been advised that in the opinion of the SEC this
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities, other than the payment by us of expenses incurred or paid by one
of our directors, officers or controlling person in connection with the
securities being registered, we will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by us is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
No person has been authorized to give any information or to make any
representation not contained in or incorporated by reference in this
prospectus, and, if given or made, the information or representation not
contained in this prospectus must not be relied on as having been authorized.
This prospectus does not constitute an offer to sell or the solicitation of an
offer to purchase, any of the securities offered by this prospectus, in any
jurisdiction to or from any person to or from whom it is unlawful to make such
offer or solicitation of an offer, or proxy solicitation in such jurisdiction.
Neither the delivery of this prospectus nor the issuance or sale of any
securities hereunder shall under any circumstances create any implication that
there has been no change inn the information disclosed in this prospectus to
date or delivered and incorporated by reference.
NO DEALER, SALES PERSON OR OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATION NOT CONTAINED
IN THIS PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF ANY OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY FASTCOMM COMMUNICATIONS
CORPORATION JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN
SUCH JURISDICTION. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY SHARES
OF IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS COMMON STOCK OF SHARES OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION COMMON STOCK
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO ITS DATE.
---------------------
FASTCOMM COMMUNICATIONS CORPORATION
10,925,434
SHARES OF
COMMON STOCK
---------------------
PROSPECTUS
---------------------
20
<PAGE> 21
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
Where You Can Find Additional information.................. October 30, 2000
Special Note Regarding Forward Looking Statements..........
Summary Description of Our Business........................
Certain Risk Factors.......................................
Use of Proceeds............................................
Selling Security Holders...................................
Description of the Securities..............................
Plan of Distribution.......................................
Legal Matters..............................................
Experts....................................................
</TABLE>
21
<PAGE> 22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses (other than
underwriting discounts and commissions), which, other than the SEC registration
fee are estimates, payable by the Company in connection with the sale and
distribution of the Shares registered hereby.
<TABLE>
===========================================================================================
<S> <C>
SEC registration fee.................................. $ 6,980
-------------------------------------------------------------------------------------------
Blue Sky fees and expenses (including legal fees)..... $ 2,500
-------------------------------------------------------------------------------------------
Legal fees and expenses............................... $27,500
-------------------------------------------------------------------------------------------
Accounting fees and expenses.......................... $ 2,500
-------------------------------------------------------------------------------------------
Printing expenses..................................... $ 2,500
-------------------------------------------------------------------------------------------
Miscellaneous......................................... $ 3,020
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Total................................................. $45,000
===========================================================================================
</TABLE>
--------------------
* Estimated
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Six of the Company's By-Laws, as amended, empowers the
Company to indemnify current or former directors, officers, employees or agents
of the Company or persons serving by request of the Company in such capacities
in any other enterprise or persons who have served by the request of the
Company in such capacities in any other enterprise to the full extent permitted
by the laws of the State of Virginia.
Article Tenth of the Virginia Stock Corporation Act (the "Act")
contains provisions authorizing indemnification by the Company of directors,
officers, employees or agents against certain liabilities and expenses which
they may incur as directors, officers, employees or agents of the Company or of
certain other entities. Section 13.1 - 699 of the Act also provides that such
indemnification may include payment by the Company of expenses incurred in
defending a civil or criminal action or proceeding in advance of the final
disposition of such action or proceeding upon receipt of an undertaking by the
person indemnified to repay such payment if he shall be ultimately found not to
be entitled to indemnification under the Section. Indemnification may be
provided even though the person to be indemnified is no longer a director,
officer, employee or agent of the Company or such other entities. Section 13.1
- 703 of the Act also contains provisions authorizing the Company to obtain
insurance on behalf of any such director, officer employee or agent against
liabilities, whether or not the Company would have the power to indemnify such
person against such liabilities under the provisions of the Section. The
Company currently maintains a policy of insurance under which the directors and
officers of the Company are insured, within the limits and subject to the
exclusions and limitations of the policy, against certain expenses in
connection with the defense of actions, suits or proceedings, to which they are
parties by reason of being or having been such directors or officers.
The indemnification and advancement of expenses provided pursuant
to Section 13.1 - 699 are not exclusive, and subject to certain conditions, the
Company may make other or further indemnification or advancement of expenses of
any of its directors, officers, employees or agents. Because the Articles of
Incorporation, as amended, of the Company do not otherwise provide,
notwithstanding the failure of the Company to provide indemnification and
despite a contrary determination by the Board of Directors or its
Securityholders in a specific case, a director, officer, employee or agent of
the Company who is or was a party to a proceeding may apply to a court of
competent jurisdiction for indemnification or advancement of expenses or both,
and the court may order indemnification and advancement of expenses, including
expenses incurred in seeking court-ordered indemnification or advancement of
expenses if it determines that the petitioner is entitled to mandatory
indemnification pursuant to Section 13.1 - 698 because he has been successful
on the merits, or because the Company has the power to indemnify on a
discretionary basis pursuant to Section 13.1 - 699 or because the court
determines that the petitioner is fairly and reasonably entitled
indemnification or advancement of expenses or both in view of all the relevant
circumstances.
Section 13.1-692.1 of the Act provides that the damages assessed
against any officer or director arising out of a single transaction, occurrence
or course of conduct shall not exceed the lesser of (1) the monetary amount
specified in the Articles of Incorporation; or (2) the greater of (i) $100,000
or the amount of cash compensation received by the officer or director from the
corporation for the twelve (12) months immediately proceeding the act or
omission for which liability was
II-1
<PAGE> 23
imposed. The liability of an officer or director engaged in willful misconduct
or a knowing violation of criminal law or of any federal or state securities
law including without limit of any claim of unlawful insider trading or
manipulation of the market for any security is not covered by such provision.
