As filed with the Securities and Exchange Commission on January 22, 1999
Registration No. 333-69809
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
ATEC GROUP, INC.
(Name of Issuer in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
5045
(Primary Standard Industrial Classification Code Number)
13-367969
(I.R.S. Employee Identification No.)
--------------------
90 Adams Avenue
Hauppauge, New York 11788
(516) 231-2832
(Address and telephone number of principal
executive offices and principal place of business)
--------------------
Surinder Rametra, Chief Executive Officer
ATEC Group, Inc.
90 Adams Avenue
Hauppauge, New York 11788
(516) 231-2832
(Name, address and telephone number of agent for service)
Copies of all communications to:
Michael H. Freedman, Esq.
Silverman, Collura, Chernis & Balzano, P.C.
381 Park Avenue South, Suite 1601
New York, New York 10016
(212) 779-8600
<PAGE>
Approximate date of proposed sale to the public: From time to time or at
one time after the effective date of this Registration Statement as determined
by the Selling Securityholders.
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, as amended ("Securities Act"), other than securities offered only in
connection with dividend or reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to 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. [ ]
================================================================================
ii
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================
Proposed Proposed
Amount to Maximum Maximum
Title of Each Class of Be Registered Offering Price Aggregate Amount of
Securities to be Registered (1) Per Share(2) Offering Price Registration Fee
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock(3) 639,916 $6.25 $ 3,999,475 $ 1,211.96
- ------------------------------------------------------------------------------------------------------
Common Stock(4) 5,946,000 $6.25 $37,162,500 $11,261.36
- ------------------------------------------------------------------------------------------------------
Total 6,585,916 $6.25 $41,161,975 $12,473.32
======================================================================================================
</TABLE>
(1) Pursuant to Rule 416 of the Securities Act of 1933, as amended, there are
also being registered such indeterminate number of additional shares of
Common Stock as may become issuable upon exercise of stock options to
prevent dilution resulting from stock splits, stock dividends or similar
transactions.
(2) Common Stock price per share calculated in accordance with Rule 457(c) of
the Securities Act using the last sale price for the Common Stock on
December 21, 1998.
(3) Represents shares of Common Stock held by Selling Securityholders.
(4) Represents shares of Common Stock underlying stock options held by Selling
Securityholders.
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, as amended ("Securities Act"), or until the
Registration Statement shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may determine.
iii
<PAGE>
DATED JANUARY 22, 1999 SUBJECT TO COMPLETION
ATEC GROUP, INC.
639,916 SHARES OF COMMON STOCK AND
5,946,000 SHARES OF COMMON STOCK UNDERLYING STOCK OPTIONS
Our Common Stock is listed on the Nasdaq SmallCap Market System ("Nasdaq")
under the symbols ATEC. The reported last sale price on Nasdaq on January 21,
1999 was $8.125.
--------------------------
Please see the Risk Factors beginning on page 3 to read about certain
factors you should consider before buying shares of Common Stock.
Certain Securityholders of ATEC propose to sell shares of Common Stock
and shares of Common Stock underlying Stock Options
THE SELLING STOCKHOLDERS:
- - may sell up to 639,916 shares of Common Stock and 5,946,000 shares of
Common Stock underlying Stock Options, as described herein under the "Plan
of Distribution."
- - will pay all stock transfer taxes, brokerage commission, underwriting
discounts or commissions and their own counsel's fees.
- - are named individually herein under "Selling Securityholders."
THE COMPANY:
- - will not receive any proceeds from the sale of the Common Stock.
- - will receive proceeds of $48,283,440 from the exercise of the Stock
Options, of which there can be no assurance.
- - will pay all expenses other than those paid by the Selling Stockholders.
--------------------------
The mailing address of the principal executive offices of ATEC Group is 90
Adams Avenue, Hauppauge, New York 11788, and the telephone number is (516)
231-2832.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is _________________, 1999
<PAGE>
THE COMPANY
GENERAL
You may obtain financial and other information relating to ATEC, its
directors and its executive officers, from (i) ATEC's 1998 Annual Report on Form
10-K, as amended; (ii) ATEC's 1998 Quarterly Reports on Form 10-Q; and (iii)
ATEC's 1998 Proxy Statement dated November 15, 1998. You may obtain copies of
these reports as indicated under "Available Information." See also
"Incorporation of Certain Documents by Reference."
BUSINESS
We are a leading system integrator and provider of a full line of computer
and information technology products and services to business, professionals,
government agencies and educational institutions. We have experienced rapid
growth over the past few years on core competencies including system design,
high speed data transmission, local and wide area networks, video conferencing,
Year 2000 solution, telecommunications, and Internet/Intranet technology. Some
projects currently under review are Year 2000 modifications and ATM
re-engineering of fiber-optic backbone networks.
