Registration No. 333-65709
SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ADM TRONICS UNLIMITED, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
22-1896032
(I.R.S. Employer Identification No.)
224-S Pegasus Avenue, Northvale, New Jersey 07647, (201) 767-6040
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Dr. Alfonso Di Mino, 224-S Pegasus Avenue, Northvale, New Jersey 07647,
(201) 767-6040
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copies to:
Jonathan B. Reisman, Esq.
Reisman & Associates, P.A.
5100 Town Center Circle, Suite 330
Boca Raton, Florida 33486
(561) 361-9300
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans,please check the following box.[ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ___
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ___
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
The Registrant hereby amends this Registration Statement to register 2,983,130
shares of Common Stock, $.0005 par value. The full registration fee has
previously been paid.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1993 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
PROSPECTUS
2,983,130 shares of Common Stock
ADM TRONICS UNLIMITED, INC.
ADM's common stock has been traded in the over-the-counter market under the
symbol ADMT. The reported last sale price of the common stock on the Nasdaq
Bulletin Board on February 1, 1999 was $.71825 per share.
The common stock is being offered for sale by three shareholders of ADM and
ADM will not receive any part of the proceeds from the sale.
An investment in the common stock involves substantial risks. See "Risk
Factors" beginning on page 3 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
The date of this prospectus is __________, 1999
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TABLE OF CONTENTS
Page
Prospectus Summary 3
Risk Factors 3
Where you can find more information 11
Safe Harbor Statement under the Private
Securities Litigation
Reform Act of 1995 12
Recent Developments 12
Use of Proceeds 13
Selling Shareholders 13
Shares Eligible for Current and Future Sale 15
Plan Distribution 16
Description of Common Stock 17
Indemnification 17
Legal Matters 18
2
PROSPECTUS SUMMARY
ADM
ADM was incorporated in Delaware on November 24, 1969. ADM'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 2,983,130 shares of common stock which are held
by three shareholders of ADM. Sales of the common stock by the selling
shareholders may be subject to contractual obligations. See "Selling
Shareholders" and "Plan of Distribution."
RISK FACTORS
An investment in the common stock is speculative and involves substantial
risks. Prospective purchasers of the common stock should carefully consider
the following risk factors in addition to the other information included or
incorporated by reference in this prospectus before purchasing the common
stock.
Although ADM has engaged in business for more than 29 years, it has been
unprofitable during substantially all of such time.
- During the quarters ended June 30, 1998 and September 30, 1998 and the
fiscal year ended March 31, 1998, ADM incurred losses of $60,255, $94,943
and $722,777, respectively.
- ADM may never be able to operate profitably.
ADM's revenues have never exceeded approximately $2,000,000 in any fiscal
year.
- During the quarters ended June 30, 1998 and September 30, 1998, ADM's
revenues were $555,822 and $445,281, respectively.
- ADM's revenues may never increase.
On September 30, 1998, ADM had an accumulated deficit of $3,083,583.
3
Because of the highly technological aspects of ADM's business, ADM's
activities are highly capital intensive.
- ADM may require additional capital to maintain its operations or expand
its business. ADM has not made any arrangements to obtain any additional
financing.
- If additional capital becomes available to ADM, it may only be available
on terms unfavorable to ADM.
Because of the specialized nature of products that ADM has marketed, ADM's
actual and potential customer base is very small.
- ADM presently sells its chemical products to a limited number of
customers. During the fiscal year ended March 31, 1998 and the quarters
ended June 30, 1998 and September 30, 1998, one of such customers
accounted for an aggregate of approximately 25%, 25% and 30% of the sales
of those products, respectively.
- The loss of any significant customer would have a material adverse effect
on ADM's business. See "Recent Developments."
ADM has lost its two largest customers for Sonotron Devices
- Arthronix, Inc. was ADM's sole distributor of Sonotron Devices prior to
1994 and has not purchased any Sonotron Devices from ADM since that time.
- During the fiscal years ended March 31, 1996 and 1997, sales of Sonotron
Devices contributed approximately 50% and 32% of revenues, respectively,
and were highly profitable. Sales of Sonotron Devices have not been
material subsequent to late 1996.
