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As Filed with the Securities and Exchange Commission on
August 17, 2000.
Registration No. 333 -
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION STATEMENT
ON FORM S-3
UNDER
THE SECURITIES ACT OF 1933
--------------------------
SAF T LOK INCORPORATED
(formerly known as RGB Computer & Video, Inc.)
(Exact name of Company as specified in its charter)
Florida 3429 65-0142837
------- ---- ----------
(State or other jurisdiction (Primary SIC (I.R.S. Employer
of incorporation or organization) Code Number) Identification No.)
1101 Northpoint Parkway
West Palm Beach, Florida 33407
(561) 478-5625
(Name, address, including Zip Code, and telephone
number, including area code, of registrant's principal
executive offices)
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Franklin W. Brooks, CEO Copies to: Robert L. Ruben, Esq.
Saf T Lok Incorporated Edward A. Friedman, Esq.
1101 Northpoint Parkway Ruben & Aronson, LLP
West Palm Beach, Florida 33407 3299 K Street, N.W.,
Suite 403
Telephone:(561) 478-5625 Washington, D.C. 20007
(Name, address, including Zip Code, and telephone number, Telephone: (202) 965-3600
including area code, of agent for service) Telecopier: (202) 965-3700
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Approximate date of commencement of proposed sale to public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
[ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box.
[X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
[ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
[ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.
[ ]
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CALCULATION OF REGISTRATION FEE/(1)/
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-------------------------- -------------------- ----------------------- ----------------------- -------------------
Title of Each Proposed Maximum Proposed Maximum
Class of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered (3) Per Security Offering Price Registration Fee
---------------- ---------- ------------ -------------- ----------------
-------------------------- ---------------- --- ----------------- ----- ------------------ ---- -------------------
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Common Stock issuable
upon conversion of 875,000 $1.0775 $942,812.50 $248.90
outstanding debentures(1)
-------------------------- ---------------- --- ----------------- ----- ------------------ ---- -------------------
Common Stock issuable as
interest on outstanding 105,000 $1.0775 $113,137.50 $29.87
Debentures(1)
-------------------------- ---------------- --- ----------------- ----- ------------------ ---- -------------------
Common Stock issued to
placement agent(1) 26,250 $1.0775 $28,284.38 $7.47
-------------------------- ---------------- --- ----------------- ----- ------------------ ---- -------------------
Common Stock issued to
finder(1) 17,500 $1.0775 $18,856.25 $4.98
-------------------------- ---------------- --- ----------------- ----- ------------------ ---- -------------------
Common Stock issued upon
exercise of warrant(2) 214,725 $0.396 $85,031.10 $22.45
-------------------------- ---------------- --- ----------------- ----- ------------------ ---- -------------------
Common Stock issued as
payment of debt(1) 200,000 $1.0775 $215,500.00 $56.89
-------------------------- ---------------- --- ----------------- ----- ------------------ ---- -------------------
Common Stock issuable
upon exercise of 9,600 $1.50 $14,400.00 $3.80
options(2)
-------------------------- ---------------- --- ----------------- ----- ------------------ ---- -------------------
Common Stock issuable
upon exercise of 9,872 $0.01 $98.72 $0.03
options(2)
-------------------------- ---------------- --- ----------------- ----- ------------------ ---- -------------------
Total 1,457,947 $1,418,120.45 $374.39
-------------------------- ---------------- --- ----------------- ----- ------------------ ---- -------------------
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(1) The registration fee was calculated based upon the average of the closing
bid and asked prices for the Common Stock on August 15, 2000, pursuant to
Rule 457(c) under the Securities Act of 1933, as amended.
(2) The registration fee was calculated based upon the exercise price of the
Option.
(3) Pursuant to Rule 416 under the Securities Act of 1933 as amended, there are
also being registered such additional number of shares as may be issuable
as a result of the anti-dilution provisions of the debentures, warrants and
options, as the case may be and to the extent applicable, but not as a
result of pure adjustments attributable to changes in market price.
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 this Registration
Statement shall become effective on such date as the SEC, acting pursuant
to said Section 8(a), may determine.
