<PAGE> 1
As filed with the Securities and Exchange Commission on August 28, 1996
File No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
U.S. ALCOHOL TESTING OF AMERICA, INC.
(Exact name of registrant as specified in its Charter)
Delaware 22-2806310
(State or other jurisdic- (I.R.S. Employer
tion of incorporation Identification No.)
or organization) Number)
10410 Trademark Street
Rancho Cucamonga, California 91730
(909) 466-8378
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Copy to:
Mr. Robert Stutman Robert W. Berend, Esq.
U.S. Alcohol Testing of America, Inc. Gold & Wachtel, LLP
4517 North West 31st Avenue 110 East 59th Street
Ft. Lauderdale, Florida 33309 New York, New York 10022
(954) 739-9600 (212) 909-9500
(Name, address and telephone
number of agent for service)
<PAGE> 2
Approximate date of commencement of proposed sale to the public: As
soon as practicable following the date on which 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, 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, check the following box and
list the Securities Act registration statement number of 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 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. [ ]
<PAGE> 3
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of each Maximum Maximum
Class of Offering Aggregate Amount of
Securities Amount to be Price Offering Registration
to be Registered Registered Per unit(1) Price(1) Fee(2)
- ---------------- ------------ ----------- --------- ------------
<S> <C> <C> <C> <C>
Common Stock, 2,000,000
$.01 par value shares $2.375(3) $4,750,000(3) $1,638
Common Stock,
$.01 par value
issuable upon
exercise of 2,000,000
warrants shares $2.00(4) $4,000,000(4) $1,379
Common Stock,
$.01 par value,
issuable upon
exercise of
warrants 4,145,000 $2.375(3) $9,844,375(3) $3,395
Total $6,412
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Rounded to the nearest dollar.
(3) Pursuant to Rule 457(c) under the Securities Act, the closing sales
price of the USAT Common Stock as reported on the American Stock
Exchange on August 23, 1996 was taken as the offering price of the
shares for the purpose of calculating the registration fee.
(4) Pursuant to Rule 457(g) under the Securities Act, the exercise price of
the warrants was used for the purpose of calculating the registration
fee.
(5) An indeterminate number of securities is being registered pursuant to
Rule 416 under the Securities Act to cover any adjustment in the number
of shares issuable as a result of the anti-dilution provisions of the
Warrants.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 4
Pursuant to Rule 429 under the Securities Act, this Registration
Statement also constitutes Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form S-1, File No. 33-43337; Post-Effective Amendment
No. 3 to the Registrant's Registration Statement on Form S-1, File No. 33-47855;
Post-Effective Amendment No. 2 to the Registrant's Registration Statement on
Form S-1, File No. 33-72680; and Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form S-1, File No. 33-90034.
<PAGE> 5
CROSS REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K
<TABLE>
<CAPTION>
Registration Statement
Item Number and Caption Prospectus Caption
----------------------- ------------------
<S> <C> <C>
1. Forepart of the Registration Cover Page of Registration
Statement and Outside Front Statement and Outside
Cover Page of Prospectus Front Cover Page of
Prospectus
2. Inside Front and Outside Back Inside Front Cover
Cover Pages of Prospectus Page of Prospectus; Outside
Back Cover Page of Prospectus
3. Summary Information, Risk Factors; Prospectus
Risk Factors and Ratio of Summary and Ratio of Earnings
Earnings to Fixed Charges to Fixed Charges Are Not Applicable
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Dilution
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Cover Page; Plan of
Distribution
9. Description of Securities Not Applicable
to be Registered
10. Interests of Named Experts Not Applicable
and Counsel
11. Material Changes
12. Incorporation of Certain Incorporation of Certain
Information by Reference Information by Reference
13. Disclosure of Commission Commission Position on
Position on Indemnification Indemnification
for Securities Act Liabilities
</TABLE>
<PAGE> 6
PROSPECTUS
U.S. ALCOHOL TESTING OF AMERICA, INC.
2,000,000 SHARES OF USAT COMMON STOCK ISSUABLE UPON
EXERCISE OF WARRANTS AND 9,755,275 SHARES
OFFERED BY SELLING STOCKHOLDERS
U.S. Alcohol Testing of America, Inc. ("USAT), is offering, by this
Prospectus, an aggregate of 2,000,000 shares of its Common Stock, $.01 par value
(the "USAT Common Stock"), issuable upon the exercise of USAT Common Stock
purchase warrants expiring December 17, 1999 (the "December 17 Warrants"). USAT
will receive gross proceeds of $3,875,000 if all of the December 17 Warrants are
exercised.
In addition, the stockholders named in the table under the caption
"Selling Stockholders" are offering, by this Prospectus, (1) an aggregate of
3,402,674 shares of the USAT Common Stock, all of which are currently
outstanding, consisting of (a) an aggregate of 2,000,000 shares which were
issued in a private placement by USAT, the final closing of which was held on
February 14, 1996; (b) an aggregate of 500,000 shares of the USAT Common Stock
issued in an acquisition on May 21, 1996; and (c) an aggregate of 902,674 shares
of the USAT Common Stock previously issued upon the exercise of USAT Common
Stock purchase warrants and a stock option; (2) an aggregate of 437,500 shares
issuable upon the exercise of stock options (the "Options") expiring the later
of 30 days from the date hereof or certain dates, the last of which is October
1, 1996; and (3) an aggregate of 5,915,101 shares of the USAT Common Stock
issuable upon the exercise of USAT Common Stock purchase warrants expiring
between September 1, 1996 and July 18, 2003. The Selling Stockholders have
advised USAT that they may, from time to time, offer the foregoing 9,755,275
shares at the prices then prevailing on the American Stock Exchange or in
isolated transactions, at negotiated prices, with institutional or other
investors. USAT will not receive any of the proceeds from the sales of the
shares of the USAT Common Stock by the Selling Stockholders.
Since January 2, 1992, the USAT Common Stock has been listed and trades
on the American Stock Exchange under the symbol "AAA." The closing price of the
USAT Common Stock reported by such Exchange on August 23, 1996 was $2.375. See
"Market Information."
<PAGE> 7
THE SHARES OFFERED BY THIS PROSPECTUS ARE SPECULATIVE IN THAT THEY
INVOLVE CERTAIN RISKS. SEE "RISK FACTORS" COMMENCING ON PAGE 6 HEREOF FOR A
DISCUSSION OF MATTERS WHICH SHOULD BE CONSIDERED BY PURCHASERS OF THESE SHARES.
<TABLE>
<CAPTION>
===========================================================================================================================
Underwriting
Discounts Proceeds
Price to and Proceeds to to Other
Public Commissions(4) Issuer Persons
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share of Common Stock $2.375 (1) 0 0 $2.375 (1)
- ---------------------------------------------------------------------------------------------------------------------------
Per Warrant share $2.465 (2) 0 $2.465 (2) 0
- ---------------------------------------------------------------------------------------------------------------------------
Per Option share $2.375 (3) 0 $2.375 (3) 0
- ---------------------------------------------------------------------------------------------------------------------------
Total for Common Stock $23,168,778 (1) 0 0 $23,168,778(1)
- ---------------------------------------------------------------------------------------------------------------------------
Total for Warrant shares $18,947,378(2) 0 $18,947,378 (2) 0
- ---------------------------------------------------------------------------------------------------------------------------
Total for Option shares $ 1,039,863 (3) 0 $1,039,863 (3) 0
===========================================================================================================================
</TABLE>
(1) Based on the closing sales price of the USAT Common Stock on August 23,
1996 as reported by the American Stock Exchange.
(2) Based on the weighted average of the exercise prices of the USAT Common
Stock purchase warrants.
(3) Based on the exercise price of the Options.
(4) Excludes expenses estimated at $50,000.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is _____________ , 1996.
<PAGE> 8
AVAILABLE INFORMATION
USAT is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy and information statements and other information filed by USAT can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, as well
at the following regional offices of the Commission: 7 World Trade Center, Suite
1300, New York, New York 10048 and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of this material can
also be obtained at prescribed rates from the Public Reference Section of the
Commission at its principal office at 450 Fifth Street, N.W., Washington, D.C.,
20549. Because the USAT Common Stock is traded on the American Stock Exchange,
reports, proxy and information statements and other information concerning USAT
can also be inspected by contacting the American Stock Exchange, Inc., 86
Trinity Place, New York, NY 10006-1881.
USAT has filed under the Securities Act of 1993, as amended (the
"Securities Act"), a Registration Statement on Form S-3, File No.
333-_____________ (the "Registration Statement"), pursuant to which (1) USAT
will offer an aggregate of 2,000,000 shares of the USAT Common Stock issuable
upon the exercise of the December 17 Warrants and (2) certain of the Selling
Stockholders named in this Prospectus will offer an aggregate of 4,145,000
shares of the USAT Common Stock issuable when and if the following USAT Common
Stock purchase warrants (such USAT Common Stock purchase warrants, together with
the December 17 Warrants, being collectively referred to herein as the "New
Warrants") are exercised: (a) an aggregate of 60,000 shares issuable upon the
exercise of New Warrants expiring November 15, 1998 (the "November 15 Warrants")
issued to USAT directors and a consultant; (b) an aggregate of 700,000 shares
issuable to an USAT director for his services upon the exercise of (i) a New
Warrant expiring November 15, 1998 as to 400,000 shares, (ii) a New Warrant
expiring November 15, 2000 as to 150,000 shares and (iii) a New Warrant also
expiring November 15, 2000 as to 150,000 shares (such three New Warrants being
collectively referred to herein as the "Director's Services Warrants"); (c)
300,000 shares issuable to the same director for his services in connection with
securing the exercises of USAT Common Stock purchase warrants upon the exercise
of a New Warrant expiring April 17, 1999 (the "Director's Second Services
Warrant"); (d) an aggregate of 235,000 shares issuable to employees of USAT or a
subsidiary thereof upon the exercise of New Warrants expiring between August 27,
1998 and July 18, 2003 (the "Employee Warrants"); (e) an
2
<PAGE> 9
aggregate of 200,000 shares issuable to two persons who are now employees of
USAT (one of whom is now the Chairman of the Board and Chief Executive Officer),
but were originally issued to the person who is now such officer for his
consulting services, upon the exercise of New Warrants expiring December 13,
1998 (the "December 13 Warrants"); (f) an aggregate of 200,000 shares issuable
to the former shareholders of Robert Stutman Associates, Inc. ("RSA") upon the
exercise of New Warrants expiring March 31, 1999 (the "March 31 Warrants"),
which warrant (the "RSA Consulting Warrant") was originally issued to RSA for
its consulting services; (g) an aggregate of 900,000 shares issuable to the
former RSA shareholders upon the exercise of New Warrants expiring May 20, 1999
(the "May 20 Warrants"), which May 20 Warrants were issued by USAT as part of
the consideration for its purchase of RSA; (h) 600,000 shares issuable to the
President and Chief Operating Officer of USAT upon the exercise of a New Warrant
expiring May 12, 1999 (the "May 12 Warrant"); (i) 150,000 shares issuable to a
person in settlement of litigation upon the exercise of a New Warrant expiring
January 29, 2000 (the "January 29 Warrant"); (j) an aggregate of 100,000 shares
issuable to two broker-dealers as a placement fee for a Regulation S offering
upon the exercise of New Warrants expiring October 19, 2000 (the "October 19
Warrants"); and (k) 700,000 shares issuable to a consultant for his financial
public relations services upon the exercise of a New Warrant expiring February
26, 1999 (the "February 26 Warrant"). USAT has also filed Post-Effective
Amendment No. 1 to Registration Statement on Form S-1, File No. 33-90034 (the
"January 1996 Registration Statement"), pursuant to which certain of the Selling
Stockholders named in this Prospectus will offer an aggregate of 551,750 shares
of the USAT Common Stock consisting of (1) an aggregate of 77,500 shares of the
USAT Common Stock issuable upon the exercise of outstanding USAT Common Stock
purchase warrants expiring on dates ranging between September 1, 1996 and
December 31, 2001 (the "January 1996 Warrants"), (2) an aggregate of 437,500
shares of the USAT Common Stock issuable upon the exercise of outstanding
options initially expiring August 1, 2004 (the "Options") granted under USAT's
1990 Restricted Stock, Non-Qualified and Incentive Stock Option Plan (the "1990
Option Plan"), (3) an aggregate of 24,250 shares of the USAT Common Stock
received upon the prior exercises of the January 1996 Warrants and (4) 12,500
shares of the USAT Common Stock received upon the prior exercise of an Option
pursuant to the 1990 Option Plan. USAT has also filed Post- Effective Amendment
No. 4 to Registration Statement on Form S-1, File No. 33-43337 (the "January
1992 Registration Statement"), pursuant to which certain of the Selling
Stockholders named in this Prospectus will offer an aggregate of 1,200,705
shares of the USAT Common Stock consisting of (1) an aggregate of 250,000 shares
of the USAT Common Stock to be issued upon the exercise of a USAT Common Stock
purchase warrant expiring September 1, 1996 (the "January 1992 Warrant"), (2) an
aggregate of 500,000 shares of the USAT Common Stock registered as part of the
Acquisition
3
<PAGE> 10
Shares and issued to the former RSA shareholders and (3) an aggregate of 450,705
shares of the USAT Common Stock received upon the prior exercises of January
1992 Warrants. USAT has also filed Post Effective Amendment No. 3 to
Registration Statement on Form S-1, File No. 33-47855 (the "September 1992
Registration Statement"), pursuant to which the Selling Stockholders named in
this Prospectus will offer an aggregate of 1,782,070 shares of the USAT Common
Stock consisting of (1) an aggregate of 1,381,351 shares of the USAT Common
Stock to be issued upon the exercise of USAT Common Stock purchase warrants
expiring between August 28, 1996 and December 31, 1997 (the "September 1992
Warrants") and (2) an aggregate of 400,719 shares of the USAT Common Stock
received upon the prior exercises of the September 1992 Warrants. USAT has also
filed Post-Effective Amendment No. 2 to Registration Statement on Form S-1, File
No. 33-72680 (the "May 1994 Registration Statement"), pursuant to which certain
of the Selling Stockholders named in this Prospectus will offer an aggregate of
75,750 shares of the USAT Common Stock consisting of (1) an aggregate of 61,250
shares to be issued upon the exercise of USAT Common Stock purchase warrants
expiring between May 17, 1997 and September 1, 1998 (the "May 1994 Warrants")
and (2) an aggregate of 14,500 shares of the USAT Common Stock received upon the
prior exercises of the May 1994 Warrants. The New Warrants, the January 1996
Warrants, the January 1992 Warrants, the September 1992 Warrants and the May
1994 Warrants are collectively referred to herein as the "Warrants". The January
1992 Registration Statement also relates to an aggregate of 1,532,679 additional
shares of the USAT Common Stock to be offered by USAT to effect future
acquisitions and an aggregate of 977,321 additional shares already issued to
effect acquisitions, but such shares of the Acquisition Shares are not being
offered by this Prospectus.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
following reports and registration statements of the Company filed pursuant to
Sections 12 and 13 of the Exchange Act:
1. Annual Report on Form 10-K for the fiscal year ended March 31, 1996;
2. Quarterly Report on Form 10-Q for the quarter ended June 30, 1996;
3. Current Report on Form 8-K/A filed on August 5, 1996; and
4. Registration Statement on Form 8-A, File No. 0-18938.
4
<PAGE> 11
All reports and definitive proxy or information statements filed
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of this Prospectus and prior to the termination of the offering of the
securities shall be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain without
charge, upon written or oral request of such person, any of the documents
incorporated by reference herein, except for the exhibits to such documents.
