Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
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
Each Class Maximum Maximum Amount of
of Amount to Offering Aggregate Registration
Securities Be Price Per Offering Fee
to be Registered Unit Price
Registered (1)
Common 3,071,000 $.5625 (2) $1,727,437.50 $509.60
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 closing high bid and low asked
prices of the Common Stock as reported on the Nasdaq Stock Market
on October 14, 1998.
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.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED OCTOBER 15, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED
PRIOR TO THE TIME 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.
PROSPECTUS
ADM TRONICS UNLIMITED, INC.
3,071,000 shares of Common Stock
This Prospectus relates to 3,071,000 shares of common stock, par
value $.0005 per share (the "Shares"), of ADM Tronics Unlimited,
Inc. (the "Company") which are held by certain persons (the
"Selling Shareholders") and were issued in connection with an
Asset Purchase Agreement (the "Asset Purchase Agreement") between
the Company, a subsidiary of the Company and Electropharmacology,
Inc. ("EPI"). Certain sales of the Shares by the Selling
Shareholders are subject to certain contractual restrictions. See
"Selling Shareholders" and "Plan of Distribution."
The Selling Shareholders and any broker-dealers, agents or
underwriters that participate with the Selling Shareholders in
the distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933 (the "Securities
Act") and any commission received by them and any profit on the
resale of the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
The Company and the Selling Shareholders have agreed to indemnify
each other under certain circumstances. 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 14, 1998 was $.5625 per
share.
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The Company will not receive any of the proceeds from any sale of
the Shares by the Selling Shareholders. The Selling Shareholders
will pay or assume underwriting discounts, brokerage commissions
or other charges incurred in any respective sale by them of the
Shares.
The Company estimates the expenses of registering the Common
Stock under the Securities Act as well as certain states
(including related filing, legal, accounting, printing and
miscellaneous fees and expenses) will be $20,000. EPI has agreed
to bear $15,000 of such expenses.
THE SECURITIES OFFERED HEREBY INVOLVE SUBSTANTIAL RISKS. SEE
"RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION NOR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is __________, 1998
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in
accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Such
reports and other information can 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 at
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 hereby 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");
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(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,
dated 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
(vi) 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
and to be a part hereof from the date of filing of such
documents. Any statement contained herein, in any supplement or
amendment hereto or in a document all or any portion of which is
incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any supplement or amendment hereto 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
securities made hereunder 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.
Copies of any information incorporated by reference herein will
be provided without charge (other than exhibits to the
information, unless such exhibits are themselves specifically
incorporated by reference) to any person who receives this
Prospectus upon written or oral request of such person. Requests
for such copies are to be directed to Andre' Di Mino, at the
Company's offices located at 224-S Pegasus Avenue, Northvale, New
Jersey 07647. The Company's telephone number 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 3,071,000 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 exceeded 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,
there can be no assurance that the Company will not require
additional capital during that time or thereafter. The Company
has not made any arrangements to obtain any additional financing.
There can be no assurance that any additional capital will be
available to the Company if and when required or, if so
available, that it will 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
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revenues realized by the Company from sales of the
Sonotron Devices resulted from sales through Arthronix and the
Japanese Distributor. 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 thereunder will provide proprietary protection 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 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
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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.
The Company also relies on trade secrets, copyright law,
employee and third-party nondisclosure 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.
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.
Certain Formulas are not Patented
Certain formulas and specifications to which the Company's
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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 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
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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.
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
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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 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
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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 devices 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
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raised by the new technological characteristics of the Sonotron
Devices when compared to certain devices 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
Sonotron 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 such 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 a 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
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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 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. Additionally, 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 19,923,863 shares of Common
Stock as of October 14, 1998, representing approximately 42%
of the Company's shares of Common Stock outstanding at such date.
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.
14
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 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 14, 1998, the Company has 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
15
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. A hearing was
held on September 2, 1998 before Nasdaq at which the Company
presented its plan for compliance. Such plan includes, if
necessary, a reverse split of the Common Stock. If Nasdaq does
not accept the Company's plan and the Company is not in
compliance with Nasdaq's requirements, the Common Stock will be
delisted from Nasdaq. If such delisting 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 delisted 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 a penny
16
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.
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
17
"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.
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.
On September 21, 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
18
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.
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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of
October 14, 1998 with respect to any person who is known to the
Company to be the beneficial owner of more than 5% of any class
of its voting securities and as to each class of the Company's
equity securities beneficially owned by its directors and
directors and officers as a group:
Title Name and Address Amount Approximate
of of Beneficial of Percent
Class Owner Beneficial of
Ownership(1) Class(1)
______________________________________________________________
Common Dr. Alfonso DiMino 2,334,239(2) 5%(2)
Stock, 224-S Pegasus Ave. shares
$.0005 Northvale, NJ 07647
par value
Common Andre' Di Mino 7,672,696(3) 16%(3)
Stock, 224-S Pegasus Ave. shares
$.0005 Northvale, NJ 07647
par value 1,700,000(4) 4%(4)
shares
3,400,000(5) 7%(5)
shares
2,925,000(6) 6%(6)
shares
Common Vincent Di Mino 1,887,928(7) 4%(7)
Stock, 224-S Pegasus Ave. shares
$.0005 Northvale, NJ 07647
par value
5,100,000(8) 11%(8)
shares
19
Common Thomas Petrie -0- -
Stock, 32 Deerhaven Lane shares
$.0005 Newfoundland, NJ 07927
par value
Common John Berenyi 4,000 (9)
Stock, 12 Washington Avenue shares
$.0005 Westport, CT 06880
par value
Common The American Heritage 4,230,000 9%
Stock, Fund, Inc. shares
$.0005 1370 Avenue of the Americas
par value New York, N.Y. 10019
Common Officers and Direc- 19,923,863(9) 42%(10)
Stock, tors as a group shares
$.0005 (5 persons)
par value
______________________________
(1) Unless otherwise noted below, the Company believes that all
persons named in the table have sole voting and investment
power with respect to all shares of Common Stock
beneficially owned by them. 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. Accordingly, the table does not
reflect the Common Stock underlying options granted to the
Company's Directors during the fiscal year ended March 31,
1998. Reference is made to the response to Item 10 in the
1998 Annual Report. 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.
(2) Represents (a) 1,004,239 shares of Common Stock directly
owned by Dr. Di Mino, (b) 1,000,000 shares of Common Stock
beneficially owned by the spouse of Dr. Di Mino, in which
shares Dr. Di Mino disclaims any beneficial ownership, and
(c) 1,330,000 shares of Common Stock, which includes the
1,000,000 shares described in (b) above, subject to an
agreement dated July 8, 1987 pursuant to which Dr. Di Mino
has the power to vote such shares.