We offer a full spectrum of services and support, which we believe is of
critical importance in the current market environment to our customers. The
integration of networks, multimedia, video conferencing, high volume storage
information and communication systems, has, in our opinion, necessitated
technical support and continued client relations after the initial purchase. We
believe that most consumers and business users do not possess the time to
investigate and locate the various computer components necessary to establish an
integrated computer system. We therefore strive to service all of our clients'
technology needs in a cost effective manner.
Our marketing strategy is to educate business clients as to our ability to
provide a "one-stop solution" to all computer needs from the initial purchase
and installation processes through required service and maintenance and future
expansion requirements. Our subsidiaries are authorized sales and service
dealers for all major manufacturers. We sell to our customers an extensive
selection of computer products at a competitive combination of price and
service. We offer over 10,000 computer products from over 500 manufacturers
including IBM, Compaq, Hewlett Packard, Apple, DEC, Hughes Networks, Microsoft,
Novell, Oracle, Sybase, Toshiba and many more.
Our corporate headquarters are located at 90 Adams Avenue, Hauppauge,
New York 11788. Our telephone number is (516) 231-2832.
2
<PAGE>
RISK FACTORS
Microcomputer Industry Conditions.
The microcomputer industry has been characterized by intense price cutting
among the major hardware and software vendors which could materially adversely
affect our future operating results. Given our limited financial resources, its
anticipated expenses and the highly competitive environment in which we operate,
there can be no assurance that our current rate of revenue growth will continue
in the future or that our future operations will remain profitable. Our future
results of operations are dependent upon continued demand for microcomputer
products. This industry experienced rapid growth until 1988 and thereafter has
grown at a substantially slower rate. Distributors in the microcomputer industry
currently face a number of adverse business conditions, including price and
gross profit margin pressures and market consolidation. During the past six
years all major hardware vendors have instituted extremely aggressive price
reductions in response to lower component costs and discount pricing by certain
microcomputer manufacturers. The increased price competition among major
hardware vendors had resulted in declining gross margins for many microcomputer
distributors and may result in a reduction in existing vendor subsidies. We
believe, however, that these current conditions, which are forcing certain of
our direct competitors out of business, may present us with opportunities to
expand our business. There can be no assurance that we will be able to continue
to compete effectively in this industry given the intense price reductions and
competition currently existing in the microcomputer industry.
Competition.
The microcomputer market is highly competitive. We are in direct
competition with local, regional and national distributors of microcomputer
products and related services. Several of these competitors offer most of the
same basic products as us. In addition, the tri-state Metropolitan New York
area, to which we market our products and services, is particularly
characterized by highly discounted pricing on microcomputer products from
various sources of competition. We face competition from microcomputer vendors
that sell their products through direct sales forces and from manufacturers and
distributors that emphasize mail order and telemarketing. We have an
insignificant market share of sales in the microcomputer industry and the
service markets which we serve. Certain of our competitors on the regional and
national level are substantially larger, have more personnel and have materially
greater financial and marketing resources than us and operate within a larger
geographic area than we do. Accordingly, there can be no assurance we will be
able to continue to compete effectively in the marketplace.
Dependence on Suppliers.
We are an authorized dealer for microcomputers and related products of
more than twenty five manufacturers. Our authorized dealer agreements with
suppliers are typically
3
<PAGE>
subject to periodic renewal and to termination on short notice or immediately
upon the occurrence of certain events. The dealer agreements also provide for
periodic audits by the supplier. A supplier could also terminate an authorized
dealer agreement for reasons unrelated to our performance. In addition, we
compete with other suppliers to obtain products on the most favorable contract
terms, which are often available only to companies substantially larger than us.
The loss of a major supplier or the deterioration of our relationship with those
major suppliers whose products are in demand, or a change in current terms of
its dealer agreements could have a material adverse effect on our business.
Proposed Expansion.
We intend to continue to seek to expand our current level of operations
through acquisitions. While we have grown during the last several years, there
can be no assurance that we will be able to further expand our operations
successfully. Expansion of our operations will depend on, among other things,
the continued growth of the microcomputer industry, our ability to withstand
intense price competition, our ability to obtain new clients, retain skilled
technicians, engineers, sales and other personnel in order to expand our
technical and marketing capabilities, secure adequate sources of products which
are then in demand on commercially reasonable terms, successfully manage growth
(including monitoring an expanded level of operations and controlling costs) and
the availability of adequate financing.
We seek to expand our operations through potential acquisitions. In the
past we have reviewed various potential acquisitions and believe that there are
numerous opportunities currently available. In June 1996, we acquired Innovative
Business Micros, Inc. ("Innovative") and in April 1998, Logix Solutions, Inc.