Requests should be directed to Robert Stutman, Chairman of Board and Chief
Executive Officer, U.S. Alcohol Testing of America, Inc., at the following
address: 4517 North West 31st Avenue, Ft. Lauderdale, Florida 33309 or telephone
number: (954) 739-9600. A reasonable fee for duplicating and mailing will be
charged for a copy of any exhibit if such exhibit is requested.
THE COMPANY
U.S. Alcohol Testing of America, Inc. ("USAT") was incorporated on
April 15, 1987 under the laws of Delaware to design, manufacture and market
instruments which measure blood alcohol concentration by breath sample and
analyzation. USAT maintains its principal executive offices at 10410 Trademark
Street, Rancho Cucamonga, California 91730, and its telephone number is (909)
466-8378.
USAT's subsidiaries operate in several different industries:
1. U.S. Drug Testing, Inc. ("U.S. Drug"), which is 67.0% owned by USAT
and whose common stock trades on the Pacific Coast Stock Exchange, is developing
proprietary systems that will test for drug use.
2. Good Ideas Enterprises, Inc. ("Good Ideas"), which is approximately
60.8% owned by USAT and whose common stock trades on the Pacific Coast Stock
Exchange, markets and distributes a variety of traditional toy products for
children of various ages.
3. ProActive Synergies, Inc. ("ProActive"), which is a wholly-owned
subsidiary of USAT incorporated in June 1995,
5
<PAGE> 12
provides single source services to assist corporations in their hiring practices
ranging from substance abuse testing and background screening to total program
management.
4. On May 21, 1996, USAT completed its acquisition of RSA, a provider
of corporate drug-free work place programs. Since January 1996, RSA has been
designing policies and programs on substance abuse prevention for customers of
the ProActive subsidiary.
5. Alconet, Inc. ("Alconet"), which is a wholly-owned subsidiary
acquired by USAT in March 1995, has developed an alcohol testing network to
upload test results and information from various alcohol breath testing devices.
U.S. Rubber Recycling, Inc. ("USRR"), which is a wholly- owned
subsidiary of USAT, manufactured and marketed floor covering products for office
and industrial use from used truck and bus tires. On April 30, 1996, USRR sold
its assets to an unaffiliated third party and discontinued operations.
USAT is also currently seeking to acquire the minority stock interests
in U.S. Drug by an offer of shares of the USAT Common Stock to the minority
stockholders of U.S. Drug as consideration for their consent to a merger (the
"U.S. Drug Merger") of U.S. Drug with and into Drug Testing Acquisition Corp., a
wholly-owned subsidiary of USAT. There can be no assurance that the U.S. Drug
Merger will be successfully consummated.
USAT is also currently seeking to acquire the minority stock interests
in Good Ideas by an offer of shares of the USAT Common Stock to the minority
stockholders of Good Ideas as consideration for their consent to a merger (the
"Good Ideas Merger") of Good Ideas Acquisition Corp., a wholly-owned subsidiary
of USAT, with and into Good Ideas. Good Ideas was treated as a discontinued
operation in USAT's financial statements as of March 31, 1996. There can be no
assurance that the Good Ideas Merger will be consummated.
USAT and its subsidiaries will be collectively referred to herein as
"the Company."
RISK FACTORS
The shares offered hereby are speculative, involve a high degree of
risk and should not be purchased by anyone unable to afford a loss of his entire
investment. In analyzing this offering, prospective investors should consider
all of the matters set forth below.
6
<PAGE> 13
1. Operating Losses. The Company has sustained losses of $42,858,501
from inception through June 30, 1996. Management initiated cost reduction
actions to reduce selling, general and administrative expenses in the fiscal
year ended March 31, 1996 ("fiscal 1996"), which prospective savings were offset
by the $903,000 in combined legal and other expenses incurred by both parties in
the May to September 1995 consent solicitation contest, $250,000 in settlement
of a claim by two then Alconet officers relating to their then employment and
$397,000 of expenses incurred by Alconet, a subsidiary not included in the
fiscal year ended March 31, 1995 ("fiscal 1995"). Without the expenses of the
consent solicitation, management believes that the selling, general and
administrative expenses can be reduced in the fiscal year ending March 31, 1997
("fiscal 1997"); however, there can be no assurance that management's
expectations will be realized in fiscal 1997 or thereafter. In addition,
management has initiated an effort through ProActive, a subsidiary, to tap the
human resource provider market which it believes can result in substantial
revenues; acquired RSA on May 21, 1996, which company has been designing
drug-free workplace policies and programs for ProActive clients since January
1996; will continue to attempt to sell its toy operations; and has sold on April
30, 1996 the assets of its rubber recycling operations, so that the Company can
concentrate on alcohol and drug testing and the related RSA/ProActive operations
as its core businesses. However, there can be no assurance that management will
receive what it considers to be an acceptable offer for Good Ideas. In addition,
the Board will liquidate Good Ideas if no acceptable offer is received by
December 31, 1996. In addition, the decision to develop a saliva based drug
testing product, rather than complete first the urine based drug testing product
for marketing, will, in the opinion of management, enhance the Company's future
growth, but has delayed the receipt of any revenues from U.S. Drug for at least
one year later than fiscal 1997, if not longer, unless revenues are to be
received from a marketing and/or development partner if and when such an
agreement for such a partner is executed, as to which there can be no assurance,
especially because management is not conducting any negotiations for such a
partner. Accordingly, it is management's belief, especially in view of the
significant losses in the fiscal year ended March 31, 1994 ("fiscal 1994"),
fiscal 1995 and fiscal 1996, that, despite these management programs, the
Company will not turn profitable in fiscal 1997 and that, pending development of
the ProActive operations in conjunction with RSA, the timing of the U.S. Drug
development work and the other management programs, it is currently too
speculative to project as to when, if ever, the Company will become profitable.
2. Need for Financing. Because of the then projected continuing losses
from the Company's operations in fiscal 1996, USAT's management believed that it
was necessary to secure additional equity, through the private placement of its
7
<PAGE> 14
securities, through the exercise of outstanding USAT Common Stock purchase
warrants or stock options or through a combination of both, in order to offset
the anticipated cash shortfall from operations. In November 1995, USAT
authorized a private placement pursuant to Regulation D under the Securities Act
offering 2,000,000 shares of the USAT Common Stock which resulted in $3,750,000
in gross proceeds upon the consummation of the offering on February 14, 1996.
Management believes that, as a result of this financing, the proceeds from the
sale of the assets of USRR, the recent and possible future exercises of the
outstanding Warrants and Options and the cash to be generated from its
operations, the Company will be able to meet its cash requirements during the
next 12 months. However, there can be no assurance that this objective will be
achieved and the Company in such event would have to seek new financing, which
financing may not be available or, if available, may not be on acceptable terms.
In addition, depending on market and other conditions relating to the individual
holder, there can be no assurance that the outstanding Warrants and Options will
be exercised and, if exercised, when. Since January 31, 1996 and through June
30, 1996, USAT Common Stock purchase warrants and stock options to purchase an
aggregate of 2,482,824 shares of the USAT Common Stock were exercised for an
aggregate exercise price of $4,421,588.
In the event that the Company is unable to generate sufficient cash
flow from operations or from sources other than operations as described in the
preceding paragraph (which event, in USAT's management's opinion, is not likely
to occur based upon the Company's past experience; however, there can be no
assurance that management will be successful in its financing efforts), then the
Company may have to reduce operations in order to survive, thereby not only
resulting in less cash from operations currently, but also delaying future
revenue growth. In such event the market price of the USAT Common Stock is
likely to drop, not only discouraging the future exercises of USAT's Warrants
and Options and possibly discouraging potential new investors, but also
increasing the risk that a current investor in USAT may lose the value of his,
her or its investment.
3. Competition. The Company has a variety of competitors depending on
the particular aspect of its business, many of which have far greater financial
resources and marketing staffs than the Company. There can be no assurance that
the Company will be able to compete successfully with these companies.
Alcohol Testing
The alcohol detection equipment industry is highly competitive.
Although management believes that USAT's Alco- Analyzer 2100 is the only
Department of Transportation approved evidential alcohol breath testing
instrument utilizing gas
8
<PAGE> 15
chromatography, it still competes with other alcohol detection techniques
developed by other companies. USAT competes with other small companies such as
CMI Inc., Intoximeters, Inc. and Lifeloc, Inc., which also offer alcohol testing
equipment. Although all of these competitors are believed currently to have
greater revenues than USAT from sales of alcohol testing devices, management is
of the opinion that only CMI, Inc., which is a subsidiary of MPD/MPH, may have
greater financial resources than USAT. In addition, several companies, including
Hoffman-LaRoche, Inc. ("Roche") and STC, Inc., offer an on-site screening saliva
based alcohol test. Roche has, and several of these other companies may have,
greater revenues and financial resources than the Company.
Drug Testing
The Company has not received any revenues from U.S. Drug because its
products are still in the developmental stage. Currently U.S. Drug is developing
two products which will screen for the presence of drugs of abuse, one which
will utilize flow immunosensor technology with urine samples as a medium of
testing and another which will utilize flow immunosensor technology with saliva
samples as a medium of testing. If the products are developed, U.S. Drug will
compete with many companies which currently utilize urine samples as a medium of
testing, such as Syva (a division of Syntex Corporation), Roche, Marion
Laboratories, Inc., Abbott Laboratories, Inc., Editek, Inc., Hycor Biomedical,
Inc., Princeton Bio Meditech, Inc. and Biosite, Inc., major pharmaceutical
companies which also provide substance abuse screening methods. Currently, to
management's knowledge, no competitor is offering a saliva based testing product
on an "on site" basis for drugs of abuse. However, management has been advised
that one or more companies may have such product under development and,
accordingly, there can be no assurance that a competitor will not offer such a
product in the future. Even if no such product is offered, U.S. Drug anticipates
competition from other substance abuse detection methods provided by the major
companies mentioned in this paragraph. If U.S. Drug successfully completes
development of first its saliva sample testing method and second its urine
sample testing method, as to which there can be no assurance, it is not certain
whether U.S. Drug will have the financial resources to compete successfully with
other companies which have greater financial resources available to them without
the assistance of a major pharmaceutical or other company possessing such
resources. There can be no assurance that the assistance of such a company can
be obtained, especially because none is currently being sought. In addition,
U.S. Drug's delay in bringing a drug testing product to market may adversely
affect its future marketing efforts because of the name recognition gained by
competitors actively marketing a product during this interim period.
9
<PAGE> 16
Human Resource Provider Operations
ProActive is a single source service provider, meaning that it is a
provider of both substance abuse testing services and background screening
services. A single source service provider is a relatively new concept.
Additionally, the Company, through the acquisition in May 1996 of RSA, can also
provide customized loss prevention services specifically designed to reduce the
negative effect of workplace substance abuse. The competition from single source
providers which ProActive currently encounters is primarily from small local and
regional companies. To management's knowledge, currently there is no single
source provider on a national level, which is what ProActive hopes to become,
and there are no other providers of customized programs and policies like RSA.
However, Laboratory Corporation of America, through Med-Express, is currently
offering background screening services to corporations on a limited basis.
Although, ProActive has experienced personnel in both the drug testing and
investigative arena, there can be no assurance that ProActive will become
successful in marketing its services as a single source provider on a national
level. In addition, ProActive will face competition from other companies which
provide each of these services separately such as the companies mentioned in the
preceding subsections of this section "Competition" under this caption "Risk
Factors" as it relates to substance abuse testing providers (including the
laboratories which are vendors to ProActive), and local or regional
investigative firms or private investigators (including vendors to ProActive) as
it relates to background investigative services. Assuming that the combined
RSA/ProActive operations achieve national status as a single source provider,
there can be no assurance that existing or new companies will not enter the
national marketplace to compete with the combined RSA/ProActive operations.
