<PAGE>
This filing is made
pursuant to Rule 424(b)(3)
under the Securities Act of
1933 in connection with
Registration No. 333-37990
PROSPECTUS
9,500,718 SHARES OF COMMON STOCK
AMERICAN TECHNOLOGIES GROUP INC.
The 9,500,718 shares of common stock being offered by this prospectus
are being offered by certain selling securityholders their respective pledgees,
donees, transferees and other successors in interest. See "Selling
Securityholders" on page 15.
The selling securityholders may offer these shares from time to time in
transactions on the OTC Bulletin Board or in privately negotiated transactions
as described under the "Plan of Distribution" on page 17. We will not receive
any of the proceeds from this offering.
Our common stock is quoted on the OTC Bulletin Board under the symbol
"ATEG." On June 2, 2000, the closing sale price of the common stock on the OTC
Bulletin Board was $0.19.
INVESTING IN OUR COMMON STOCK INVOLVES SUBSTANTIAL RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 7.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is June 6, 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
ABOUT AMERICAN TECHNOLOGIES ..................................................4
Business Summary ........................................................4
Proposed Financing ......................................................6
End of Merger Talks with Commodore
Separation Technologies Inc .........................................6
RISK FACTORS .................................................................7
Financial Risk Factors .......................................................7
We have a History of Losses Which Will Continue Through
the End of the Current Fiscal Year...................................7
We have Experienced Substantial Difficulty Generating
Sufficient Working Capital...........................................7
Our Sales of Securities Convertible into Common Stock at
a Discount to the Market Price May Cause the Market
Value of Our Common Stock to Drop ...................................8
Lack of Listing on a Major Exchange May Make It
Difficult for Investors to Dispose of Our Common
Stock ...............................................................8
Because Our Common Stock is a "Penny Stock," Trading in it is
Subject to the Penny Stock Rules Which Could Affect Your
Ability to Resell the Stock in the Market ...........................9
Business Risk Factors .......................................................10
We May Not Find Customers for Our Products .............................10
There May Be Unforeseen Regulatory Requirements which
Impede the Marketing and Sale of Our Products ......................10
We May Not Be Able to Obtain the Patents or Trademarks
Needed to Protect the Value of Our Technologies ....................11
WHERE YOU CAN FIND MORE INFORMATION .........................................12
FORWARD-LOOKING STATEMENTS ..................................................13
2
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DESCRIPTION OF COMMON STOCK .................................................13
USE OF PROCEEDS FROM SALE OF COMMON STOCK ...................................14
USE OF PROCEEDS FROM EXERCISE OF WARRANTS AND OPTIONS .......................14
SELLING SECURITYHOLDERS .....................................................15
PLAN OF DISTRIBUTION ........................................................17
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES ..............................18
EXPERTS .....................................................................19
LEGAL MATTERS ...............................................................19
</TABLE>
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ABOUT AMERICAN TECHNOLOGIES
Business Summary
American Technologies develops and sells products based upon on our
patented and proprietary technologies. The goal of our efforts is to develop
products that have a positive impact on the environment. Our address and
telephone number are: 1017 South Mountain Avenue, Monrovia, California
91016, (626) 357-5000.
We concentrate on technology discovery and development efforts in three
areas:
- I(E)-TM- (Catalyst) Technology
- Water Purification
- Particle Beams
Our I(E) (Catalyst) Technology refers to a proprietary process which
produces water solutions containing water clusters that are stable at room
temperature. The clusters are groups of water molecules configured in such a way
so as to produce relatively large plus/minus polarity. We believe this polarity
is what gives the clusters their catalytic properties. We can produce different
kinds of water solutions for different applications.
Tests indicate that these water clusters improve the performance of
various chemical, physical and biological processes, including combustion
enhancement, descaling, enzyme processes and de-coking. For example, in internal
combustion engines the clusters attract hydrocarbons and oxygen resulting in a
more complete burning of the fuel. This results in improved efficiency and
reduced carbon deposits in the combustion chamber.
Independent researchers observe these water clusters by different
standard research tools including:
- Laser autocorrelation
- Electron microscope
- Atomic force microscope
- UV spectroscopy
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American Technologies sells these water solutions for use in several
product lines including household cleaning products. We also use them in our
combustion enhancers.