<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION, DATED AUGUST 17, 2000
SAF T LOK INCORPORATED
1,457,947 Shares of Common Stock
This Prospectus relates to the 1,457,947 shares of Common Stock of Saf
T Lok Incorporated, being offered by certain selling security holders. We will
not receive any proceeds from the sale of shares by the selling security
holders. The selling security holders acquired or will acquire their shares:
upon conversion of our 6% convertible debentures;
as payment of interest on our convertible debentures;
as payment of placement agent and finder fees; upon exercise
of outstanding options and warrants; and
as payment of outstanding debt.
Our common stock is traded on the Nasdaq SmallCap Market under
the trading symbol "LOCK". On August 15, 2000, the closing bid
and asked prices for our common stock were $1.062 and $1.093,
respectively.
The selling securityholders may sell the shares in this offering from
time to time in transactions in the open market (including any securities
exchange or through any inter-dealer quotation system), in negotiated
transactions, or by a combination of these methods, at fixed prices related to
market prices or at negotiated prices.
This investment involves a high degree of risk. You should purchase
shares only if you can afford a complete loss of your investment. See "Risk
Factors" beginning on page 3 for a discussion of important matters that should
be considered by you prior to investing.
These securities have not been approved or disapproved by the
Securities and Exchange Commission or any state securities commission, nor has
the SEC or any state securities commission determined if this prospectus is
truthful or complete.
The date of this Prospectus is August 17, 2000
<PAGE>
TABLE OF CONTENTS
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Page
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BUSINESS........................................................................... 1
RISK FACTORS....................................................................... 1
WHERE YOU CAN FIND MORE INFORMATION................................................ 5
INFORMATION INCORPORATED BY REFERENCE ............................................. 5
SELLING SECURITY HOLDERS........................................................... 6
PLAN OF DISTRIBUTION............................................................... 6
DESCRIPTION OF SECURITIES.......................................................... 7
LEGAL MATTERS...................................................................... 8
EXPERTS............................................................................ 8
INDEMNIFICATION.................................................................... 8
</TABLE>
<PAGE>
BUSINESS
Saf T Lok Incorporated, through its wholly-owned subsidiary Saf T Lok
Corporation, designs, develops, manufactures, and distributes safety locks for
guns. Saf T Lok Incorporated and Saf T Lok Corporation are jointly referred to
in this Prospectus as "Saf T Lok", "we", "us" and "our".
Our gunlocks are intended to reduce the possibility of unauthorized or
accidental use of firearms, including unintentional discharge by children and
assailants. Our target markets include:
o newly manufactured handguns in the U.S.; and
o previously manufactured, used handguns in the U.S., which is known
as the "retrofit market".
Our gunlocks are used by federal, state and local law enforcement
agencies and other consumers in the U.S. Our combination gun locks are the
subject of eleven United States patents, one United States patent application,
and Canadian and other foreign patent applications.
We have determined that the current political and social climate relating
to handguns requires that we raise substantial capital in order to fund
operations and effectively lobby for regulatory changes that will enable us to
substantially increase our revenues. Alternatively, we must consummate a
strategic alliance or business combination that will allow us to remain viable.
Towards this end, we have engaged an investment banking firm to advise us on
mergers, acquisitions and similar business combinations. We may be unsuccessful
in attracting a strategic partner or acquirer.
On February 7, 2000, we held our annual meeting of shareholders. At the
annual meeting:
Franklin W. Brooks, Jeffrey W. Brooks, William M. Schmidt, Dennis
W. DeConcini and James V. Stanton were reelected to serve on our
board of directors; and
our shareholders authorized an increase in the number of shares of
common stock we are authorized to issue from 20 million shares to
30 million shares.
The additional shares will be available for issuance at the direction
of the board of directors, without further shareholder action, for capital
raising purposes, for strategic alliances and for other purposes deemed by the
board to be in our best interests. We have no specific plans at this time to
issue additional shares.
Our executive offices are located at 1101 Northpoint Parkway, West Palm
Beach, Florida 33407. Our telephone number at that location is (561) 478-5625.
Except for the historical information contained herein, the matters
discussed in this prospectus under "Risk Factors", in addition to certain
statements contained elsewhere in this prospectus or in our filings under the
Securities Exchange Act of 1934, (the "Exchange Act"), are "Forward-Looking
Statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 and are thus prospective. Such forward-looking statements are subject to
risks, uncertainties and other factors which could cause actual future results
or trends to differ materially from future results or trends expressed or
implied by such forward-looking statements. The most significant of such risks,
uncertainties and other factors are discussed in this prospectus under "Risk
Factors" and prospective investors are urged to carefully consider such factors.