4. No Common Stock Dividends. USAT has not paid any cash dividends on
the USAT Common Stock and, based on the Company's cash requirements and
continuing losses, does not anticipate paying cash dividends on the USAT Common
Stock in the foreseeable future.
5. Depressive Effect on Market of Warrant or Option Exercises,
Potential 144 Sales and Untimely Sales by Selling Stockholders. Any exercise of
the outstanding USAT Common Stock purchase warrants or stock options of USAT
will increase the shares available for public trading, which may depress the
public market price for the USAT Common Stock. USAT is required to maintain a
current prospectus in order to permit the sale of shares underlying certain of
USAT's warrants and USAT's options for any holder thereof who exercises.
Because, prior to the date hereof, there was, in the opinion of counsel to USAT,
no such prospectus complying with Section 10(a)(3) of the Securities Act, USAT
filed the Registration Statement to secure such a
10
<PAGE> 17
prospectus. Accordingly, because the last of these USAT warrants and USAT
options do not expire until November 15, 2000, the potential exercises and the
subsequent sales thereof may act as an overhang on the market for the USAT
Common Stock for a long period.
As of August 22, 1996, 35,337,337 shares of the USAT Common Stock were
issued and outstanding, 2,173,474 of which were held by current or former
directors and executive officers of USAT and could only be sold pursuant to Rule
144 or another exemption under the Securities Act. Essentially, Rule 144 permits
the sale of (a) restricted securities (as such term is defined in Rule
144(a)(3)) held by any person after a two-year holding period and (b)
non-restricted securities held by affiliates of the issuer without any holding
period, in brokerage transactions and in an amount equal to the greater of the
average weekly reported trading volume during the prior four-week period or one
percent of the issuer's outstanding common shares during any three-month period.
If the stockholder has held the restricted securities for more than three years
and has not been an affiliate for more than three months prior to the
contemplated sale (the term "affiliate" being generally defined as a director,
executive officer or a beneficial owner of such number of the outstanding shares
of the USAT Common Stock as to be deemed in control of USAT), such stockholder
may sell pursuant to Rule 144(k) under the Securities Act without regard to such
a limitation on the number of shares.
As of August 22, 1996, there were also reserved for issuance: (a)
250,000 shares of the USAT Common Stock issuable upon the exercise at $1.33 per
share of the January 1992 Warrant; (b) 1,381,351 shares issuable upon the
exercise at exercise prices ranging between $1.33 and $4.00 per share of the
September 1992 Warrants; (c) 61,250 shares issuable upon the exercise at
exercise prices ranging between $1.0625 and $4.00 per share of the May 1994
Warrants; (d) 82,750 shares issuable upon the exercise at exercise prices
ranging between $2.00 and $2.50 per share of the January 1996 Warrants; (e)
2,000,000 shares issuable upon the exercise at $2.00 per share of the December
17 Warrants; (f) 185,207 shares issuable upon the conversion of the shares of
the Class A Preferred Stock, $.01 par value (the "Class A Preferred Stock"); (g)
437,500 shares issuable upon the exercise at $2.375 per share of the Options
granted under the 1990 Option Plan originally expiring August 1, 2004, but now
expiring the later of (i) 30 days after the date hereof or (ii) 90 days after
(1) the optionee's employment terminated or terminates or (2), if the optionee
is not an employee, the directorship terminated; (h) 60,000 shares issuable upon
the exercise at $1.9375 per share of the November 15 Warrants issued to then new
directors of USAT and a consultant; (i) 700,000 shares issuable upon the
exercise of the Director's Services Warrants (as to 400,000 shares at $1.9375
per share), as to 150,000 shares at $3.00 per share and as to
11
<PAGE> 18
150,000 shares at $4.00 per share) issued to a director in connection with his
services in a capacity other than as a director, including those related to the
then pending private placement pursuant to Regulation D under the Securities
Act; (j) 300,000 shares issuable upon the exercise at $3.125 per share of the
Director's Second Services Warrant issued to the same director for other
services not in his capacity as a director; (k) 235,000 shares issuable upon the
exercise at exercise prices ranging between $1.875 and $3.50 per share of the
Employee Warrants issued to employees of the Company; (l) 200,000 shares
issuable upon the exercise at $2.00 per share of the December 27 Employee
Warrants issued to a then consultant to USAT for his acting as spokesperson for
the Company's alcohol and drug testing operations (on April 18, 1996 he was
named Chairman of the Board, Chief Executive Officer and a director of USAT) and
part of which he transferred to another employee of USAT; (m) 200,000 shares
issuable upon the exercise at $2.00 per share of the March 31 Warrants issued to
RSA as a consultant to ProActive in consideration of its services rendered to
ProActive operations (the warrant being divided among the RSA shareholders after
the acquisition of RSA by USAT); (n) 900,000 shares issuable upon the exercise
at $3.125 per share of the May 20 Warrants issued to the RSA shareholders as
part of the RSA purchase price; (o) 600,000 shares issuable upon the exercise at
$3.125 per share of the May 12 Warrant expiring May 12, 1999 issued to the new
President and Chief Operating Officer of USAT; (p) 700,000 shares issuable upon
the exercise at $2.4375 per share of the February 26 Warrant issued to a
consultant to USAT for financial public relations services; (q) 100,000 shares
issuable upon the exercise at $2.17 per share of the October 19 Warrants issued
to the placement agents for a private placement pursuant to Regulation S under
the Securities Act; and (r) 150,000 shares issuable upon the exercise at $2.25
per share of the January 29 Warrant issued to an individual in connection with
settlement of a litigation against USAT. All of the foregoing Warrants and
Options were granted at or above the fair market value of the USAT Common Stock
on the respective date of grant. Were all of these 11,771,776 shares issuable
upon the exercises of the foregoing Warrants and Options, the 185,207 shares
issuable upon the conversion of the Class A Preferred Stock, and the shares
described in the preceding paragraph which could be sold pursuant to Rule 144,
or a substantial number of the foregoing shares, publicly sold over a short time
period, the market price of the USAT Common Stock could decline significantly
because the market might lack the capacity to absorb a large number of shares
during a brief period. Such a decline in market price may make the terms of any
future financing more difficult for USAT to consummate on a favorable basis.
In addition, were the purchasers of 2,000,000 shares of the USAT Common
Stock issued in the private placement as to which the final closing was held on
February 14, 1996 and the former RSA
12
<PAGE> 19
shareholders for the 500,000 shares of the USAT Common Stock they received upon
the acquisition of RSA by USAT to offer such shares pursuant to this Prospectus,
particularly if a substantial number of these shares were offered for sale at
the same time, such offerings could have the same adverse impact as described in
the preceding paragraph. The 500,000 shares issued to the RSA shareholders were
registered under the Securities Act as "Acquisition Shares" in the January 1992
Registration Statement, but required a post-effective amendment to the January
1992 Registration Statement being declared effective under the Securities Act
for such shareholders to resell.
To the extent that the Good Ideas Merger is consummated, shares of the
USAT Common Stock will be issued to the Good Ideas Minority Stockholders. To the
extent that the U.S. Drug Merger is consummated, shares of the USAT Common Stock
will be issued to the minority stockholders of U.S. Drug. The aggregate of these
shares of the Common Stock issued on such transactions will, with limited
exceptions, be freely tradeable and, if a substantial number of these shares
were offered for sale at the same time, such offerings could have the same
adverse impact as described in the second preceding paragraph.
6. Technological Changes. The substance abuse testing industry is a
technological sensitive industry in that companies are constantly developing new
methods and making changes to current methods for substance abuse detection in
order to remain competitive. USAT competes, and, when its development stage for
a saliva based test and a urine based test are completed, U.S. Drug will
compete, with larger companies such as those named under the section
"Competition" under this caption "Risk Factors," many of which have
substantially greater financial resources available to them to invest in the
research and development of their products than USAT and U.S. Drug. These
competitors may develop products in the future which may render USAT's and U.S.
Drug's products obsolete or non-competitive from a pricing point of view. To
remain competitive, USAT and U.S. Drug may require substantial financial
resources for personnel and other costs to conduct research and update current
products to reflect the technological advances; however, such financial
resources may not be available. In the alternative, depending on the progress in
the drug testing research and development program (including the current
feasibility study), U.S. Drug may at a later date seek a major pharmaceutical or
other company to assist in the development program and, depending on the
financial arrangements to be negotiated, such development partner may seek
marketing rights to the products when and if successfully developed. Although
such a partner may reduce certain current expenditures, it may later, by
assuming marketing rights, reduce prospective revenues to U.S. Drug. Because of
the stage of development of the product and the fact that no search or
negotiations are currently being conducted, management believes
13
<PAGE> 20
that it is currently too speculative to anticipate U.S. Drug's competitive
position based on the presence of a development and/or marketing partner. See
the section "Need for Financing" under this caption "Risk Factors."
7. Market Limitation for Alcohol Testing Products. The potential
markets for USAT's alcohol testing products may be substantially limited to the
ones in which it currently sells law enforcement, correctional facilities,
medical and clinical facilities, alcohol treatment centers and emergency rooms.
This market insofar as alcohol testing is concerned may be saturated and the
opportunity for growth limited; however, management of USAT believes that the
demand for alcohol testing could grow in the industrial market, in which USAT
does some current selling, on a broader basis as did the demand for drug testing
at an earlier date. There can be no assurance that such growth will occur or
that, if the growth occurs, USAT will successfully penetrate the industrial
market.
8. Possible Market Making Restrictions. Unless granted an exemption by
the Commission from Rule 10b-6 under the Exchange Act, any soliciting
broker-dealers will be prohibited from engaging in any market making activities
regarding USAT's securities for two business days prior to any solicitation
activity on behalf of the Selling Stockholders or the termination of any right
that soliciting broker-dealers may have to receive a fee for the exercise of the
Warrants following such solicitation. As a result, soliciting broker-dealers may
be unable to continue to provide a market for USAT's securities during certain
periods while the Warrants or the Options are exercisable.
DILUTION
As of June 30, 1996, there were 35,353,092 shares of the USAT Common
Stock outstanding and the net tangible book value of USAT was $149,052 or $.004
per share of the USAT Common Stock. Net tangible book value per share of the
USAT Common Stock is the tangible assets of USAT less all liabilities and the
Class A Preferred Stock liquidation preference divided by the number of shares
of the USAT Common Stock outstanding. If all shares of the Class A Preferred
Stock are converted into shares of the USAT Common Stock, USAT would have
35,538,299 shares of the USAT Common Stock outstanding with a net tangible book
value of $354,837 or $.01 per share of the USAT Common Stock. If all of the
Warrants and the Options were exercised, USAT would have 43,890,900 shares of
the USAT Common Stock outstanding with a net tangible book value of $20,621,776
or $.47 per share of the USAT Common Stock.
The following table reflects the dilution incurred by the various
holders of the Warrants and the Options after the
14
<PAGE> 21
exercise of their respective Warrants and Options and assuming the conversion of
the Class A Preferred Stock as described in the preceding paragraph:
<TABLE>
<S> <C>
Net tangible book value per share before Warrant exercise $.01
Dilution per share to $1.0625 Warrantholders $1.0525
Dilution per share to $1.33 Warrantholders $1.32
Dilution per share to $1.87 Warrantholders $1.86
Dilution per share to $1.875 Warrantholders $1.865
Dilution per share to $1.9375 Warrantholders $1.9275
Dilution per share to $2.00 Warrantholders $1.99
Dilution per share to $2.17 Warrantholders $2.16
Dilution per share to $2.1875 Warrantholders $2.1775
Dilution per share to $2.19 Warrantholders $2.18
Dilution per share to $2.22 Warrantholders $2.21
Dilution per share to $2.25 Warrantholders $2.24
Dilution per share to $2.3125 Warrantholders $2.3025
Dilution per share to $2.375 Optionholders $2.365
Dilution per share to $2.4375 Warrantholders $2.4275
Dilution per share to $2.50 Warrantholders $2.49
Dilution per share to $2.8125 Warrantholders $2.8025
Dilution per share to $3.00 Warrantholders $2.99
Dilution per share to $3.125 Warrantholders $3.115
Dilution per share to $3.50 Warrantholders $3.49
Dilution per share to $4.00 Warrantholders $3.99
</TABLE>
(1) Shares of the USAT Common Stock are issuable upon the exercise of the
Warrants and the Options are at the following exercise prices per
share: 15,000 at $1.0625; 270,000 at $1.33; 92,795 at $1.87; 10,000 at
$1.875; 465,000 at $1.9375; 2,440,000 at $2.00; 100,000 at $2.17;
36,000 at $2.1875; 5,000 at $2.19; 1,185,856 at $2.22; 150,000 at
$2.25; 15,000 at $2.3125; 437,500 at $2.375; 700,000 at $2.4375; 18,750
at $2.50; 5,000 at $2.8125; 150,000 at $3.00; 1,800,000 at $3.125;
194,000 at $3.50; and 150,000 at $4.00.
Those investors purchasing shares of the USAT Common Stock from the
Selling Stockholders would have a dilution of $2.275 per share based upon a
market price of $2.375 as set forth on the front Cover Page of this Prospectus.
USE OF PROCEEDS
The net proceeds arising from the exercise of the Warrants and the
Options is not ascertainable because there is no assurance of any such exercise.
USAT will use these proceeds, if any, for general corporate purposes including
salaries and working capital in no allocatable order of priority. If all
Warrants and Options whose underlying shares are being offered by this
Prospectus were exercised, USAT would realize net proceeds
15
<PAGE> 22
of $19,986,941. If less than all of the Warrants and the Options are exercised,
working capital would be reduced or eliminated and the funds received would be
applied without priority to advertising and marketing programs. USAT will
receive no proceeds from the subsequent sales by the Selling Stockholders of the
shares of the USAT Common Stock to be issued to them upon the exercise of the
Warrants and Options.
