Registration No. 333-65709
SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ADM TRONICS UNLIMITED, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
22-1896032
(I.R.S. Employer Identification No.)
224-S Pegasus Avenue, Northvale, New Jersey 07647, (201) 767-6040
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Dr. Alfonso Di Mino, 224-S Pegasus Avenue, Northvale, New Jersey 07647,
(201) 767-6040
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copies to:
Jonathan B. Reisman, Esq.
Reisman & Associates, P.A.
5100 Town Center Circle, Suite 330
Boca Raton, Florida 33486
(561) 361-9300
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
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
Title of Proposed Proposed Amount of
Each Class Maximum Maximum Registration
of Amount to Offering Aggregate Fee
Securities be Price Per Offering
to be Registered Unit Price
Registered (1)
Common 3,033,353 $.578(2) $1,753,278 $517(3)
Stock Shares
$.0005 par
value
(1) Pursuant to Rule 416 under the Securities Act of 1933, there are also
being registered such additional shares of Common Stock as may become
issuable pursuant to anti-dilution provisions.
(2) Based on the average of the bid and asked prices of the Common Stock
as reported on the Nasdaq Stock Market on October 28, 1998.
(3) $509.60 has previously been paid.
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 1993 or until the
Registration Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
<PAGE>
PRELIMINARY PROSPECTUS DATED OCTOBER 29, 1998
The information in this prospectus is not complete and may be changed. The
Selling Shareholders may not sell these securities until the registration
statement filed with the Securities And Exchange Commission is effective. This
Prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
PROSPECTUS
ADM TRONICS UNLIMITED, INC.
3,033,353 shares of Common Stock
This Prospectus relates to 3,033,353 shares of common stock, par value
$.0005 per share (the "Shares"), of ADM Tronics Unlimited, Inc. (the
"Company") which are being offerd for sale by certain shareholders of the
Company (the "Selling Shareholders"). See "Selling Shareholders" and "Plan of
Distribution."
On the date of this Prospectus, the common stock of the Company (the
"Common Stock") was traded in the over-the-counter market and was quoted on
the Nasdaq SmallCap Market ("Nasdaq") under the symbol ADMT. Such Common Stock
may, however, be delisted from Nasdaq. See "Risk Factors." The last sale
price of such Common Stock as reported by Nasdaq on October 28, 1998 was
$.594 per share.
The securities offered hereby involve substantial risks. See "Risk Factors"
beginning on page 5 of this Prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this Prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
The date of this Prospectus is __________, 1998
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AVAILABLE INFORMATION
The Company is required to file periodic reports with the Securities and
Exchange Commission (the "Commission"). Reports and other information filed
by the Company may be inspected and copied at the Commission's public
reference facilities located at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's Regional Offices at Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center,
New York, New York 10048. Copies of such material can be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The public may obtain
information on the operation of the Commission's Public Reference Room by
calling 1-800-SEC-0330. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
issuers, such as the Company, that file electronically with the Commission.
The address of the Web site is http://www.sec.gov.
The Company has filed a registration statement on Form S-3 with the
Commission (such registration statement including all amendments and exhibits
thereto, called the "Registration Statement") under the Securities Act with
respect to the Shares offered hereby. This Prospectus does not contain all
the information set forth in the Registration Statement. For further
information with respect to the Company and the Shares, reference is made to
the Registration Statement, a copy which is available on the Commission's Web
site. Statements contained in the Prospectus concerning provisions of certain
documents are not necessarily complete and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
references.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Prospectus should be read in conjunction with the following
documents of the Company which have been filed with the Commission and are
incorporated by reference into this Prospectus:
(i) The Company's Annual Report on Form 10-KSB, as amended, for the fiscal
year ended March 31, 1998 (the "1998 Annual Report");
(ii) The Company's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1998;
(iii)The Company's Current Report on Form 8-K, as amended, May 27, 1998;
(iv) The Company's Current Report on Form 8-K dated August 18, 1998;
(v) The description of the Common Stock contained in the Company's
Registration Statement on Form 10;. and
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(vi)The Company's proxy soliciting materials with respect to a Special
Meeting of Shareholders scheduled to be held on December 4, 1998 (the "Proxy
Materials").
(vii)All other documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of this offering.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering shall be deemed to be incorporated by
reference in the Prospectus from the date of filing of such documents. Any
statement contained in this Prospectus or in any supplement or amendment or in
a document all or any portion of which is incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained in this
Prospectus or in any supplement or amendment modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus
or any supplement or amendment hereto.
Neither the delivery of this Prospectus nor any sale of Shares shall,
under any circumstances, create any implication that there has been no change
in the affairs of the Company or its affiliates since the date hereof or that
the information contained herein is correct as of any time subsequent to its
date.
The Company will provide to each to each person, including any beneficial
owner, to whom a Prospectus is delivered, a copy of any or all of the
information that has been incorporated by reference in the Prospectus but not
delivered with the Prospectus. The information will be provided upon written
or oral request at no cost to the requester. Requests for such information
must be made to Andre' Di Mino, at the Company's offices located at 224-S
Pegasus Avenue, Northvale, New Jersey 07647 or at the Company's telephone
number which is 201-767-6040.
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PROSPECTUS SUMMARY
The Company
ADM Tronics Unlimited, Inc. together with its subsidiaries (unless the
context otherwise requires, collectively, the "Company") is a technology based
developer and manufacturer of a diversified line of products categorized into
three distinct market segments - therapeutic, non-invasive electronic medical
devices; environmentally safe chemical products and topical dermatological
products. Pursuant to an Asset Purchase Agreement (the "Asset Purchase
Agreement") between the Company, a subsidiary of the Company and
Electropharmacology, Inc. ("EPI"), the Company has recently acquired certain
assets from EPI. Those assets had been utilized by EPI in connection with the
SofPulse electromagnetic stimulation device marketed under the name MRT-SofPulse
or SofPulse for use in treating pain and edema in post-operative soft tissue
injuries. See "Recent Developments."
The Company was incorporated in Delaware on November 24, 1969. Unless the
context otherwise requires, references to the "Company" in this Prospectus
include the Company and its subsidiaries. The Company's principal executive
offices are located at 224-S Pegasus Avenue, Northvale, New Jersey 07647 and its
telephone number is (201) 767-6040.
The Offering
This Prospectus relates to 3,033,353 shares of Common Stock, par value
$.0005 per share (the "Shares"), which are held by certain persons (the "Selling
Shareholders") and were issued in connection with the Asset Purchase Agreement.
Certain sales of the Shares by the Selling Shareholders are subject to certain
contractual obligations. See "Selling Shareholders" and "Plan of Distribution."
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RISK FACTORS
An investment in the Shares is speculative and involves substantial risks.
Prospective purchasers of the Shares should carefully consider the following
risk factors in addition to the other information included or incorporated by
reference in this Prospectus before purchasing the Shares.
Limited Revenues and Continuing Operating Losses; Accumulated Deficit
- The Company's revenues in any fiscal year have not exceded
approximately $2,000,000. During the quarter ended June 30, 1998 and
the fiscal year ended March 31, 1998, the Company incurred losses of
$60,255 and $722,777, respectively and had revenues of $555,822 and
$1,535,239, respectively.