(3) Represents 7,672,696 shares of Common Stock directly owned
20
by Mr. Di Mino.
(4) Represents 1,700,000 shares of Common Stock held by the
Andre' Di Mino Irrevocable Trust, a Trustee and the
beneficiary of which is Andre' Di Mino who may be deemed to
be a beneficial owner of the shares held by such Trust.
(5) Represents 1,700,000 shares of Common Stock held each by the
Maria Elena Di Mino and Maurice Di Mino Irrevocable Trusts,
a Trustee of which is Andre Di Mino who may be deemed to be
a beneficial owner of the shares held by such Trusts by
reason of his power to vote such shares.
(6) Represents shares held of record by Andre' Di Mino, as
trustee, under a Voting Trust Agreement with the Selling
Shareholders. See "Selling Shareholders."
(7) Represents (a) 1,287,928 shares of Common Stock directly
owned by Mr. Di Mino, (b) 300,000 shares of Common Stock
beneficially owned by the spouse of Vincent Di Mino, and (c)
300,000 shares of Common Stock owned by the child of Mr. Di
Mino who resides in his home, in all of which shares set
forth in (b) and (c) of this Note (5) Mr. Di Mino disclaims
any beneficial ownership.
(8) Represents 5,100,000 shares of Common Stock of which
1,700,000 such shares are held by each of the Andre' Di Mino
Irrevocable Trust, the Maria Elena Di Mino Irrevocable Trust
and the Maurice Di Mino Irrevocable Trust. Vincent Di Mino,
a Trustee of each of such Trusts, may be deemed to be a
beneficial owner of the shares held by such Trusts by reason
of his power to vote such shares.
(9) Represents less than 1%.
(10) See Notes above.
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:
21
Shares of
Common
Stock Number of
Beneficially Shares
Owned (1) Being Offered
Name & Address
Electropharmacology, 1,400,000(2) 1,400,000(2)
Inc.
2301 NW 33rd Court
Pompano Beach, FL
33069
Jones, Day, Reavis & 1,525,000(2) 1,525,000(2)
Pogue
2300 Trammell Crow
Center
Dallas, TX 75201
Resource Realty 146,000 146,000
Services, Inc.
421-13 Route 59
Monsey, NY 10952
Totals 3,071,000 3,071,000
_______________
(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
22
Trust Agreement. Pursuant to such Agreement, Mr. DiMino 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 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
preceing 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.
23
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 "Bureau"), the average of the last
reported high bid and low asked prices reported by the 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. 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 Securites Act.
The Selling Shareholders have advised the Company that the Shares to be offered
by them pursuant to this Prospectus represent all of the shares of Common Stock
deemed to be beneficially owned bu them as of the date of this Prospectus.
24
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 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.
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 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.
25
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
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
26
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.
27
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 PROSPECTUS
RELIED UPON AS HAVING BEEN ADM TRONICS UNLIMITED, INC.
AUTHORIZED BY THE COMPANY. 3,071,000 SHARES OF
THIS PROSPECTUS DOES NOT COMMON STOCK, $.0005
CONSTITUTE AN OFFER TO SELL OR PAR VALUE
A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES
OFFERED HEREBY TO ANY PERSON OR
BY ANYONE IN ANY JURISDICTION
IN WHICH IT IS UNLAWFUL TO MAKE , 1998
SUCH OFFER OR 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.
------------------------
TABLE OF CONTENTS
PAGE
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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), 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 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.
II-1
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 certificate.*
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 incorporated by reference.
4.3 Form of Warrant issued to Electropharmacology, Inc.
and Resource Realty Services, Inc.*
5.1 Opinion re legality. *
9.1 Trust Agreements of November 7, 1980 by and between Dr.
Alfonso Di Mino et al. Exhibit 9 to the Registrant'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.
II-2
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
II-3
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.
333-62165 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. *
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 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 Section13(a)
II-4
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
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.
II-5
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 15 day of October, 1998.
ADM TRONICS UNLIMITED, INC.
By: /s/ 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 Officer 10/15/98
Dr. Alfonso Di Mino and Director
/s/ Andre' Di Mino Chief Financial and 10/15/98
Andre' Di Mino Accounting Officer
And Director
/s/ Vincent Di Mino
Vincent Di Mino Director 10/15/98
/s/ Thomas Petrie
Thomas Petrie Director 10/15/98
__________________
John Berenyi Director
II-6
Exhibit 4.1 Specimen Stock Certificate
Number XXXXXXX ADM Tronics Unlimited, Inc. Shares
Incorporated Under the Laws XXXXXX
Of the State of Delaware
Common Stock
CUSIP 001004 10 0
This is to certify that XXXXXXXXXXXXXXXXXX is the owner of
XXXXXXXXXXXXXXXXXXXX See reverse side for
certain definitions
Fully paid and non-assessable shares, of the par value of
($.0005) each, of the common stock of
ADM Tronics Unlimited, Inc.
transferable on the books of the Corporation in person or by
attorney duly authorized in writing upon surrender of this
cerificate properly endorsed. This certificate and the shares
represented hereby are issued and shall be held subject to all
the provisions of the Corporation's Certificate of Incorporation
and any amendments thereof, copies of which are on file with the
Transfer Agent, to all the provisions of which the holder hereof
by acceptance of this certificate assents.
This certificate is not valid until countersigned by the
Transfer Agent.
