Registration No. 333-65709
SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 2
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 only 3,007,745 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
3,007,745 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 January 6, 1999 was $.84375
per share.
The common stock is being offered for sale by certain 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 __________, 1998
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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. Unless
the context otherwise requires, references to "ADM" in this
prospectus include ADM Tronics Unlimited, Inc. and its
subsidiaries. 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 3,007,745 shares of common stock
which are held by certain shareholders of ADM and were issued in
connection with the asset purchase agreement. Certain sales of the
common stock by the selling shareholders are subject to certain
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.
Because of the highly technological aspects of ADM's business,
ADM's activities are highly capital intensive.
3
-- 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.
Limited number of customers for ADM's products
-- 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.
-- 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 certain 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.
-- 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.
4
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.
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.
5
-- 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 certain of its intellectual property rights. These
measures may not provide meaningful protection to ADM.
-- The laws of certain 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.
Certain of ADM's formulas are not patented
Because certain formulas and specifications to which ADM's chemical
products are not patented or otherwise protected, others may
replicate ADM's formulas
Dependence on key executives
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.
None of the officers has an employment agreement with ADM.
ADM's Business is Intensely Competitive
Risks unique to ADM
-- Because of the nature of ADM's products, ADM's business is
intensely competitive on the basis of both price and quality.
-- 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.
-- Diapulse Corporation of America, Inc. manufactures and markets
devices that are substantially equivalent to the SofPulse Device.
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-- 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 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.
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 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 certain suppliers is limited by
its lack of significant capital
ADM's products may become obsolete
-- 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.
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. No facility using Sonotron Devices may be
able to operate profitably.
7
Because certain of 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 certain 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.
ADM is subject to risks of expansion
-- 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.
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
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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.
Shares eligible for current and future sale could adversely
affect the prevailing market price of the common stock. See
"Shares Eligible for Current and Future Sale."
Possible 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.
-- 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.
-- Additional shares of common stock could become issuable
pursuant to anti-dilution adjustments under the terms of the
options and warrants.
Limited market for the common stock
From time to time there has not been significant 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.
9
Possible adverse effect of recent delisting from Nasdaq of the
common stock.
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."
Lack of Dividends
-- 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.
-- It is the present policy of ADM to retain any earnings to
finance the growth and development of ADM's business.
Possible issuance of preferred 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 without stockholder approval.
-- The issuance of preferred stock could adversely affect the
voting power or other rights of the holders of the common stock.
-- The issuance of preferred stock could be utilized, under
certain circumstances, 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
10
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;
-- 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
Certain statements contained in the "Prospectus Summary"
and "Risk Factors" regarding matters that are not statements of
historical fact, including statements relating to plans,
strategies, expectations and future economic results, are
forward-looking statements within the meaning of Section 27A of
the Securities Act. Actual results may differ materially from
the statements made, as a result of various factors, including
risks associated with market acceptance of 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.
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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.
-- 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 certain 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.
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-- 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 certain 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 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.
Share of Number
Common Stock Shares
Beneficially Being
Name & Adddress Owned (1) Offered
Electropharmacology, Inc. 1,400,000(2) 1,400,000(2)
2301 NW 33rd Court
Pompano Beach, FL 33069
Jones, Day, Reavis & Pogue 1,462,745(2) 1,461,745(2)
2300 Trammell Crow Center
Dallas, TX 75201
Resource Realty Services, Inc. 146,000 146,000
421-13 Route 59
Monsey, NY 10952
Totals 3,007,745 3,007,745
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(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 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 certain 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
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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 January 6, 1999, 1999, ADM had purchased 63,255
shares from Jones, Day for $40,000.
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
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 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 certain
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 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 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
certain 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.
15
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 underwriter they may utilize,
will be indemnified by ADM against certain 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
ProfessionalFees and Expenses $ 18,000
Miscellaneous $ 1,490
Total $ 20,000
Electropharmacology has agreed to pay the $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
16
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 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 certain circumstances. See "Selling Shareholders."
LEGAL MATTERS
Certain legal matters relating to the common stock offered
hereby has been passed upon for ADM by Reisman & Associates,
P.A., Boca Raton, Florida.
17
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
securities offered hereby to any
person or by anyone in any PROSPECTUS
jurisdiction in which it is
unlawful to make such offer or ADM TRONICS UNLIMITED, INC.
solicitation. Neither the delivery 3,007,745 SHARES OF
of this prospectus nor any sale COMMON STOCK
made hereunder shall, under any
circumstances, create any
implication that the information
herein is correct as of any date
subsequent to the date hereof.
18
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.
II-1
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.
II-2
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)
II-3
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.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this registration statement or amendment thereto
to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Northvale, State of New Jersey, on
this 29 day of October, 1998.
ADM TRONICS UNLIMITED, INC.
/s/ Dr. Alfonso Di Mino
By: DR. ALFONSO DI MINO,. President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signatures appears below under the heading "Signature"
constitutes and appoints Dr. Alfonso Di Mino and Andre' Di Mino
his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities to sign any or all
amendments to this registration statement, and to file the same,
with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, each acting alone, full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the
following persons in the capacities and on the date indicated.
Signatures Title Date
/s/ Dr. Alfonso Di Mino Chief Executive Officer 1/13/99
Dr. Alfonso Di Mino and Director
/s/ Andre' Di Mino Chief Financial Officer 1/13/99
Andre' Di Mino And Director
/s/ Vincent Di Mino Director 1/13/99
Vincent Di Mino
/s/ Thomas Petrie Director 1/13/99
Thomas Petrie
______________ Director
John Berenyi
_______________ Director
Dr. Harold Gelb
II-5
Exhibit 5.1
LAW OFFICES
REISMAN & ASSOCIATES, P.A.
Suite 330
5100 Town Center Circle
Boca Raton, Florida 33486
TELEPHONE (561) 361-9300 TELECOPIER (561) 416-9249
January 13, 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 3,007,745 shares of
Common Stock, $.0005 par value.
We have examined such originals or certified, conformed or
photostatic copies, the authenticity of which we have assumed, of
certificates of public officials and your corporate officers and
other documents, certificates, records, authorizations and
proceedings as we have deemed relevant and necessary as the basis
for the opinion expressed herein. In all such examinations, we
have assumed the genuineness of all signatures on original and
certified documents and all copies submitted to us as conformed
or photostatic copies.
Based on the foregoing, we are of the opinion that the securities
referred to herein when sold as set forth in the Registration
Statement will be legally issued, fully paid and non-assessable.
We hereby consent to the filing of our opinion as an exhibit to
the Registration Statement and consent to the use of our name as
it appears under the caption "Legal Matters" therein.
Sincerely,
/s/ REISMAN & ASSOCIATES, P.A.
REISMAN & ASSOCIATES, P.A.