- In June 1995, ADM appointed a Japanese company as its exclusive
distributor of Sonotron Devices in Japan, Singapore and Malaysia. The
Japanese distributor has advised ADM that it does not presently intend to
distribute any additional Sonotron Devices.
- Substantially all revenues realized by ADM from sales of the Sonotron
Devices resulted from sales through Arthronix and the Japanese
distributor.
Patent protection may not be available or adequate to protect ADM's
products
- Because virtually all of ADM's products may be copied or duplicated by
others, patent protection is of material importance to its business.
- ADM may apply for additional patents and seek to obtain licenses to
patents and patent applications from others. Present or future
applications may not result in patents being issued or, if issued, the
claims allowed may not adequately protect ADM.
4
- Patents which are currently being relied upon by ADM or which may be
issued to ADM in the future may be challenged, invalidated or
circumvented.
Another company has challenged ADM's patents relating to Sonotron Devices
- A United States patent in connection with a product which appears to be
similar to ADM's Sonotron Device was granted to Electrogesic Corporation
in 1994. Electrogesic's patent counsel rendered a written opinion to the
effect that its product does not infringe a patent held by ADM, and,
further that a patent held by ADM would be found invalid by a court.
Although, based upon the description of Electrogesic's product in the
opinion letter, ADM's patent counsel disagreed with that conclusion and
advised ADM that the Electrogesic's product infringes three patents held
by ADM, there can be no assurance that any patent held by ADM will be
determined by a court to be valid or to be infringed by the third party's
product. In 1994 ADM commenced an action in the United States District
Court for the Southern District of New York against Electrogesic. ADM
asserted claims based upon patent infringement, interference with existing
and prospective contractual and business relations and breach of contract.
Electrogesic denied any wrongdoing and asserted counterclaims based upon
unfair competition, restraint of trade, violation of anti-trust laws and
interference with business relations. In June 1995, ADM withdrew its
action and Electrogesic withdrew the counterclaims. A similar action
could be instituted against ADM in the future which could result in an
unfavorable outcome to ADM.
ADM's products and proposed products could, in the future, be found to
infringe patents of others
- Because medical products are covered by a large number of patents and
patent applications and patent applications in the United States remain
confidential until a patent is issued, infringement actions may be
instituted against ADM if ADM's products use or are suspected of using
technology, processes or other subject matter that is claimed under other
existing patents. The same result could occur if others obtain patents
claiming subject matter utilized by ADM.
- An adverse outcome in any future patent dispute could subject ADM to
significant liabilities to third-parties, require disputed rights to be
licensed or require ADM to cease using the infringed technology.
- If ADM's products infringe patents or proprietary rights of others, ADM
may be required to modify the design of its products or obtain a license.
ADM may not be able to adequately modify the design or obtain a license on
terms not unfavorable to ADM, if at all.
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ADM's limited resources may render it unable to protect its patents or
challenge others
- Because many holders of patents in the medical products industry have
substantially greater resources than does ADM and patent litigation is
very expensive, ADM may not have the resources necessary to challenge
successfully the validity of patents held by others or withstand claims of
infringement or challenges to its patents in cases where ADM's position
has merit.
- Even if ADM prevails, the cost of litigation could have a material
adverse effect on ADM.
Trade secrets and other means of protection relied upon by ADM may not
adequately protect ADM
- Because many of ADM's products and technologies are not patented, ADM
relies on trade secrets, copyright law, employee and third-party
nondisclosure agreements and other protective measures to protect some of
its intellectual property rights. These measures may not provide
meaningful protection to ADM.
- The laws of many foreign countries do not protect ADM's intellectual
property rights to the same extent as do the laws of the United States, if
at all. Although ADM's sales in those countries have not been material
for more than two years, they may become material in the future.
Because the formulas and specifications for ADM's chemical products are
not patented or otherwise protected, others may replicate ADM's formulas
ADM is dependant on key executives who do not have employment agreements
with ADM
-Because the success of ADM is largely dependent upon the personal efforts,
abilities and business relationships of its executive officers, if any of
the officers was to terminate his employment with ADM or be unable to be
employed before a qualified successor, if any, could be found, ADM would
be materially adversely affected.