Updated information will be periodically provided by us as required by the
Securities Act and the Exchange Act. We, however, undertake no obligation to
publicly release the results of any revisions to such forward-looking statements
which may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
RISK FACTORS
Prospective investors should carefully consider the following Risk
Factors, in addition to the other information set forth in this prospectus, in
evaluating an investment in the securities offered hereby.
Inferior and less expensive gun locks, produced by our competitors,
have reduced our revenues and may continue to make our market penetration
difficult.
The market for our gun locking devices is unproven even though there
are millions of handguns in the United States. Our gun locking devices retail
for approximately $70 to $90 each while simple, key operated trigger locks
retail for less than $20. Our belief in the existence of a large market for our
gun locking devices is based solely on anecdotal evidence, without the benefit
of any broad-based market study. There is no assurance that a market will
develop that will provide sufficient revenues for us to make a profit. If a
market for our products does develop, we may have to compete against larger
entities with substantially more resources. There is no assurance that we could
compete successfully against those competitors.
1
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We have an accumulated deficit, a history of net losses and our
auditors have raised doubts about our continued viability; investors could lose
their entire investment.
As of June 30, 2000, we had an accumulated deficit of $25,741,918. For
the year ended December 31, 1999 and the six months ended June 30, 2000, we
incurred net losses of $(3,829,043) and $(2,489,807), respectively. Management
projects that we require monthly operating revenues averaging at least $300,000,
but for the calendar year 1999, our monthly operating revenues averaged only
approximately $14,000. As a result of the foregoing, the report of our
independent auditors for the year ended December 31, 1999 raises doubt about our
continued existence and states that in order to remain viable, we must
o raise additional capital; and
o achieve a successful level of sales.
Our inability to raise capital or achieve substantial sales could
result in our discontinuance of operations and our investors could lose the
entire amount of their investment.
Our success requires us to attract a partner for a business combination
or strategic alliance, in the absence of which we may fail.
We believe that consolidation in the gun industry and the resources
necessary in order to focus the current political and social climate in a manner
that will allow us to successfully market our gun locks requires us to align
ourselves with a larger, more financially secure business partner. Accordingly,
we are seeking a candidate with whom to complete a business combination or
strategic alliance, and have engaged a recognized investment banking firm to
assist us in our efforts. However, in the event we are unsuccessful in
identifying and completing such a strategic transaction, we will continue to
have difficulty implementing our business plan and achieving success. We have
not yet [entered into any agreement with] any party interested in consummating a
business combination or strategic alliance with us.
In the event we consummate a business combination, it is possible that
we will undergo a change in control, our officers and directors will be
replaced, our shareholders will undergo additional dilution of their equity
ownership in us and our business following a business combination may prove more
risky than our current situation.
In the event we are successful in attracting a third-party to
consummate a business combination, it is possible that:
o we may have to incur a material amount of debt at interest
rates substantially exceeding the prime rate;
o we will issue a substantial number of additional shares of our
stock and thereby dilute the percentage ownership of us by our
existing shareholders;
o the vesting of certain outstanding options held by our
officers, directors and affiliates will be accelerated,
thereby further diluting the percentage ownership of us by our
existing shareholders;
o the acquirer may appoint its designees to serve as our
executive officers and directors, and our existing officers
and directors will resign;
o our business following a business combination could prove more
risky and offer poorer prospects for the future than our
current situation; and
o the transition of operations and management following a
business combination or strategic alliance may cause a loss of
momentum of our current manufacturing, marketing and
promotional efforts.
Our deficit and history of losses will make raising additional capital more
difficult.
We have recently raised approximately $875,000, which we believe will
satisfy our cash requirements for approximately the next six to nine months. In
the event we are unable to consummate a business combination or other third
party alliance, and we require additional funding, our accumulated deficit and
net losses will likely have an adverse impact upon our ability to raise
additional funding. To the extent that additional financing is made available to
us, it may not be on favorable terms.