Our laboratory results on various applications of our I(E) (Catalyst)
Technology to combustion have been confirmed by independent tests conducted by a
variety of potential customers. These tests include positive results in a gas
turbine electric generation power plant, successful testing by a foreign company
of the combustion catalyst with ethanol directly into gasoline, and positive
results over five months of testing at a diesel electric power generation
facility in China.
During the fiscal year ended July 31, 1999, revenue from the sale of
these water solutions for use in products manufactured by others was nominal
and revenue from the sale of The Force-Registered Trademark- combustion
enhancer was $248,000. During the same period, American Technologies had
incurred net losses of approximately $10.8 million.
During the six months ended January 31, 2000, revenue from the sale of
The Force was $127,450 and we incurred a loss of approximately $3.5 million.
During the six months ended January 31, 1999, revenue from the sale of The Force
was $96,480 and we incurred a loss of approximately $5.1 million.
In the water purification area, our low pressure vacuum distillation
system is undergoing tooling design for a home use version for introduction to
the marketplace in late 2000. Our vacuum distiller utilizes a proprietary method
to provide the principal advantage of vacuum distillers - boiling water at low
temperatures which avoids mineral deposits and scaling - without the need for
expensive and noisy vacuum pumps. We are currently soliciting bids for the
manufacturing of the distiller.
The third technology is the particle beam project which produces a beam
of heavy particles. The development of the particle beam has been conducted
through an American Technologies sponsored research program with the California
Institute of Technology. The development of this technology is likely to require
a minimum of three to five years and expenditure of substantial sums of money,
likely to be in excess of $10,000,000, on research and development. We submitted
a proposal to the Department of Energy for a $6,000,000 joint venture grant to
produce a small pilot plant based on the current prototype located at CalTech.
The proposal describes the potential of our particle beam to turn harmful
nuclear waste
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into harmless components. The DOE has reviewed the proposal and discussions
are underway regarding funding of the project. The particle beam project has
been on hold pending receipt of significant funding to continue its
development
Dr. Lo, our Director of Research and Development, has developed certain
particle beam theories. According to these theories, the proposed particle beam
may be able to break down molecules or even atoms and their nuclei, or be used
for rock drilling or precision cutting of metals without distortion or excessive
heat. No evidence exists to substantiate these potential applications.
Proposed Financing
We have entered into a letter Agreement with Bristol Capital LLC under
which Bristol will move forward in negotiating and establishing directly or
through an affiliated company a $12 million equity line of credit. Under the
line of credit, upon the effectiveness of a registration statement covering the
shares of common stock to be purchased by Bristol under the financing, the
Company can draw up to $12 million in monthly increments over 3 years. However,
there can be no assurance that we can consummate this transaction in a timely
manner, if at all.
In exchange for Bristol's commitment to use its reasonable best efforts
to accomplish this financing, the Company issued Bristol warrants to purchase
3,000,000 shares of common stock at the lower of $0.35 and 76% of the average of
the closing bid prices on each of the five trading days immediately prior to
exercise of the warrants. The Company has the right to call the warrants upon
ten days notice once the registration statement which incorporates this
prospectus is declared effective by the Securities and Exchange Commission and
provided the closing bid price on the tenth day is at least equal to 125% of the
exercise price of the warrants. The maximum monthly call by the Company is
$150,000.
End of Merger Talks with Commodore Separation Technologies Inc.
In February 1999, we signed a letter of intent which contains terms for
our acquisition of Commodore Separation Technologies. Recently we notified
Commodore Separation Technologies that we no longer desire to continue to pursue
the possible merger.
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RISK FACTORS
You should carefully consider the risks described below before making
an investment decision. The risks and uncertainties described below are the only
material risks facing us of which we are currently aware. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial may
also impair our business operations.
If any of the following risks actually occur, our business, financial
condition or results of operations could be materially adversely affected. In
such case, the trading price of our common stock could decline, and you may lose
all or part of your investment.
Financial Risk Factors
WE HAVE A HISTORY OF FINANCIAL LOSSES WHICH WILL CONTINUE THROUGH THE END OF THE
CURRENT FISCAL YEAR
We have operated at a loss throughout our history. Net losses for the
six months ended January 31, 2000 were approximately 3.5 million and for the
fiscal year ended July 31, 1999 were approximately $10.8 million. Net losses for
the fiscal year ended July 31, 1998 were approximately $9.44 million. At January
31, 1999 we had an accumulated deficit of approximately $50.9 million.