There can be no assurance that we will be able to effect any other acquisitions
or that, if we are able to effect any acquisitions, we will be able to
successfully integrate into our operations any acquired business and expand our
operations. Moreover, the Innovative acquisition is a related party transaction
which was not negotiated on an arms-length basis. There can be no assurance that
the consideration paid by us for Innovative would not have been at a more
beneficial rate had ATEC and Innovative not been affiliated parties. We may use
authorized but unissued Common Shares to purchase businesses or assets of
companies. In the event that we make an acquisition through a leveraged
transaction, of which we have no present intention, there can be no assurance
that we will have sufficient income to satisfy the interest payments.
Technological Change.
The microcomputer products market is characterized by rapid technological
change and frequent introduction of new products and product enhancements. Our
ability to compete successfully depends, in large part, on our ability to obtain
products when needed and on favorable terms from those suppliers and vendors
which are able to adapt to technological changes and advances in the
microcomputer industry. We have access to state-of-the-art technical databases
which provide us with information concerning technological advances from
4
<PAGE>
major vendors as soon as it is published. While this allows us the flexibility
to shift rapidly from one vendor to another, there can be no assurance that our
current vendors and suppliers will be able to achieve the technological advances
necessary to remain competitive or that we will be able to obtain authorizations
from new vendors or for new products that gain market acceptance. There can be
no assurance that we will be able to continue to keep pace with the
technological demands of the marketplace to successfully enhance our outsourced
support services to be compatible with new microcomputer products.
Dependence on Certain Vendors and Suppliers.
We have two customers which together accounted for 25% of our sales in
fiscal 1998. We also have two suppliers which together accounted for 50% of our
purchases in fiscal 1998. The loss of a major customer or supplier could be
expected to have a material adverse effect on our operations during the
short-term until we were able to generate replacement sources, although there
can be no assurance of obtaining such sources.
Possible Need for Additional Financing.
Depending upon our then current level of sales, we require additional
funds in order to expand its activities. We anticipate, based on currently
proposed plans and assumptions relating to this operation, that projected cash
flow from operations and currently available financing arrangements, will be
sufficient to satisfy our contemplated cash requirements for at least the next
12 months. In the event that our plans change or our assumptions change or prove
to be inaccurate, or if the projected cash flow proves to be insufficient to
fund operations (due to unanticipated expenses, possible acquisitions, technical
problems or difficulties or otherwise), we may find it necessary or advisable to
seek additional funding and/or to reallocate some of the proceeds or to use
portions thereof for other purposes. There can be no assurance that additional
financing, whether debt or equity, will be available to us on commercially
reasonable terms, or at all.
Even if additional financing were available, we may not be able to obtain
any additional financing, since all of our assets are pledged as collateral
pursuant to a credit facility. Any inability to obtain additional financing
could have a material adverse effect on us, including possibly requiring us to
significantly curtail our planned expansion.
Marketing Capability.
Substantially all of our marketing activities are being conducted by our
officers, directors and limited number of salespersons. Management will continue
to devote a substantial amount of time developing and maintaining continuing
personal relationships with our customers. Our growth prospects, however, will
be largely dependent upon our ability to achieve greater penetration of the
Microcomputer industry. Achieving market penetration will require us to be able
to attract skilled marketing personnel.
5
<PAGE>
Lack of Patents and Proprietary Protection.
We hold no patents and have no trademarks or copyrights registered in the
United States Patent and Trademark Office or in any state. While such protection
may become important to us, it is not considered essential to the success of our
business. We rely on the know-how, experience and capabilities of our management
personnel. Without trademark and copyright protection, however, we have no
protection from other parties attempting to offer similar services. We have
access to state-of-the-art technical databases of various leading vendors, which
enables us to learn of technical breakthroughs as soon as they are published;
however, we have no proprietary right to these databases.
Control by Current Management.
Our officers and directors currently possess voting rights representing
approximately 34% of our outstanding voting securities. Accordingly, our current
management is able to exercise substantial control over us, including
influencing the election of our directors, and generally directing our affairs.
Dependence on Key Personnel.
Our success is largely dependent on the personal efforts of Surinder
Rametra and Ashok Rametra. Although we have entered into employment agreements
with Messrs. Rametra and Rametra, the loss of their services could have a
material adverse effect on our business and prospects. We do not maintain "key
man" life insurance on the lives of Messrs. Rametra and Rametra. Our success is
also dependent upon our ability to hire and retain additional qualified
engineering, technical and marketing personnel. There can be no assurance that
we will be able to hire or retain such necessary personnel in the future.
No Dividends.
We have not paid any cash dividends on our Common Stock and do not expect
to declare or pay any cash or other dividends in the foreseeable future.
Possible Volatility of Common Share Price.