- Although, the Company has engaged in business for more than 29 years,
it has been unprofitable during substantially all of such time.
- There can be no assurance that the Company will be able to increase
its revenues or operate profitably.
- On June 30, 1998, the Company had an accumulated deficit of
$2,988,640.
Capital Intensive Nature of Business
The Company's activities are highly capital intensive. Although the
Company believes that its present capital and anticipated revenues from
operations will be sufficient to meet its presently planned capital needs for
a period of at least twelve months, the Company may require additional capital
during that time or thereafter. The Company has not made any arrangements to
obtain any additional financing. If any additional capital becomes available
to the Company if and when required it may not be available, on terms not
unfavorable to the Company.
Limited Number of Customers
- The Company presently sells its chemical products to a limited number
of customers. During the fiscal year ended March 31, 1998 and the quarter
ended June 30, 1998, one of such customers accounted for an aggregate of
approximately 25% of the sales of such products.
- Arthronix, Inc. ("Arthronix") was the Company's sole distributor of
Sonotron Devices prior to 1994. In June 1995, the Company appointed a
Japanese company (the "Japanese Distributor") as the exclusive distributor
of Sonotron Devices in Japan, Singapore and Malaysia. The Japanese
Distributor has advised the Company that it does not presently intend to
distribute any additional Sonotron Devices. Substantially all revenues
realized by the Company from sales of the Sonotron Devices resulted from
sales through Arthronix and the Japanese Distributor.
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- The loss of any significant customer would have a material adverse
effect on the Company's business. See "Recent Developments."
Dependance upon Patents and Other Means of Protection
- The Company believes that patent protection is of material importance
to its business and may apply for additional patents as it deems
appropriate and seek to obtain licenses to patents and patent
applications from others. There can be no assurance, however, that any
present or future applications will result in patents being issued or,
if such patents are issued, that any claims allowed will be
sufficiently broad to protect the Company's technology. In addition,
there can be no assurance that the patents which are currently being
relied upon by the Company or which may be issued to the Company in the
future will not be challenged, invalidated or circumvented, or that the
rights granted under those patents will provide proprietary protection
to the Company. A United States patent in connection with a product
which appears to be similar to the Company's Sonotron Device was granted
to Electrogesic Corporation ("Electrogesic") in 1994. Electrogesic's
patent counsel rendered a written opinion to the
effect that such product does not infringe a patent held by the Company,
and, further that a patent held by the Company would be found invalid by
a court. Although, based upon the description of Electrogesic's product in
the opinion letter, the Company's patent counsel disagrees with such
conclusion and believes that the Electrogesic's product infringes three
patents held by the Company, there can be no assurance that any patent held
by the Company will be determined by a court to be valid or to be infringed
by the third party's product. In 1994 the Company commenced an action in
the United States District Court for the Southern District of New York
against Electrogesic. The Company asserted claims based upon patent
infringement, interference with existing and prospective contractual and
business relations and breach of contract. Electrogesic denied the
Company's substantive claims and asserted counterclaims based upon unfair
competition, restraint of trade, violation of anti-trust laws and
interference with business relations. In June 1995, the Company withdrew
its action and Electrogesic withdrew the counterclaims. There can be no
assurance that a similar action will not be instituted against the Company
in the future and , if so instituted, that the outcome will be favorable
to the Company.
- Medical products are covered by a large number of patents and patent
applications. Because patent applications in the United States remain
confidential until a patent is issued, the Company's products and proposed
products could, in the future, be found to infringe patents of others of
which the Company is not currently aware. If the Company's products are
suspected of using technology, processes or other subject matter that is
claimed under other existing patents, or if others obtain patents claiming
subject matter utilized by the Company, infringement actions may be
instituted against the Company. Because many holders of patents in the
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medical products industry have substantially greater resources than does the
Company and because, historically, patent litigation is very expensive, the
Company may not have the resources necessary to challenge successfully the
validity of such third-party patents or withstand claims of infringement or
challenges to its patents in cases where the Company's position has merit. Even
if the Company is successful in prevailing in such actions, the cost of such
litigation could have a material adverse effect on the Company's business,
financial condition and results of operations. An adverse outcome in any future
patent dispute could subject the Company to significant liabilities to
third-parties, require disputed rights to be licensed or require the Company
to cease using the infringed technology. In the event the Company's products
infringe patents or proprietary rights of others, the Company may be required
to modify the design of its products or obtain a license. There can be no
assurance that the Company will be able to so modify such design or obtain any
license on terms not unfavorable to the Company, if at all.
Dependance upon Trade Secrets and Other Means of Protection
The Company also relies on trade secrets, copyright law, employee and
third-party non-disclosure agreements and other protective measures to protect
its intellectual property rights pertaining to its products and technology.
There can be no assurance that these measures will provide meaningful
protection of the Company's trade secrets, know-how, or other proprietary
information in the event of any unauthorized use, misappropriation or
disclosure. In addition, the laws of certain foreign countries do not protect
the Company's intellectual property rights to the same extent as do the laws
of the United States, if at all. There can be no assurance that the Company
will be able to successfully protect its intellectual property. .
Certain Formulas are not Patented
Certain formulas and specifications to which the Company's chemical
products are manufactured are not patented or otherwise protected. Therefore,
there can be no assurance that others have not or will not replicate the
Company's formulas
Dependence on Key Executives
The success of the Company is largely dependent upon the personal efforts,
abilities and business relationships of its executive officers. None of such
officers has an employment agreement with the Company. If any of such officers
was to terminate his employment with the Company or be unable to be so employed
before a qualified successor, if any, could be found, there would be a
materially adverse effect on the Company's business and prospects.
Competition; Technological Obsolescence
The Company's areas of business are intensely competitive on the basis of
both price and quality. Substantially all of the Company's competitors have
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substantially greater financial resources than does the Company. The Company
believes that its small amount of capital resources has limited the number of
potential customers that would be willing to purchase the Company's products and
further limits the Company's bargaining power with certain suppliers. The
limitations with respect to the number of concerns willing to deal with an
entity of the Company's size and the terms on which it can obtain raw materials
may place the Company at a competitive disadvantage. In addition, the Company
is dependent on the personal relationships established by its executive officers
in order to maintain its current operations.
Diapulse Corporation of America, Inc. manufactures and markets devices that
are substantially equivalent to the SofPulse Device. A number of other
manufacturers, both domestic and foreign, market shortwave diathermy devices
that produce deep tissue heat and that may be used for the treatment of certain
of the medical conditions in which the SofPulse Device is also indicated. There
can be no assurance that other technologies or products that are functionally
similar to those of the Company are not currently under development.
The Company's products also face competition from other forms of treatment
such as diathermy, hyperbaric oxygen chambers, thermal therapies and
hydrotherapy. Other companies with substantially larger expertise and resources
than those available to the Company may develop or market new products that
directly compete with the Company's present and proposed products. In addition,
alternate forms of treatment that compete with such products may achieve rapid
acceptance in the medical community.
The medical products market is characterized by rapidly changing technology
that may result in product obsolescence or short product life cycles. The
Company's ability to compete will be dependent on the Company's ability to
enhance continually and improve its products and to develop successfully or
acquire and market new products. There can be no assurance that the Company will
be able to compete successfully, that competitors will not develop technologies
or products that render the Company's products obsolete or less marketable or
that the Company will be able to enhance successfully its existing products or
develop or acquire new products.