Net cash used in operation declined by over $1.1 million from fiscal
1998 to fiscal 1999. We anticipate that we will be able to continue our reduced
cash out flow during fiscal 2000, except to the extent of expenses associated
with marketing and production of products. The amount of net losses and the time
required to reach profitability are uncertain. There can be no assurance that we
will ever be able to generate sufficient revenue from our products now ready for
market or from those under development to achieve profitability on a sustained
basis.
WE HAVE EXPERIENCED SUBSTANTIAL DIFFICULTY GENERATING SUFFICIENT WORKING CAPITAL
We have been experiencing difficulty in maintaining sufficient working
capital needed to ensure stability and continued existence. Only a small portion
of the capital expended to date has come from actual revenue generation, and we
find it increasingly difficult to raise investment capital. We are at a critical
juncture in our history. It is absolutely
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essential to begin to generate significant revenues in order to maintain our
existence. While plans are in place and being executed to accomplish this
end, there can be no guarantee that these plans will prove to be successful.
Our current cash monthly operating expenses are approximately $225,000.
We believe the $12 million equity line of credit to be obtained pursuant to a
letter of intent dated December 10, 1999, along with anticipated minimum
projected revenues of $2,000,000 for fiscal 2000, will be sufficient for us to
operate in the normal course for the next 12 months. However, if revenues are
less than projected or the equity line of credit is not finalized, our ability
to continue operations will be dependent upon additional financing activities,
of which there can be no assurance.
The report by Corbin & Wertz on our financial statements for the fiscal
year ending July 31, 1999 contains an explanatory paragraph indicating that
there were operating losses which raised substantial doubt about the ability of
American Technologies to continue as a going concern. This going concern
qualification may adversely affect our perception by prospective customers and
suppliers.
OUR SALES OF SECURITIES CONVERTIBLE INTO COMMON STOCK AT A DISCOUNT TO THE
MARKET PRICE MAY CAUSE THE MARKET VALUE OF OUR COMMON STOCK TO DROP
As a result of our poor financial condition, several times over the
past few years we have sold securities that are convertible into our common
stock at a discount to the market price for the common stock. This has resulted
in the issuance of a significant amount of additional shares of common stock at
prices below market. It is possible that this method of financing operations has
contributed to the decline in the market price of the common stock. If we need
to obtain financing in the future in the same manner, this may again have an
adverse affect on the market price for our common stock.
LACK OF LISTING ON A MAJOR EXCHANGE MAY MAKE IT DIFFICULT FOR INVESTORS TO
DISPOSE OF OUR COMMON STOCK
Our common stock is quoted on the OTC Bulletin Board system. The OTC
Bulletin Board generally supports quotations for companies that do not meet the
NASDAQ SmallCap Market listing requirements. As a result, investors may find it
more difficult to dispose of or to obtain accurate price quotations
8
<PAGE>
of our common stock than they would if the stock were quoted on the SmallCap
Market. In addition, quotation on the bulletin board depends on the
willingness of broker-dealers to make a market in our common stock. There can
be no assurance that the stock will continue to be quoted on the bulletin
board or that there will continue to be a market for the buying and selling
of our common stock.
There are currently 15 firms making a market in our common stock,
although there can be no assurance that any or all of them will continue to do
so in the future. The current market makers are:
M. H. Meyerson & Co., Inc. Knight Securities, L.P.
Wm. V. Frankel & Co., Incorporated Sharpe Capital, Inc.
Speer, Leeds & Kellogg Capital Markets Olsen Payne & Company
Hill Thompson Magid & Co. Inc. Wien Securities Corp.
Herzog, Heine, Geduld, Inc. Wilson-Davis & Co., Inc.
Paragon Capital Corp. Mayer & Schweitzer, Inc.
North American Institutional Brokers GVR Company
USCC Trading, a Division of Fleet Securities
BECAUSE OUR COMMON STOCK IS A "PENNY STOCK," TRADING IN IT IS SUBJECT TO THE
PENNY STOCK RULES WHICH COULD AFFECT YOUR ABILITY TO RESELL THE STOCK IN THE
MARKET.