ADM's Business is Intensely Competitive
Risks unique to ADM
- Substantially all of ADM's competitors have substantially greater
financial resources than does ADM.
- Limitations due to the number of vendors and others willing to deal with
an entity of ADM's size and the terms on which it can obtain raw materials
can place ADM at a competitive disadvantage.
6
- 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 medical conditions for which the SofPulse Device
is also indicated.
- ADM's products face competition from other forms of treatment such as
hyperbaric oxygen chambers, thermal therapies and hydrotherapy.
- Companies with substantially larger expertise and resources than those
available to ADM may develop or market new products that directly compete
with ADM's present and proposed products.
ADM is subject to significant industry risks
- Other technologies or products that are functionally similar to ADM 's
may currently be under development.
- Alternate forms of treatment that compete with ADM's products may achieve
rapid acceptance in the medical community.
- Because of the nature of ADM's products, ADM's business is intensely
competitive on the basis of both price and quality.
In addition to sales limitations based upon the specialized nature of
ADM's products, because of ADM's small amount of capital resources, only
a limited the number of potential customers can be expected to purchase
ADM's products
ADM's bargaining power with suppliers is limited by its lack of
significant capital
Because the technologies utilized by ADM products are rapidly changing,
competitors may develop technologies or products that render ADM's
products obsolete or less marketable.
- If ADM is unable to continually enhance and improve its products and to
develop or acquire and market new products, ADM will be unable to compete
with others.
- ADM may not be able to successfully enhance its existing products or
develop or acquire new products primarily because of its limited
resources.
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Adverse experience with clinics
- From time to time since 1989, ADM and others have operated clinics to
treat people suffering from the pain of osteoarthritis through the use of
the Sonotron Device. None of the clinics generated any significant
revenues. ADM believes that the inability to generate significant
revenues is a result of the unavailability of governmental reimbursement
or private insurance to patients.
- No facility using Sonotron Devices may be able to operate profitably in
the absence of reimbursement or insurance, if at all.
Because ADM's products may cause personal injury or property damage, ADM
may be exposed to product liability claims by users of the products
-ADM maintains a general liability insurance policy that includes aggregate
product liability coverage of $2,000,000 which may not be sufficient to
cover potential claims.
-The present level of insurance coverage may not be available in the future
at a reasonable cost, if at all.
Because ADM generally warrants its products to be free from defects in
materials and workmanship for periods of time ranging from ninety days to
two years, warranty claims and expenses could have a material adverse
effect on ADM
If changes in the health care system or method of reimbursement for the
SofPulse Device and any other medical device which may be marketed by ADM
in the United States occur, ADM may not be able to market its medical
devices
- Significant uncertainty exists as to the reimbursement status of existing
and newly approved healthcare products and adequate third-party coverage
may not be available for any of ADM's products in the future.
Because ADM and its products are subject to significant governmental
regulation, any failure by ADM to comply with the applicable regulations
or a failure to obtain and maintain necessary product approval could
restrict or eliminate ADM's ability to sell its products.
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ADM's expansion plans could be seriously undermined by its limited
financial resources, potential inability to secure financing and essential
governmental approvals, and other factors
- Because ADM is pursuing a growth strategy and intends to hire additional
personnel in the future, because of ADM's limited resources it may not be
able to effectively manage its expanding operations and anticipate all of
the changing demands that its planned expansion will impose on its
resources.
- The success of ADM's planned expansion will depend on numerous factors,
many of which are beyond ADM's control, including, among others, the
securing of necessary governmental permits and regulatory approvals, the
hiring and training of management personnel, the terms and availability of
financing and other general economic and business conditions.
- Obtaining governmental approvals may be too costly for ADM.
- The government may withhold or deny approval of a product if the
government believes that sufficient clinical data has not been submitted
or the efficacy or safety of the product does not warrant approval.
Because of their ownership of common stock, ADM's officers and directors
will, as a practical matter, have the ability to direct substantially all
matters requiring approval by the stockholders of ADM, including the
election of directors
-Their ownership could discourage the possible takeover of ADM or make the
removal of management of ADM more difficult, discourage hostile bids for
control of ADM in which stockholders may receive premiums for their common
stock, or otherwise dilute the rights of holders of common stock and the
market price of common stock.