The market price for our securities has been and may at times continue to
be highly volatile. Factors such as our financial results, introduction of new
products in the marketplace, status of compliance with certain regulations
governing the sale of our products and various factors affecting the computer
industry generally may have a significant impact on the market price of our
securities. Additionally, in the last several years, the stock market has
experienced a high level of price and volume volatility and market prices for
many companies, particularly small and emerging growth companies, the common
stock of which trades in the over-the-counter-market, have experienced wide
price fluctuations which have not necessarily
6
<PAGE>
been related to the operating performance of such companies.
Future Sales of Common Shares Under Rule 144 or Otherwise.
Of the approximately 6,764,460 shares of Common Stock issued and
outstanding as of the date of this Prospectus a significant number of such
shares are "restricted securities" as that term is defined under Rule 144
promulgated under the Securities Act of 1933, as amended ("Securities Act").
However, all restricted shares are currently eligible for sale under Rule 144.
In general, under Rule 144, a person (or persons whose shares are aggregate) who
has satisfied a one-year holding period may sell "restricted securities" within
any three-month period limited to a number of shares which does not exceed the
greater of one percent of the then outstanding shares or the average weekly
trading volume during the four calendar weeks prior to such sale. Rule 144 also
permits the sale (without any quantity limitation) of "restricted securities" by
a person who is not an affiliate of the issuer and who has satisfied a two-year
holding period. We cannot predict the effect that sales made under Rule 144,
sales made pursuant to other exemptions under the securities laws or under
registration statements may have on any then prevailing market price.
Nevertheless, the possibility exists that the sale of any of these shares may
have a depressive effect on the price of our securities in any public trading
market. See "Shares Eligible for Future Sale" and "Principal Shareholders."
Risks Associated with Forward Looking Statements.
This Prospectus contains "forward-looking statements" which can be
identified by the use of words such as "intend," "anticipate," "believe,"
"estimate," "project," or "expect" or similar statements. The statements in
"Risk Factors" are cautionary statements. They identify important factors, with
respect to forward-looking statements, that could cause actual results to differ
materially from those forecasted in such statements. All forward-looking
statements in this Prospectus are expressly qualified in their entirety by the
cautionary statements in this paragraph.
7
<PAGE>
USE OF PROCEEDS
ATEC will not receive proceeds from any resale of the Common Stock. The
proceeds to be received by ATEC from the exercise of the Options (assuming all
of such securities are exercised), will be $48,283,440. ATEC intends to use such
proceeds for general corporate purposes. Pending use of the proceeds, they will
be invested in short term, interest bearing securities or money market funds.
DILUTION
The following discussion is based on the issuance of the Common Stock and
assumes that all of the Options are exercised:
As of September 30, 1998, the net tangible book value of the Common Stock,
based on the balance sheet at September 30, 1998, was $9,168,215 or $1.37 per
share. Net tangible book value per share represents the amount of the assets,
$21,310,153, less intangible assets of $4,116,188 and liabilities of $8,025,750,
divided by the number of shares outstanding, 6,700,664. Without taking into
account any other changes in the net tangible book value of ATEC after September
30, 1998, upon the issuance of the Common Stock and the exercise of the Options,
and the receipt of the net proceeds therefrom ($48,283,440), the pro forma net
tangible book value of the Common Stock, would be $57,451,655. Upon dividing the
pro forma net tangible book value by the pro forma amount of Common Stock
outstanding (12,646,664), the pro forma net tangible book value per share is
$4.54 per share, representing an immediate increase in the net tangible book
value of $3.17 per share to the present shareholders. Dilution to new investors,
since new investors will purchase shares at varying and fluctuating prices,
represents the difference between the market price of the Common Stock and the
pro forma net tangible book value per share after the issuance of all the shares
of Common Stock issuable upon exercise of the Options.
8
<PAGE>
RESALES BY SELLING SECURITYHOLDERS
This Prospectus relates to the proposed resale by the Selling
Securityholders of up to (i) 639,916 shares of outstanding Common Stock; and
(ii) 5,946,000 shares of Common Stock issuable upon the exercise of Options. The
following table sets forth as of December 31, 1998 certain information with
respect to the persons for whom ATEC is registering the Common Stock for sale to
the public. No such persons have had a material relationship with or has held
any position or office with ATEC within three years, other than as footnoted
below. ATEC will not receive any of the proceeds from the sale of the Common
Stock, but may receive up to $48,283,440 on the exercise of the Options.