The Securities Enforcement and Penny Stock Reform Act of 1990 imposes
restrictions when making trades in any stock such as our common stock which is
defined as a "penny stock." The SEC's regulations generally define a penny stock
as an equity security that has a price of less than $5.00 per share, other than
securities which are traded on markets such as the New York Stock Exchange, the
American Stock Exchange or the Nasdaq Stock Market. As a result of being a penny
stock, the market liquidity for our common stock may be adversely affected since
the regulations on penny stocks could limit the ability of broker-dealers to
sell our common stock and thus your ability to sell our common stock in the
secondary market. The regulations restricting trades in penny stock include:
- a requirement that stock brokers deliver to their customers, prior to any
transaction involving a penny stock, a disclosure schedule explaining the penny
stock market and the risks associated with the penny stock market; and
- a requirement that broker-dealers who recommend penny stocks to persons
other than their established customers and a
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limited class of accredited investors must make a special written suitability
determination for the purchaser and receive the purchaser's written agreement
to the transaction prior to the sale of the securities.
Business Risk Factors
As we are engaged in the development and marketing of products based on
new technologies, there are significant risks associated with its potential
success.
WE MAY NOT FIND CUSTOMERS FOR OUR PRODUCTS
None of our current products enjoy widespread distribution or customer
acceptance. While we do have a number of products that are past the development
stage, we have yet to establish major, stable markets for them. Although we
believe we have the expertise to commercialize these products, any or all of our
products may fail to prove to have widespread customer appeal. Various marketing
strategies and alliances are now in place. Current significant distributors
include Hungarofek and Market One.
THERE MAY BE UNFORESEEN REGULATORY REQUIREMENTS WHICH IMPEDE THE MARKETING AND
SALE OF OUR PRODUCTS
Most of our current products are being sold directly to the consumer in
markets that are not generally regulated by government agencies. In the case of
consumer products for enhancing engine performance, such as The Force or the
F420 fuel additive, registration of these products with CARB (California Air
Resources Board) and EPA (Environmental Protection Agency) is required and has
been done.
Since the F420 additive's chemical contents fall within the
restrictions of the EPA regulations, there are no known impediments to
maintaining this registration. We have also registered The Force airborne
combustion enhancer as an add-on device with CARB. Currently, we are not aware
of any reason why CARB would withdraw that registration.
In the case of bulk fuel additives, there are strong industry
regulations in the United States. Extensive testing is required to meet these
industry regulations prior to domestic sale of the additive and there is no
guarantee that our bulk additive products can meet all of these industry
regulations.
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Foreign markets have only recently begun to impose significant regulations on
the petroleum industry to lessen the industry's effect on the environment. With
less testing required for the sale of new products in certain of these foreign
markets, we are able to introduce our products in these markets quicker. We are
therefore directing a substantial marketing effort towards these foreign
markets.
WE MAY NOT BE ABLE TO OBTAIN THE PATENTS OR TRADEMARKS NEEDED TO PROTECT THE
VALUE OF OUR TECHNOLOGIES
Our success will depend, in part, on whether we can obtain patent and
trademark protection for our technologies and products. We cannot guarantee that
we will be able to secure these protections. If we fail to do so, there is no
guarantee that our technologies will not be subject to copying by other
entities. This would result in a level of competition which could well prevent
us from being successful. Although we have taken steps, including entering into
confidentiality agreements with our employees and third parties to protect our
trade secrets and unpatented know-how, other third parties may still be able to
obtain such information.
We have applied for a number of patents on our particle beam, vacuum
distiller and I(E) catalyst technologies. Some have been approved. The status is
as follows:
- Particle Beam Approved Patents
We are maintaining 7 granted U.S. patents and 9 foreign patents issued
on particle beam technology. Additionally, there are 3 U.S. and 6
foreign patent applications pending.
- IE Catalyst Technology
We have been granted 1 U.S. patent on the I(E) Technology and 7 U.S.
patent applications are in various stages of prosecution. Foreign
patent applications to protect this technology are also in progress.
- Vacuum Distiller
We have been granted 1 U.S. patent on the vacuum distiller technology
and there are 2 U.S. patent applications pending. Foreign applications
to protect the technology are also in process.