The industries in which the Company engages are characterized by rapidly
changing technology and evolving industry standards, often resulting in product
obsolescence or short product life cycles. The Company's ability to compete will
be dependent on the Company's ability to enhance continually and improve its
products and to develop successfully or acquire and market new products. There
can be no assurance that the Company will be able to do so or that competitors
will not develop technologies or products that render the Company's products
obsolete or less marketable or that the Company will be able to enhance
successfully its existing products or develop or acquire new products. No
assurance can be given as to the ability of the Company to effectively compete
in any area of its business.
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Adverse Experience With Clinics
From time to time since 1989, the Company and others have operated clinics
to treat subjects suffering from the pain of osteoarthritis through the use of
the Sonotron Device. None of the clinics generated any significant revenues.
There can be no assurance that any facility will be able to realize profits
through the use of Sonotron Devices.
Potential Product Liability and Warranty Expense
The Company may be exposed to potential product liability claims by users
of the Company's products. Although the Company has not experienced any product
liability claims to date, the Company maintains a general liability insurance
policy that includes aggregate product liability coverage of $2,000,000.
Although the Company believes that its present insurance coverage is adequate
for the types of products currently marketed, there can be no assurance that
such insurance will be sufficient to cover potential claims or that the present
level of coverage will be available in the future at a reasonable cost, if at
all. The Company generally warrants its products to be free from defects in
materials and workmanship for periods of time ranging from ninety days to two
years, and there can be no assurance that future warranty claims and expenses
will not have a material adverse effect on the Company.
Dependence on Third-party Reimbursement
Health care providers such as hospitals and physicians that purchase or
lease medical devices in the United States generally rely on third-party
payors, principally Medicare, Medicaid and private health insurance plans,
including health maintenance organizations, to reimburse all or part of the
cost of the treatment for which the medical device is being used. Successful
commercialization of the Company's products marketed in the United States will
depend in part upon the availability of reimbursement for the cost of the
treatment from third party health care payors such as Medicare, Medicaid and
private health insurance plans, including health maintenance organizations.
Such third party payors have increasingly challenged the cost of medical
products and services, which have and could continue to have a significant
effect on the ratification of such products and services by many health care
providers. Several proposals have been made by federal and state government
officials that may lead to health care reforms, including a government directed
national health care system and health care cost-containment measures. The
effect of changes in the health care system or method of reimbursement for the
SofPulse Device and any other medical device which may be marketed by the
Company in the United States cannot be determined.
While third party payors generally make their own decisions regarding
which medical procedures and services to cover, Medicaid and other third party
payors may apply standards similar to those used by Medicare in determining
whether to provide coverage for a particular procedure or service. The Medicare
statute prohibits payment for any medical procedures or services that are not
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reasonable and necessary for the diagnosis or treatment of illness or injury.
The Health Care Financing Administration ("HCFA"), an agency within the
Department of Health and Human Services which is responsible for administering
the Medicare program, has interpreted this provision to prohibit Medicare
coverage of procedures that, among other things, are not deemed safe and
effective treatments for the conditions for which they are being used, or which
are still investigational.
HCFA issued a memorandum in April 1997 setting forth its recommendation to
cease reimbursement for a broad group of electrical stimulation devices,
including the modality incorporated in the SofPulse Device. HCFA was enjoined
from implementing this national policy under a ruling by a U.S. District Court
in Massachusetts on November 18, 1997. The Company believes that such
injunction is still in effect
There can be no assurance that coverage of the SofPulse Device or any
other medical device marketed by the Company in the United States will be
available from Medicare, Medicaid or any other third party payor. The
unavailability of third party coverage or inadequacy of third party
reimbursement would adversely affect the Company's ability to market any such
products.
The Company cannot predict what additional legislation or regulations, if
any, may be enacted or adopted in the future relating to the Company's business
or the health care industry, including third party coverage and reimbursement,
or what effect any such legislation or regulations may have on the Company.
Furthermore, significant uncertainty exists as to the reimbursement status of
newly approved healthcare products, and there can be no assurance that adequate
third-party coverage will be available with respect to any of the Company's
products in the future. Failure by physicians, hospitals, nursing homes and
other users of the Company's products to obtain sufficient reimbursement for
treatments using the Company's products would have a material adverse effect on
the Company.
Governmental Regulation
The marketing of medical devices, such as the Sonotron Device, for human
application in the United States is subject to clearance by the United States
Food and Drug Administration (the "FDA"). In March 1989, in response to a
Premarket Notification filed by the Company with the FDA, the FDA notified the
Company that the Sonotron Device, under the FDA's standards, is not
substantially equivalent to certain medical device marketed in interstate
commerce prior to May 28, 1976, and, therefore, could not be marketed on the
basis of such Notification. The FDA advised the Company that its determination
was based upon (a) the new intended use of applying superficial heat at non-
therapeutic temperatures for the treatment of osteoarthritis, and (b) new types
of safety and effectiveness questions that are raised by the new technological
characteristics of the Sonotron Devices when compared to certain devices
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marketed before May 28, 1976. In March 1991, a further Premarket Notification
was filed with the FDA on behalf of the Company with respect to the then
current model of the Sonotron Device which Notification was subsequently
voluntarily withdrawn by the Company. In February 1998, the Company filed a new
Premarket Notification accompanied by additional data. In July 1998, the
Company submitted a revised Premarket Notification. In October 1998, the
Company was advised by the FDA that additional clinical data relating to the use
of the Sponotron Device on Carpal Tunnel Syndrome may be required to be
submitted. There can be no assurance that, if required to be submitted, the
Company can obtain data. In the event that Sonotron Devices cannot be marketed
pursuant to a Premarket Notification, before Sonotron Devices can be marketed
in the United States for human applications, the Company may be required to
obtain Premarket Approval ("PMA") from the FDA. In the event that the Company
files an application for PMA with the FDA, the Company will be required to
submit extensive data to the FDA in support thereof. The Company may not possess
sufficient data and there can be no assurance that the Company will be able to
obtain the requisite data. Furthermore, the Company believes that if it were
to file such an application with the FDA supported by the requisite data, the
Pre-Market Application would require a minimum of 180 days and, more likely than
not, a substantially longer period of time, to be processed by the FDA. There
can be no assurance that any application filed by the Company will be granted.
in the foreseeable future, if at all.
Unless the Company's receives clearance from the FDA to market Sonotron
Devices in the United States, it is likely that many foreign countries will not
permit the use of Sonotron Devices therein and sales in other foreign countries
will be difficult. In October 1991, the Company's Distribution Agreement in
Canada was terminated after the distributor was unable to obtain the approval
of the Quebec Association of Physicians and Surgeons for the human application
of Sonotron Devices in Quebec.
Risks of Expansion
The Company is pursuing a growth strategy and intends to hire additional
personnel in the future. The success of the Company's planned expansion will
depend on numerous factors, many of which are beyond the Company's control,
including, among other factors, the securing of necessary governmental permits
and regulatory approvals, the hiring and training of management personnel, the
terms and availability of financing and other general economic and business
conditions. Any problems or delays encountered in any one or more of these
areas can result in delays in the opening of branch offices. There can be no
assurance that the Company will effectively manage its expanding operations and
anticipate all of the changing demands that its planned expansion will impose
on its resources.