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated XXXXXXX XXX XXXX
/s/Andre' DiMino ADM Tronics /s/ Dr. A. Di Mino
Secretary Unlimited, Inc. President
Corporate Seal
1969
Delaware
Securities Transfer Corporation
P. O. Box 701629
Dallas, Tx 75370
/s/ Jan Hoffer
Authorized Signature
EXHIBIT 4.3 Form of Warrant issued to Electropharmacology, Inc.
and Resource Realty Associates, Inc.
THIS WARRANT AS WELL AS THE SECURITIES ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE ACT"), AND MAY NOT BE OFFERED OR SOLD UNLESS
REGISTERED UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION UNDER
THE ACT IS AVAILABLE.
Void after 5:00 P.M., New York City Time, on the third
anniversary of the Commencement Date, as that term is hereinafter
defined (the "Termination Date")
WARRANT TO PURCHASE SHARES OF THE COMMON STOCK OF
ADM TRONICS UNLIMITED, INC.
This is to Certify That, FOR VALUE RECEIVED, ___________________
(collectively with any successors, assignees or transferees,
the "Holder"), is entitled to purchase, subject to the provisions
of this Warrant, from ADM TRONICS UNLIMITED, INC., a Delaware
corporation (the "Company"), shares of the Common Stock of the
Company, $.0005 par value (the "Common Stock") at any time or
from time to time from the Commencement Date, as that term is
hereinafter defined, until 5:00 P.M., New York City Time on the
Termination Date. The purchase price per share shall be the Fair
Market Value on the original issue date hereof. The number of
shares to be received upon the exercise of this Warrant and the
price to be paid for each such share may be adjusted from time to
time as hereinafter set forth. The shares deliverable upon such
exercise, and as adjusted from time to time, are hereinafter
sometimes referred to as "Warrant Shares" and the exercise price
of this Warrant as in effect at any time as adjusted from time to
time is hereinafter sometimes referred to as the "Exercise
Price." For purposes of this Warrant, the Fair Market Value
shall be determined as follows: 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 the NASDAQ
system, Fair Market Value shall be the average of the last
reported sale prices of the Common Stock on such exchange or
system for the five trading days for which such prices are
available immediately preceding the day for which the
determination is being made; or if the Common Stock is not so
listed or admitted to unlisted trading privileges, Fair Market
Value shall be the average of the means of the last reported high
bid and low asked prices reported by the National Quotation
Bureau, Inc. for the five trading days for which such prices are
available immediately preceding the day for which the
determination is being made; or if the Common Stock is not so
listed or admitted to unlisted trading privileges and bid and
asked prices are not so reported, the Fair Market Value shall be
the book value per share as at the end of the most recent fiscal
quarter of the Company ending prior to the date for which the
determination is being made, as adjusted for any additional
shares of Common Stock which may have been issued since the end
of such quarter and determined in accordance with generally
accepted accounting principles applied consistently.
EXCEPT AS PROVIDED IN CLAUSE (iii) OF THE PROVISO TO THE FIRST
SENTENCE OF SECTION 1 HEREOF, (A) UNLESS THE COMPANY REALIZES
CONSOLIDATED CUMULATIVE GROSS REVENUES FROM RENTALS AND SALES OF
SOFPULSES, LESS RETURNS AND ALLOWANCES (WITHOUT DEDUCTION FOR
UNCOLLECTABLE RECEIVABLES), DURING THE TWELVE MONTH PERIOD COMMENCING
ON THE ORIGINAL ISSUE DATE HEREOF ("SOFPULSE TWELVE MONTH REVENUES")
OF AT LEAST $1,650,000, THIS WARRANT SHALL BE VOID AND OF NO FORCE
AND EFFECT, (B) IF THE SOFPULSE TWELVE MONTH REVENUES ARE AT LEAST
$1,650,000 BUT LESS THAN $2,640,000, THIS WARRANT SHALL ONLY ENTITLE
THE HOLDER TO PURCHASE UP TO 750,000 SHARES OF THE COMMON STOCK, LESS
ANY SHARES THERETOFORE PURCHASED UPON EXERCISE HEREOF, AND (C) IF THE
SOFPULSE TWELVE MONTH REVENUES ARE AT LEAST $2,640,000, THIS WARRANT
SHALL ENTITLE THE HOLDER TO PURCHASE UP TO __________ SHARES OF THE
COMMON STOCK, LESS ANY SHARES THERETOFORE PURCHASED UPON EXERCISE
HEREOF. As used herein, SofPulse shall mean the pulsed
electromagnetic stimulation device designed, developed,
manufactured and marketed by Electropharmacology, Inc.
("EI")under the name MRT-SofPulse or SofPulse and related models
including electrical and mechanical design modifications that are
deemed substantially equivalent for use in the label indication
specified in the Section 510(k) premarket notification pursuant
to which Magnetic Resonance Therapeutics, Inc., the predecessor
of EI, received clearance for commercial marketing of the MRT 100
SofPulse pulsed electromagnetic stimulation device from the
United States Food and Drug Administration in January 1991. The
Company shall be deemed to have realized revenues upon the
earlier of (i) the date the Company accepts a purchase order for
a SofPulse, or (ii) the date a SofPulse is shipped to a customer,
or (iii) the date a customer is invoiced in the ordinary course
of business.
The Commencement Date, as that term is defined in this Warrant,
shall be the date that is thirteen months after the original
issue date hereof.
SECTION 1. EXERCISE OF WARRANT.
This Warrant may be exercised in whole or in part at any time or
from time to time during the period commencing on Commencement
Date and terminating at 5:00 P.M., New York City Time, on the
Termination Date (the "Exercise Period") provided, however, that
(I) if the Termination Date is a day on which banking
institutions in the State of New York are authorized by law to
close, then on the next succeeding day which shall not be such a
day, and (ii) in the event of any merger, consolidation or sale
of substantially all the assets of the Company resulting in any
distribution to the Company's stockholders occurring not later
than the Termination Date, upon exercise of this Warrant the
Holder shall receive, in lieu of Warrant Shares, the kind and
amount of securities and property (including cash) receivable by
a holder of the number of shares of Warrant Shares into which
this Warrant might have been exercisable immediately prior
thereto and (iii) if during the twelve month period commencing on
the original issue date hereof, the Company sells or agrees to
sell all or substantially all of the assets constituting its
SofPulse business, in a single transaction or in a series of
related transactions, other than in the ordinary course of
business, this Warrant shall become exercisable to the same
extent as if SofPulse Twelve Month Revenues exceeded $2,400,000.