SELLING STOCKHOLDERS
The table below sets forth (1) the number of shares of the USAT Common
Stock (an aggregate of 2,000,000 shares) registered under the Securities Act
pursuant to the Registration Statement and to be offered by the Selling
Stockholders named in the following table pursuant to this Prospectus; (2) the
number of shares of the USAT Common Stock owned beneficially by each such
Selling Stockholder before and after such offering; and (3) the percentage of
beneficial ownership before and after the offering. The shares reported in the
table as being beneficially owned reflect or include (1) an aggregate of
2,000,000 shares of the USAT Common Stock purchased in a private placement
pursuant to Regulation D under the Securities Act, the closings under which were
held between December 18, 1995 and February 14, 1996, and (2) an aggregate of
2,000,000 shares of the USAT Common Stock issuable upon the exercise of the
December 17 Warrants. The shares issuable upon the exercise of the December 17
Warrants have been registered under the Securities Act pursuant to the
Registration Statement for issuance by USAT and, in the opinion of Gold &
Wachtel, LLP, counsel to USAT, because none of such holders is an affiliate of
USAT as such term is defined in Rule 405 under the Securities Act, none of the
holders are required, upon resale after exercise, to deliver a prospectus naming
such holder as a Selling Stockholder and otherwise complying with Section
10(a)(3) under the Securities Act.
<TABLE>
<CAPTION>
Number of Shares Percentage(1)
---------------------------------------- ---------------
Name Before Offered After Before After
- ---- ------ ------- ----- ------ -----
<S> <C> <C> <C> <C> <C>
Agia, Mallis & Pautler 100,000 50,000 50,000 nil nil
Profit Sharing Plan
Mallis Limited Partnership 500,000 250,000 250,000 nil nil
Schwartz Family Limited 200,000 100,000 150,000 nil nil
Partnership
John and Arthur Schwartz 200,000 100,000 100,000 nil nil
Martin W. Rosen 500,000 250,000 250,000 1.4 nil
Thomas and H. Lawrence 100,000 50,000 50,000 nil nil
Kaufman Family Partnership
Frank and Patricia Musolino 800,000 400,000 400,000 2.3 1.1
Henry H. Ramseur 100,000 50,000 50,000 nil nil
</TABLE>
16
<PAGE> 23
<TABLE>
<CAPTION>
Number of Shares Percentage(1)
---------------------------------------- ---------------
Name Before Offered After Before After
- ---- ------ ------- ----- ------ -----
<S> <C> <C> <C> <C> <C>
Arthur Gordon 100,000 50,000 50,000 nil nil
Harold S. Rosen 100,000 50,000 50,000 nil nil
Walter Schlessel 100,000 50,000 50,000 nil nil
Jack and Anita Elias 100,000 50,000 50,000 nil nil
Sanford Miller 500,000 250,000 250,000 1.4 nil
Townsview Properties Limited 100,000 50,000 50,000 nil nil
Martin B. Perlman 100,000 50,000 50,000 nil nil
Richard R. Kreitler 100,000 50,000 50,000 nil nil
Craig and Barbara Wertkin 100,000 50,000 50,000 nil nil
Craig S. Wertkin 100,000 50,000 50,000 nil nil
David E. Leven 100,000 50,000 50,000 nil nil
</TABLE>
- -----------------------
(1) The percentages computed in this column of the table are based upon
35,353,092 shares of the USAT Common Stock outstanding on August 22,
1996 and effect being given, where appropriate, pursuant to Rule
13d-3(d)(1)(i) under the Exchange Act, to shares issuable upon the
exercise of the Warrants and the Options which are currently
exercisable or exercisable within 60 days of August 22, 1995.
The table below sets forth (1) the number of shares of the USAT Common
Stock (an aggregate of 7,151,705 shares) registered under the Securities Act
pursuant to the Registration Statement and the January 1992 Registration
Statement and to be offered by those of the Selling Stockholders named in the
following table pursuant to this Prospectus after, except for an aggregate of
2,750,300 shares of the USAT Common Stock, the exercise of the New Warrants and
the January 1992 Warrant granted to him or her; (2) the number of shares of the
USAT Common Stock owned beneficially by each such Selling Stockholder before and
after such offering; and (3) the percentage of beneficial ownership before and
after the offering.
<TABLE>
<CAPTION>
Number of Shares Percentage(1)
---------------------------------------- ---------------
Name Before Offered After Before After
- ---- ------ ------- ----- ------ -----
<S> <C> <C> <C> <C> <C>
Alan I. Goldman (2) 10,000 (3) 10,000 (3) 0 nil 0
Peter M. Mark (2) 567,600 (3) 10,000 (3) 557,600 1.6 1.6
John C. Lawn (2) 10,000 (3) 10,000 (3) 0 nil 0
Linda H. Masterson (4) 610,000 (5) 610,000 (5) 0 1.7 0
Michael McCord (6) 413,808 (7) 10,000 (7) 403,808 1.2 1.1
Lee S. Rosen (2) 1,478,648 (8) 1,010,000 (8) 468,648 4.1 1.3
Robert Stutman (9) 971,500 (10) 971,500 (10) 0 2.7 0
</TABLE>
17
<PAGE> 24
<TABLE>
<CAPTION>
Number of Shares Percentage(1)
---------------------------------------- ---------------
Name Before Offered After Before After
- ---- ------ ------- ----- ------ -----
<S> <C> <C> <C> <C> <C>
Brian L. Stutman 636,500 (11) 636,500 (11) 0 1.8 0
Sandra Debow 57,000 (12) 7,000 (12) 0 nil 0
Michael Rochelle 120,000 (13) 120,000 (13) 0 nil 0
Kimberly Rochelle 40,000 (14) 40,000 (14) 0 nil 0
Joseph Bradley (15) 10,000 (16) 10,000 (15) 0 nil 0
Erica Kline 5,000 (17) 5,000 (17) 0 nil 0
Shoreh Moheb 10,000 (18) 10,000 (18) 0 nil 0
Patricia Starling 10,000 (19) 10,000 (19) 0 nil 0
Greg Uyeda 3,000 (20) 3,000 (20) 0 nil 0
Leonard DePino 3,000 (20) 3,000 (20) 0 nil 0
Steven Kline 68,000 (21) 55,000 (21) 13,000 nil
Christine Clearwater 30,000 (22) 30,000 (22) 0 nil 0
William Current 39,000 (23) 39,000 (23) 0 nil 0
Brick Bradford 30,000 (24) 30,000 (24) 0 nil 0
Gary Geddig 5,000 (25) 5,000 (25) 0 nil 0
Martin Walsh 5,000 (26) 5,000 (26) 0 nil 0
Robert E. Reed 5,000 (26) 5,000 (26) 0 nil 0
Jonathan J. Pallin 150,000 (27) 150,000 (27) 0 nil 0
Lyle K. Pfeffer 700,000 (28) 700,000 (28) 0 1.9 0
Pacific Miners 50,000 (29) 50,000 (29) 0 nil 0
Aires Peak 50,000 (29) 50,000 (29) 0 nil 0
Michael J. Witham (30) 462,750 (31) 315,000 (31) 147,750 (31) 1.3 nil
James C. Witham (32) 1,342,030 (33) 283,530 (33) 1,058,500 (33) 3.8 3.0
Karen B. Laustsen (34) 178,925 (35) 76,925 (35) 202,000 (35) nil nil
Roger Tatum 17,500 (36) 17,500 (36) 0 nil 0
George Berger (37) 41,125 (38) 20,250 (38) 15,875 nil nil
</TABLE>
- --------------
(1) The percentages computed in this column of the table are based upon
35,337,337 shares of the USAT Common Stock outstanding on August 22,
1996 and effect being given, where appropriate, pursuant to Rule
13d-3(d)(1)(i) under the Exchange Act, to shares issuable upon the
exercise of the Warrants and the Options which are currently
exercisable or exercisable within 60 days of August 22, 1995.
(2) A director of USAT.
(3) The shares reported in this table include or reflect 10,000 shares of
the USAT Common Stock issuable upon the exercise at $1.9375 per share
of a November 15 Warrant issued to the holder as a director of USAT
who, at the date of grant, was not employed by USAT or any subsidiary
thereof.
(4) Ms. Masterson, a director of USAT since September 26, 1995, became its
President and Chief Operating Officer effective May 13, 1996.
18
<PAGE> 25
(5) The shares reported in the table reflect (a) 10,000 shares of the USAT
Common Stock issuable upon the exercise at $1.9375 per share of a
November 15 Warrant issued to her as a director of USAT on the same
basis as described in note (3) to the table; and (b) 600,000 shares
issuable upon the exercise at $3.125 per share of the May 12 Warrant
issued pursuant to Ms. Masterson's terms of employment. The May 12
Warrant is currently exercisable as to 50,000 shares and becomes
exercisable as to 100,000 shares at the end of her first year of
employment and as to 150,000 shares at the end of each of her second,
third and fourth years of employment. She has three years, from the
date each installment becomes exercisable, to exercise as to such
installment, so that the expiration date for the last installment is
May 12, 2003.
(6) A consultant to the USAT Board.
(7) The shares reported in the table include 10,000 shares of the USAT
Common Stock issuable upon the exercise at $1.9375 per share of a
November 15 Warrant issued to him as a consultant to the Board of USAT.
(8) The shares reported in the table include (a) 10,000 shares of the USAT
Common Stock issuable upon the exercise at $1.9375 per share of a
November 15 Warrant issued to Mr. Rosen on the same basis as those
described in note (3) to this table; (b) 400,000 shares issuable upon
the exercise at $1.9375 per share of a Director's Services Warrant; (c)
150,000 shares upon the exercise at $3.00 per share of a Director's
Services Warrant; (d) 150,000 shares upon the exercise at $4.00 per
share of a Director's Services Warrant; and (e) 300,000 shares issuable
upon the exercise at $3.125 per share of the Director's Second Services
Warrant issued to Mr. Rosen as consideration for assisting in the
exercise of USAT Common Stock purchase warrants. The Director's
Services Warrants described in (b), (c) and (d) were issued to Mr.
Rosen as consideration for his services, including those related to the
private placement consummated in February 1996. 50,000 of the shares
subject to each of the Director's Services Warrants described in (c)
and (d) may be forfeited if none of the December 17 Warrants are
exercised and may be reduced in the number of shares which may be
exercised pro rata to the exercise of the December 17 Warrants.
(9) Mr. Stutman was elected Chairman of the Board and a director of USAT
and designated as its Chief Executive Officer on April 18, 1996.
(10) The shares reported in the table include (a) 127,500 shares of the USAT
Common Stock issuable upon the exercise
19
<PAGE> 26
at $2.00 per share of a December 13 Warrant issued to him for his
consulting services; (b) 105,500 shares issuable upon the exercise at
$2.00 per share of a March 31 Warrant issued to him when the RSA
Consulting Warrant to purchase 200,000 shares to be issued to RSA was
divided among the former RSA shareholders; (c) 474,750 shares issuable
upon the exercise at $3.125 per share of a May 20 Warrant issued to him
in exchange for his ownership interest in RSA; and (d) 263,750 shares
of the Acquisition Shares also issued to him in exchange for his
ownership interest in RSA.
(11) The shares reported in the table reflect (a) 72,500 shares of the USAT
Common Stock issuable upon the exercise at $2.00 per share of a
December 13 Warrant transferred to him by Robert Stutman, who received
the same initially for the latter's consulting services as described in
Note (10) to the table; (b) 70,500 shares issuable upon the exercise at
$2.00 per share of a March 31 Warrant issued to him when the RSA
Consulting Warrant was divided among the former RSA shareholders; (c)
317,250 shares issuable upon the exercise at $3.125 per share of a May
20 Warrant issued to him in exchange for his ownership interest in RSA;
and (d) 176,250 shares of the Acquisition Shares also issued to him in
exchange for his ownership interest in RSA.
(12) The shares reported in the table reflect (a) 4,000 shares of the USAT
Common Stock issuable upon the exercise at $2.00 per share of a March
31 Warrant issued to her when the RSA Consulting Warrant was divided
among the former RSA shareholders; (b) 18,000 shares issuable upon the
exercise at $3.125 per share of a May 20 Warrant issued to her in
exchange for her ownership interest in RSA; (c) 10,000 shares of the
Acquisition Shares also issued to her in exchange for her ownership
interest in RSA; and (d) 25,000 shares issuable upon the exercise at
$3.50 per share of an Employee Warrant which becomes exercisable as to
6,250 shares on each anniversary date of June 10, 1996 over a four-year
period. The holder has three years from the date the Employee Warrant
becomes exercisable as to an installment to exercise as to such
installment, so that the expiration date for the last installment will
be June 9, 2003.
(13) The shares reported in the table reflect (a) 15,000 shares of the USAT
Common Stock issuable upon the exercise at $2.00 per share of a March
31 Warrant issued to him when the RSA Consulting Warrant was divided
among the former RSA shareholders; (b) shares issuable upon the
exercise at $3.125 per share of a May 20 Warrant issued to him in
exchange for his ownership interest in RSA; and (c) 37,500
20
<PAGE> 27
shares of the Acquisition Shares also issued to him in exchange for his
or her ownership interest in RSA.
(14) The shares reported in the table reflect (a) 5,000 shares of the USAT
Common Stock issuable upon the exercise at $2.00 per share of a March
31 Warrant issued to her when the RSA Consulting Warrant was divided
among the former RSA shareholders; (b) 22,500 shares issuable upon the
exercise at $3.125 per share of a May 20 Warrant issued to her in
exchange for her ownership interest in RSA; and (c) 12,500 shares of
the Acquisition Shares also issued to her in exchange for her ownership
interest in RSA.
(15) Treasurer, Acting Chief Financial Officer and Acting Chief Accounting
Officer of USAT.