Possible Volatility of Market Price of the Common Stock
- The market price for the Common Stock has been and may continue to be
highly volatile as has been the case with the securities of other companies
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in emerging businesses. Factors such as the Company's financial results and
introduction of new products by the Company or its competitors, and various
factors affecting the healthcare industry generally, may have a significant
impact on the market price of the Common Stock.
- In recent years, the stock market has experienced a high level of
price and volume volatility and market prices for the stock of many
companies, particularly of small and emerging growth companies, the
securities of which trade in the over-the-counter-market, have
experienced wide price fluctuations which have not necessarily been
related to the operating performance of such companies.
Control by Officers and Directors
The Company believes that its executive officers and directors
beneficially owned or may be deemed to, directly or indirectly, otherwise have
voting control of approximately 42% of the Common Stock. The foregoing
includes shares held by affiliates of such persons and shares which may be
acquired upon exercise or conversion of securities held by them. As a result of
such ownership, they will, as a practical matter, have the ability to direct
substantially all matters requiring approval by the stockholders of the Company,
including the election of directors. Furthermore, such ownership could
discourage the possible takeover of the Company or make the removal of
management of the Company more difficult, discourage hostile bids for control
of the Company in which stockholders may receive premiums for their shares of
Common Stock, or otherwise dilute the rights of holders of Common Stock and the
market price of Common Stock.
Shares Eligible for Future Sale
On October 14, 1998, the Company had 47,469,907 shares of Common Stock
outstanding. Of these shares, with the exception of certain contractual
restrictions imposed upon the Selling Shareholders, approximately 30,300,000
shares are freely transferable without restriction or further registration under
the Securities Act. The remaining shares of Common Stock currently outstanding
are "restricted securities" or owned by affiliates within the meaning of such
term in Rule 144 promulgated under the Securities Act, and which are currently
eligible for sale in the public market in reliance upon Rule 144. In general,
under Rule 144 as currently in effect, a person (or persons whose shares are
aggregated), including persons who may be deemed to be "affiliates" of the
Company as that term is defined in Rule 144, is entitled to sell within any
three-month period a number of restricted shares owned for at least one year
that does not exceed the greater of (i) one percent of the then outstanding
shares of Common Stock, or (ii) the average weekly trading volume in the Common
Stock during the four calendar weeks preceding the filing of a prescribed notice
with the Commission with respect to such sale. Sales under Rule 144 are also
subject to certain requirements as to the manner of sale, notice and the
availability of current public information about the Company. Where a minimum
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of two years has elapsed between the later of the date of the acquisition of
restricted securities from the Company or from an affiliate of the Company and
any resale thereof in reliance on Rule 144 for the account of either the initial
acquiror or any subsequent holder, a person who has not been an affiliate of the
Company for at least the three months immediately preceding the sale is entitled
to sell such securities under Rule 144 without regard to any of the limitations
described above. Sales of substantial amounts of Common Stock in the public
market under Rule 144, pursuant to registration statements or otherwise could
adversely affect the prevailing market price of the Common Stock. The Company
has agreed to register an aggregate of 1,575,000 shares of Common Stock
underlying warrants held by the Selling Shareholders under certain
circumstances.
Effect of Options and Warrants
On October 28, 1998, 1998, the Company had outstanding options and warrants
for the purchase of an aggregate of 5,867,819 shares of Common Stock at a
weighted average price of $.303 per share. Furthermore, the Company has agreed
to issue additional options and warrants for the purchase of an aggregate of
6,100,000 shares of Common Stock at a weighted average price of $.504 per share.
Additional shares of Common Stock could become issuable pursuant to
anti-dilution adjustments under the terms of such securities. For the
respective terms of such options and warrants, the holders thereof are given an
opportunity to profit from a rise in the market price of the Common Stock with
a resulting dilution in the interests of the other stockholders. Further, the
terms on which the Company may obtain additional financing during that period
may be adversely affected by the existence of such options and warrants. The
holders of those securities may exercise them at a time when the Company might
be able to obtain additional capital through a new offering of securities on
terms more favorable than those provided therein.
Market for Common Stock
From time to time there has not been significant trading volume in the
Common Stock and, accordingly, there can be no assurance that holders of the
Common Stock will be able to sell their Common Stock when they desire to do so.
Possible Delisting from Nasdaq
Although the Company believes that the continued listing of the Company's
Common Stock on Nasdaq is important for the marketability of the Common Stock
and the prestige of the Company in the financial community, the Company's Common
Stock may be delisted from Nasdaq. In order for the Common Stock to continue to
be listed on Nasdaq, among other things, the net tangible assets of the Company
must be at least $2,000,000 and the Common Stock must have a minimum bid price
of $1.00. The Common Stock has had a bid price of less than $1.00 per share.
See "Recent Developments."
13
Dividend Policy
- The Company has never paid any cash dividends on its Common Stock and has
no present intention to declare or to pay cash dividends on its Common
Stock.
- It is the present policy of the Company to retain any earnings to finance
the growth and development of the Company's business.
Authorization of Preferred Stock
The Company's Certificate of Incorporation authorizes the issuance of
"blank check" preferred stock with such designations, rights and preferences
as may be determined from time to time by the Board of Directors. Accordingly,
the Board of Directors is empowered, without stockholder approval, to issue
such preferred stock with dividend, liquidation, conversion, voting, or other
rights that could adversely affect the voting power or other rights of the
holders of the Common Stock. In the event of issuance, the preferred stock
could be utilized, under certain circumstances, as a method of discouraging,
delaying, or preventing a change in control of the Company. Although the
Company has no present intention to issue any shares of its authorized
preferred stock, there can be no assurance that the Company will not do so in
the future.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
Certain statements contained in the "Prospectus Summary" and "Risk
Factors" regarding matters that are not statements of historical fact,
including statements relating to plans, strategies, expectations and future
economic results, are forward-looking statements within the meaning of Section
27A of the Securities Act. Actual results may differ materially from the
statements made, as a result of various factors, including risks associated
with market acceptance of the Company's products, the Company's capital needs,
obtaining regulatory approval, patent and other intellectual property
protection, the Company's maintenance of its net tangible assets, economic and
other factors which impact the market for the Company's products and other
factors which are described from time to time in the Company's Securities and
Exchange Commission filings.
RECENT DEVELOPMENTS
- In August 1998, the Company was notified that its Premarket Notification
filed with the FDA with respect to the Aurex-3 had been approved. Such
approval does not constitute an assurance that the Aurex-3 can be
successfully marketed by the Company.
14
- On August 18, 1998, the Company consummated the transactions contemplated
by the Asset Purchase Agreement.
- Reference is made to Item 3. "Legal Proceedings" in the 1998 Annual
Report with respect to arbitration conducted through the American
Arbitration Association. In September 1998, the arbitrator held that the
Company breached the 1993 Distribution Agreement. The Arbitrator awarded
$186,000 plus interest to Arthronix as well as attorneys' fees and costs
of up to an aggregate of $53,000, all to be paid by the Company.