For purposes of this Warrant, the term "Warrant Shares" shall
include such securities and property. This Warrant may be
exercised by presentation and surrender hereof to the Company at
its principal office, or at the office of its stock transfer
agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price for the
number of Warrant Shares specified in such form. Such payment may
be made, at the option of the Holder, by check or wire transfer.
As soon as practicable after each such exercise of the Warrant,
but not later than two business days from the date of such
exercise, the Company shall issue and deliver to the Holder a
certificate or certificates representing the Warrant Shares
issuable upon such exercise, registered in the name of the Holder
or the Holder's designee. If this Warrant should be exercised in
part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the
Warrant Shares purchasable thereunder. Upon receipt by the
Company of this Warrant at its office, or by the stock transfer
agent of the Company at its office, in proper form for exercise,
the Holder shall be deemed to be the holder of record of the
Warrant Shares issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or
that certificates representing such shares shall not then be
physically delivered to the Holder.
SECTION 2. RESERVATION OF SHARES.
The Company shall at all times reserve for issuance and/or
delivery upon exercise of this Warrant such number of Warrant
Shares as shall be required for issuance and delivery upon
exercise of this Warrant.
SECTION 3. FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. With respect
to any fraction of a share called for upon any exercise hereof,
the Company shall pay to the Holder an amount in cash equal to
such fraction multiplied by the Fair Market Value of a share,
determined as set forth above.
SECTION 4. RIGHTS AND LIABILITIES OF THE HOLDER.
The Holder shall not, by virtue hereof, be entitled to any rights
of a shareholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the
extent set forth herein. No provision of this Warrant, in the
absence of affirmative action by the Holder to purchase the
Warrant Shares, and no mere enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the
Holder for the Exercise Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by creditors
of the Company.
SECTION 5. ADJUSTMENTS, NOTICE PROVISIONS AND RESTRICTIONS
ON ISSUANCE OF ADDITIONAL SECURITIES.
SECTION 5.1 Adjustment of Exercise Price. The Exercise Price
in effect from time to time shall be subject to adjustment, as
follows:
(a) In case the Company shall (I) declare a dividend or make a
distribution on the outstanding shares of its capital stock that
is payable in shares of its Common Stock, (ii) subdivide, split
or reclassify the outstanding shares of its Common Stock into a
greater number of shares, or (iii) combine or reclassify the
outstanding shares of its Common Stock into a smaller number of
shares, the Exercise Price in effect immediately after the record
date for such dividend or distribution or the effective date of
such subdivision, combination or reclassification shall be
adjusted so that it shall equal the price determined by
multiplying the Exercise Price in effect immediately prior
thereto by a fraction, of which the numerator shall be the number
of shares of Common Stock outstanding immediately before such
dividend, distribution, split, subdivision, combination or
reclassification, and of which the denominator shall be the
number of shares of Common Stock outstanding immediately after
such dividend, distribution, split, subdivision, combination or
reclassification. Any shares of Common Stock issuable in payment
of a dividend shall be deemed to have been issued immediately
prior to the record date for such dividend for purposes of
calculating the number of outstanding shares of Common Stock of
the Company under this Section. Such adjustment shall be made
successively upon the occurrence of each event specified above.
(b) In case the Company fixes a record date for the issuance to
holders of its Common Stock of rights, options, warrants or
convertible or exchangeable securities generally entitling such
holders to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price (as such term
is defined in Subsection 5.1(d) hereof) per share of Common Stock
on such record date, the Exercise Price shall be adjusted
immediately thereafter so that it shall equal the price
determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, of which the numerator
shall be the number of shares of Common Stock outstanding on such
record date plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common
Stock so offered would purchase at the Current Market Price per
share, and of which the denominator shall be the number of shares
of Common Stock outstanding on such Record Date plus the number
of additional shares of Common Stock offered for subscription or
purchase. Such adjustment shall be made successively on each date
whenever a record date is fixed.
(c) In case the Company fixes a record date for the making of a
distribution to all holders of shares of its Common Stock (i) of
shares of any class of capital stock other than its Common Stock
or (ii) of evidences of its indebtedness or (iii) of assets
(other than dividends or distributions referred to in Subsection
5.1(a) hereof) or (iv) of rights, options, warrant or convertible
or exchangeable securities (excluding those rights, options,
warrants or convertible or exchangeable securities referred to in
Subsection 5.1(b) hereof), then in each such case the Exercise
Price in effect immediately thereafter shall be determined by
multiplying the Exercise Price in effect immediately prior
thereto by a fraction, of which the numerator shall be the total
number of shares of Common Stock outstanding on such record date
multiplied by the Current Market Price (as such term is defined
in Subsection 5.1(d) hereof) per share on such record date, less
the aggregate fair value as determined in good faith by the Board
of Directors of the Company of said shares or evidences of
indebtedness or assets or rights, options, warrants or
convertible or exchangeable securities so distributed, and of
which the denominator shall be the total number of shares of
Common Stock outstanding on such record date multiplied by such
Current Market Price per share on such record date. Such
adjustment shall be made successively each time such a record
date is fixed. In the event that such distribution is not so
made, the Exercise Price then in effect shall be readjusted to
the Exercise Price which would then be in effect if such record
date had not been fixed.