We have substantial outstanding debt and if we are unable to generate
revenues or otherwise finance debt repayment, we will be subject to legal
proceedings and judgments
2
<PAGE>
As of August 11, 2000, we have long-term debt of approximately
$925,000, $50,000 of which matures in December 2001 and $875,000 of which
matures in May 2002. Our current rate of revenue generation is insufficient to
enable us to repay this indebtedness on maturity. In the event this indebtedness
is not converted into common stock and we are unable to generate increased
operating revenues or otherwise finance our repayment of these debts, we will
become subject to lawsuits and judgments against us. Lawsuits and judgments
against us will adversely affect our ability to raise additional capital or
consummate a business combination or strategic alliance and, accordingly, our
continued viability will be suspect.
We are the subject of an SEC investigation, an unfavorable outcome to
which will likely have a negative effect on our stock price.
We have been responding to informal requests for information from the
SEC since receiving notice of an "informal inquiry" from the SEC's Division of
Enforcement on May 29, 1998. On September 22, 1998, the SEC issued its formal
Order Directing Private Investigation and Designating Officers to Take Testimony
which revealed that members of the SEC's Staff have reported information to the
SEC that, in the Staff's view, tends to show that during the period from at
least January 1, 1996 and continuing thereafter, the Company, its present or
former officers, directors or employees or others, may have violated federal
securities laws. Pursuant to this formal order of investigation, the Company and
certain of our current and former officers and directors have produced documents
pursuant to requests and subpoenas from the SEC. The investigation is continuing
and we are not able to speculate as to its specific subject matter. There can be
no assurance as to the timing of the completion of the investigation or as to
the final result thereof, and no assurance can be given that the final result of
the investigation will not have a material adverse effect on the Company. We are
cooperating with the SEC, and have responded and will continue to respond to
requests for information in connection with the investigation.
If legal proceedings pending against us are not resolved in our favor,
our future remains questionable.
On March 28, 2000, Winner Holding LLC, Winner Club LLC and James E.
Winner Jr. (collectively, "Winner") filed a complaint against the Company and
Mr. Franklin W. Brooks (the Company's Chief Executive Officer and Chairman of
the Board) in the United States District Court for the Western District of
Pennsylvania (Case No. 00-610). The suit arises from discussions between the
parties regarding a possible merger. Winner's complaint purports to allege,
among other things, causes of action for breach of contract, fraud, negligent
misrepresentation and breach of duty to negotiate in good faith, and seeks
compensatory damages in excess of $75,000 for each cause of action. Winner is
also seeking a permanent injunction preventing the Company from being acquired
by another party, as well as punitive damages of at least $5,000,000. The
Company intends to defend the suit vigorously, and believes that available
documentary evidence demonstrates that the Company was not legally obligated to
Winner. The Company has notified its insurance carriers of the filing of the
Winner Complaint to determine whether such carriers will provide either
indemnity or a defense. Pursuant to its Articles of Incorporation, the Company
will provide Mr. Brooks with counsel and indemnify him in conjunction with the
action to the fullest extend permitted. The Company recently filed a motion in
the District Court to dismiss the case without prejudice based on improper
venue, or alternatively, for change of venue to Palm Beach County, Florida.
We are also defendants in certain other litigation actions that have
been commenced against us. No assurance can be provided that these actions will
be resolved in a manner favorable to us. Unfavorable judgments rendered against
us in these actions, or a portion of these actions, may have a material adverse
effect on our business and financial condition.
In the event a claim asserted against us by a third party becomes the
subject of litigation, we will be forced to defend ourselves and could be
required to pay a substantial judgment which may have a material adverse effect
upon the financial condition of the Company.
Political climate or events may have a material adverse effect on the
market for our gun locking devices.
The issue of gun control is a highly political issue in the United
States. We believe that the National Rifle Association will oppose any
legislation that touches on gun control, including any gun lock legislation.
Other groups are promoting gun lock legislation at the federal and state levels.
However, we cannot rely on, and no assurance can be given regarding, the passage
of any type of gun control or gun safety legislation to create a market for our
gun locking devices.
State and Federal regulations could present obstacles to our
operations.
While gun locking devices are currently not regulated under state or
federal regulations, we believe it is likely in the future that such devices
will be regulated. There can be no assurance that our locks will meet the
requirements of such future regulations, in which case, sales of our products
may be materially adversely affected.
Patent protection will not eliminate competition.