- In September 1998, the Company entered into an agreement with MEDIQ/PRN
Life Support Services, Inc. ("MEDIQ") pursuant to which the Company
appointed MEDIQ as its exclusive distributor of SofPulse Devices. The
distributorship will run for three years unless terminated by either
party at the end of any twelve month period. MEDIQ has agreed to use
its best efforts to market SofPulse Devices to medical professionals and
healthcare entities with which it has existing relationships in order to
secure rental customers for the SofPulse Devices. MEDIQ has further
agreed to provide a 24 hour a day customer service center to support the
marketing efforts and maintain an adequate inventory of SofPulse Devices.
The Company will train MEDIQ's personnel in connection with renting,
marketing, use and maintenance of the SofPulse Devices. The Company has
also agreed to train customers in the clinical use of SofPulse Devices.
For its services under the Agreement, MEDIQ will receive 45% of revenues
received from the rental of the SofPulse Devices.
- In October 1998, the Company entered into an Agreement with Byron Medical
("Byron") pursuant to which Byron agreed to perform promotional
activities in connection with the SofPulse Devices. The Agreement will
terminate in October 2001 unless sooner terminated by either party at the
end of any twelve month period. The Company has agreed to pay Byron a
commission of 7.5% of amounts received from customers referred by leads
supplied by Byron.
- The Company intends to effect a 1 for 4 reverse split of the Common
Stock, subject to shareholder approval. Reference is made to the Proxy
Materials. The Company has been notified by Nasdaq that if the closing
bid price of the Common Stock is not at least $1.00 per share on or
before December 11, 1998 and at least the next ten trading days, the
Common Stock will be delisted from Nasdaq. In addition, if the Company
is not otherwise in compliance with Nasdaq's requirements, the Common
Stock will also be delisted from Nasdaq. If such de-listing were to
occur, an investor could find it more difficult to dispose of, or to
obtain accurate quotations as to the market value of, the Common Stock.
In addition, if the Common Stock were to become de-listed from trading on
Nasdaq and the trading price of the Common Stock were below $5.00 per
share, which it is as of the date of this Prospectus, trading in the
Common Stock would also be subject to the requirements of certain rules
promulgated under the Exchange Act which require additional disclosure by
broker-dealers in connection with any trades involving a stock defined as
15
a penny stock (generally, any non-Nasdaq equity security that has a market
price of less than $5.00 per share, subject to certain exceptions). Such rules
require the delivery, prior to any penny stock transaction, of a disclosure
schedule explaining the penny stock market and the risks associated therewith,
and impose various sales practice requirements on broker-dealers who sell
penny stocks to persons other than established customers and accredited
investors (generally institutions). For these types of transactions, the
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
sale. The additional burdens imposed upon broker-dealers by such requirements
may discourage broker-dealers from effecting transactions in the Common Stock,
which could severely limit the market liquidity of the Common Stock and the
ability of purchasers in this offering to sell the Common Stock and Warrants
in the secondary market.
USE OF PROCEEDS
The Shares will be offered by the Selling Shareholders. See "Selling
Shareholders" and "Plan of Distribution." The Company will not receive any
proceeds from the sale of the Common Stock.
SELLING SHAREHOLDERS
The following table sets forth certain information as of the date
hereof, with respect to the Common Stock held by each Selling
Securityholder. Except as set forth below, none of the Selling Shareholders
has had any position, office or other material relationship with the Company
or any of its predecessors or affiliates within the past three years other
than as a result of the ownership of the Common Stock. The Common Stock
offered by this Prospectus may be offered from time to time by the Selling
Shareholders named below:
Shares of Number of
Common Stock Shares
Beneficially Being
Name & Addres Owned(1) Offered
Electropharmocology,Inc. 1,400,000(2) 1,400,000(2)
2301 NW 33rd Court
Pompano Beach, FL 33069
16
Jones, Day, Reavis & Pogue 1,487,353(2) 1,487,353(2)
2300 Trammell Crow Center
Dallas, TX 75201
Resource Realty Associates, Inc. 146,000 146,000
421-13 Route 59
Monsey, NY 10952
Totals 3,033,353 3,033,353
(1) For purposes hereof, a person is deemed to be the beneficial owner of
securities that can be acquired by such person within 60 days from the
date hereof upon the exercise of warrants or options or the conversion
of convertible securities. Each beneficial owner's percentage ownership
is determined by assuming that any such warrants, options or
convertible securities that are held by such person (but not those held
by any other person) and which are exercisable within 60 days from the
date hereof, have been exercised or converted, as the case may be.
Accordingly, 1,500,000 and 75,000 shares of Common Stock underlying
Warrants issued by the Company to Electropharmacology, Inc. and
Resource Realty Services, Inc., respectively , are not deemed to be
beneficially owned by Electropharmacology, Inc. and, therefore, are not
reflected in the table.
(2) Held of record by Andre' Di Mino, as Trustee, under a Voting Trust
Agreement. Pursuant to such Agreement, Mr. Di Mino has full voting
rights with respect to the Shares until 2008 or until such earlier time
as they may be sold pursuant to either this Prospectus or Rule 144
under the Securities Act. Accordingly, Mr. Di Mino may be deemed to be
the beneficial owner of the Shares.
On May 27, 1998, the Company entered into an Asset Purchase Agreement
(the "Asset Purchase Agreement") with Electropharmacology, Inc. ("EPI")
pursuant to which the Company purchased certain assets previously utilized
by EPI in connection with the SofPulse electromagnetic stimulation device
marketed under the name MRT-SofPulse or SofPulse for use in treating pain
and edema in post-operative soft tissue injuries. Reference is made to the
response to Item 1 of the 1998 Annual Report. Resource Realty Services,
Inc. introduced the Company to EPI and consulted with the Company in
connection with the Asset Purchase Agreement. An affiliate of EPI is a
consultant to the Company.
EPI and Jones, Day, Reavis & Pogue ("JDRP") agreed not to sell any
17
Shares prior to October 17, 1998 and September 17, 1998, respectively. The
Selling Shareholders each further agreed that for the ninety day period
commencing September 18, 1998, in any calendar month, collectively, they
will not sell or otherwise dispose of a number of Shares in excess of 5% of
the average reported trading volume of the Common Stock during the
immediately preceding calendar month (such limitation not being cumulative)
and during the period commencing on December 17, 1998 and terminating on
August 18, 1999, in any calendar month, collectively, they will not sell a
number of Shares in excess of 10% of the average reported trading volume of
the Common Stock during the immediately preceding calendar month (such
limitation not being cumulative). EPI has agreed with JDRP that EPI will
not sell any of the Shares until the earlier of the time that JDRP has sold
all its Shares or the foregoing restrictions are no longer in effect.
Furthermore, until August 18, 1999, EPI and JDRP have each agreed that prior
to making any sale of any Shares, it shall give notice to the Company and
the Company shall have until the next business day to notify the applicable
Selling Shareholder that it will purchase all of the Shares with respect to
which notice was given, at a price equal to the Fair Market Value (as
defined in the Asset Purchase Agreement) of the Common Stock.