(16) The shares reported in the table reflect 10,000 shares of the USAT
Common Stock issuable upon the exercise at $1.875 per share of an
Employee Warrant expiring January 2, 1999.
(17) The shares reported in the table reflect 5,000 shares of the USAT
Common Stock issuable upon the exercise at $2.8125 per share of an
Employee Warrant expiring August 27, 1998.
(18) The shares reported in the table reflect (a) 5,000 shares of the USAT
Common Stock issuable upon the exercise at $1.9375 per share of an
Employee Warrant expiring January 31, 1999 and (b) 5,000 shares
issuable upon the exercise at $3.50 per share of an Employee Warrant
which becomes exercisable as to 1,250 shares on each anniversary date
of May 2, 1996 over a four-year period. The holder has three years,
from the date the Employee Warrant becomes exercisable as to an
installment, to exercise as to such installment, so that the expiration
date for the last installment is May 1, 2003. She also is eligible to
receive a Common Stock purchase warrant, also exercisable at $3.50 per
share, to acquire 5,000 shares if certain performance criteria are met.
The underlying shares subject to such warrant are not being registered
under the Securities Act in the Registration Statement and,
accordingly, the shares are not being offered for resale pursuant to
this Prospectus.
(19) The shares reported in the table reflect 10,000 shares of the USAT
Common Stock issuable upon the exercise at $2.00 per share of an
Employee Warrant expiring December 27, 1998.
(20) The shares reported in the table reflect 3,000 shares of the USAT
Common Stock issuable upon the exercise at
21
<PAGE> 28
$2.1875 per share of an Employee Warrant expiring July 19, 1999.
(21) The shares reported in the table as being beneficially owned reflect
3,000 shares of the USAT Common Stock allocated to this officer and
employee of a subsidiary on May 3, 1996; (b) 5,000 shares issuable upon
the exercise at $2.3125 per share of an Employee Warrant expiring July
17, 1998 and being offered pursuant to this Prospectus as indicated in
the table; (c) 10,000 shares issuable upon the exercise at $2.3125 per
share of a January 1996 Warrant expiring July 17, 1998, which shares
are being offered for resale by the holder after exercise pursuant to
this Prospectus as indicated in the fourth table under this caption
"Selling Stockholders;" and (d) 50,000 shares issuable upon the
exercise at $3.50 per share of an Employee Warrant which becomes
exercisable as to 12,500 shares on each anniversary date of May 3, 1996
over a four-year period and which 50,000 shares are being offered
pursuant to this Prospectus as indicated in the table. The holder has
three years, from the date the Employee Warrant becomes exercisable as
to an installment, to exercise as to such installment, so that the
expiration date for the last installment is May 2, 2003. He also is
eligible to receive a Common Stock purchase Warrant, also exercisable
at $3.50 per share, to acquire 20,000 shares if certain performance
criteria are met. The underlying shares subject to such warrant are not
being registered under the Securities Act in the Registration Statement
and, accordingly, the shares are not being offered for resale pursuant
to this Prospectus.
(22) The shares reported in the table reflect 30,000 shares of the USAT
Common Stock issuable upon the exercise at $3.50 per share of an
Employee Warrant which becomes exercisable as to 7,500 shares on each
anniversary date of May 15, 1996 over a four-year period. The holder
has three years, from the date the Employee Warrant becomes exercisable
as to an installment, to exercise as to such installment, so that the
expiration date for the last installment is May 14, 2003.
(23) The shares reported in the table reflect 39,000 shares of the USAT
Common Stock issuable upon the exercise at $3.50 per share of an
Employee Warrant which becomes exercisable as to 9,750 shares on each
anniversary date of May 1, 1996 over a four-year period. The holder has
three years, from the date the Employee Warrant becomes exercisable as
to an installment, to exercise as to such installment, so that the
expiration date for the last installment is April 30, 2003. He also is
eligible to receive Common stock purchase warrants, also exercisable at
$3.50 per share, to
22
<PAGE> 29
acquire additional shares (in blocks of 10,000 shares) if certain
performance criteria are not. The underlying shares subject to these
warrants are not being registered under the Securities Act and,
accordingly, are not being offered for resale by the holder pursuant to
this Prospectus.
(24) The shares reported in the table reflect 30,000 shares of the USAT
Common Stock issuable upon the exercise at $3.50 per share of an
Employee Warrant which becomes exercisable as to 7,500 shares on each
anniversary date of April 30, 1996 over a four-year period. The holder
has three years, from the date the Employee Warrant becomes exercisable
as to an installment, to exercise as to such installment, so that the
expiration date for the last installment is April 29, 2003.
(25) The shares reported in the table reflect 5,000 shares of the USAT
Common Stock issuable upon the exercise at $3.50 per share of an
Employee Warrant which becomes exercisable as to 1,250 shares on each
anniversary date of July 19, 1996 over a four-year period. The holder
has three years, from the date the Employee Warrant becomes exercisable
as to an installment, to exercise as to such installment, so that the
expiration date for the last installment is July 18, 2003.
(26) The shares reported in the table reflect 5,000 shares of the USAT
Common Stock issuable upon the exercise at $3.50 per share on each
anniversary date of July 8, 1996 over a four-year period. The holder
has three years, from the date the Employee Warrant becomes exercisable
as to an installment, to exercise as to such installment, so that the
expiration date for the last installment is July 7, 2003.
(27) The shares reported in the table reflect issuable upon the exercise at
$2.25 per share of the January 29 Warrant issued to the Selling
Stockholder upon settlement of litigation.
(28) The shares reported in the table reflect shares issuable upon the
exercise at $2.4375 of the February 26 Warrant issued to the Selling
Stockholder for his financial public relations consulting services.
(29) The shares reported in the table reflect shares issuable upon the
exercise at $2.17 per share of a October 19 Warrant issued to the
Selling Stockholder as a placement fee for an offering by USAT pursuant
to Regulation S under the Securities Act.
23
<PAGE> 30
(30) A former Vice President of USAT.
(31) The shares reported in the table as being beneficially owned reflect
(a) 250,000 shares issuable at $1.33 per share upon the exercise of a
January 1992 Warrant and being offered pursuant to this Prospectus as
indicated in this table; (b) 60,000 shares issuable at $2.375 per share
upon the exercise of an Option and being offered pursuant to this
Prospectus as indicated in the third table under this caption "The
Selling Stockholders;" (c) 65,000 shares acquired upon a prior exercise
of the January 1992 Warrant and being offered pursuant to this
Prospectus as indicated in this table; and (d) 87,750 other shares.
(32) The former Chairman, President and Chief Executive Officer and a former
director of USAT.
(33) The shares reported in the table reflect (a) 283,530 shares of the USAT
Common Stock received upon the exercise of January 1992 Warrant and
being offered pursuant to this Prospectus as indicated in this table;
(b) 180,000 shares issuable upon the exercise of an Option and being
offered pursuant to this Prospectus as indicated in the third table
under this caption "Selling Stockholders;" and (c) 878,500 other
shares.
(34) A former Executive Vice President and director of USAT.
(35) The shares reported in the table reflect (a) 76,925 shares of the USAT
Common Stock received upon the exercise of a January 1992 Warrant and
being offered pursuant to this Prospectus as indicated in this table;
(b) 100,000 shares issuable upon the exercise of an Option and being
offered pursuant to this Prospectus as indicated in the third table
under this caption "Selling Stockholders;" and (c) 102,000 other
shares.
(36) The shares reported in the table reflect shares of the USAT Common
Stock received upon the exercise of a January 1992 Warrant and being
offered pursuant to this Prospectus as indicated in this table.
(37) A former Secretary of USAT.
(38) The shares reported in the table reflect (a) 20,250 shares of the USAT
Common Stock received upon the exercise of a January 1992 Warrant and
being offered pursuant to this Prospectus as indicated in this table;
(b) 5,000 shares issuable upon the exercise of an Option and being
offered pursuant to this Prospectus as indicated in the third table
under this caption "Selling Stockholders;" and (c) 15,875 other shares.
24
<PAGE> 31
The table below sets forth (1) the number of shares of the USAT Common
Stock (an aggregate of 437,500 shares) registered under the Securities Act
pursuant to the January 1996 Registration Statement and to be offered by each of
the Selling Stockholders named in the following table pursuant to this
Prospectus after the exercise at $2.375 per share of the Option granted to him
or her pursuant to the 1990 Option Plan, (2) the number of shares of the USAT
Common Stock beneficially owned by each such Selling Stockholder before and
after such offering and (3) the percentage of beneficial ownership before and
after the offering.
<TABLE>
<CAPTION>
Number of Shares Percentage(1)
---------------------------------------- ---------------
Name Before Offered After Before After
- ---- ------ ------- ----- ------ -----
<S> <C> <C> <C> <C> <C>
James C. Witham (2) 1,342,030 (3) 180,000 (3) 1,162,030 (3) 3.8 3.3
Gary S. Wolff (4) 105,000 (5) 80,000 (5) 25,000 (5) nil nil
Karen B. Laustsen (6) 278,925 (7) 100,000 (7) 178,925 (7) nil nil
William DiTuro (8) 37,600 (9) 12,500 (9) 25,100 (9) nil nil
Michael J. Witham (10) 462,750 (11) 60,000 (11) 402,750 (11) nil nil
George Berger (12) 41,125 (13) 5,000 (13) 36,125 (13) nil nil
</TABLE>
- ----------------------
(1) The percentages computed in this column of the table are based upon
35,353,092 shares of the USAT Common Stock outstanding on August 22,
1996 and effect being given, where appropriate, pursuant to Rule
13d-3(d)(1)(i) under the Exchange Act, to shares issuable upon the
exercise of the Options and the Warrants, all of which insofar as they
relate to Selling Stockholders in the table are currently exercisable.
(2) The former Chairman, President and Chief Executive Officer and a former
director of USAT.
(3) The shares reported in the table reflect (a) 180,000 shares of the USAT
Common Stock issuable upon the exercise of an Option and being offered
pursuant to this Prospectus as indicated in this table; (b) 283,530
shares received upon the exercise of a January 1992 Warrant and being
offered pursuant to this Prospectus as indicated in the second table
under this caption "Selling Stockholders"; and (c) 878,500 other
shares.
(4) The former Treasurer, Chief Financial Officer and Chief Accounting
Officer of USAT.
(5) The shares reported in the table reflect (a) 80,000 shares of the USAT
Common Stock issuable upon the exercise of an Option and being offered
pursuant to this Prospectus as indicated in this table; (b) an
aggregate of 25,000 shares
25
<PAGE> 32
issuable upon the exercise of May 1994 Warrants and being offered
pursuant to this Prospectus as indicated in the fourth table under this
caption "Selling Stockholders;" and (c) 144,226 other shares.
(6) A former Executive Vice President and director of USAT.
(7) The shares reported in the table reflect (a) 100,000 shares of the USAT
Common Stock issuable upon the exercise of an Option and being offered
pursuant to this Prospectus as indicated in this table; (b) 76,925
shares of the USAT Common Stock received upon the exercise of a January
1992 Warrant and being offered pursuant to this Prospectus indicated in
the second table under this caption "Selling Stockholders;" and (c)
102,000 other shares.
(8) A former director of USAT.
(9) The shares reported in the table reflect (a) 12,500 shares of the USAT
Common Stock issuable upon the exercise of an Option and being offered
pursuant to this Prospectus as indicated in this table; (b) 10,000
shares issuable upon the exercise of a May 1994 Warrant and being
offered pursuant to this Prospectus as indicated in the fourth table
under this caption "Selling Stockholders;" and (c) 15,100 other shares.
(10) A former Vice President of USAT.
(11) The shares reported in the table reflect (a) 60,000 shares of the USAT
Common Stock issuable upon the exercise of an Option and being offered
pursuant to this Prospectus as indicated in this table; (b) 250,000
shares issuable upon the exercise of a January 1992 Warrant and being
offered pursuant to this Prospectus as indicated in the second table
under this caption "Selling Stockholders;" (c) 65,000 shares received
upon the exercise of a January 1992 Warrant and being offered pursuant
to this Prospectus as indicated in the second table under this caption
"Selling Stockholders;" and (c) 87,750 other shares.
(12) A former Secretary of USAT.
(13) The shares reported in the table reflect (a) 5,000 shares of the USAT
Common stock issuable upon the exercise of an Option and being offered
pursuant to this Prospectus as indicated in this table; (b) 20,250
shares received upon the exercise of a January 1992 Warrant and being
offered pursuant to this Prospectus as indicated in the second table
under this caption "Selling Stockholders;" (c) 15,875 other shares.
26
<PAGE> 33
The table below sets forth (1) the number of shares of the USAT Common
Stock (an aggregate of 138,750 shares) issuable upon the exercise of the May
1994 Warrants (61,250 shares) and the January 1996 Warrants (77,500 shares),
which shares were registered under the Securities Act pursuant to the May 1994
Registration Statement and the January 1996 Registration Statement and are being
offered pursuant to this Prospectus by the Selling Stockholders named in the
table after the exercise of the May 1994 Warrants and the January 1996 Warrants;
(2) the exercise price of the May 1994 Warrants and the January 1996 Warrants;
and (3) the expiration dates of the May 1994 Warrants and the January 1996
Warrants. None of the Selling Stockholders named in the table owns 1% or more of
the out-standing shares of the USAT Common Stock before or after this offering.
During the past three years, none of the Selling Stockholders had any
relationship with USAT other than as a securityholder of USAT except as
indicated in a note to the table.