The market price for the common stock has been and may continue to be
highly volatile.
- Factors such as ADM's financial results and introduction of new products
by ADM or its competitors, and various factors affecting the healthcare
industry generally, may have a significant impact on the market price of
the common stock.
- In recent years, the stock market has experienced a high level of price
and volume volatility and market prices for the stock of small companies
which have not necessarily been related to the operating performance of
those companies.
9
Shares eligible for current and future sale could adversely affect the
prevailing market price of the common stock.
- Approximately 64% of ADM's outstanding common stock can be sold without
restriction. See "Shares Eligible for Current and Future Sale."
Possible adverse effect of large number of options and warrants at
relatively low exercise prices
- For the respective terms of ADM's options and warrants, their holders may
profit from a rise in the market price of the common stock with a
resulting dilution in the interests of the other stockholders.
- The terms on which ADM may obtain additional financing during the
respective terms may be adversely affected by the their existence.
-Holders of ADM's options and warrants may exercise them at a time when ADM
might be able to obtain additional capital through a new offering of
securities on terms more favorable than those provided by them.
- On January 6, 1999, ADM had outstanding options and warrants for the
purchase of an aggregate of 5,867,819 shares of common stock at a weighted
average price of $.303 per share. Those shares represent approximately
12% of ADM's outstanding common stock.
- ADM has agreed to issue additional options and warrants for the purchase
of an aggregate of 6,000,000 shares of common stock at a weighted average
price of $.504 per share. Those shares represent approximately 13% of
ADM's outstanding common stock
- Additional shares of common stock could become issuable pursuant to
anti-dilution adjustments under the terms of the options and warrants.
From time to time there has been insignificant trading volume in the
common stock and, accordingly, holders of the common stock may not be able
to sell their common stock when they desire to do so.
The recent delisting from Nasdaq of the common stock may have an adverse
effect.
Because the common stock was recently delisted from NASDAQ, the
marketability of the common stock and the prestige of ADM in the financial
community may be diminished. See "Recent Developments."
ADM 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
10
Issuance of preferred stock could adversely affect holders of the common
stock
- The Board of Directors is empowered, without stockholder approval, to
issue preferred stock with dividend, liquidation, conversion, voting, or
other rights determined by the Board of Directors.
- The issuance of preferred stock could adversely affect the voting power,
dividend and distribution rights of the holders of the common stock.
- The issuance of preferred stock could be utilized as a method of
discouraging, delaying, or preventing a change in control of ADM.
- Although ADM has no present intention to issue any preferred stock, it
may do so in the future.
WHERE YOU CAN FIND MORE INFORMATION
ADM files annual, quarterly and current reports, proxy statements and
other information with the SEC. The public may read and copy any document ADM
files at the SEC's public reference room at 450 Fifth Street, N.W., Washington,
D.C. 20549. the public may obtain information on the operation of the public
reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
Internet site that contains reports, proxy and information statements and other
information regarding issuers, such as ADM, that file electronically with the
SEC. The address of that site is http://www.sec.gov.
The SEC allows ADM to "incorporate by reference" the information ADM files
with it which means that ADM can disclose important information to you by
referring you to the documents containing the information. The information
incorporated by reference is considered to be part of this prospectus, and
later information that ADM files with the SEC will automatically update and
supersede this information. ADM incorporates by reference the documents filed
by us and listed below and any future filings made with the SEC under Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 subsequent to
the date of this prospectus and prior to the termination of this offering.
- Annual Report on Form 10-KSB, as amended, for the fiscal year ended
March 31, 1998;
- Quarterly Reports on Form 10-QSB for the quarter ended June 30, 1998
and September 30, 1998;
- Current Report on Form 8-K, as amended, dated May 27, 1998 ;
- Current Report on Form 8-K, as amended, dated August 18, 1998;
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- The description of the common stock contained in our registration
statement on Form 10;. and
- Proxy soliciting materials with respect to a Special Meeting of
Shareholders held on December 4, 1998.