The Company agreed that if the Shares have not been registered under
the Securities Act and under applicable state securities laws by October 17,
1998, then on that day and on each thirty day anniversary thereof until the
Shares are so registered, if timely requested by JDRP, the Company will
purchase from JDRP for $20,000 a number of Shares equal to 20,000 divided by
(a) if the Common Stock is listed on a national securities exchange or
admitted to unlisted trading privileges on such exchange or listed for
trading on Nasdaq, the last reported sale price of the Common Stock on such
exchange or system or if no such sale is made on day of computation, the
average of the closing high bid and low asked prices on such exchange or
system, (b) if the Common Stock is not so listed or admitted to unlisted
trading privileges but bid and asked prices are reported by the National
Quotation Bureau, Inc., the average of the last reported high bid and low
asked prices reported by such Bureau, or (c) if the Common Stock is not so
listed or admitted to unlisted trading privileges and bid and asked prices
are not so reported, the book value of a share of the Common Stock as at the
end of the prior fiscal quarter. In October 1998, pursuant to the request
of JDRP, the Company purchased 37,647 shares of Common Stock from JDRP for
$20,000. The Company's obligation to purchase Shares from JDRP is limited
to an aggregate purchase price of $60,000 if such registration has not
occurred due to circumstances not reasonably within the control of the
Company.
The Company and the Selling Shareholders have agreed to indemnify each
other with respect to losses, cost or damages, including, but not limited
to, those which may arise under the Securities Act.
The Selling Shareholders have advised the Company that the Shares to be
offered by them pursuant to this Prospectus represent all of shares of the
18
Common Stock deemed to be beneficially owned by them as of the date of this
Prospectus.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time to purchasers directly by the
Selling Shareholders. Alternatively, the Selling Shareholders may from time
to time offer the Shares through underwriters, dealers or agents, who may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Shareholders for whom they may act as agent. The
Selling Shareholders and any underwriters, dealers or agents that participate
in the distribution of Shares may be deemed to by underwriters, and any
commissions or concessions received by any such underwriters, dealers or
agents may be deemed to be underwriting discounts and commissions under the
Securities Act. At the time a particular offer of Shares is made, to the
extent required, a Prospectus Supplement will be distributed which will set
forth the terms of the offering, including the name or names of any
underwriters, dealers or agents, any discounts, commissions and other items
constituting compensation from the Selling Shareholders and any discounts,
commissions or concessions allowed or reallowed or paid to dealers.
The Shares may be sold from time to time in one or more transactions at
a fixed offering price, which may be changed, or at varying prices determined
at the time of sale or at negotiated prices. Under agreements entered into
with the Company, the Selling Shareholders, and any underwriter they may
utilize, will be indemnified by the Company against certain civil liabilities,
including liabilities under the Securities Act.
The Company has estimated its expenses of the offering of the Shares by
the Selling Shareholders as follows:
- Registration Fee $ 510
- Professional Fees and Expenses $ 18,000
- Miscellaneous $ 1,490
Total $ 20,000
EPI has agreed to pay $15,000 of such expenses. The remainder of the
expenses has been or will be paid by the Company.
DESCRIPTION OF COMMON STOCK
Set forth below is a description of the material terms and provisions of the
Common Stock which should be read in conjunction with the Certificate of
Incorporation, as amended, of the Company (the "Certificate of
19
Incorporation"), and the By-Laws, as amended, of the Company (the "By-Laws").
Copies of the Certificate of Incorporation and the By-Laws are available from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates or may be requested by writing to
or calling Andre' Di Mino at the address or telephone number, respectively,
set forth above.
Holders of the Common Stock are entitled to one vote at all meetings of
stockholders for each share held by them with respect to all matters upon
which they have a right to vote. Holders of Common Stock have no preemptive
rights and have no other rights to subscribe for additional shares of the
Company, nor do such holders have any conversion rights or rights of
redemption. All shares of Common Stock will participate equally in dividends,
when, as and if declared by the Board of Directors, out of funds legally
available therefor, and in net assets upon liquidation, subject to the rights
of holders of preferred stock, if any.
Transfer Agent. The Company's transfer agent is Securities Transfer
Corporation, 16910 Dallas Parkway, Suite 100, Dallas, TX 75248.
INDEMNIFICATION
The Company's By-Laws provide that the Company shall, to the fullest extent
permitted by Section 145 of the Delaware General Corporation Law, indemnify
its executive officers and directors.
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify any person who is, or is threatened to be made, a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative )other than an action
by or in the right of such corporation) by reason of the fact that such person
is or was an officer or director of such corporation, or is or was serving at
the request of such corporation as a director, officer, employee or agent of
any other corporation or enterprise. The indemnity may include expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. A Delaware corporation,
may indemnify officers and directors in an action by or in the right of the
corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to
be liable for negligence or misconduct in the performance of his duty to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses which he actually and reasonably incurred
in connection therewith. The indemnification provided is not deemed to be
20
exclusive of any other rights to which an officer or director may be entitled
under a corporation's by-laws, by agreement, vote, or otherwise.
Insofar as indemnification arising under the Securities Act may be permitted
to directors, officers and controlling persons of the Company pursuant to the
foregoing provisions, or otherwise, the Company has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
The Company and the Selling Shareholders have agreed to indemnify each other
in certain circumstances. See "Selling Shareholders."
EXPERTS
The consolidated financial statements of the Company at March 31, 1998 and
1997 and for each of the two years in the period ended March 31, 1998,
appearing in the 1998 Annual Report have been audited by Kaufman, Rossin & Co.,
independent auditors, as set forth in their report thereon and incorporated
herein by reference, and are included in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters relating to the Common Stock offered hereby has
been passed upon for the Company by Reisman & Associates, P.A., Boca Raton,
Florida.
21
NO PERSON HAS BEEN AUTHORIZED IN
CONNECTION WITH THE OFFERING MADE TO
GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN PROSPECTUS
OFFER TO BUY ANY OF THE SECURITIES ADM TRONICS UNLIMITED, INC.
OFFERED HEREBY TO ANY PERSON OR BY
ANYONE IN ANY JURISDICTION WHICH IT IS 3,033,353 SHARES OF
UNLAWFUL TO MAKE SUCH OFFER OR COMMON STOCK $.0005 PAR VALUE
SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
PART II
Item 14. INFORMATION NOT REQUIRED IN THE PROSPECTUS OTHER EXPENSES OF
ISSUANCE AND DISTRIBUTION.
S.E.C. Registration Fee $ 510
Professional Fees and Expenses $ 18,000
Miscellaneous $ 1,490
Total $ 20,000
Electropharmacology, Inc. has agreed to pay the Registrant $15,000 with respect
to the above expenses. The remainder of the above expenses has been or will
be paid by the Registrant.
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's By-Laws provide that the Company shall, to the fullest extent
permitted by Section 145 of the Delaware General Corporation Law, indemnify its
executive officers and directors.