All of our products currently offered for sale are protected by patents
in the U.S. The group of patent applications currently in process have
sufficient overlap to
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offer protection to our current commercial applications. We file applications
with the U.S. Patent and Trademark Office once we perceive a new significant
commercial application, and prior to public disclosure of the technology.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from our web site at www.ateg.com or at the SEC's web site at www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until the selling securityholders sell all the shares. This
prospectus is part of a registration statement we filed with the SEC
(Registration No. 333-37990).
The following documents are hereby incorporated by reference in this
Registration Statement:
- Annual Report on Form 10-KSB for the year ended July 31, 1999.
- Quarterly Report on Form 10-QSB for the three months ended October 31, 1999.
- Quarterly Report on Form 10-QSB for the three months ended January 31, 2000.
- Current Report of Form 8-K dated August 30, 1999.
You may request a copy of these filings, at no cost, by writing or telephoning
us at the following address:
Corporate Secretary
American Technologies Group, Inc.
1017 South Mountain Avenue
Monrovia, California 91016
(626) 357-5000
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You should rely only on the information incorporated by reference or provided in
this prospectus or any supplement. We have not authorized anyone else to provide
you with different information. The selling securityholders will not make an
offer of these shares in any state where the offer is not permitted. You should
not assume that the information in this prospectus or any supplement is accurate
as of any date other than the date on the front of such documents.
FORWARD-LOOKING STATEMENTS
We have made forward-looking statements in this prospectus and in the
documents which are incorporated by reference. Forward-looking statements are
subject to risks and uncertainties and include information concerning possible
or assumed future results of our operations. When we use words such as
"believes," "expects," "anticipates" or similar expressions, we are making
forward-looking statements. You should note that an investment in our securities
involves certain risks and uncertainties that could affect our future financial
results. Our actual results could differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including those
set forth in "Risk Factors" and elsewhere in this prospectus.
DESCRIPTION OF COMMON STOCK
We have 100,000,000 shares of common stock authorized of which
38,500,871 shares are outstanding as of May 15, 2000. The holders of shares of
common stock are entitled to dividends when and as declared by the Board of
Directors from funds legally available therefore, and, upon liquidation, are
entitled to share pro rata in any distribution to holders of common stock. There
are no preemptive, conversion or redemption privileges, nor sinking fund
provisions with respect to the common stock, however, our Articles of
Incorporation, as amended, provide that "Each shareholder shall have the same
rights as any individual to purchase said stock [shares of Common Stock], but
shall not have any pre-emptive rights as that term is defined under NRS 78.265."
All of the outstanding shares of common stock are duly authorized, validly
issued, fully paid and non-assessable. Under Nevada law, the law of the state of
incorporation of American Technologies, and the our Articles of Incorporation,
each holder of a share of common stock is entitled to one vote
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for each matter submitted for a vote. Additionally, under Nevada law
cumulative voting is allowed for the election of directors, if provided for
in the Articles of Incorporation. Our Articles of Incorporation do not
provide for cumulative voting. However, California law requires companies
meeting certain requirements, which we meet, to permit shareholders to elect
to cumulate their votes for directors.
USE OF PROCEEDS FROM SALE OF COMMON STOCK
American Technologies will not receive any of the proceeds from the
sale of the shares of common stock by the selling securityholders.
USE OF PROCEEDS FROM EXERCISE OF WARRANTS AND OPTIONS
The 3,000,000 warrants issued to Bristal Capital are exercisable at
the lower of $0.35 and 76% of the average of the closing bid prices on each
of the five trading days immediately prior to exercise of the warrants. The
remaining 1,583,334 warrants are exercisable at $0.25 per share. Options as to
220,000 shares of common stock are exercisable at $0.25 per share and options
as to 50,000 shares of common stock are exercisable at $0.50 per share.
If all of the warrants and options for which the underlying shares
of common stock are included in this prospectus were exercised as of May 25,
2000, we will receive a maximum of approximately $895,834 in net proceeds. We
intend to use these funds for working capital and the payment of certain
trade payables.
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SELLING SECURITYHOLDERS
The following table sets forth as of May 15, 2000, the following:
(i) the name of each selling stockholder;
(ii) the number of shares of our common stock and the percentage of our
outstanding common stock beneficially owned by each such selling stockholder
before this offering;
(iii) the number of shares that each selling stockholder may offer and
sell pursuant to this prospectus; and
(iv) the number of shares of our common stock and the percentage of our
outstanding common stock beneficially owned by each such selling stockholder
after this offering.
