<PAGE> 1
As filed with the Securities and Exchange Commission on September 23, 1996
File No. 333-10945
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
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. / /
----------------------------------
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.
----------------------------------
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> 3
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> 4
PROSPECTUS
U.S. ALCOHOL TESTING OF AMERICA, INC.
-------------------------------------
2,000,000 SHARES OF USAT COMMON STOCK ISSUABLE UPON
EXERCISE OF WARRANTS AND 9,725,275 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 3,652,674 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 1,152,674 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 5,885,101 shares of the USAT Common Stock issuable upon the
exercise of USAT Common Stock purchase warrants expiring between October
31, 1996 and July 18, 2003. The Selling Stockholders have advised USAT
that they may, from time to time, offer the foregoing 9,725,275 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. The following executive
officers and directors of USAT are among the Selling Stockholders: Robert
Stutman, Linda H. Masterson, Alan I. Goldman, John C. Lawn, Peter M. Mark
and Lee S. Rosen.
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 September 16,
1996 was $2.4375.
<PAGE> 5
-------------------------------------
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 $2.4375 (1) 0 0 $2.4375 (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 $23,705,358(1) 0 0 $23,705,358(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
September 16, 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 September ___, 1996.
<PAGE> 6
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.
The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants
that file electronically with the Commission at the following Web site
address: http://www.sec.gov. 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.
333-10945 (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
2
<PAGE> 7
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 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 500,000 shares of the USAT Common Stock registered as
part of the
3
<PAGE> 8
Acquisition Shares and issued to the former RSA shareholders and (2)
an aggregate of 700,705 shares of the USAT Common Stock received upon
the prior exercises of USAT Common Stock purchase warrants which
expired September 1 or September 16, 1996 (the "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
1,752,070 shares of the USAT Common Stock consisting of (1) an
aggregate of 1,351,351 shares of the USAT Common Stock to be issued
upon the exercise of USAT Common Stock purchase warrants expiring
between October 31, 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.(a) Annual Report on Form 10-K for the fiscal year ended
March 31, 1996;
(b) Form 10-K/A amending the foregoing filed on September
23, 1996;
2.(a) Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996;
4
<PAGE> 9
(b) Form 10-Q/A amending the foregoing filed on September
23, 1996;
3.(a) Current Report on Form 8-K filed on June 5, 1996;
(b) Current Report on Form 8-K/A filed on August 5, 1996;
(c) Current Report on Form 8-K/A filed on August 27,
1996;
(d) Current Report on Form 8-K/A filed on September 23,
1996;
4. Notice of Annual Meeting of Stockholders and Proxy
Statement dated September 12, 1996; and
5. Registration Statement on Form 8-A, File No. 0-18938.
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
5
<PAGE> 10
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, 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
6
<PAGE> 11
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.
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
7
<PAGE> 12
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 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 August 31, 1996, USAT Common Stock
purchase warrants and stock options to purchase an aggregate of
2,732,824 shares of the USAT Common Stock were exercised for an
aggregate exercise price of $4,754,088.
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
8
<PAGE> 13
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 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
9
<PAGE> 14
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.
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
10
<PAGE> 15
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 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 31, 1996, 35,603,092 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 31, 1996, there were also reserved for issuance: (a)
1,351,351 shares issuable upon the exercise at exercise prices ranging
between $1.33 and $4.00 per share of the September 1992 Warrants; (b)
61,250 shares issuable upon the exercise at exercise prices ranging
between $1.0625 and $4.00 per share of the May 1994 Warrants; (c)
82,750 shares issuable upon the exercise at exercise prices ranging
between $2.00 and $2.50 per share of the January 1996 Warrants; (d)
2,000,000 shares
11
<PAGE> 16
issuable upon the exercise at $2.00 per share of the December 17
Warrants; (e) 185,207 shares issuable upon the conversion of the
shares of the Class A Preferred Stock, $.01 par value (the "Class A
Preferred Stock"); (f) 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; (g) 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; (h) 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 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; (i)
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; (j) 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; (k) 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; (l)
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); (m) 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; (n) 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; (o) 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; (p) 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 (q) 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 11,491,776 shares
12
<PAGE> 17
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 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.
13
<PAGE> 18
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 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.
14
<PAGE> 19
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 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 $1.87 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; 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; 1,175,856 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 $2.5875
15
<PAGE> 20
per share based upon a market price of $2.6875 on September 3, 1996
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 of $19,605,941. 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.
16
<PAGE> 21
<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 2.2 1.1
Henry H. Ramseur 100,000 50,000 50,000 nil nil
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 35,603,092 shares of the USAT Common Stock
outstanding on August 31, 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 31, 1996.
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 3,000,300 shares of the
USAT Common Stock, the exercise of the
17
<PAGE> 22
New Warrants 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 4.0 1.3
Robert Stutman (9) 971,500 (10) 971,500 (10) 0 2.7 0
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 nil
Christine Clearwater 30,000 (22) 30,000 (22) 0 nil 0
William Current 39,000 (23) 39,000 (23) 0 nil 0
Brik 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) 20,875(38) nil nil
</TABLE>
---------------------
(1) The percentages computed in this column of the table are
based upon 35,603,092 shares of the USAT Common Stock
outstanding on August 31, 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 31, 1996.