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify any person who is, or is threatened to be made, a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of such corporation) by reason of the fact that such person
is or was an officer or director of such corporation, or is or was serving at
the request of such corporation as a director, officer, employee or agent of
any other corporation or enterprise. The indemnity may include expenses
(including attorney's fees), judgements, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such
action, suit or proceeding, provided thet he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. A Delaware
corporation may indemnify officers and directors in an action by or in the
right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable for negligence or misconduct in the
performance of his duty to the coporation. Where an officer or director is
successful on the merits or otherwise in defense of any action referred
to above, the corporation must indemnify him against the expenses which he
actually and reasonably incurred in connection therewith. The indemnification
provided is not deemed to be exclusive of any other rights to which an officer
or director may be entitled under a corporation's by-laws, by agreeement, vote,
or otherwise.
Item 16. EXHIBITS
3.1 Certificate of Incorporation and amendments thereto filed on August 9,
1976 and May 15, 1978. Exhibit 3(a) to the Registrant's Registration
Statement on Form 10, File No. 0-17629 (the "Form 10"), is hereby
incorporated by reference.
3.2 Certificate of Amendment to Certificate of Incorporation filed
December 9, 1996. Exhibit 3(a) to the Registrant's Annual Report on
Form 10-KSB for the fiscal year ended March 31, 1997 is hereby
incorporated by reference.
3.3 By-Laws. Exhibit 3(b) to the Form 10 is hereby incorporated by
reference.
4.1 Specimen Common Stock Certficate.*
4.2 Warrant issued to the Global Opportunity Fund Limited. Exhibit 4.1
to the Registrant's Annual Report on Form 10-KSB, as amended for the
fiscal year ended March 31, 1998 (the "1998 Annual Report") is hereby
incoproated by reference.
4.3 Form of Warrant issued to Electropharmacology, Inc. and Resource Realty
Services, Inc.*
5.1 Opionion re legality.**
9.1 Trust Agreements of November 7, 1980 by and between Dr. Alfonso Di
Mino et al. Exhibit 9 to the Regsitrant's Annual Report on Form 10-KSB
for the fiscal year ended March 31, 1993 is hereby incorporated by
reference.
9.2 Voting Trust Agreement of August 18, 1998 between certain shareholders
of the Registrant and ADM.*
10.1 Memorandum of Lease by and between the Registrant and Cresskill
Industrial Park III dated as of August 26, 1993. Exhibit 10(a) to the
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1994 is hereby incorporated by reference.
10.2 Agreement of July 8, 1987 by and between Donna Di Mino, Dr. Alfonso Di
Mino, et al. Exhibit 10(q) to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended March 31, 1993 is hereby incorporated
by reference.
10.3 Agreement of July 13, 1993 by and between ADM Medical Ventures
Corporation and Arthronix, Inc. Exhibit 10(r) to the Registrant's
Annual Report on Form 10-KSB for the fiscal year ended March 31, 1993
is hereby incorporated by reference.
10.4 Agreement of June 9, 1992 by and between Advent Medical Technology,
Inc. and Arthritic Relief Centers, Inc. Exhibit 2 to the Registrant's
Current Report on Form 8-K dated June 9, 1992 is hereby incorporated
by reference.
10.5 Agreement of June 9, 1992 by and between Advent Medical Technology,
Inc. and Vet-Sonotron Systems, Inc. Exhibit 3 to the Registrant's
Current Report on Form 8-K dated June 9, 1992 is hereby incorporated
by reference.
10.6 Stock Purchase Agreement and Registration and Rights Agreement
(undated) by and between The American Heritage Fund, Inc. and the
Registrant. Exhibit 10(i) to the Registrant's Annual Report on Form
10-KSB for the fiscal year ended March 31, 1993 is hereby incorporated
by reference.
10.7 Amendment to Agreement of March 16, 1993 by and between Arthritic
Relief Centers, Inc. and Advent Medical Technology, Inc. Exhibit 10(k)
to the Registrant's Annual Report on Form 10-KSB for the fiscal year
ended March 31, 1993 is hereby incorporated by reference.
10.8 Voting Agreement of March 16, 1993 by and between Vet Sonotron
Systems, Inc. and Advent Medical Technology, Inc. Exhibit 10(l) to the
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1993 is hereby incorporated by reference.
10.9 Voting Agreement of March 16, 1993 by and between Arthritic Relief
Centers, Inc. and Advent Medical Technology, Inc. Exhibit 10(m) to the
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1993 is hereby incorporated by reference.
10.10 Agreement for Sale of Stock Between the Registrant, James C.
Wickstead and Thomas Petrie. Exhibit 10.10 to the 1998 Annual Report
is hereby incorporated by reference.
10.11 Employment Agreement of November 26, 1997 between Thomas Petrie
and Precision Assembly Corp. Exhibit 10.11 to the 1998 Annual Report is
hereby incorporated by reference.
10.12 Asset Purchase Agreement of May 27, 1998 by and among
Electropharmacology, Inc., AA Northvale Medical Associates, Inc.
Exhibit 10.12 to the 1998 Annual Report is hereby incorporated by
reference.
10.13 Subscription Agreement of March 31, 1998 between the Registrant
and The Global Opportunity Fund Limited. Exhibit 10.13 to the 1998 Annual
Report is hereby incorporated by reference.
10.14 Consulting Agreement, dated May 15, 1998, by and between the
Registrant and Wharton Capital Corp. Exhibit 99.1 to the Registrant's
Registration Statement on Form S-8, File. No. 333-57823, is hereby
incorporated by reference.
10.15 Extension to Consulting Agreement dated August 18, 1998 by and
between the Registrant and Wharton Capital Corp. Exhibit 99.2 to the
Registrant's Registration Statement on Form S-8, File. No. 333-62165,
is hereby incorporated by reference.
10.16 Consulting Agreement dated June 25, 1998 by and between the
Registrant and Joel Brownstein. Exhibit 99.3 to the Registrant's
Registration Statement on Form S-8, File. No. 333-66023 is hereby
incorporated by reference.
10.17 Agreement of September 21, 1998 by and between AA Northvale
Medical Associates, Inc. and MEDIQ/PRN Life Support Services, Inc. *
10.18 Agreement of October 28, 1998 between AA Northvale Medical
Associates, Inc. and Byron Medical. **
21.1 Subsidiaries of the Registrant. *
23.1 Consent of Kaufman, Rossin & Co. **
23.2 Consent of Reisman & Associates, P.A. (included in Exhibit 5.1)
24.1 Power of Attorney. (included on signature page) *
_________________________
* Filed with Registratioin Statement on Form S-3.
** Filed herewith.
Item 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sells
securities, a post-effective amendment to this registration
statements to: (i) include any prospectus required by
Section 10(a)(3) of the Securities Act; (ii) reflect in
the prospectus any facts or events which, individually or
together, represent a fundamental change in the information
in the registration statement; and (iii) include any
additional or changed material information on to the plan of
distribution.
(2) That, for determining liability under the Securities Act,
each such post-effective amendment shall be treated as a new
registration statement of the securities offered, and the
offering of the securities at that time shall be deemed to
be the initial bona fide offering.
(3) To file a post-effective amendment to remove from
registration any of the securities that remain unsold at the
end of the offering.
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 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.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Northvale, State of New Jersey, on
this 29 day of October, 1998.
ADM TRONICS UNLIMITED, INC.