(d) For the purpose of any computation under Subsection 5.1(a),
5.1(b) or 5.1(c) hereof, the "Current Market Price" per share at
any date (the "Computation Date") shall be deemed to be the Fair
Market Value except that the respective five day periods referred
to in the definition of such term shall be twenty day periods,
provided, however, upon the occurrence, prior to the Computation
Date, of any event described in Subsections 5.1(a), 5.1(b) or
5.1(c) which shall have become effective with respect to market
transactions at any time (the "Market-Effect Date") on or after
the beginning of any such applicable 20-day period, the Current
Market Price, for each trading day preceding the Market-Effect
Date shall be adjusted, for purposes of calculating such average,
by multiplying such price by a fraction the numerator of which is
the Exercise Price as in effect immediately after the Market-
ffect Date and the denominator of which is the Exercise Price
immediately prior to the Market-Effect Date, it being understood
that the purpose of this proviso is to ensure that the effect of
such event on the market price of the Common Stock shall, as
nearly as possible, be eliminated in order that the distortion in
the calculation of the Current Market Price may be minimized.
(e)All calculations under this Section 5.1 shall be made to the
nearest cent.
SECTION 5.2 Adjustment of Number of Shares. Upon each
adjustment of the Exercise Price pursuant to Subsection 5.1
hereof, this Warrant shall thereupon evidence the right to
purchase, in addition to any other securities to which the Holder
is entitled to purchase, that number of Warrant Shares
(calculated to the nearest one-hundred thousandth of a share)
obtained by multiplying the number of shares of Common Stock
purchasable upon exercise of the Warrant immediately prior to
such adjustment by the Exercise Price in effect immediately prior
to such adjustment and dividing the product so obtained by the
Exercise Price in effect immediately after such adjustment.
SECTION 5.3 Verification of Computations. The Company shall
select a firm of independent public accountants, which may be the
Company's independent auditors, and which selection may be
changed from time to time, to verify the computations made in
accordance with this Section 5. The certificate, report of other
written statement of any such firm shall be conclusive evidence
of the correctness of any computation made under this Section 5
in the absence of manifest error. Promptly upon its receipt of
such certificate, report or statement from such firm of
independent public accountants, the Company shall deliver a copy
thereof to the Holder.
SECTION 5.4 Warrant Certificate Amendments. Irrespective of
any adjustments pursuant to this Section 5, Warrant Certificates
theretofore or thereafter issued need not be amended or replaced,
but Warrant Certificates thereafter issued shall bear an
appropriate legend or other notice of any adjustments and which
legend and/or notice has been provided by the Company to the
Holder, provided the Company may, at its option, issue new
Warrant Certificates evidencing Warrants in the form attached
hereto to reflect any adjustment in the Exercise Price and the
number of Warrant Shares evidenced by such Warrant Certificates
and deliver the same to the Holder in substitution for existing
Warrant Certificates.
SECTION 6. OFFICER'S CERTIFICATE.
Whenever the Exercise Price, the number of Warrant Shares
underlying this Warrant or either of them shall be adjusted as
required by the provisions of the foregoing Section, the Company
shall forthwith file in the custody of its Secretary or an
Assistant Secretary at its principal office and with its stock
transfer agent, if any, an officer's certificate showing the
adjusted Exercise Price and number of Warrant Shares determined
as herein provided, setting forth in reasonable detail the facts
requiring such adjustment, including a statement of the number of
additional shares of Common Stock, if any, and such other facts
as shall be necessary to show the reason for and the manner of
computing such adjustment. Each such officer's certificate shall
be made available at all reasonable times for inspection by the
Holder or any holder of a Warrant executed and delivered pursuant
to Section 1 hereof and the Company shall, forthwith after each
such adjustment, mail a copy by certified mail of such
certificate to the Holder or any such holder.
SECTION 7. NOTICES TO WARRANT HOLDERS.
So long as this Warrant shall be outstanding, (I) if the Company
shall pay any dividend or make any distribution upon the Common
Stock, (ii) if the Company shall offer to the holders of its
Common Stock rights to subscribe for, purchase, or exchange
property for any shares of any class of stock, or any other
rights or options or (iii) if any capital reorganization of the
Company, reclassification of the capital stock of the Company,
consolidation or merger of the Company with or into another
corporation, sale, lease or transfer of all or substantially all
of the property and assets of the Company to another corporation,
or voluntary or involuntary dissolution, liquidation or winding
up of the Company shall be effected, then in any such case, the
Company shall cause to be sent by overnight mail or courier
service to the Holder, at least fifteen days prior to the date
specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating
the date on which (x) a record date is to be set for the purpose
of such dividend, distribution or subscription rights, or (y)
such reclassification, reorganization, consolidation, merger,
conveyance, lease, dissolution, liquidation or winding up is to
take place and the date, if any is to be fixed, as of which the
holders of Common Stock or other securities shall receive cash or
other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution,
liquidation or winding up.
SECTION 8. RECLASSIFICATION, REORGANIZATION OR MERGER.
In case of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock of the Company, or
in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and
which does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common
Stock of the class issuable upon exercise of this Warrant) or in
case of any sale, lease or conveyance to another corporation of
the property of the Company as an entirety (collectively such
actions being hereinafter referred to as "Reorganizations"), the
Company shall, as a condition precedent to such Reorganization
transaction, cause effective provisions to be made so that the
Holder shall have the right thereafter by exercising this Warrant
at any time prior to the expiration of the Warrant, to receive in
lieu of the amount of securities otherwise deliverable, the kind
and amount of shares of stock and other securities and property
receivable upon such Reorganization by a holder of the number of
shares of Common Stock which might have been purchased upon
exercise of this Warrant and the warrants included in the Shares
immediately prior to such Reorganization. Any such provision
shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for
in this Warrant. The foregoing provisions of this Section 8 shall
similarly apply to successive Reorganizations.
SECTION 9. ISSUE TAX.
The issuance of certificates representing the Warrant Shares upon
the exercise of this Warrant as well as securities underlying the
Share Warrants shall be made without charge to the Holder for any
issuance tax in respect thereof.
SECTION 10. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF
WARRANT.