You may request a copy of these filings, at no cost, by writing or telephoning
us as follows:
Shareholder Services
ADM Tronics Unlimited, Inc.
224-S Pegasus Avenue
Northvale, New Jersey 07647
(201) 767-6040
This prospectus is part of a registration statement filed with the SEC, File
No. 333-65709.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
Statements contained in the "Prospectus Summary" and "Risk Factors"
regarding matters that are not statements of historical fact, including
statements relating to plans, strategies, expectations and future economic
results, are forward-looking statements within the meaning of Section 27A of
the Securities Act. Actual results may differ materially from the
statements made, as a result of various factors, including risks associated
with market acceptance of ADM's products, ADM's capital needs, obtaining
regulatory approval, patent and other intellectual property protection,
ADM's maintenance of its net tangible assets, economic and other factors
which impact the market for ADM's products and other factors which are
described from time to time in ADM's filings with the SEC.
RECENT DEVELOPMENTS
- In August 1998, ADM was notified that its Premarket Notification filed
with the FDA with respect to the Aurex-3 had been approved. The
approval does not constitute an assurance that the Aurex-3 can be
successfully marketed by ADM.
- On August 18, 1998, ADM consummated the transactions contemplated by
the asset purchase agreement.
- Reference is made to Item 3. "Legal Proceedings" in ADM's 1998 Annual
Report on Form 10-KSB with respect to arbitration conducted through the
American Arbitration Association. In September 1998, the arbitrator
held that ADM 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 ADM.
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- In September 1998, ADM entered into an agreement with MEDIQ/PRN Life
Support Services, Inc. pursuant to which ADM 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. ADM will train MEDIQ's personnel in connection with renting,
marketing, use and maintenance of the SofPulse Devices. ADM has also
agreed to train customers in the clinical use of SofPulse Devices. For
its services under the Agreement, MEDIQ will receive 45% of revenues
received from the rental of the SofPulse Devices.
- In October 1998, ADM entered into an Agreement with Byron Medical
pursuant to which Byron agreed to perform promotional activities in
connection with the SofPulse Devices. The Agreement will terminate in
October 2001 unless sooner terminated by either party at the end of any
twelve month period. ADM has agreed to pay Byron a commission of 7.5%
of amounts received from customers referred by leads supplied by Byron.
- On December 16, 1998, the common stock was delisted from Nasdaq.
Because of the delisting, as long as the common stock remains below
$5.00 per share, trading in the common stock is subject to the
requirements of applicable rules under the Securities Exchange Act of
1934 which require additional disclosure by broker-dealers in
connection with any trades involving the common stock. Those rules
require the delivery, prior to any transaction in the common stock, of
a disclosure schedule explaining the penny stock market and associated
risks, and impose various sales practice requirements on broker-dealers
who sell the common stock 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 may discourage broker-dealers from
effecting transactions in the common stock, which could severely limit
the liquidity of the common stock.
- On December 8, 1998, Dr. Harold Gelb, D.M.D. was elected as a member of
ADM's Board of Directors. Dr. Gelb, age 73, has practiced dentistry
for more than 50 years and limits his practice to temporomandibular
disorders. Dr. Gelb is a Diplomate of the American Board of Orofacial
Pain and a Diplomate of the American Academy of Head, Neck and Facial
Pain. Dr. Gelb's address is 635 Madison Avenue, New York, New York
10022. ADM has granted options to Dr. Gelb to purchase an aggregate of
500,000 shares of common stock at a weighted average price of $.372 per
share.
USE OF PROCEEDS
ADM will not receive any proceeds from the sale of common stock by the
selling shareholders.
SELLING SHAREHOLDERS
The following table sets forth information as of the date of this
prospectus with respect to the common stock held by each selling shareholder.
Except as set forth below, none of the selling shareholders has had any
13
position, office or other material relationship with ADM 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 may be offered from time
to time by the selling shareholders.