/s/ Dr. Alfonso Di Mino
By: DR. ALFONSO DI MINO,. President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signatures appears below
under the heading "Signature" constitutes and appoints Dr. Alfonso Di Mino and
Andre' Di Mino his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities to sign any or all amendments to this registration
statement, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully for all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, each acting alone, or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURES TITLE DATE
/s/ Dr. Alfonso Di Mino Chief Executive October 29, 1998
Dr. Alfonso Di Mino Officer and Director
/s/ Andre' Di Mino Chief Financial and October 29, 1998
Andre' Di Mino Accounting Officer and
Director
/s/ Vincent Di Mino Director October 29, 1998
Vincent Di Mino
/s/ Thomas Petrie Director October 29, 1998
Thomas Petrie
John Berenyi Director
EXHIBIT 5.1
LAW OFFICES
REISMAN & ASSOCIATES, P.A.
Suite 330
5100 Town Center Circle
Boca Raton, Florida 33486
TELEPHONE (561) 361-9300 TELECOPIER (561) 416-9249
October 28, 1998
ADM Tronics Unlimited, Inc.
224-S Pegasus Avenue
Northvale, NJ 07647
Ladies and Gentlemen:
We have acted as your counsel in connection with a Registration Statement on
Form S-3 to be filed with the Securities and Exchange Commission under the
Securities Act of 1933 (the "Registration Statement") with respect to 3,033,353
shares of Common Stock, $.0005 par value.
We have examined such originals or certified, conformed or photostatic copies,
the authenticity of which we have assumed, of certificates of public officials
and your corporate officers and other documents, certificates, records,
authorizations and proceedings as we have deemed relevant and necessary as the
basis for the opinion expressed herein. In all such examinations, we have
assumed the genuineness of all signatures on original and certified documents
and all copies submitted to us as conformed or photostatic copies.
Based on the foregoing, we are of the opinion that the securities referred to
herein when sold as set forth in the Registration Statement will be legally
issued, fully paid and non-assessable.
We hereby consent to the filing of our opinion as an exhibit to the
Registration Statement and consent to the use of our name as it appears under
the caption "Legal Matters" therein.
Sincerely,
/s/ REISMAN & ASSOCIATES, P.A.
REISMAN & ASSOCIATES, P.A.
EXHIBIT 10.18
A G R E E M E N T
THIS AGREEMENT, is made and entered into this 28 day of October, 1998 by and
between AA Northvale Medical Associates, Inc. having a principal place of
business at 224-S Pegasus Avenue, Northvale, New Jersey 07647 ("AAN") and BYRON
Medical, having a principal place of business at 602 W. Rillito Street, Tucson,
Arizona 85705 ("BYRON").
WITNESSETH
WHEREAS, AAN produces an electronic, non-invasive, therapeutic medical
device which is cleared by the United States Food and Drug Administration for
marketing in the United States for the treatment of pain and edema associated
with post-operative soft tissue injuries, such device known under one or more
of the following trademarks; MRT , MRT SOFPULSETM and SOFPULSETM (collectively
referred to herein as "SOFPULSE"), and
WHEREAS, BYRON is involved in advertising and promotional activities for
products to medical professionals and entities that perform aesthetic
(cosmetic) surgery.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. Definitions:
MARKETPLACE as used herein shall mean medical professionals or clinical service
entities that are in the business of performing elective and non-elective
aesthetic (cosmetic) procedures including cosmetic surgery.
SOFPULSE as used herein shall mean the MRT SofPulse pulsed electromagnetic
device cleared for commercial marketing as an adjunct in the palliative
treatment of post-operative pain and edema in soft tissues.
CUSTOMERS as used herein shall mean patients that have had an aesthetic
(cosmetic) surgical procedure and that rent SOFPULSE for use in the home.
2. The parties hereto agree that this is a non-exclusive Agreement in that
only leads provided, in writing, by BYRON to AAN shall be commissionable to
BYRON. Leads, as referred to throughout this Agreement, shall be physicians
that have an interest in prescribing the SOFPULSE for use by their patients for
post-operative treatment. The rentals which result from the foregoing
prescriptions shall be commissionable to BYRON for the Term of this Agreement.
BYRON will make contacts and identify medical professionals and entities that
could refer potential CUSTOMERS for SOFPULSE through the following methods:
Exhibiting SOFPULSE and distributing related literature approved by AAN
at approximately 50 medical trade shows and conferences annually.
Including SOFPULSE product information in approximately 5,000 invoices
or statements mailed to customers monthly.
Placing SOFPULSE product information in product boxes when shipping its
products to customers.
Issuing an announcement to the MARKETPLACE announcing the national
roll-out of this distribution program.
Providing reasonable field support requested by AAN through BYRON field
employees and associates.
Sending SOFPULSE product information and offers through broadcast
faxing to approximately 6,000 plastic surgeons within 3 months of
the date of this Agreement in a planned regional roll-out approved
by AAN.
Requiring customer service personnel to discuss SOFPULSE with customers
during incoming calls.
3. All potential leads identified by BYRON will be forwarded to AAN on a
monthly basis.
4. As compensation for the services provided by BYRON, BYRON will receive from
AAN a commission of 7.5% of the amounts received from CUSTOMERS referred from
the Leads supplied by BYRON. Such commission will be paid to BYRON by AAN by
the 15th of the month following receipt of payment from CUSTOMERS in the
preceding month.
5. BYRON shall submit to AAN for prior approval any written communication to
be used in conjunction with the marketing activities detailed herein, and
further agrees that it will make modifications to such materials as may be
requested by AAN.
6. AAN will indemnify, defend and hold BYRON harmless from and against any and
all claims, judgements, damages and costs (including attorney's fees) arising
with respect to any SOFPULSE, which a customer or end-user alleges has caused
injury. BYRON will indemnify, defend and hold harmless AAN from and against
any and all claims, judgements, damages and costs (including attorney's fees)
arising out of BYRON's marketing of SOFPULSE.
7. AAN hereby grants BYRON a non-exclusive right and license to use all trade
names and trademarks associated with SOFPULSE in connection with BYRON's
marketing of the same.
8. The term of this Agreement shall be for a period of three years from the
date hereof, but shall be subject to earlier termination at the end of any 12
month period by any party making written notice to the other party of its
desire to terminate the Agreement 60 days prior to the anniversary date of the
effective date of this Agreement. Notwithstanding the foregoing, all Leads
secured by Byron that result in a placement of SofPulse will be commissionable
for the term of the Agreement or 24 months, whichever is longer.
9. This agreement shall be construed and enforced in accordance with the laws
of the State of New Jersey and any disputes arising hereto shall be brought in
the Courts of Bergen County, New Jersey.
10. This Agreement constitutes the entire agreement of the parties hereto and
supercedes any previous agreement written, oral or implied. This Agreement can
be modified or terminated only by a written instrument executed by the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
AA Northvale Medical Associates, Inc. BYRON Medical
/s/ Andre' Di Mino, President /s/ Byron Economidy, CEO
Andre' Di Mino Byron Economidy
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Amendment No.1
Registration Statement on Form S-3 of our report dated June 26, 1998, which
appears on Page F-1 in the annual report on Form 10-KSB of ADM Tronics
Unlimited, Inc., for the fiscal year ended March 31, 1998.
/s/ Kaufman, Rossin & Co.
Kaufman, Rossin & Co,
Miami, Florida
October 29, 1998