<TABLE>
<CAPTION>
Securities Securities
Owned Prior Securities Owned
to Offering(1) Offered Herein After Offering
-------------- -------------- --------------
Name of Selling
Securityholders Common Stock Options Common Stock Amount %
- --------------- ------------ ------- ------------ ------ ---
<S> <C> <C> <C> <C> <C>
Gary Patterson 10,000 0 10,000 0 0
John R. Serafini, Jr 8,000 0 8,000 0 0
Norton D. Weiner 10,000 0 10,000 0 0
Cheri Housman 4,445 0 4,445 0 0
Carl Jones 110,000 1,474,200 2,718,200(2) 0 0
Carla C. de Baca 7,000 0 7,000 0 0
Jesse and Dione Lenz JT 1,000 0 1,000 0 0
Michelle O'Mahoney 17,600 163,800 307,400(3) 0 0
James Peterson 12,600 163,800 302,400(3) 0 0
Monica Wright 4,000 0 4,000 0 0
Elwood Jones 2,200 0 2,200 0 0
Eileen Matzen 2,200 0 2,200 0 0
Vimonh Chittarath 2,500 0 2,500 0 0
Keith Backes 1,000 0 1,000 0 0
Jan K. Lorenzo 35 0 35 0 0
Dozal & Associates, Inc. 10,000 0 10,000 0 0
Frank F. Dozal 66,700 737,100 1,370,800(4) 0 0
Rita Dozal 56,700 737,100 1,360,800(4) 0 0
Mark M. Soane and 5,898 0 5,898 0 0
Sarah R. Soane JT
Guardian Ventures, Inc. 11,792 0 11,792 0 0
S.R.T.B., LLC 117,925 0 117,925 0 0
B.A.T.B., LLC 117,925 0 117,925 0 0
Brian Ellis 200 0 200 0 0
Michael Golden 16,041 0 16,041 0 0
Ben Lichtenberg 15,316 0 15,316 0 0
Steven Schwartz 6,220 0 6,220 0 0
John Elwyn 2,073 0 2,073 0 0
Bruce Mahon 829 0 829 0 0
Michael Silverman 1,037 0 1,037 0 0
Craig Samuels 1,037 0 1,037 0 0
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Securities Securities
Owned Prior Securities Owned
to Offering(1) Offered Herein After Offering
-------------- -------------- --------------
Name of Selling
Securityholders Common Stock Options Common Stock Amount %
- --------------- ------------ ------- ------------ ------ ---
<S> <C> <C> <C> <C> <C>
Jonathan Rich 11,995 0 11,995 0 0
Anthony Guglieri 706 0 706 0 0
Glen Merendino 706 0 706 0 0
Vincent Chieco 706 0 706 0 0
Bill McCormack 353 0 353 0 0
Joe Candela 353 0 353 0 0
Joe Spinello 706 0 706 0 0
Agnes Tavoulareas 706 0 706 0 0
Josh Bismuth 706 0 706 0 0
David Rich 706 0 706 0 0
Continental Capital Corp. -- 150,000 150,000(5) 0 0
</TABLE>
- ----------
(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares of Common Stock which such person has
the right to acquire within 60 days of December 31, 1998. For purposes of
computing the percentage of outstanding shares of Common Stock held by
each person or group of persons named above, any security which such
person or persons has or have the right to acquire within such date is
deemed to be outstanding but is not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person. Except
as indicated in the footnotes to this table and pursuant to applicable
community property laws, ATEC believes based on information supplied by
such persons, that the persons named in this table have sole voting and
investment power with respect to all shares of Common Stock which they
beneficially own.
(2) Includes presently exercisable (i) Options for the purchase of 340,200
shares of Common Stock exercisable during the eighteen month period
commencing April 10, 1998 and expiring October 10, 1999 at an exercise
price of $4.74 per share; and (ii) Options for the purchase of 1,134,000
shares of Common Stock exercisable during the eighteen month period
commencing April 10, 1998 and expiring October 10, 1999 at an exercise
price of $7.50 per share. Also includes not presently exercisable Options
for the purchase of 1,134,000 shares of Common Stock during the period
commencing March 31, 1999 and expiring December 31, 2000 at an exercise
price of $10.00 per share.
(3) Includes presently exercisable (i) Options for the purchase of 37,800
shares of Common Stock exercisable during the eighteen month period
commencing April 10, 1998 and expiring October 10, 1999 at an exercise
price of $4.74 per share; and (ii) Options for the purchase of 126,000
shares of Common Stock exercisable during the eighteen month period
commencing April 10, 1998 and expiring October 10, 1999 at an exercise
price of
10
<PAGE>
$7.50 per share. Also includes not presently exercisable Options for the
purchase of 126,000 shares of Common Stock during the period commencing
March 31, 1999 and expiring December 31, 2000 at an exercise price of
$10.00 per share.