3
<PAGE>
We hold twelve U. S. patents that pertain to the Saf T Lok(R)
combination gun locks. One U.S. patent is pending. Patent applications have
also been filed for protection in Canada and other countries. We expect these
applications to be approved. However, there can be no assurance that any of
these patents will adequately protect us from competitors offering similar
devices or that we will have adequate resources to protect ourselves from
infringers. We believe our trademarks and other proprietary rights are important
to our success and our competitive position. The actions we take to establish
and protect our trademarks and other proprietary rights, however, may be
inadequate to prevent imitation of our products by others or to prevent others
from claiming violations of their trademarks and proprietary rights by us. In
addition, others may assert rights in our trademarks and other proprietary
rights.
Purchasers of our shares could suffer substantial dilution if all or a
substantial portion of outstanding options, warrants and debentures are
converted.
We currently have reserved for issuance:
2,718,109 shares in the event of exercise of options which we
have granted;
214,725 shares in the event of conversion of outstanding
warrants; and
1,060,000 shares in the event of conversion of principal and
interest on outstanding debentures.
The issuance of our reserved common stock will increase the number of
outstanding shares of common stock by approximately 27%, and may cause
substantial dilution to purchasers of shares covered by this prospectus.
If all or a substantial portion of our shares that are eligible for
public resale are sold, the market price for our shares may be materially
adversely affected.
All of the 3,992,834 shares that have been reserved for issuance have
been registered with the SEC so that the holders of such shares may resell them
publicly. In addition, approximately 305,174 shares of our outstanding common
stock have been held for at least one year and may, therefore, be publicly
resold under Rule 144. If all or a substantial portion of the shares which may
be publicly resold become available in the marketplace, the market price of our
shares may be adversely affected.
If the market price for our shares declines and causes us to be
delisted from the Nasdaq SmallCap market, additional sales practices imposed
upon broker-dealers could adversely affect the market for our shares.
In the event our shares do not remain listed on the Nasdaq SmallCap
Market, they may become subject to Rule 15g-9 under the Exchange Act. That rule
imposes additional sales practice requirements on broker-dealers that sell
low-priced securities ("penny stock") to persons other than established
customers and institutional accredited investors. The SEC's regulations define a
"penny stock" to be an equity security that has a market price less than $5.00
per share or with an exercise price of less than $5.00 per share, subject to
certain exceptions. For transactions covered by this rule, a broker-dealer must
make a special suitability determination for the purchaser and have received the
purchaser's written consent to the transaction prior to sale. Consequently, the
rule may affect the ability of broker-dealers to sell our shares and may affect
the ability of holders to sell our shares in the secondary market.
The penny stock restrictions will not apply to our shares if they
remain listed on the Nasdaq Small Cap Market. We cannot assure you that our
shares will continue to qualify for exemption from these restrictions. If our
shares became subject to the penny stock rules, a holder's ability to sell our
shares could be materially adversely affected.
Our products are characterized by continuous and rapid technological
advances and evolving industry standards.
Compatibility with industry standards in areas such as operating
systems and communications protocols is material to our marketing strategy and
product development efforts. In order to remain competitive, we must respond
effectively to technological changes by continuing to enhance and improve our
existing products to incorporate emerging or evolving standards, and by
successfully developing and introducing new products that meet customer
requirements. There can be no assurance that we will successfully develop,
market, or support such products or that we will respond effectively to
technological changes or new product announcements or introductions by others.
If we do not enhance and improve our products, our sales and financial results
could be materially adversely affected. In addition, there can be no assurance
that, as a result of technological changes, all or a portion of our inventory
would not be rendered obsolete.
4
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with 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 public reference rooms.
Our SEC filings are also available to the public from the SEC's website
at "http://www.sec.gov." The SEC also 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 the
information that we file later with the SEC will automatically update and
supersede this information. We filed a registration statement with the SEC
pursuant to the Securities Act of 1933, as amended (the "Securities Act"),
regarding the securities offered by this prospectus. This prospectus does not
contain all of the information included in the registration statement. For
further information with respect to us and the securities offered by this
prospectus, please see the registration statement. This prospectus is a part of
the registration statement. Statements contained in this prospectus regarding
any contract or other document referred to are not necessarily complete, and in
each instance you should see the copy of such contract or statement filed as an
exhibit to the registration statement. A copy of the registration statement may
be inspected without charge at the SEC's principal office. We will provide,
without charge, to each person to whom a copy of this prospectus is delivered,
upon written or oral request, a copy of any document incorporated by reference
in this prospectus. To request this information, please contact Franklin W.