Name & Address Shares of Common Stock Number of Shares
Beneficially Owned (1) Being Offered
Electropharmacology, Inc. 1,400,000(2) 1,400,000(2)
2301 NW 33rd Court
Pompano Beach, FL 33069
Jones, Day, Reavis & Pogue 1,437,130(2) 1,437,130(2)
2300 Trammell Crow Center
Dallas, TX 75201
Resource Realty Services, Inc. 146,000 146,000
421-13 Route 59
Monsey, NY 10952
Totals 2,983,130 2,983,130
_______________
(1) For purposes of this prospectus, a person is deemed to be the
beneficial owner of securities that can be acquired by that person
within 60 days from the date of this prospectus 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 warrants, options or convertible securities that are held by such
person (but not those held by any other person) and which are
exercisable within the 60 day period 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 ADM to Electropharmacology and
Resource Realty, respectively, are not deemed to be beneficially owned
by them and, therefore, are not reflected in the table.
(2) Held of record by Andre' Di Mino, as Trustee, under a Voting Trust
Agreement. Pursuant to such Agreement, Mr. Di Mino has full voting
rights with respect to the shares until 2008 or until such earlier time
as they may be sold pursuant to either this
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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, ADM entered into an asset purchase agreement with
Electropharmacology, Inc. pursuant to which ADM purchased assets previously
utilized by Electropharmacology 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 ADM's 1998 Annual
Report on form 10-KSB. Resource Realty Services, Inc. introduced ADM to
Electropharmacology and consulted with ADM in connection with the asset
purchase agreement. An affiliate of Electropharmacology is a consultant to
ADM.
Electropharmacology and Jones, Day, Reavis & Pogue agreed not to sell
any common stock prior to October 17, 1998 and September 17, 1998,
respectively. They also agreed that for (a) the ninety day period commencing
September 18, 1998, in any calendar month, collectively, they would not
dispose of a number of shares of common stock 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 (b) 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
of common stock in excess of 10% of the average reported trading volume of
the common stock during the immediately preceding calendar month (such
limitation not being cumulative). Electropharmacology has agreed with
Jones, Day that Electropharmacology will not sell any of the common stock
until the earlier of the time that Jones, Day has sold all its common stock
or the foregoing restrictions are no longer in effect. Furthermore, until
August 18, 1999, Electropharmacology and Jones, Day have each agreed that
prior to making any sale of any common stock, it shall give notice to ADM
and ADM shall have until the next business day to notify the applicable
selling shareholder that it will purchase all of the common stock with
respect to which notice was given, at its fair market value as defined in
the asset purchase agreement.
ADM agreed that if the common stock has 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 until the common
stock is so registered, if timely requested by Jones, Day, ADM will purchase
from Jones, Day for $20,000 a number of shares of common stock equal to
20,000 divided by the then current value per share as determined in
accordance with the asset purchase agreement. ADM's obligation to purchase
shares of common stock from Jones, Day is limited to an aggregate purchase
price of $60,000 if registration has not occurred due to circumstances not
reasonably within the control of ADM. As of February 3, 1999, ADM had
purchased 87,870 shares from Jones, Day for $60,000.
ADM and the selling shareholders have agreed to indemnify each other
with respect to losses, cost or damages, including, but not limited to,
those which may arise under the Securities Act.
SHARES ELIGIBLE FOR CURRENT AND FUTURE SALE
On January 6, 1999, ADM had 47,406,652 shares of common stock
outstanding. Of these shares, with the exception of contractual
15
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, a person (or persons whose shares are
aggregated), including persons who may be deemed to be "affiliates" of
ADM 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 requirements as to the manner
of sale, notice and the availability of current public information
about ADM.
- Where a minimum of two years has elapsed between the later of the date
of the acquisition of restricted securities from ADM or from an
affiliate of ADM and any resale 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 ADM 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
- ADM has agreed to register an aggregate of 1,575,000 shares of common
stock underlying warrants held by the selling shareholders under
specified circumstances.
PLAN OF DISTRIBUTION
The common stock 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 common stock 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 common stock may be deemed to
by underwriters, and any commissions or concessions received by any such
underwriters, dealers or agents may be deemed to be underwriting discounts
and commissions under the Securities Act of 1933.
The common stock 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 ADM, the selling shareholders, and any
16
underwriter they may utilize, will be indemnified by ADM against specified
civil liabilities, including liabilities under the Securities Act.