This Warrant is exchangeable, without expense, at the option of
the Holder, upon presentation and surrender hereof to the Company
or at the office of its stock transfer agent, if any, for other
warrants of different denominations entitling the holder thereof
to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. The term "Warrant" as used herein
includes any Warrants into which this Warrant may be divided or
exchanged. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation
of this Warrant, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon surrender
and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any
such new Warrant executed and delivered shall constitute an
additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or
mutilated shall be at any time enforceable by anyone.
This Warrant may be assigned by the Holder provided that such
assignment, in the opinion of counsel to the Company, does not
violate the registration provisions of the Act or any other
applicable securities laws, rules or regulations.
SECTION 11. GOVERNING LAW, JURISDICTION AND VENUE.
This Warrant shall be governed by and construed and enforced in
accordance with the laws of the State of New Jersey. The Company
hereby consents to the exclusive jurisdiction and venue of the
courts of the State of New Jersey located in Bergen County, New
Jersey or the United States District Court having original
jurisdiction over matters arising in such county with respect to
any matter relating to this Warrant and the performance of the
Company's obligations hereunder and the Company hereto hereby
further consents to the personal jurisdiction of such courts.
Any action suit or proceeding brought by or on behalf of the
Company relating to such matters shall be commenced, pursued,
defended and resolved only in such courts and any appropriate
appellate court having jurisdiction to hear an appeal from an
appeal from any judgment entered in such courts.
ADM Tronics Unlimited, Inc
By: /s/ Andre' Di Mino
EXHIBIT 5.1 Opinion re: legality
Reisman & Associates, P. A.
5100 Town Center Circle Suite 330
Boca Raton, Florida 33486
Telephone 561-361-9300 Telecopier 561-416-9249
October 15, 1998
ADM Tronics Unlimited, Inc.
224-S Pegasus Avenue
Northvale, New Jersey 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
3,071,000 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 copies submitted to us as conformed or photostatic copies.
Based on the foregoing, we wre of the opinion that the securities referred
to herein when sold as set forth in the Registration Statement wil 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 9.2 Voting Trust Agreement of August 18, 1998 between
Certain shareholders of the Registrant and ADM.
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT (the "Agreement") is made this 18th day
of August, 1998 between those shareholders of ADM TRONICS
UNLIMITED, INC., a Delaware corporation (the "Company"), whose
names are hereunto subscribed and any other shareholders of the
Company who shall join in and become parties to this Agreement as
hereinafter provided (each, a Shareholder and, collectively, the
"Shareholders") and ANDRE' DI MINO, having offices at 224-S Pegasus
Avenue, Northvale, NJ 07647 (the "Trustee").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Asset Purchase Agreement among
Electropharmacology, Inc., the Company and AA Northvale Medical
Associates, Inc. (the "Asset Purchase Agreement"), the Shareholders
have acquired the shares of common stock of the Company in the
amounts set forth opposite their respective names on Exhibit A
attached hereto (the "Purchase Shares"); and
WHEREAS, with a view to safe and competent management of the
Company in the interests of all shareholders thereof, the
Shareholders desire to create a trust in the manner as set forth
herein;
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. Transfer of Shares. Upon the execution hereof, the
Shareholders shall deliver to the Trustee the certificate or
certificates, if issued, representing the Purchase Shares. In
addition, the Shareholders shall deliver to the Trustee the
certificate or certificates representing any shares of common stock
of the Company subsequently acquired upon exercise of Warrants
issued pursuant to the Asset Purchase Agreement. Such shares and
the Purchase Shares are hereinafter collectively referred to as the
"Shares." All such certificates shall be endorsed in blank or
accompanied by proper stock transfer powers. The Shares shall be
held by the Trustee for the Term (as hereinafter defined) subject
to the terms hereof.
2. Delivery to the Company. A counterpart of this Agreement and
of every agreement supplemental hereto shall be filed at the
Company's principal office.
3. Other Shareholders May Join. Any shareholder of the Company
may become a party to this Agreement by executing a copy hereof and
delivering the certificates representing their respective Shares to
the Trustee in a manner as set forth in paragraph 1 hereof.
4. Voting Trust Certificates. Upon delivery to the Trustee of the
certificates representing the Shares, the Trustee shall cause the
Shares to be transferred on the books of the Company to the
Trustee, as trustee, and will deliver to each of the Shareholders
a trust certificate for the number of Shares delivered to the
Trustee, substantially in the form of the certificate attached
hereto as Exhibit B (a "Voting Trust Certificate"). The Trustee
shall keep a record of the holders of the Voting Trust
Certificates, including the names and addresses of the holders and
the number and class of Shares in respect of which the respective
Voting Trust Certificates are issued (the "Voting Trust Record").
A copy of the Voting Trust Record shall be deposited by the
Trustee with the Company at its principal office.
5. Transfer of Voting Trust Certificates. The provisions of the
Asset Purchase Agreement relating to the transfer or other
disposition of any or all of the Shares (the "Restrictions") shall
be deemed to apply to the Voting Trust Certificates. Subject to the
foregoing and the other provisions of this Agreement, the Voting
Trust Certificates may be transferred by endorsement by the person
to whom such Voting Trust Certificate was issued, or by such
person's attorney-in-fact, guardian or personal representative of
such person's estate, and delivery to the Trustee. A transfer
shall not be evidence to or binding upon the Trustee until the
Voting Trust Certificate is surrendered to the Trustee and the
transfer is so entered upon the Voting Trust Record reflecting the
names of the parties by whom and to whom transferred, the numbers
of the Voting Trust Certificates, the number of Shares and the date
transferred. No new Voting Trust Certificate shall be issued until
the former Voting Trust Certificate for the Shares represented
shall have been surrendered to and canceled by the Trustee. In the
event that any Voting Trust Certificate shall be claimed to be lost
or destroyed, a new Voting Trust Certificate may be issued upon
such proof of loss and delivery of such security as may be required
by the Trustee acting reasonably.