<TABLE>
<CAPTION>
Number of Exercise Expiration
Name Shares Price Date
- ---- --------- -------- ----------
<S> <C> <C> <C>
Gary S. Wolff (1) 15,000 (2) $1.06 11/1/97
10,000 $4.00 5/17/97
Glenn A. Bergenfield (3) 10,000 (4) $4.00 5/17/97
William DiTuro (3) 10,000 (2) $4.00 5/17/97
Clifford Bennett (4) 5,000 $2.19 9/1/98
7,500 $2.50 9/1/98
Debra Sands (5) 5,000 $2.1875 7/19/99
James Velnosky (6) 10,000 $2.00 12/31/99
10,000 $2.00 12/31/2000
10,000 $2.00 12/31/2001
Norman Shifrin 9,625 $2.1875 7/19/99
Arthur Meisner 5,750 $2.1875 7/19/99
Irmgard Kaufhold 9,625 $2.1875 7/19/99
James Whelan (5) 11,250 $2.50 4/15/98
Steven Kline (6) 10,000 $2.3125 7/17/99
</TABLE>
- --------------------
(1) The former Treasurer, Chief Financial Officer and Chief Accounting
Officer of USAT.
(2) See the third table under this caption "Selling Stockholders" for
information as to his Option also being offered pursuant to this
Prospectus.
(3) A former director of USAT.
(4) The shares reported in the table do not include 12,500 shares received
upon the exercise of an Option and being
27
<PAGE> 34
offered pursuant to this Prospectus as indicated in the fifth table
under this caption "Selling Stockholders."
(5) A former employee of USAT or a subsidiary of USAT.
(6) Employed by USAT or one of its subsidiaries.
The table below sets forth (1) the number of shares of the USAT Common
Stock (an aggregate of 1,381,351 shares) issuable upon the exercise of the
September 1992 Warrants, which shares were registered under the Securities Act
pursuant to this September 1992 Registration Statement and are being offered
pursuant to this Prospectus by the Selling Stockholders named in the table after
the exercise of the September 1992 Warrants; (2) the exercise prices of the
September 1992 Warrants; and (3) the expiration dates of the September 1992
Warrants. None of the Selling Stockholders named in the table owns 1% or more of
the outstanding shares of the USAT Common Stock before or after this offering.
During the past three years, none of these Selling Stockholders had any
relationship with USAT other than as a securityholder of USAT except as
indicated in a note to the table.
<TABLE>
<CAPTION>
Number of Exercise Expiration
Name Shares Price Date
- ---- --------- -------- ----------
<S> <C> <C> <C>
Tuck Trainor 20,000 $1.33 8/28/96
Dennis Ringer 10,000 $2.22 9/1/96
David Brooks 7,700 $3.50 9/16/97
Herbert Stein 75,000 $4.00 12/31/97
JGC, Inc. (1) 75,295 $1.87 12/17/97
Arthur Klusner (1) 17,500 $1.87 12/17/97
WG Trading Company LP 225,000 $2.22 10/31/96
Guli R. Rajani 56,250 $2.22 10/31/96
Norman Shifrin 149,720 $2.22 10/31/96
Ruby Balter 56,250 $2.22 10/31/96
Arnold Balter, IRA Rollover 56,250 $2.22 10/31/96
Lori Balter 14,062 $2.22 10/31/96
Joan Kaufman 28,125 $2.22 10/31/96
Douglas Black 126,562 $2.22 10/31/96
Irmgard Kaufhold 35,705 $2.22 10/31/96
Harold Edrich 6,060 $2.22 10/31/96
Jay M. Kulkin 14,062 $2.22 10/31/96
Lee Frank 70,312 $2.22 10/31/96
Jeffrey S. Podell 14,062 $2.22 10/31/96
Mitchell Weisner 28,125 $2.22 10/31/96
Phillip A. Witt 14,062 $2.22 10/31/96
Richard Vitello 14,062 $2.22 10/31/96
Morris B. Black 225,000 $2.22 10/31/96
Gabriel Mark Cerrone 14,062 $2.22 10/31/96
Rosalia Cerrone 28,125 $2.22 10/31/96
</TABLE>
28
<PAGE> 35
- -------------------
(1) The holder received its September 1992 Warrant as underwriting
compensation.
The table below sets forth the number of shares (an aggregate of
451,969) of the USAT Common stock being offered by certain of the Selling
Stockholders pursuant to this Prospectus, the shares having been acquired by the
stockholder after the exercise of a May 1994 Warrant (14,500 shares), a January
1996 Warrant (24,250 shares), a September 1992 Warrant (400,719 shares) or an
Option (12,500 shares). None of the Selling Stockholders named in the table owns
1% or more of the outstanding shares of the USAT Common Stock before or after
this offering. During the past three years none of these Selling Stockholders
had any relationship with USAT other than as a securityholder of USAT except as
indicated in a note to the table.
<TABLE>
<CAPTION>
Name Number of Shares Type of Warrant
- ---- ---------------- ---------------
<S> <C> <C>
Jock Cameron(1) 5,000 January 1996
Douglas Allen(1) 10,000 May 1994
Floyd Staggs(1) 500 May 1994
Warren Montaldo(1) 8,000 January 1996
4,000 May 1994
James Whelan (1) 11,250 January 1996
Tuck Trainor 23,000 September 1992
Glenn Vittor (2) 31,500 September 1992
Mark J. Mallis 28,125 September 1992
Thomas Kaufman 28,125 September 1992
Irmgard Kaufhold 13,514 September 1992
Paul Bender 14,062 September 1992
Marc and Andy Goldfarb 14,062 September 1992
John Lansing 11,812 September 1992
Gary Nadelman IRA 56,250 September 1992
Seymour Nadelman 42,187 September 1992
Syndie Nadleman 84,375 September 1992
Eugene Sorosky 14,062 September 1992
Jill H. Swid 7,925 September 1992
Robin Swid 7,925 September 1992
Scott L. Swid 7,925 September 1992
Stephen C. Swid 15,870 September 1992
Glenn A. Bergenfield (3) 12,500 N/A - Option
</TABLE>
- ------------------------
(1) Formerly employed by USAT or a subsidiary of USAT.
(2) Received as underwriting compensation.
(3) A former director of USAT.
29
<PAGE> 36
PLAN OF DISTRIBUTION
The holders of 3,402,674 shares of the USAT Common Stock, all of which
shares are currently outstanding, have advised USAT that they may, from time to
time, offer these shares pursuant to the Prospectus as Selling Stockholders at
the prices then prevailing on the American Stock Exchange or in isolated
transactions, at negotiated prices, with institutional or other investors and
that they have engaged no underwriter to act for them, although sales may be
effected for each of such holders through his, her or its personal
broker-dealer.
In addition, the holders of the Warrants (other than the December 17
Warrants) and the Options have advised USAT that, when and if they exercise
their respective securities, they may, from time to time, sell the underlying
shares of the USAT Common Stock in the manner described in the preceding
paragraph. Because the 2,000,000 shares of the USAT Common Stock underlying the
December 17 Warrants have been registered under the Securities Act pursuant to
this Registration Statement and none of the holders of the December 17 Warrants
is an affiliate of USAT as such term is defined in Rule 405 under the Securities
Act, such holders will not, in the opinion of Gold & Wachtel, LLP, general
counsel to USAT, require, after exercise of a December 17 Warrant in order to
resell, a prospectus (a) naming him, her or it as a Selling Stockholder with
respect to the shares of the USAT Common Stock issuable upon the exercise of the
December 17 Warrants and (b) otherwise complying with Section 10(a)(3) of the
Securities Act.
USAT, its officers, directors, affiliates and the Selling Stockholders
are obligated to take such steps as may be necessary to ensure that the offer
and sale by such parties of the 9,755,275 shares of the USAT Common Stock
offered by this Prospectus (the "Distribution") shall comply with the
requirements of the federal securities laws, including Rule 10b-6 (the "Rule")
and other applicable anti-manipulation provisions of the Exchange Act.
In general, Rule 10b-6 under the Exchange Act prohibits any person
connected with the Distribution from directly or indirectly bidding for, or
purchasing for any account in which he, she or it has a beneficial interest, any
shares of the USAT Common Stock or any right to purchase shares of the USAT
Common Stock, or attempting to induce any person to purchase shares of the USAT
Common Stock or rights to purchase shares of the USAT Common Stock, until after
he, she or it has completed his, her or its participation in the Distribution.
USAT has obtained joint and several agreements from its directors,
officers and affiliates not to purchase any shares of the USAT Common Stock or
other securities of the Company
30
<PAGE> 37
convertible into shares of the USAT Common Stock during the Distribution Period
in violation of the Rules and Regulations promulgated under the Exchange Act,
including, but not limited to, Rule 10(b)-6. These affiliated securityholders
are jointly and severally subject to a nine-business day waiting ("cooling-
off") period prior to their commencement of offers or sales of their securities.
They cannot make any bids or purchases during this period and while the
distribution herein continues. This Rule is equally applicable to non-affiliated
Selling Stockholders engaged in the Distribution as well as the other Rule 10b-6
restrictions applicable to the Selling Stockholders.
Because the Selling Stockholders will be subject to the
anti-manipulation provisions of Rule 10b-6, USAT will send written notice to all
of them by certified mail at least two business days prior to the effective date
of this Prospectus explaining their obligations under the Rule which begins two
days prior to the commencement of any distribution and continuing throughout the
period until their offers and sales terminate.
Unless granted an exemption by the Commission from Rule 10b-6, any
soliciting broker-dealers will be prohibited from engaging in any market making
activities in USAT's securities for the period from two business days prior to
any solicitation activity or the termination of any right that the underwriter
and soliciting broker-dealers may have to receive a fee for the exercise of
warrants following such solicitation. As a result, soliciting broker-dealers may
be unable to continue to provide a market for USAT's securities during certain
periods while the warrants are exercisable.
USAT is bearing all costs relating to the registration of the shares of
the USAT Common Stock offered by this Prospectus (other than fees and expenses,
if any, of counsel or other advisers to the Selling Stockholders). Any
commissions, discounts or other fees payable to broker-dealers in connection
with any sale of the USAT Common Stock will be borne by the Selling Stockholder
selling such shares.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
the Company by Gold & Wachtel, LLP, New York, New York.
MATERIAL CHANGES
On July 3, 1996 Gary S. Wolff resigned from his positions as Chief
Financial Officer, Chief Accounting Officer and Treasurer of USAT and as a
director, Chief Financial Officer and Treasurer of Good Ideas and U.S. Drug.
Effective that date, Joseph Bradley
31
<PAGE> 38
was elected Treasurer of USAT, Good Ideas and U.S. Drug and simultaneously
designated as their Acting Chief Financial Officer and Acting Chief Accounting
Officer.
As of March 31, 1996, there were notes payable by USAT to U.S. Drug in
the amount of $282,295 which, as extended, were due June 30, 1996. The
indebtedness was repaid and USAT has authorized a loan of $500,000 to U.S. Drug
which amount will be due December 31, 1996.
USAT intends to call the Annual Meeting of Stockholders for October 22,
1996 at which time stockholders will be asked to elect two Class A Directors, to
ratify the appointment of Ernst & Young LLP as auditors for fiscal 1997 and to
approve a change of name of USAT to "Substance Abuse Technologies, Inc." The
USAT Board intends, if the U.S. Drug Merger and the Good Ideas Merger are
consummated, to merge all operating subsidiaries into USAT and operate as five
operating divisions: one conducting alcohol testing operations (currently
conduced by USAT), the second conducting drug testing operations (the intended
operations of U.S. Drug), the third offering laboratory testing for alcohol and
drugs (currently conducted by USAT's Biochemical Toxicology Laboratories
("Biotox") division), the fourth offering human resource provider operations
(currently conducted by ProActive) and the fifth offering substance abuse
programs (currently offered by RSA). There can be no assurance that either or
both of the Mergers will be consummated or the reorganization otherwise
effected.
COMMISSION POSITION ON INDEMNIFICATION
The USAT Board of Directors has authorized indemnification of directors
and officers of USAT to the fullest extent permitted by Delaware law.
Section 145(a) of the GCL permits a corporation to indemnify any person
who was or is a party 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 the
corporation), by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action, suit
or proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation, and, with
32
<PAGE> 39
respect to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful.
Under Section 145(b) of the GCL, a corporation also may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he or
she is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection with the defense or settlement
of such action or suit if he or she acted in good faith and in a manner he or
she reasonably believed to be in, or not opposed to the best interests of the
corporation. However, in such an action by or on behalf of a corporation, no
indemnification may be in respect of any claim, issue or matter as to which the
person is adjudged liable to the corporation unless and only to the extent that
the court determines that, despite the adjudication of liability but in view of
all the circumstances, the person is fairly and reasonably entitled to indemnity
for such expenses which the court shall deem proper.
In addition, under Section 145(f) of the GCL, the indemnification
provided by Section 145 shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his or her official capacity and as to action in another capacity while
holding such office.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of USAT
pursuant to the foregoing provisions, or otherwise, USAT has been advised that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by USAT of expenses incurred or paid by a director, officer or
controlling person of USAT 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, USAT 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 Securities
Act and will be governed by the final adjudication of such issue.
33
<PAGE> 40
===============================================================================
No dealer, salesperson or other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy the securities offered hereby to any person in
any state or other jurisdiction in which such offer or solicitation would be
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that the information
contained herein is correct as of any time subsequent to the date hereof.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information.................. 2
Incorporation of Certain Information
By Reference........................ 4
The Company............................ 5
Risk Factors........................... 6
Dilution............................... 14
Use of Proceeds........................ 15
Selling Stockholders................... 16
Plan of Distribution................... 30
Legal Matters.......................... 31
Material Changes....................... 31
Commission Position on Indemnification. 32
</TABLE>
UNTIL _______, 1996 (_____ DAYS AFTER THE DATE OF THE PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN SECURITIES OFFERED HEREBY, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDER- WRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
===============================================================================
===============================================================================
U.S. ALCOHOL TESTING OF
AMERICA, INC.