The Registration Rights Agreements between the Company and the
Selling Securityholders provides that the Selling Securityholders and, under
certain circumstances, persons participating as underwriters in the offering or
sale of the Common Stock being registered will indemnify and hold harmless the
Company and each director, officer and controlling person of the Company with
respect to any statement or omission in the Registration Statement or the
Prospectus based upon written information furnished to the Company by or on
behalf of the Selling Securityholders or such underwriters, as the case may be,
for inclusion therein.
Item 16. EXHIBITS
The Exhibits listed below have been filed as part of this Registration
Statement
4.1 Restated Articles of Incorporation of the Company (Previously filed as
Exhibit to Form S-18, Reg. No 33-19785)
4.2 Restated By-Laws of the Company, as amended (Previously filed as Exhibit
to Form S-18, Reg. No 33-19785)
4.3 Specimen Certificate of Common Stock of the Registrant (Previously filed
as Exhibit to Form S-18, Reg. No 33-19785)
4.4 Securities Purchase Agreement dated September 8, 2000 between the Company
and a group of Purchasers*
4.5 Prepaid Warrants issued to the Purchasers on September 8, 2000*
4.6 Incentive Warrants issued to the Purchasers on September 8, 2000*
4.7 Placement Agency Agreement between the Company and The Zanett Securities
Corporations*
4.8 Registration Rights Agreement between the Company and the Purchasers*
5.1 Opinion on Legality **
23.1 Consent of BDO Seidman LLP, certified public accountants **
23.2 Consent of Sokolow, Dunaud, Mercadier & Carreras LLP (contained in
Exhibit 5.1)**
24.1 Power of Attorney (included within Signature Page II-4)
----------
* Incorporated by reference to the Registrant's current report on Form 8-K
filed with the Securities and Exchange Commission on September 13, 2000.
** Filed Herewith
Item 17. 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 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; and
(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)
do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed 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.
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<PAGE> 24
(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 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 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 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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against pubic
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
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<PAGE> 25
SIGNATURES
Under 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-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Dulles, State of Virginia on the 27th day of
October, 2000.
FASTCOMM COMMUNICATIONS CORPORATION
By: /s/ Peter C. Madsen
------------------------------------------------
Peter C. Madsen, President, CEO and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Peter C. Madsen , Mark H.
Rafferty and Thomas G. Amon, and each of them, his true and lawful agent, proxy
and attorney-in-fact, with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, to (i) act on,
sign and file with the Securities and Exchange Commission any and all
amendments (including post-effective amendments) to this Registration Statement
together with all schedules and exhibits thereto, (ii) act on, sign and file
such certificates, instruments, agreements and other documents as may be
necessary or appropriate in connection therewith, (iii) act on and file any
supplement to any prospectus included in this Registration Statement or any
such amendment, and (iv) take any and all actions which may be necessary or
appropriate in connection therewith, granting unto such agents, proxies and
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or appropriate to be done, as fully for
all intents and purposes as he might or could do in person, hereby approving,
ratifying and confirming all that such agents, proxies and attorneys-in-fact,
any of them or any of his or their substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ PETER C. MADSEN CHAIRMAN OF THE BOARD; CHIEF EXECUTIVE OFFICER OCTOBER 27, 2000
----------------------------------- AND DIRECTOR
PETER C. MADSEN
/s/ MARK H. RAFFERTY VICE PRESIDENT; PRINCIPAL FINANCIAL AND ACCOUNTING OCTOBER 27, 2000
----------------------------------- OFFICER; DIRECTOR
MARK H. RAFFERTY
/s/ EDWARD R. OLSON DIRECTOR OCTOBER 27, 2000
-----------------------------------
EDWARD R. OLSON
/s/THOMAS G. AMON DIRECTOR OCTOBER 27, 2000
-----------------------------------
THOMAS G. AMON
/s/MICHAEL PASCOE DIRECTOR OCTOBER 27, 2000
-----------------------------------
MICHAEL PASCOE
</TABLE>
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<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
---------- -----------
<S> <C>
4.1 Restated Articles of Incorporation of the Company (Previously filed as Exhibit to Form S-18, Reg. No 33-19785)
4.2 Restated By-Laws of the Company, as amended (Previously filed as Exhibit to Form S-18, Reg. No 33-19785)
4.3 Specimen Certificate of Common Stock of the Registrant (Previously filed as Exhibit to Form S-18, Reg.
No 33-19785)
4.4 Securities Purchase Agreement dated September 8, 2000 between the Company and a group of Purchasers*
4.5 Prepaid Warrants issued to the Purchasers on September 8, 2000*
4.6 Incentive Warrants issued to the Purchasers on September 8, 2000*
4.7 Placement Agency Agreement between the Company and The Zanett Securities Corporation*
4.8 Registration Rights Agreement between the Company and the Purchasers*
5.1 Opinion on Legality **
23.1 Consent of BDO Seidman LLP, certified public accountants **
23.2 Consent of Sokolow, Dunaud, Mercadier & Carreras (contained in Exhibit 5.1)**
24.1 Power of Attorney (included within Signature Page II-4)
</TABLE>
----------
* Incorporated by reference to the Registrant's current report on Form 8-K
filed with the Securities & Exchange Commission on September 13, 2000.
** Filed Herewith
II-5