6. Disposition of Shares. Subject to the provisions of Section
5 hereof, in the event that a Shareholder (a "Disposing
Shareholder") desires to transfer or otherwise dispose of any or
all of its Shares, the Disposing Shareholder shall first deliver to
the Voting Trustee notice thereof (a "Disposition Notice") and the
Disposing Shareholder's Voting Trust Certificate, duly endorsed for
transfer. If such Shares are not then the subject of a current and
effective registration statement under the Securities Act of 1933
(the "Act"), the Disposing Shareholder shall also deliver to the
Voting Trustee an opinion of the Disposing Shareholder's counsel
which opinion must be reasonably acceptable to the Company's
counsel, at the Disposing Shareholder's sole cost and expense, to
the effect that the disposition of the Shares will be exempt from
the registration requirements of the Act and such written
representations of the proposed recipient of such Shares as shall
be reasonably be required by the Company's counsel. The Voting
Trustee shall then take such steps as are reasonably required to
issue the requisite number of Shares in accordance with the
instructions in the Designation Notice and issue a new Voting Trust
Certificate to the Disposing Shareholder with respect to any
remaining Shares. If the Shares being disposed of are the subject
of a current and effective registration statement under the Act or
such Shares are being sold pursuant to Rule 144 thereunder, not
later than 5:00 p.m. (New Jersey time) on the business day
following the delivery of the Disposition Notice (and if required
the opinion of counsel with respect thereto) the Voting Trustee
shall send the certificate representing such Shares to the
Company's Transfer Agent by means of an overnight courier service,
such as Federal Express, with instructions to immediately reissue
a certificate representing the Shares being sold and deliver such
certificate as directed by the Disposing Shareholder and, if less
than all the Shares of the Disposing Shareholder are being sold,
reissue a Voting Trust Certificate to the Disposing Shareholder.
The Voting Trustee acknowledges that time is of the essence with
respect to such delivery of the Shares so that the Disposing
Shareholder can meet its delivery obligations with respect to the
delivery of the certificate representing such Shares. If the
Shares are not being disposed of pursuant to a current and
effective registration statement under the Act or pursuant to Rule
144, the Voting Trustee shall deliver such Shares and such new
Voting Trust Certificate as promptly as possible, and in no event
later than the close of business on the fifth business day
following delivery of the Disposition Notice (and the opinion of
counsel with respect thereto) and the Voting Trust Certificate to
the Voting Trustee. Notwithstanding the foregoing, the Disposition
Notice shall not be deemed to have been duly delivered unless it
contains such information as shall be reasonably requested by the
Company's counsel, provided, however, that if the Voting Trustee
does not object to the Disposition Notice before 5:00 p.m. (New
Jersey Time) on the business day following the actual delivery to
the Voting Trustee of the Disposition Notice, the Disposition
Notice shall be deemed to have been duly delivered. Except as
provided in the immediately preceding sentence, Delivery Notices
and Voting Trust Certificates shall be deemed to be delivered on
the date actually received at the address set forth in the preamble
hereto (or such other address as may be subsequently provided to
the Shareholders) and addressed to the Voting Trustee or, if such
delivery is rejected, on the date such delivery is rejected.
7. Voting of Shares. Upon the execution hereof, the Trustee shall
have the duty and the sole and exclusive power and authority to
vote the Shareholders' Shares, in person or by proxy, as in the
judgement of the Trustee may be in the best interests of the
Company, at all regular and special meetings of the shareholders of
the Company, upon any action by written consent of shareholders, in
the election of directors and upon any matter or question that may
be brought before the shareholders of the Company, as fully as any
Shareholder might do if personally present, including but not
limited to the right to vote the Shares to increase or decrease the
authorized capital stock of the Company or divide or subdivide the
outstanding equity securities of the Company.
8. Liability of Trustee. The Trustee shall use the Trustee's best
judgement in voting the Shares subject to this Agreement, but shall
not be liable for any act or omission, any vote or consent given,
in good faith and in the absence of gross negligence or wilful
misconduct. The Trustee shall use its best judgement in voting the
Shares held by the Trustee, but the Trustee shall assume no
responsibility for the consequence of any vote cast, or consent
given by the Trustee, in good faith and in the absence of gross
negligence or wilful misconduct.
9. Power to Construe Agreement. The Trustee is hereby empowered
to construe this Agreement, and the Trustee's reasonable and good
faith construction of this Agreement shall be final, conclusive and
binding upon all holders of the Voting Trust Certificates and all
other interested parties.
10. Successor Trustee. In the event of the incapacity of the
Trustee to act as such, the Board of Directors of the Company shall
appoint a successor trustee.
11. Term. Unless sooner terminated by the parties hereto, the
term of this Agreement and the voting trust contained herein (the
"Term") shall be for a period of ten (10) years from the date
hereof (the "Term"). Notwithstanding the foregoing the Term shall
expire with respect to any of the Shares sold without violating the
Restrictions pursuant to a then effective and current Registration
Statement under the Act or Rule 144 thereunder. Upon expiration of
the Term, the Shares then held by the Trustee shall be assigned to
the respective Shareholders then entitled to such Shares upon
surrender of the Shareholders' Voting Trust Certificates.
Thereafter, the Trustee shall be relieved and discharged from any
further obligation hereunder.
12. Dividends and Distributions. In the event that any dividend
or distribution is declared by the Company, the portion of such
dividend or distribution payable to the holders of the Voting Trust
Certificates shall be paid to the Trustee for the benefit of the
holders of the Voting Trust Certificates. The Trustee shall divide
all dividends and distributions among the holders of the Voting
Trust Certificate in proportion to the number of Shares
respectively represented by such Voting Trust Certificate to the
number of Shares represented by all Voting Trust Certificates. If
any dividend or distribution shall be paid in the form of
securities of the Company, the Trustee shall receive such
securities and the holders of the Voting Trust Certificates shall
be entitled to the delivery of new or additional Voting Trust
Certificates representing such holder's proportional amount of the
securities so received by the Trustee.
13. Notice. All notices, demands, requests, or other
communications that may be or are required to be given, served or
sent by any party to any other party pursuant to this Agreement
shall be in writing and shall be mailed by first-class, registered
or certified mail, return receipt requested, postage prepaid, or
transmitted by hand delivery, telegram, facsimile, or telex,
addressed as follows
If to Electropharmacology, Inc.:
Electropharmacology, Inc.