(2) A director of USAT.
18
<PAGE> 23
(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.
(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
19
<PAGE> 24
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 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
20
<PAGE> 25
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) 68,500 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
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,
21
<PAGE> 26
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 $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.
22
<PAGE> 27
(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 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.
23
<PAGE> 28
(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.
(30) A former Vice President of USAT.
(31) The shares reported in the table as being beneficially owned
reflect (a) 315,000 shares of the USAT Common Stock received
upon the exercises 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;" and (c) 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.
24
<PAGE> 29
(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.
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(2)
---- ------ ------- ----- ------ --------
<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 35,603,092 shares of the USAT Common Stock outstanding on
August 31, 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
25
<PAGE> 30
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 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) 315,000 shares received upon prior exercises
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
26
<PAGE> 31
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;" and (c) 15,875 other shares.
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.
27
<PAGE> 32
(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 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 1,351,351 shares) issuable upon the
exercise of the September 1992 Warrants, which shares were registered
under the Securities Act pursuant to the 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>
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
</TABLE>
28
<PAGE> 33
<TABLE>
<CAPTION>
Number of Exercise Expiration
Name Shares Price Date
---- --------- -------- ----------
<S> <C> <C> <C>
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>
-----------
(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 Cindy 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>
29
<PAGE> 34
---------------
(1) Formerly employed by USAT or a subsidiary of USAT.
(2) Received as underwriting compensation.
(3) A former director of USAT.
PLAN OF DISTRIBUTION
The holders of 3,652,674 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 9,725,275 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
30
<PAGE> 35
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 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.
31
<PAGE> 36
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 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 has called 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
32
<PAGE> 37
(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, 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
33
<PAGE> 38
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.
34
<PAGE> 39
<TABLE>
<S> <C>
=========================================== ===========================================
No dealer, salesperson or other person
has been authorized to give any informa-
tion 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 U.S. ALCOHOL TESTING OF
offer to sell or a solicitation of an AMERICA, INC.
offer to buy the securities offered
hereby to any person in any state or other
jurisdiction in which such offer or 2,000,000 SHARES OF COMMON
solicitation would be unlawful. Neither STOCK ($.01 PAR VALUE) ISSUABLE
the delivery of this Prospectus nor any UPON EXERCISE OF WARRANTS AND
sale made hereunder shall, under any 9,725,275 SHARES OFFERED BY
circumstances, create any implication SELLING STOCKHOLDERS
that the information contained herein is
correct as of any time subsequent to the
date hereof.
TABLE OF CONTENTS
Page ---------------------------
----
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Information ---------------------------
By Reference........................ 4
The Company............................ 5
Risk Factors........................... 7
Dilution............................... 14
Use of Proceeds........................ 16
Selling Stockholders................... 16
Plan of Distribution................... 30
Legal Matters.......................... 31
Material Changes....................... 32
Commission Position on Indemnification. 32
UNTIL OCTOBER ___, 1996 (40 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 September ___, 1996
ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDER-
WRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
=========================================== ===========================================
</TABLE>
<PAGE> 40
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> 41
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> 42
<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> 43
<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.
23(d)* 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.
II-4
<PAGE> 44
<TABLE>
<S> <C>
6. Filed as an exhibit to USAT's Registration Statement on Form S-1,
File No. 33-43337, and incorporated herein by this reference.
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.
</TABLE>
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.
II-5
<PAGE> 45
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.
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> 46
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, there-unto
duly authorized, in the City of New York, State of New York, on
September 19, 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 September 19, 1996.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Robert Stutman Principal Executive Officer
-------------------------------- and Director
Robert Stutman
/s/ Dennis Wittman Principal Financial and Accounting
-------------------------------- Officer
Dennis Wittman
/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> 47
EXHIBIT INDEX
U.S. ALCOHOL TESTING OF AMERICA, INC.
AMENDMENT NO. 1 TO
REGISTRATION STATEMENT ON FORM S-3
EXHIBITS FILED WITH AMENDMENT NO. 1
TO FORM S-3 REGISTRATION STATEMENT
<TABLE>
<CAPTION>
Number Exhibits Page Number
------ -------- -----------
<S> <C> <C>
5(a) Opinion of Gold & Wachtel, LLP E-1
23(a) Consent of Wolinetz, Gottlieb & E-3
Lafazan, P.C.
23(c) Consent of Ernst & Young LLP E-4
23(d) Consent of Ernst & Young LLP E-5
</TABLE>
<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;
E-1
<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
E-2
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement Amendment No. 1 of Form S-3 of our report dated
May 26, 1995 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. 333-10945) 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
September 19, 1996
E-3
<PAGE> 1
Exhibit 23(c)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference of our report dated May
20, 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.
333-10945) 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
September 18, 1996
E-4
<PAGE> 1
Exhibit 23(d)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference of our report dated June
23, 1996 with respect to the financial statements of Robert Stutman &
Associates, Inc. as of December 31, 1994 and 1995 and for each of the
three years in the period ended December 31, 1995 included in the Form
8-K/A, as amended, filed with the Securities and Exchange Commission,
in the Registration Statement (Form S-3 No. 333-10945) 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
Boston, Massachusetts
September 18, 1996
E-5