The shares registered pursuant to this prospectus may be offered from
time to time by any of the selling stockholders named below or by those
individuals and entities to which they or their transferees, devisees, donees or
distributees may transfer devise, gift or distribute the shares. See "Plan of
Distribution" on page 17.
Except as described below, each of the selling stockholders has sole
voting and investment power with respect to the shares beneficially owned by
them. In addition, except as described below, none of the selling stockholders
has had any material relationship with Company or any of our predecessors or
affiliates within the past three years.
Since each selling stockholder may sell all, some or none of its shares
registered under this prospectus, no estimate can be made of the aggregate
number or percentage of shares of common stock that each selling stockholder
will beneficially own upon completion of this offering. Thus, for purposes of
the table set forth below, we have assumed that the selling stockholders will
sell all of the shares of common stock registered for them under this
prospectus.
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<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED AFTER
NUMBER OF SHARES THE OFFERING (A)
BENEFICIALLY OWNED PRIOR NUMBER OF --------------------------
NAME TO OFFERING (A) SHARES OFFERED NUMBER PERCENTAGE
---- --------------- -------------- ------ ----------
<S> <C> <C> <C> <C>
Bristol Capital LLC. 3,700,000 (1) 3,600,000 100,000 *
MacCaughern Trade Develop. 1,002,500 1,000,000 2,500 *
Nimbus Holding Inc. 1,333,334 (2) 1,333,334 0 0
The Charles Ltd. Pship. 1,333,334 (2) 1,333,334 0 0
Susan Schad(3) 1,750,400 (4) 500,000 (5) 1,250,400 3.2
Express Success Int'l LLC. 500,000 (56) 500,000 0 0
In-Finn-Ity Prod., Inc. 500,000 500,000 0 0
John Collins(7) 1,775,000 (8) 200,000 (6) 1,575,000 4.0
FNG & Assoc., Inc. 140,000 100,000 40,000 *
David MacKichan 546,000 125,000 421,000 1.1
Michael Fort 100,000 (9) 92,500 7,500 0
James Hennen(10) 214,050 (9)(11) 36,550 177,500 *
John Demoleas 70,000 (6) 50,000 20,000 *
Michael Keating 352,161 (12) 50,000 302,161 *
Michael Alexander 70,000 (11) 50,000 20,000 *
Joseph Charney 85,000 (11) 30,000 (11) 55,000 *
</TABLE>
--------------------------------------
* Less than 1%.
(A) As required by the regulations of the SEC, the number of shares shown as
beneficially owned includes shares which can be purchased within 60 days.
1. Represents an estimate of the number of shares of common stock to be
offered by Bristol Capital; the actual number of shares of common stock
issuable upon exercise of warrants is indeterminate, is subject to
adjustment and could be materially more than such estimated number
depending on factors which cannot be predicted by us at this time. The
actual number of shares of common stock offered in this prospectus, and
included in the registration statement of which this prospectus is a
part, includes such additional number of shares of common stock as may
be issued or issuable upon exercise of warrants by reason of any stock
split, stock dividend or similar transaction involving the common stock,
in accordance with Rule 416 under the Securities Act. Under the terms
of the warrants, the warrants are exercisable by any holder only to the
extent that the number of shares of common stock issuable pursuant to
such securities, together with the number of shares of common stock
owned by such holder and its affiliates (but not including shares of
common stock underlying unexercised portions of the warrants) would not
exceed 4.9% of the then outstanding common stock as determined in
accordance with Section 13(d) of the Exchange Act. Accordingly, the
number of shares of common stock set forth in the table for Bristol
Capital exceeds the number of shares of common stock that Bristol
Capital could own beneficially at any given time through their ownership
of warrants. In that regard, the beneficial ownership of the common
stock by Bristol Capital set forth in the table is not determined in
accordance with Rule 13d-3 under the Exchange Act.
2. Includes 666,667 shares of common stock issuable upon the exercise of
warrants.
3. Mrs. Schad husband has been a director since September 1999.
4. Includes 254,500 shares of common stock issuable upon the exercise of
stock options or warrants held by Mr. Schad and shares held directly and
indirectly by members of Mrs. Schad's immediate family.