2301 NW 33rd Court, Suite 102
Pompano Beach, FL 33069
Attn: Arup Sen
Facsimile: (954) 975-4021
If to Jones, Day, Reavis & Pogue:
Jones, Day, Reavis & Pogue
2300 Trammel Crow Center
200 Ross Avenue
Dallas, TX
Attn.: Stephen L. Fluckiger, Esq.
Facsimile. (214) 969-5100
If to the Voting Trustee
Andre' Di Mino
c/o ADM Tronics Unlimited, Inc.
224-S Pegasus Avenue
Northvale, NJ 07647
Facsimile: (201) 784-0620
Each party may designate by notice in writing a new address to
which any notice, demand, request or communication may thereafter
be so given, served or sent. Except as otherwise set forth herein,
each notice, demand, request or communication that is mailed,
delivered or transmitted in the manner described above shall be
deemed sufficiently given, served, sent and received for all
purposes at such time as it is delivered to the addressee, with the
return receipt, the delivery receipt, the affidavit of messenger,
or (with respect to a telecopy or telex) the answerback or
confirmation of receipt being deemed conclusive evidence of such
delivery, or at such time as delivery is refused by the addressee
upon presentation.
14. Counterparts. This Agreement may be executed in counterparts
and all executed counterparts shall be deemed an original, bind
upon all parties.
15. Facsimile Signatures. Facsimile signatures on counterparts of
this Agreement are hereby authorized and shall be acknowledged as
if such facsimile signatures were an original execution, and this
agreement shall be deemed as executed when an executed facsimile
hereof is transmitted by a party to any other party.
16. Governing Law. This agreement shall be construed and
interpreted in accordance with and shall be governed by the laws of
the State of Delaware without regard to principals of conflict of
law and irrespective of the fact that one or more parties hereto is
now or may hereafter be a resident of a different state,
jurisdiction or country.
17. Venue/Jurisdiction. Each of the parties hereto hereby consents
to the exclusive jurisdiction and venue in the state and federal
courts in the State of New Jersey with respect to any matter
relating to this Agreement and the performance of the parties'
obligations hereunder and each of the parties hereto hereby further
consents to the personal jurisdiction of such courts. Any action
suit or proceeding brought by or on behalf of any of the parties
hereto relating to such matters shall be commenced, pursued,
defended and resolved only in such courts and any appropriate
appellate court having jurisdiction to hear an appeal from any
judgment entered in such courts. The parties hereby agree that
service of process may be made in any manner permitted by the rules
of such courts and the laws of the State of New Jersey.
IN WITNESS WHEREOF, the Shareholders have set their hands and seals
and set opposite their signatures the number of Shares held by them
respectively, and the Trustee has executed this Agreement on the
day and date first above written.
ELECTROPHARMACOLOGY, INC.
By:
JONES, DAY, REAVIS & POGUE
By:
ANDRE' DI MINO
EXHIBIT A
Shareholder Name Number of Shares
Electropharmacology, Inc 1,400,000
Jones, Day, Reavis & Pogue 1,525,000
EXHIBIT B
VOTING TRUST CERTIFICATE
THIS SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE ACT"), AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE DISPOSED OF (A) UNLESS REGISTERED
UNDER THE ACT OR, IN THE OPINION OF COUNSEL FOR ADM TRONICS
UNLIMITED, INC., AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS
AVAILABLE AND (B) SUCH DISPOSITION IS IN ACCORDANCE WITH THE
PROVISIONS OF THE VOTING TRUST AGREEMENT DESCRIBED BELOW.
This is to certify that the undersigned Trustee has received
a certificate or certificates issued in the name of
evidencing the ownership of ________________ shares of common stock
of ADM TRONICS UNLIMITED, INC. a Delaware corporation, and that
the shares are held subject to all of the terms and conditions of
that certain Voting Trust Agreement dated August ______, 1998 by
and between ADM Tronics Unlimited, Inc. and certain shareholders
thereof (the "Voting Trust Agreement"). During the Term of the
Voting Trust Agreement as that term is defined therein, the Trustee
or the Trustee's successors or assigns as provided in the Voting
Trust Agreement, shall possess and shall be entitled to exercise
the right to vote and otherwise represent all of the shares for all
purposes, it being agreed that no voting right shall pass to the
holder hereof by virtue of the ownership of this Voting Trust
Certificate.
This Voting Trust Certificate is assignable with the right of
issuance of a new Voting Trust Certificate of like tenor only upon
the surrender to the undersigned or its successors of this Voting
Trust Certificate properly endorsed. Upon termination of the
Voting Trust Agreement, this Voting Trust Certificate shall be
surrendered to the Trustee by the holder upon delivery to such
holder of a stock certificate representing a like number of shares.
IS IN WITNESS WHEREOF, the undersigned Trustee has executed this
Voting Trust Certificate this _________ day of August 1998.
____________________
Andre' Di Mino
EXHIBIT 10.17 Agreement between AA Northvale Medical Associates, Inc and
MEDIQ/PRN Life Support Services, Inc.
This Agreement, is made and entered into this 21st day of September, 1998
by and between AA Northvale Medical Associates, Inc., a subsidiary of ADM
Tronics Unlimited, Inc., having a principal place of business at 224-S
EXHIBIT 21.1 Subsidiaries of the Registrant
Subsidiary Incorporation State
Sonotron Medical Systems, Inc. Delaware
Vet-Sonotron Systems, Inc. Delaware
Pegasus Labiratories, Inc. New Jersey
Enviro-Pack Development Corporation New Jersey
Precision Assembly Corporation New Jersey
Arthritic Relief Centers, Inc. Nevada
ADM Medical Ventures Corporation Nevada
AA Northvale Medical Associates, Inc. New Jersey
Immuno-Therapy Corporation New Jersey
Each of the subsidiaries does business under its corporate name.
EXHIBIT 23.1 Consent of Kaufman, Rossin & Co.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this 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 15, 1998