ADM has estimated its expenses of the offering of the common stock by
the selling shareholders as follows:
- Registration Fee $ 510
- Professional Fees and Expenses $ 18,000
- Miscellaneous $ 1,490
Total $ 20,000
Electropharmacology has agreed to pay $15,000 of such expenses. The
remainder of the expenses has been or will be paid by ADM.
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 ADM and the By-Laws, as amended, of ADM.
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 common stock of
ADM, nor do the holders have any conversion rights or rights of redemption.
All 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. ADM's transfer agent is Securities Transfer Corporation,
16910 Dallas Parkway, Suite 100, Dallas, TX 75248.
INDEMNIFICATION
ADM's By-Laws provide that ADM 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
17
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 ADM pursuant to
the foregoing provisions, or otherwise, ADM 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.
ADM and the selling shareholders have agreed to indemnify each other in
specified circumstances. See "Selling Shareholders."
LEGAL MATTERS
Legal matters relating to the common stock has been passed upon for ADM by
Reisman & Associates, P.A., Boca Raton, Florida to the extent set forth in
that firm's opinion filed as an exhibit to the registration statement.
18
No person has been authorized in
connection with the offering made
to give any information or to make
any representations not contained
in this prospectus and, if given or
made, such information or
representations must not be relied
upon as having been authorized by
ADM.
This prospectus does not constitute
an offer to sell or a solicitation
of an offer to buy any of the PROSPECTUS
securities offered hereby to any ADM TRONICS UNLIMITED, INC.
person or by anyone in any
jurisdiction in which it is 2,983,130 SHARES OF
unlawful to make such offer or COMMON STOCK
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.
19
PART II
Item 14. INFORMATION NOT REQUIRED IN THE PROSPECTUS OTHER EXPENSES OF
ISSUANCE AND DISTRIBUTION.
SEC 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 Registrant's By-Laws provide that it 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.
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.
10.5 Agreement of June 9, 1992 by and between Advent Medical Technology, Inc.
and Vet Sonotron Systems, Inc. Exhibit 3 to the Registrant's Current
Report on Form 8-K dated June 9, 1992 is hereby incorporated by
reference.
10.6 Stock Purchase Agreement and Registration and Rights Agreement (undated)
by and between The American Heritage Fund, Inc. and the Registrant.
Exhibit 10(i) to the Registrant's Annual Report on Form 10-KSB for the
fiscal year ended March 31, 1993 is hereby incorporated by reference.
10.7 Amendment to Agreement of March 16, 1993 by and between Arthritic Relief
Centers, Inc. and Advent Medical Technology, Inc. Exhibit 10(k) to the
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1993 is hereby incorporated by reference.
10.8 Voting Agreement of March 16, 1993 by and between Vet Sonotron Systems,
Inc. and Advent Medical Technology, Inc. Exhibit 10(l) to the
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1993 is hereby incorporated by reference.
10.9 Voting Agreement of March 16, 1993 by and between Arthritic Relief
Centers, Inc. and Advent Medical Technology, Inc. Exhibit 10(m) to the
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1993 is hereby incorporated by reference.
10.10 Agreement for Sale of Stock Between the Registrant, James C. Wickstead
and Thomas Petrie. Exhibit 10.10 to the 1998 Annual Report is hereby
incorporated by reference.
10.11 Employment Agreement of November 26, 1997 between Thomas Petrie and
Precision Assembly Corp. Exhibit 10.11 to the 1998 Annual Report is
hereby incorporated by reference
10.12 Asset Purchase Agreement of May 27, 1998 by and among
Electropharmacology, Inc., AA Northvale Medical Associates, Inc. Exhibit
10.12 to the 1998 Annual Report is hereby incorporated by reference.
10.13 Subscription Agreement of March 31, 1998 between the Registrant and The
Global Opportunity Fund Limited. Exhibit 10.13 to the 1998 Annual Report
is hereby incorporated by reference.
10.14 Consulting Agreement, dated May 15, 1998, by and between the Registrant
and Wharton Capital Corp. Exhibit 99.1 to the Registrant's Registration
Statement on Form S-8, File. No. 333-57823, is hereby incorporated by
reference.