5. Includes 250,000 shares of common stock issuable upon the exercise of
warrants.
6. Represents shares of common stock issuable upon the exercise of stock
options.
7. Mr. Collins was Chairman of the Board and Chief Executive Officer from
1991 until November 1998.
8. Includes 575,000 shares of common stock issuable upon the exercise of
stock options and 300,000 shares held by Mr. Collins for the benefit of
his ex-wife as to which shares he disclaims beneficial ownership.
9. Includes warrants to purchase 7,500 shares of common stock.
10. Mr. Hennen was a director from September 1999 until May 2000.
11. Includes 20,000 shares of common stock issuable upon the exercise of
stock options.
12. Includes 100,000 shares of common stock issuable upon the exercise of
stock options.
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Registration Rights
In connection with the sale of the warrants, we entered into a
registration rights agreement which requires us to register 1.2 times the number
of shares of common stock issuable on exercise of the warrants. We are also
obligated to register and qualify the shares under such state securities laws as
the selling securityholders may request.
We are obligated to use our best efforts to cause the registration
statement to become effective and to keep the registration statement effective
for two years or until the selling securityholders may sell all registerable
securities under Rule 144 or until the selling securityholders no longer own any
shares, whichever occurs first.
The registration rights agreement provides for certain payments to
Bristol Capital if we are unable to have the registration statement declared
effective by the SEC within 90 days from the date of the issuance of the
warrants.
PLAN OF DISTRIBUTION
The selling securityholders and their pledgees, donees, transferees and
other successors in interest may offer the shares of common stock received upon
exercise of the warrants at various times in one or more of the following
transactions, which may include block transactions:
- in the over-the-counter market;
- on any exchange where our common stock is then listed;
- with broker-dealers or third parties other than in the
over-the-counter market or on an exchange, including block sales;
- through the writing of options or short sales; or
- involving a combination of such methods or other methods.
The selling securityholders may sell their shares at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, at fixed prices or such other prices as the
selling securityholders determine from time to time.
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The selling securityholders may use dealers, agents or underwriters to
sell their shares. If this happens, the dealers, agents or underwriters may
receive compensation in the form of discounts or commissions from the selling
securityholders or from the purchasers of shares or from both. The compensation
to a particular broker may be in excess of customary compensation.
The selling securityholders and any dealers, agents or underwriters
that participate with the selling securityholders in the distribution of the
shares may be deemed to be "underwriters" as this term is defined in the
Securities Act. Any commissions paid or any discounts or concessions allowed to
any such persons, and any profits received on the resale of the shares of our
common stock offered by this prospectus, may be deemed to be underwriting
commissions or discounts under the Securities Act.
We will pay most expenses related to the offer and sale of the shares
offered by the selling securityholders using this prospectus. The selling
securityholders, however, will pay any underwriting discounts and selling
commissions.
Any shares covered by this prospectus which qualify for sale under Rule
144 of the Securities Act may be sold under that Rule rather than under this
prospectus.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our bylaws, as amended, provide that we shall indemnify our directors
and officers to the fullest extent permitted by Nevada law, including
circumstances in which indemnification is otherwise discretionary under Nevada
law.
In addition, American Technologies and each selling securityholder have
agreed to indemnify each other against certain liabilities, including certain
liabilities under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons, we been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
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EXPERTS
Our audited financial statements as of and for the year ended July 31, 1999
incorporated by reference in this prospectus and elsewhere in this registration
statement have been audited by Corbin & Wertz, independent public accountants,
as indicated in their report with respect thereto, and are incorporated herein
by reference in reliance upon the authority of said firm as experts in giving
said reports. Reference is made to said report, which includes an explanatory
paragraph with respect to the uncertainty regarding our ability to continue as a
going concern as discussed in Note 1 to the financial statements.
Our audited financial statements as of and for the year ended July 31, 1998
incorporated by reference in this prospectus and elsewhere in this registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in giving said report. Reference is made to said report, which includes
an explanatory paragraph with respect to the uncertainty regarding our ability
to continue as a going concern as discussed in Note 1 to the financial
statements.
LEGAL MATTERS
For the purpose of this offering, John M. Dab, our General Counsel, is
giving his opinion on the validity of the shares.
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