2,000,000 SHARES OF COMMON
STOCK ($.01 PAR VALUE) ISSUABLE
UPON EXERCISE OF WARRANTS AND
9,755,275 SHARES OFFERED BY
SELLING STOCKHOLDERS
PROSPECTUS
____________ __, 1996
===============================================================================
<PAGE> 41
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is an estimate of expenses, except for the
registration fee, to be incurred by U.S. Alcohol Testing of America, Inc. (the
"Registrant" or "USAT") for the issuance and distribution of the securities
being registered hereby.
<TABLE>
<S> <C>
Registration Fee....................... $ 6,412
Accountants' Fees and Expenses......... 7,000
Legal Fees and Expenses................ 15,000
Printing, Transfer Agent and
Other Miscellaneous Expenses......... 21,588
-------
Total..................... $50,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Board of Directors of the Registrant has authorized indemnification
of directors and officers of the Registrant to the fullest extent permitted by
Delaware law.
Section 145(a) of the General Corporation Law of Delaware (the "GCL")
permits a corporation to indemnify any person who was or is a party 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 the corporation), by reason of the
fact that he or she is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with such action, suit or proceeding if he or she acted in good
faith and in a manner he or she 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 or her conduct was
unlawful.
Under Section 145(b) of the GCL, a corporation also may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he or
she is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
II-1
<PAGE> 42
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees) actually
and reasonably incurred by him or her in connection with the defense or
settlement of such action or suit if he or she acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation. However, in such an action by or on behalf of a
corporation, no indemnification may be in respect of any claim, issue or matter
as to which the person is adjudged liable to the corporation unless and only to
the extent that the court determines that, despite the adjudication of liability
but in view of all the circumstances, the person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
In addition, under Section 145(f) of the GCL, the indemnification
provided by Section 145 shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office.
ITEM 16. EXHIBITS TO FORM S-3.
All of the following exhibits designated with a footnote reference are
incorporated herein by reference to a prior registration statement filed under
the Securities Act of 1933, as amended (the "Securities Act"), or a periodic
report filed by USAT pursuant to Section 13 of the Securities Exchange Act of
1934, as amended. An exhibit marked with an asterisk is filed with this
Registration Statement.
<TABLE>
<CAPTION>
Number Exhibits
- ------ --------
<S> <C>
2(a) Copy of Exchange of Stock Agreement and Plan of Reorganization
dated May 7, 1992 between Good Ideas Enterprises, Inc., a
Texas corporation ("Good Ideas Texas"), U.S. Alcohol & Drug
Testing International N.V. and David Brooks. (1)
2(b) Copy of Agreement and Plan of Merger dated as of April 12,
1996 by and among USAT, Good Ideas Acquisition Corp. and Good
Ideas Enterprises, Inc., a Delaware corporation ("Good
Ideas"). (2)
2(c) Copy of Agreement and Plan of Merger dated as of April 23,
1996 by and among USAT, U.S. Drug Acquisition Corp. and U.S.
Drug Testing, Inc. ("U.S. Drug"). (3)
</TABLE>
II-2
<PAGE> 43
<TABLE>
<CAPTION>
Number Exhibits
- ------ --------
<S> <C>
2(d) Copy of the Certificate of Merger of Good Ideas Texas with and
into Good Ideas as filed on December 17, 1992.(1)
4(a) Specimen of Common Stock certificate of USAT. (4)
4(b) Specimen of Class "A" Cumulative and Convertible Preferred
Stock certificate of USAT. (4)
4(c) Specimen of Class "B" Non-Voting Preferred Stock certificate
of USAT. (5)
4(d) Form of Warrant Agreement dated December 17, 1990 between J.
Gregory & Company Inc. and USAT. (4)
4(d)(1) Form of Underwriter's Warrant expiring December 17, 1997 of
USAT. (4)
4(e) Form of Common Stock purchase warrant expiring October 31,
1996 of USAT. (5)
4(f) Form of Common Stock purchase warrant. (6)
USAT's Common Stock purchase warrants expiring August 28,
1996, September 1, 1996, September 16, 1996, September 30,
1996, October 31, 1996, May 17, 1997, September 16, 1997,
November 1, 1997, December 17, 1997, December 31, 1997,
February 28, 1998, April 15, 1998, July 17, 1998, August 27,
1998, September 1, 1998, November 1, 1998, November 15, 1998,
December 13, 1998, December 20, 1998, December 27, 1998,
January 2, 1999, January 31, 1999, February 26, 1999, February
28, 1999, March 31, 1999, April 14, 1999, April 17, 1999, May
12, 1999, July 17, 1999, July 19, 1999, August 11, 1999,
December 31, 1999, January 29, 2000, October 19, 2000,
November 15, 2000, December 31, 2000, December 31, 2001, April
29, 2003, April 30, 2003, May 1, 2003, May 2, 2003, May 12,
2003, May 14, 2003, June 9, 2003, July 7, 2003 and July 18,
2003 are substantially identical to the form of Common Stock
purchase warrant filed (by incorporation by reference) as
Exhibit 10(x) hereto except as to the name of the holder, the
expiration date and the exercise price and, accordingly,
pursuant to Instruction 2 to Item 601 of Regulation S-K under
the Securities Act are not individually filed.
</TABLE>
II-3
<PAGE> 44
<TABLE>
<CAPTION>
Number Exhibits
- ------ --------
<S> <C>
4(g) Copy of Restricted Stock, Non-Qualified Option and Incentive
Stock Option Plan of USAT. (4)
4(g)(1) Form of Stock Option expiring August 1, 2004 issued pursuant
to Exhibit 10(y) hereto. (7)
4(h) Copy of Common Stock purchase warrant expiring December 13,
1998. (8)
4(i) Form of Common Stock purchase warrant expiring May 20, 1999.
(9)
4(j)* Form of Common Stock purchase warrant expiring December 17,
1999.
5(a)* Opinion of Gold & Wachtel, LLP.
23(a)* Consent of Wolinetz, Gottlieb & Lafazan, P.C.
23(b) Consent of Gold & Wachtel, LLP is included in their opinion
filed as Exhibit 5 hereto.
23(c)* Consent of Ernst & Young LLP.
</TABLE>
- ------------------------
1. Filed as an exhibit to Good Ideas' Registration Statement on Form S-1,
File No. 33-73494, and incorporated herein by this reference.
2. Filed as an Exhibit to Good Ideas Annual Report on Form 10-K for the
fiscal year ended March 31, 1996 and incorporated herein by this
reference.
3. Filed as an exhibit to U.S. Drug's Annual Report on Form 10-K for the
fiscal year ended March 31, 1996 and incorporated herein by this
reference.
4. Filed as an exhibit to USAT's Registration Statement on Form S-18, File
No. 33-29718, and incorporated herein by this reference.
5. Filed as an exhibit to USAT's Registration Statement on Form S-1, File
No. 33-47855, and incorporated herein by this reference.
6. Filed as an exhibit to USAT's Registration Statement on Form S-1, File
No. 33-43337, and incorporated herein by this reference.
II-4
<PAGE> 45
7. Filed as an exhibit to USAT's Annual Report on Form 10-K for the fiscal
year ended March 31, 1995 and incorporated herein by this reference.
8. Filed as an exhibit to USAT's Registration Statement on Form S-8 filed
on March 5, 1996 and incorporated herein by this reference.
9. Filed as an exhibit to USAT's Current Report on Form 8-K filed on June
5, 1996 and incorporated herein by this reference.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-5
<PAGE> 46
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities
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 Securities Act and will be governed by the final
adjudication of such issue.
II-6
<PAGE> 47
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment to a registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, State of New York, on August 27, 1996.
U.S. ALCOHOL TESTING OF AMERICA, INC.
(Registrant)
By: /s/ Robert Stutman
-------------------------------------
Robert Stutman
Chairman, and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment to a registration statement has been signed by the following persons
in the capacities indicated on August 27, 1996.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/s/ Robert Stutman Principal Executive Officer
- ----------------------------- and Director
Robert Stutman
/s/ Joseph Bradley Acting Principal Financial and
- ----------------------------- Accounting Officer
Joseph Bradley
/s/ Alan I. Goldman Director
- -----------------------------
Alan I. Goldman
/s/ John C. Lawn Director
- -----------------------------
John C. Lawn
/s/ Peter M. Mark Director
- -----------------------------
Peter M. Mark
/s/ Linda H. Masterson Director
- -----------------------------
Linda H. Masterson
/s/ Lee S. Rosen Director
- -----------------------------
Lee S. Rosen
</TABLE>
<PAGE> 48
EXHIBIT INDEX
U.S. ALCOHOL TESTING OF AMERICA, INC.
REGISTRATION STATEMENT ON FORM S-3
EXHIBITS FILED WITH FORM S-3 REGISTRATION STATEMENT
Number Exhibits Page Number
- ------ -------- -----------
4(j) Form of Common Stock purchase warrant E-1
expiring December 17, 1999.
5(a) Opinion of Gold & Wachtel, LLP. E-10
23(a) Consent of Wolinetz, Gottlieb & E-12
Lafazan, P.C.
23(c) Consent of Ernst & Young LLP. E-13
<PAGE> 1
Exhibit 4(j)
Warrant No. __________ __________ Shares
NO SALE, OFFER OR TRANSFER OF THIS WARRANT OR THE SHARES ISSUABLE UPON
EXERCISE THEREOF SHALL BE MADE UNLESS A REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT TO SUCH
TRANSACTION IS THEN IN EFFECT OR THE ISSUER HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO IT THAT SUCH TRANSFER DOES NOT REQUIRE
REGISTRATION UNDER SUCH ACT.
THIS WARRANT WILL BE VOID AFTER 5:00 P.M., NEW YORK TIME, ON DECEMBER 17, 1999
WARRANT
TO SUBSCRIBE FOR AND PURCHASE SHARES OF
COMMON STOCK OF
U.S. ALCOHOL TESTING OF AMERICA, INC.
This certifies that, for value received, _____________________________
(hereinafter called the "Holder"), or registered assigns, is entitled, at any
time or from time to time at or after the earlier of December 18, 1996 or the
effective date of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the shares issuable upon the
exercise of this Warrant (the "Commencement Date") and at or before 5:00 P.M.,
New York time, on December 17, 1999 (the "Expiration Date"), to subscribe for
and purchase an aggregate of _________________ fully paid and non-assessable
shares of the common stock, $.01 par value (the "Common Stock"), of U.S. Alcohol
Testing of America, Inc., (hereinafter called the "Corporation") at a purchase
price of $2.00 per share (the "Purchase Price"), subject to adjustment as
provided in Section 3 hereof, payable in lawful money of the United States of
America, upon surrender of this Warrant and payment of the Purchase Price to the
Corporation at its principal office (currently 10410 Trademark Street, Rancho
Cucamonga, California 91730) or at such other place as the Corporation may
designate by written notice to the Holder.
The Warrant evidenced hereby is one of a duly authorized series of
warrants to purchase an aggregate of not more than 2,000,000 shares of the
Common Stock (such warrants and this Warrant being collectively referred to
herein as the "Warrants") to be issued to the purchasers in a private placement
initiated by the Corporation pursuant to Regulation D under the Securities
E-1
<PAGE> 2
Act and pursuant to a Confidential Private Placement Memorandum dated November
27, 1995 (the "Memorandum").
1. Exercise
The Warrant evidenced hereby may be exercised from time to time, in
whole or in part, from the Commencement Date until the Expiration Date, provided
that in no event may any fractional share of the Common Stock be issued. In the
event that a fractional share would otherwise be issued as a result of any
adjustment made pursuant to Section 3 hereof or otherwise, payment for such
fractional share shall be made on the basis of the Market Price on the date of
exercise. For the purpose of this Section 1, the term "Market Price" shall mean
(a) if the Common Stock is traded on a national securities exchange or on the
National Association of Securities Dealers Automated Quotation ("NASDAQ")
System, the closing sales price (or, if no sales on that day, the high bid
price) or (b) if the Common Stock is not traded as provided in subsection (a),
the closing bid price as reported in the OTC Bulletin Board of the National
Association of Securities Dealers, Inc. (the "NASD") or in the pink sheets by
the National Quotation Bureau, Inc.
Upon any exercise of the Warrant evidenced hereby, the form of election
to purchase set forth as Exhibit A hereto shall be properly completed, executed
and delivered to the Corporation, together with full payment to the Corporation
of the Purchase Price for the shares as to which the Warrant is exercised by
certified check or bank draft. In the event that there is only a partial
exercise of the Warrant evidenced hereby, there shall be issued to the Holder a
new Warrant Certificate, in all respects similar to this Warrant Certificate,
evidencing the number of shares of the Common Stock still available for
exercise.
Upon receipt of full payment and properly completed documentation, the
Corporation shall then cause the Transfer Agent for the Common Stock to issue
fully paid and nonassessable shares of the Common Stock as are represented by
the exercise.
If this Warrant shall be surrendered upon exercise within any period
during which the transfer books for the Common Stock are closed for any purpose,
the Corporation shall not be required to make delivery of certificates for
shares of the Common Stock until the date of the reopening of said transfer
books.
2. Expiration Date
The Warrant evidenced hereby may not be exercised before the
Commencement Date or after the Expiration Date with respect to the shares of the
Common Stock as to which the Warrant may be exercised and, to the extent not
exercised by the Expiration Date, the Warrant evidenced hereby shall become
void.
E-2
<PAGE> 3
3. Adjustments
Subject to the provisions of this Section 3, the Purchase Price and the
shares of the Common Stock as to which the Warrant may be exercised shall be
subject to adjustment from time to time as hereinafter set forth:
(a) If at any time, or from time to time, the Corporation
shall, by subdivision, consolidation, or reclassification of shares, or
otherwise, change as a whole the outstanding shares of the Common Stock into a
different number or class of shares, the number and class of shares so changed
shall replace the shares outstanding immediately prior to such change and the
Purchase Price and the number of shares purchasable under the Warrants
immediately prior to the date on which such change shall become effective shall
be proportionately adjusted.