(4) Includes presently exercisable (i) Options for the purchase of 170,100
shares of Common Stock exercisable during the eighteen month period
commencing April 10, 1998 and expiring October 10, 1999 at an exercise
price of $4.74 per share; and (ii) Options for the purchase of 567,000
shares of Common Stock exercisable during the eighteen month period
commencing April 10, 1998 and expiring October 10, 1999 at an exercise
price of $7.50 per share. Also includes not presently exercisable Options
for the purchase of 567,000 shares of Common Stock during the period
commencing March 31, 1999 and expiring December 31, 2000 at an exercise
price of $10.00 per share.
(5) Represents Options for the purchase of 150,000 shares of Common Stock
exercisable during the one year period commencing March 11, 1998 and
expiring March 11, 1999. 100,000 of such Options are exercisable at $4.00
per share, and 50,000 of such Options are exercisable at $5.00 per share.
11
<PAGE>
PLAN OF DISTRIBUTION
The Selling Securityholders may offer and sell shares of Common Stock from
time to time in the discretion of the Selling Securityholders on Nasdaq or in
the over-the-counter market or otherwise at prices and at terms then prevailing
or at prices related to the then current market price, or at negotiated prices.
The distribution of the shares of Common Stock may be effected from time to time
in one or more transactions including, without limitation: (a) a block trade in
which the broker-dealer so engaged will attempt to sell the Common Stock as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus; (c)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; and (d) face-to-face or other direct transactions between the
Selling Securityholders and purchasers without a broker-dealer or other
intermediary. In effecting sales, broker-dealers or agents engaged by the
Selling Securityholders may arrange for other broker-dealers or agents to
participate. From time to time, one or more of the Selling Securityholders may
pledge, hypothecate or grant a security interest in some or all of the common
Stock owned by them, and the pledgees, secured parties or persons to whom such
securities have been hypothecated shall, upon foreclosure in the event of
default, be deemed to be Selling Securityholders hereunder. In addition, the
Selling Securityholders may from time to time sell short the Common Stock of
ATEC, and in such instances, this Prospectus may be delivered in connection with
such short sale and the Common Stock offered hereby may be used to cover such
short sale.
Sales of Selling Securityholders' Common Stock may also be made pursuant
to Rule 144 under the Securities Act, where applicable. The Selling
Securityholders' shares may also be offered in one or more underwritten
offerings, on a firm commitment or best efforts basis. ATEC will receive no
proceeds from the sale of Common Stock by the Selling Securityholders.
To the extent required under the Securities Act, the aggregate amount of
Selling Securityholders' Common Stock being offered and the terms of the
offering, the names of any such agents, brokers, dealers or underwriters and any
applicable commission with respect to a particular offer will be set forth in an
accompanying Prospectus supplement. Any underwriters, dealers, brokers or agents
participating in the distribution of the Common Stock may receive compensation
in the form of underwriting discounts, concessions, commissions or fees from a
Selling Securityholder and/or purchasers of Selling Securityholders' shares of
Common Stock, for whom they may act. In addition, sellers of Selling
Securityholders' shares of Common Stock may be deemed to be underwriters under
the Securities Act and any profits on the sale of Selling Securityholders'
shares of Common Stock by them may be deemed to be discounts or commissions
under the Securities Act. Selling Securityholders may have other business
relationships with ATEC and its subsidiaries or affiliates in the ordinary
course of business.
From time to time each of the Selling Securityholders may transfer,
pledge, donate or assign Selling Securityholders' shares of Common Stock to
lenders, family members and others and each of such persons will be deemed to be
a "Selling Securityholder" for purposes of this
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Prospectus. The number of Selling Securityholders' shares of Common Stock
beneficially owned by those Selling Securityholders who so transfer, pledge,
donate or assign Selling Securityholders' shares of Common Stock will decrease
as and when they take such actions. The plan of distribution for Selling
Securityholders' shares of Common Stock sold hereunder will otherwise remain
unchanged, except that the transferees, pledgees, donees or other successors
will be Selling Securityholders hereunder.
Including, and without limiting the foregoing, in connection with
distributions of the Common Stock, a Selling Securityholder may enter into
hedging transactions with broker-dealers and the broker-dealers may engage in
short sales of the Common Stock in the course of hedging the positions they
assume with such Selling Securityholder. A Selling Securityholder may also enter
into option or other transactions with broker-dealers that involve the delivery
of the Common Stock to the broker-dealers, who may then resell or otherwise
transfer such Common Stock. A Selling Securityholder may also loan or pledge the
Common Stock to a broker-dealer and the broker-dealer may sell the Common Stock
so loaned or upon default may sell or otherwise transfer the pledged Common
Stock.
Under applicable rule and regulations under the Exchange Act, any person
engaged in the distribution of the Common Stock may not bid for or purchase
shares of Common Stock during a period which commences one business day (5
business days, if ATEC's public float is less than $25 million or its average
daily trading volume is less than $100,000) prior to such person's participation
in the distribution, subject to exceptions for certain passive market making
activities. In addition and without limiting the foregoing, each Selling
Securityholder will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Regulation
M which provisions may limit the timing of purchases and sales of shares of
ATEC's Common Stock by such Selling Securityholder.