10.15 Extension to Consulting Agreement dated August 18, 1998 by and between
the Registrant and Wharton Capital Corp. Exhibit 99.2 to the
Registrant's Registration Statement on Form S-8, File. No. 333-62165,
is hereby incorporated by reference.
10.16 Consulting Agreement dated June 25, 1998 by and between the Registrant
and Joel Brownstein. Exhibit 99.3 to the Registrant's Registration
Statement on Form S-8, File. No. 333-66023 is hereby incorporated by
reference.
10.17 Agreement of September 21, 1998 by and between AA Northvale Medical
Associates, Inc. and MEDIQ/PRN Life Support Services, Inc. *
10.18 Agreement of October 28, 1998 between AA Northvale Medical Associates,
Inc. and Byron Medical. *
21.1 Subsidiaries of the Registrant. *
23.1 Consent of Kaufman, Rossin & Co. ****
23.2 Consent of Reisman & Associates, P.A. (included in Exhibit 5.1)
23.3 Consent of Ernst & Young, LLP ****
24.1 Power of Attorney. (included on signature page) *
- ------------------
* Filed with Registration Statement on Form S-3.
** Filed with Amendment No. 1 to Registration Statement on Form S-3.
*** Filed herewith.
**** To be filed by amendment.
Item 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sells
securities, a post-effective amendment to this registration
statements to: (i) include any prospectus required by
Section 10(a)(3) of the Securities Act; (ii) reflect in
the prospectus any facts or events which, individually or
together, represent a fundamental change in the information
in the registration statement; and (iii) include any
additional or changed material information on to the plan of
distribution.
(2) That, for determining liability under the Securities Act,
each such post-effective amendment shall be treated as a new
registration statement of the securities offered, and the
offering of the securities at that time shall be deemed to be
the initial bona fide offering.
(3) To file a post-effective amendment to remove from
registration any of the securities that remain unsold at the
end of the offering.
The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Northvale, State of New Jersey, on
this 3rd day of February, 1999.
ADM TRONICS UNLIMITED, INC.
/s/ Dr. Alfonso Di Mino
By: DR. ALFONSO DI MINO,. President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signatures
appears below under the heading "Signature" constitutes and appoints Dr.
Alfonso Di Mino and Andre' Di Mino his true and lawful attorney-in-fact and
agent with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities to sign any or all amendments
to this registration statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting alone,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully for all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or
his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURES TITLE DATE
/s/Dr. Alfonso Di Mino Chief Executive Officer February 3, 1999
and Director
/s/Andre' Di Mino Chief Financial and February 3, 1999
Accounting Officer and
Director
/s/ Vincent Di Mino Director February 3, 1999
/s/ Thomas Petrie Director February 3, 1999
__________________ Director
John Berenyi
__________________ Director
Dr. Harold Gelb
EXHIBIT 5.1
Law Offices
REISMAN & ASSOCIATES, INC.
Suite 330
5100 Town Center Circle
Boca Raton, Florida 33486
TELEPHONE (561) 361-9300 TELECOPIER (561) 416-9249
February 4, 1999
ADM Tronics Unlimited, Inc.
224-S Pegasus Avenue
Northvale, NJ 07647
Ladies and Gentlemen:
We have acted as your counsel in connection with a Registration Statement on
Form S-3 to be filed with the Securities and Exchange Commission under the
Securities Act of 1933 (the "Registration Statement") with respect to 2,983,130
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 or public officials
and your corporate officers and other documents, certificates, records,
authorizations and proceedings as we have deemed relevant and necessary as the
basis for the opinion expressed herein. In all such examinations, we have
assumed the genuineness of all signatures on original and certified documents
and all copies submitted to us as conformed or photostaic copies.
Based on the foregoing, we are of the opinion that the securities referred to
herein whn sold as set forth in the Registration Statement will be legally
issued, fully paid and non-assessable.
We hereby consent to the filing of our opinion as an exhibit to the Registration
Statement and consent to the use of our name as it appears under the caption
"Legal Matters" therein.
Sincerely,
/s/ REISMAN & ASSOCIATES, P. A.
REISMAN & ASSOCIATES, P. A.