(b) Irrespective of any adjustments or change in the Purchase
Price or the number of securities actually purchasable under the Warrants, the
Warrants theretofore and thereafter issued may continue to express the exercise
price and the number of securities purchasable thereunder as the Purchase Price
and the number of securities purchasable were expressed in the Warrants when
initially issued.
(c) If at any time while the Warrants are outstanding, the
Corporation shall consolidate with, or merge into, another corporation, firm or
entity, or otherwise enter into a form of business combination, the holders of
the Warrants shall thereafter be entitled upon exercise thereof to purchase,
with respect to each security purchasable thereunder immediately prior to the
date on which such consolidation or merger or other form of business combination
shall become effective, the securities or property to which a holder of one such
security would have been entitled upon such consolidation or merger or other
form of business combination, without any change in, or payment in addition to,
the Purchase Price in effect immediately prior to such consolidation or merger
or other form of business combination, and the Corporation shall take such steps
in connection with such consolidation or merger or other form of business
combination as may be necessary to assure that all the provisions of the
Warrants shall thereafter be applicable, as nearly as reasonably may be, in
relation to any securities or property thereafter deliverable upon the exercise
of the Warrants.
(d) The Board of Directors of the Corporation, in its
discretion, may, at any time during the exercise period of the Warrants, extend
the exercise period or reduce the Purchase Price for all Warrants then
outstanding.
(e) Upon the happening of any event requiring the adjustment
of the exercise price hereunder, the Corporation shall forthwith give written
notice thereof to each registered holder of the Warrants stating the adjusted
Purchase Price and the adjusted number of securities purchasable upon the
exercise thereof resulting from such event and setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is
based. The certificate of the Corporation's independent public accountants shall
be conclusive evidence of the correctness of any computation made hereunder.
E-3
<PAGE> 4
4. Notice to Holder
Nothing contained herein shall be construed as conferring upon the
Holder the right to vote or to consent or to receive notice as a stockholder in
respect of the meetings of shareholders for the election of directors of the
Corporation or any other matter, or any other rights whatsoever as a stockholder
of the Corporation; provided, however, that in the event that:
(a) the Corporation shall take action to make any distribution
(other than cash dividends payable out of earnings or earned surplus) on the
Common Stock;
(b) the Corporation shall take action to offer for
subscription pro rata to the holders of the Common Stock any additional shares
of stock of any class or other rights or securities convertible into the Common
Stock;
(c) the Corporation shall take action to accomplish any
capital reorganization, or reclassification of the capital stock of the
Corporation (other than a change in par value, or a change from par value to no
par value, or a change from no par value to par value, or a subdivision or
combination of the Common Stock), or a consolidation or merger of the
Corporation into, or a sale of all or substantially all of its assets to,
another corporation; or
(d) the Corporation shall take action looking to a voluntary
dissolution, liquidation or winding up of the Corporation;
then, in any one or more of such cases, the Corporation shall, (x) at least 10
days prior to the date on which the books of the Corporation shall close or a
record date shall be taken for such distribution or subscription rights or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, cause notice thereof to be sent to the Holder at the address
appearing on the Warrant register of the Corporation and, (y) in the case of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, cause at least 10 days' prior written notice of the
date when the same shall take place to be given to the Holder in the same
manner. Such notice in accordance with the foregoing clause (x) shall also
specify, in the case of any such distribution or subscription rights, the date
on which the holders of the Common Stock shall be entitled thereto, and such
notice in accordance with the foregoing clause (y) shall also specify the date
on which the holders of the Common Stock shall be entitled to exchange their
shares of the Common Stock for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, as the case may be. Failure to give such notice or
any defect therein shall not affect the legality or validity of any of the
matters set forth in this Section 4 inclusive.
5. Duty to Register Underlying Shares
E-4
<PAGE> 5
The Corporation agrees, at its expense, as soon as is reasonably
practicable, but not earlier than six months after the date of the last of the
Subsequent Closing Dates as such term is defined in the Memorandum, to prepare
and file a registration statement under the Securities Act (the "Registration
Statement") with respect to its offer of the shares of the Common Stock issuable
upon the exercise of the Warrants and thereafter to use its best efforts (a) to
have such Registration Statement declared effective and (b) to have available
for delivery by the Corporation to the Holder at all times thereafter a
prospectus relating to the issuance of the shares of the Common Stock issuable
upon the exercise of the Warrants which complies with Section 10(a)(3) of the
Securities Act.
The Holder, by his, her or its acceptance of this Warrant, acknowledges
that neither the Warrant nor the shares of the Common Stock issuable upon
exercise thereof have been registered under the Securities Act and, accordingly,
represents and warrants to the Corporation that he, she or it is acquiring the
Warrant for investment and not with a view to, or in connection with, any
distribution thereof. The holder further represents and warrants that, if a
registration statement under the Securities Act is not effective with respect to
the underlying shares at the time of exercise, the Holder will acquire the
shares of the Common Stock for investment and not with a view to, or in
connection with, any distribution thereof.
6. Transfers and Exchanges
The Corporation shall transfer, from time to time, any outstanding
Warrants upon the books to be maintained by the Corporation for that purpose,
upon surrender thereof for transfer properly endorsed or accompanied by
appropriate instructions for transfer. Upon any such transfer, a new Warrant
shall be issued to the transferee and the surrendered Warrant shall be canceled
by the Corporation. Warrants so canceled shall be delivered to the Corporation
from time to time upon request. Warrants may be exchanged at the option of the
holder thereof, when surrendered at the office of the Corporation, for another
Warrant, or other Warrants of different denominations, of like tenor and
representing in the aggregate the rights to purchase a like number of shares.
Anything in this Section 6 to the contrary notwithstanding, no transfer shall be
made if such transfer would violate Section 5 of the Securities Act.
7. Payment of Taxes
The Corporation will pay any documentary stamp taxes attributable to
the initial issuance of the Common Stock issuable upon the exercise of the
Warrants; provided, however, that the Corporation shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue or delivery of any certificates for the Common Stock in a name other than
that of the registered holder of the Warrant in respect of which such shares are
issued, and in such case the Corporation shall not be required to issue or
deliver any certificates for the Common Stock or any Warrant for remaining
shares until the person requesting the same has paid to the Corporation the
amount of such tax or has established to the Corporation's satisfaction that
such tax has been paid.
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<PAGE> 6
8. Mutilated or Missing Warrants
In case any of the Warrants shall be mutilated, lost, stolen or
destroyed, the Corporation may in its discretion issue and deliver in exchange
and substitution for, and upon cancellation of, the mutilated Warrant, or in
lieu of, and in substitution for, the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and representing an equivalent right or interest, but only
upon receipt of evidence satisfactory to the Corporation of such loss, theft or
destruction of such Warrant. Applicants for such substitute Warrants shall also
comply with such other reasonable regulations and pay such reasonable charges as
the Corporation may prescribe.
9. Reserve
The Corporation covenants and agrees that, from time to time, there
will be authorized and available for delivery a sufficient number of its shares
of the Common Stock or other securities into which the Warrants are then
exercisable to permit the exercise of all of the Warrants at the time
outstanding as and when the certificates shall, from time to time, be
deliverable in accordance with Section 1 hereof. In the event that there are
insufficient shares or other securities for such purpose, the Corporation shall
use its best efforts to seek stockholder approval for an Amendment to the
Corporation's Certificate of Incorporation and/or to take such other action as
is necessary or appropriate to cause such shares or other securities to be
authorized.
10. Governing Law
The Warrant evidenced hereby shall be construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed in that State, without giving effect to any principles of
conflicts of laws.
IN WITNESS WHEREOF, U.S. Alcohol Testing of America, Inc. has caused
this Warrant to be signed manually by a duly authorized officer of the
Corporation.
By: __________________________
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<PAGE> 7
EXHIBIT A
ELECTION TO PURCHASE
To U.S. Alcohol Testing of America, Inc.
- ---------------------------------------------
- ---------------------------------------------
- ---------------------------------------------
The undersigned hereby irrevocably elects to exercise the Warrant
represented by the within Warrant Certificate to purchase shares of the Common
Stock issuable upon the exercise of the Warrant and requests that certificates
for such shares shall be issued in the name of
- -----------------------------------------------------------------
(Name)
- -----------------------------------------------------------------
(Address)
- -----------------------------------------------------------------
(Taxpayer number)
and be delivered to
---------------------------------------------
(Name)
at
--------------------------------------------------------------
(Address)
and, if said number of shares of the Common Stock shall not be all the shares of
the Common Stock evidenced by the within Warrant Certificate, that a new Warrant
Certificate for the balance remaining of such said shares be registered in the
name of
- -----------------------------------------------------------------
(Name)
- -----------------------------------------------------------------
(Address)
- -----------------------------------------------------------------
(Taxpayer number)
and delivered to the undersigned at the address below stated.
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<PAGE> 8
Dated: 19
----------------, --
Name of holder of Warrant Certificate:
- -----------------------------------------------------------------
(please print)
- -----------------------------------------------------------------
(Address)
- -----------------------------------------------------------------
(Signature)
Note: The above signature must correspond
with the name as written upon the
face of this Warrant Certificate in
every particular, without alteration
or enlargement or any change
whatever.
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<PAGE> 9
ASSIGNMENT
(to be executed by the registered holder
to effect a transfer of the within Warrant)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
(Name)
________________________________________________________________________________
(Address)
________________________________________________________________________________
the right to purchase the __________ shares of Common Stock evidenced by this
Warrant, and does hereby irrevocably constitute and appoint
_________________________________ to transfer the said right on the books of the
Corporation, with full power of substitution.
Dated: _______________________
___________________________________
(Signature)
Notice: The signature to this assignment must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement, or any change whatsoever and must be guaranteed by a
bank, other than a savings bank or trust company, having an office or
correspondent in New York, or by a firm having membership on a registered
national securities exchange or in the NASD.
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<PAGE> 1
Exhibit 5(a)
August 27, 1996
U.S. Alcohol Testing of America, Inc.
10410 Trademark Street
Rancho Cucamonga, California 91730
Dear Sirs:
We refer to the Registration Statement on Form S-3 (the
"Registration Statement") to be filed by U.S. Alcohol Testing of America, Inc.
("USAT") under the Securities Act of 1933, as amended (the "Securities Act"),
relating to (1) an aggregate of 2,000,000 shares of its Common Stock, $.01 par
value (the "USAT Common Stock"), issuable upon the exercise of USAT Common Stock
purchase warrants expiring December 17, 1999 (the "December 17 Warrants") and
(2) the stockholders named in the table under the caption "Selling Stockholders"
offer of (a) an aggregate of 2,000,000 shares (the "Outstanding Shares") which
were issued in a private placement by USAT, the final closing of which was held
on February 14, 1996 and (b) an aggregate of 4,145,000 shares of the USAT Common
Stock issuable upon the exercise of USAT Common Stock purchase warrants (the
"Warrants") expiring between July 17, 1998 and July 18, 2003.
As counsel to USAT, we have examined the Certificate of
Incorporation of USAT, its By-Laws, its minutes and other corporate proceedings
and corporate records and stock transfer records relating to the authorization
and, where applicable, the issuance of the Outstanding Shares, the December 17
Warrants and the Warrants and have reviewed the Registration Statement in the
form intended to be filed. In our opinion, we have made such an investigation
and examination as we have deemed necessary for the purposes of expressing an
informed opinion on the matters hereafter discussed.
Based upon such examination, it is our opinion that:
1. USAT is duly organized and validly existing under the laws
of the State of Delaware;
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<PAGE> 2
U.S. Alcohol Testing of America, Inc.
August 27, 1996
Page Two
2. The shares of the USAT Common Stock issuable upon the
exercise of the December 17 Warrants and the Warrants will be, when issued,
validly issued, fully paid and non-assessable; and
3. The Outstanding Shares being offered by the Selling
Stockholders are validly issued, fully paid and non-assessable.
In addition, we hereby consent to the filing of this opinion
as an Exhibit to the Registration Statement and to the references to our firm
under the captions "Selling Stockholders," "Plan of Distribution" and "Legal
Matters" included in the Prospectus which constitutes Part I of the Registration
Statement.
Very truly yours,
/s/ Gold & Wachtel, LLP
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<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated May 26, 1996 on the consolidated
financial statements of U.S. Alcohol Testing of America, Inc. and Subsidiaries
included in its Annual Report (Form 10-K) for the year ended March 31, 1996,
filed with the Securities and Exchange Commission, in the Registration
Statement (Form S-3 No. 333-______) and related Prospectus of U.S. Alcohol
Testing of America, Inc. for the registration of 2,000,000 shares of its common
stock issuable upon exercise of warrants and shares offered by selling
stockholders.
/s/ Wolinetz, Gottlieb & Lafazan, P.C.
WOLINETZ, GOTTLIEB & LAFAZAN, P.C.
Rockville Centre, New York
August 28, 1996
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<PAGE> 1
Exhibit 23(c)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference of our report dated May 26, 1996
with respect to the consolidated financial statements of U.S. Alcohol Testing of
America, Inc. included in its Annual Report (Form 10-K) for the year ended March
31, 1996, filed with the Securities and Exchange Commission, in the Registration
Statement (Form S-3 No. 333-______) and related Prospectus of U.S. Alcohol
Testing of America, Inc. for the registration of 2,000,000 shares of its common
stock issuable upon exercise of warrants and shares offered by selling
stockholders.
/S/ ERNST & YOUNG LLP
Riverside, California
August 23, 1996
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