ATEC is bearing all costs relating to the registration of the shares of
Common Stock (other than fees and expenses, if any, of counsel or other advisors
to the Selling Securityholders). Any commissions, discounts or other fees
payable to broker-dealers in connection with any sale of the shares of Common
Stock will be borne by the Selling Securityholder selling such shares of Common
Stock.
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TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock of ATEC is North
American Transfer Company, 147 W. Merrick Road, Freeport, New York 11520.
LEGAL MATTERS
The legality of the shares offered hereby has been passed upon for ATEC by
Silverman, Collura, Chernis & Balzano, P.C., 381 Park Avenue South, Suite 1601,
New York, New York 10016.
EXPERTS
ATEC's consolidated financial statements incorporated by reference in this
Registration Statement, have been incorporated herein in reliance on the reports
of Weinick Sanders Leventhal & Co., LLP, independent accountants, given upon the
authority of such firm as experts in accounting and auditing.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934 ("Exchange Act") and in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission ("Commission"). Such reports, proxy statements and other information
can be inspected and copied at the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices at Room 1204, Everett McKinley Dirksen Building, 219 South Dearborn
Street, Chicago, Illinois 60604; and 7 World Trade Center, Suite 1300, New York,
New York 10048. Copies of such 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 Commissions website is
www.sec.gov.
This Prospectus does not contain all of the information set forth in the
Registration Statements of which this Prospectus is a part and which we have
filed with the Commission. For further information with respect to ATEC and the
securities offered hereby, reference is made to the Registration Statement,
including the exhibits filed as a part thereof, copies of which can be inspected
at, or obtained at prescribed rates from the Public Reference Section of the
Commission at the address set forth above. Additional updating information with
respect to ATEC may be provided in the future by means of appendices or
supplements to the Prospectus.
We hereby undertake to provide without charge to each person to whom a
copy of this Prospectus is delivered, upon written or oral request of such
person, a copy of any and all of the information that has been or may be
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents).
Requests should be directed to the ATEC Group, Inc., 90 Adams Avenue, Hauppague,
New York 11788 (516) 231-2832.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We hereby incorporate by reference in this Prospectus the following
documents which have been filed by ATEC with the Commission:
(a) Annual Report on Form 10-K/A1 for its fiscal year ended June 30, 1998;
(b) Quarterly Report on Form 10-Q for the three month period ended
September 30, 1998;
(c) the portions of ATEC's Proxy Statement for the Annual Meeting of
Stockholders held on December 15, 1998 that have been incorporated by reference
in ATEC's Annual Report on Form 10-K/A1;
(d) The description of ATEC's Common Stock contained in ATEC's
Registration Statement on Form S-1, Registration No. 33-2070 and on Form SB-2,
Registration No. 33-54356, and any amendment or report filed for the purpose of
updating such description filed subsequent to the date of this Prospectus and
prior to the termination of the offering described herein;
(e) All other reports filed by ATEC pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date hereof and prior to the
termination of the offering described herein, which documents shall be deemed a
part hereof from the date of filing thereof.
Any statement contained in a document 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 or is 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.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of ATEC,
ATEC 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 ATEC of expense incurred or paid by a
director, officer, or controlling person of ATEC in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person of ATEC in connection with the securities being registered,
ATEC will, unless in the opinion of its counsel the matter has been settled by a
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 issues.
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================================================================================
No dealer, salesman or any other person is authorized to give any
information or to represent anything not contained in this Prospectus. You must
not rely on any unauthorized information or representations. This Prospectus is
an offer to sell the securities offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this
Prospectus is current only as of this date
TABLE OF CONTENTS
Page
Prospectus Summary.............................................................2
Risk Factors...................................................................3
Use of Proceeds................................................................8
Dilution.......................................................................8
Resales by Selling Securityholders.............................................9
Plan of Distribution..........................................................12
Transfer Agent................................................................14
Legal Matters.................................................................14
Experts.......................................................................14
Available Information.........................................................14
Incorporation by Reference....................................................15
Disclosure of Commission Position.............................................15
================================================================================
================================================================================
639,916 SHARES OF COMMON
STOCK AND 5,946,000 SHARES
OF COMMON STOCK
UNDERLYING STOCK OPTIONS
ATEC GROUP, INC.
_______________
PROSPECTUS
_______________
____________, 1999
================================================================================
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC Registration Fee $12,473.32
Printing Expenses $ 1,000*
Legal Fees and Expenses $ 5,000*
Accounting Fees and Expenses $ 1,000*
Transfer Agent Fees $
Miscellaneous Expenses $ 1,000*
TOTAL $20,473.32*
- ----------
* Estimated
The Selling Security Holders will not be paying any portion of the
foregoing expenses of issuance and distribution.
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware and
Article 7 of the Company's Articles of Incorporation contain provisions for
indemnification of officers, directors, employees and agents of the Company. The
Articles of Incorporation require the Company to indemnify such persons to the
full extent permitted by Delaware law. Each person will be indemnified in any
proceeding if he acted in good faith and in a manner which he reasonably
believed to be in, or not opposed to, the best interest of the Company.
Indemnification would cover expenses, including attorney's fees, judgments,
fines and amounts paid in settlement.
The Company's Articles of Incorporation also provided that the Company's
Board of Directors may cause the Company to purchase and maintain insurance on
behalf of any present or past director or officer insuring against any liability
asserted against such person incurred in the capacity of direct or officer or
arising out of such status, whether or not the Company would have the power to
indemnify such person. The Company may seek to obtain directors' and officers'
liability insurance.
Item 16. Exhibits
5.1* Opinion of Silverman, Collura, Chernis & Balzano, P.C., special counsel
for the Registrant, as to the legality of the securities being registered.
23.1 Consent of Weinick Sanders Leventhal & Co., LLP, Certified Public
Accountants.
23.2* Consent of Silverman, Collura, Chernis & Balzano, P.C. (contained in
Exhibit 5.1).
*Previously filed.
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<PAGE>
Item 17. Undertakings.
(a) Rule 415 Offerings.
The undersigned small business issuer hereby undertakes that it will:
(1) File, during the period required by Rule 415, a post-effective
amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
Registration Statement; and
(iii) Includes any additional or changed material information on the plan
of distribution.
provided, however, the paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
in a post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) For determining liability under the Securities Act of
1933, treat each post-effective amendment as a new registration
statement of the securities offered, and the offering of the securities
at that time to be the initial bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
(b) Request for acceleration of effective date.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act"), may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer 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 small business issuer of expenses incurred or paid by a
director, officer or controlling person of the small business issuer in the
successful defense of any action, suit or proceedings) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the small business issuer 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
II-2
<PAGE>
by it is against public policy as expressed in the Act and will be governed by
the final adjudication of such court.
(c) Reliance upon Rule 430A under the Securities Act.
The undersigned small business issuer hereby undertakes that it will:
(1) For determining any liability under the Securities Act of 1933,
as amended, treat the information omitted from the form of prospectus
filed as part of the registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the small business issuer under
Rule 424(b)(1) or (4) or 497(h) under the Securities Act as part of this
registration statement as of the time the Commission declared it
effective.
(2) For determining any liability under the Securities Act of 1933,
as amended, treat each post-effective amendment that contains a form of
prospectus as a new registration statement for the securities offered in
the registration statement, and that offering of the securities at that
time as the initial bona fide offering of those securities.
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<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, therewith duly
authorized, in Hauppauge, New York on January 22, 1999.
ATEC GROUP INC.
By: s/Surinder Rametra
----------------------------------
Surinder Rametra, Chairman and CEO
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS,that each person whose signature appears
below, hereby constitutes and appoints Surinder Rametra, his true and lawful
attorney-in-fact, with full power of substitution and resubstitution, for his
and in his name, place and stead, in any and all capacities, to sign any or all
amendments or supplements to this Registration Statement and to file the same
with all exhibits thereto and other documents in connection therewith, with the
Commission, granting unto said attorney-in-fact full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with respect to this Registration Statement or any amendments or supplements
hereto and about the premises, as fully to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact, or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in their respective
capacities with ATEC Group, Inc. and on the dates indicated.
SIGNATURES
Signature Title Date
s/Surinder Rametra Chairman of the Board January 22, 1999
- ---------------------- of Directors and CEO
Surinder Rametra, (Principal Executive Officer)
as attorney-in-fact
______________________ Chief Financial Officer
James Charles (Principal Financial
and Accounting Officer)
______________________ Chief Operating Officer
Ashok Rametra and Director
______________________ Director
George Eagan
______________________ Director
David Reback
II-4
Consent of Independent Accountants
We consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement of Atec Group, Inc. on Form S-3 of our report dated
August 21, 1998, except for Note 2(c) as to which the date is October 10, 1998,
on our audits of the consolidated financial statements of Atec Group, Inc. and
Subsidiaries as of June 30, 1998 and 1997 and for each of the three years ended
June 30, 1998, which report is included in the Company's Annual Report on Form
10-K/A1 filed with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934. We also consent to the reference to our firm
under the caption "Experts".
WEINICK SANDERS LEVENTHAL & CO., LLP
/s/ Weinick Sanders Leventhal & Co., LLP
New York, N.Y.
January 22, 1999