Brooks, President, Saf T Lok Incorporated, 1101 Northpoint Parkway, West Palm
Beach, Florida 33407 (561) 478-5625.
INFORMATION INCORPORATED BY REFERENCE
This Prospectus incorporates by reference the following documents and
information we previously filed with the SEC under the Exchange Act:
(a) our annual report on Form 10-KSB for the fiscal year ended
December 31, 1999;
(b) our quarterly report on Form 10-QSB for the fiscal quarter
ended March 31, 2000;
(c) our quarterly report on Form 10-QSB for the fiscal quarter
ended June 30, 2000; and
(d) our current report on Form 8-K dated April 4, 2000.
All documents filed with the SEC by us pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date of this registration
statement and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be part of it from the date of filing of those
documents.
This prospectus is part of a Registration Statement we filed with the
SEC. You should rely only on the information and representations provided in
this prospectus. We have authorized no one to provide you with different
information. We are not making offers for the securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.
5
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SELLING SECURITY HOLDERS
Of the 1,457,947 shares covered by this prospectus, 875,000 shares are
issuable upon conversion of our outstanding 6% convertible debentures, 105,000
shares cover two years' interest payments on the debentures, 17,500 shares are
outstanding shares of our common stock which were issued for finder services
rendered in connection with the offering of our debentures, 26,250 shares were
issued to the placement agent in connection with the placement of the
debentures, 214,725 shares are issuable upon exercise of certain warrants,
19,472 shares are issuable upon exercise of certain options and 200,000 shares
were issued as payment of outstanding debt in the aggregate amount of $181,009.
Except as otherwise disclosed, none of these persons or entities has had any
material relationship with us during the past three years. All of the shares
covered by this prospectus are being registered for resale by the registered
owner. We agreed to register the shares as part of the consideration for our
sale of these securities.
The following table sets forth the name of each selling security
holder, the number of shares owned, the number of shares being registered for
resale by each selling security holder and the number of shares to be owned by
the selling security holder following this offering:
<TABLE>
<CAPTION>
Number of Shares to Shares to be owned
Name of selling security holder shares owned(1) be offered after offering
--------------- ---------- --------------
<S> <C> <C> <C>
Cache Capital (USA) L.P. 980,000 980,000 -0-
Alexander, Westcott, Inc.(1) 14,725 14,725 -0-
J. P. Carey Securities, Inc.(1) 26,250 26,250 -0-
Pegasus Capital Inc.(2) 17,500 17,500 -0-
Ralph Nichols(3) 57,367 19,472 37,895
Optimum Fund 200,000 200,000 0
Chrisman Chiang(4) 200,000 200,000 0
</TABLE>
------------------------------------
(1) Acted as a placement agent of the Company in connection with our 6%
convertible debentures.
(2) Acted as a finder in connection with our 6% convertible debentures.
(3) Employed as General Manager in charge of operations of the Company from
May 1999 to November 1999 and engaged as a consultant to the Company
from November 1999 to December 1999.
(4) Loaned $181,000 to us prior to the issuance of 200,000 shares as
payment of such debt.
We have agreed to pay full costs and expenses, incentives to the
issuance, offer, sale and delivery of the shares, including but not limited to,
all fees and expenses in preparing, filing and printing the registration
statement and prospectus and related exhibits, amendments and supplements
thereto and mailing of such items. We will not pay selling commissions and
expenses associated with any sale by the selling security holders.
PLAN OF DISTRIBUTION
The shares offered hereby by the selling security holders may be sold
from time to time by the selling security holders, or by pledgees, donees,
transferees or other successors in interest. Such sales may be made on one or
more exchanges or in the over-the-counter market (including the Nasdaq National
Market of The Nasdaq Stock Market), or otherwise at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The shares may be sold by one or more of the following
methods, including, without limitation:
o a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o face-to-face or other direct transactions between the selling security
holders and purchasers without a broker-dealer or other intermediary;
and
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers.
6
<PAGE>
In effecting sales, brokers or dealers engaged by the selling security
holders may arrange for other brokers or dealers to participate in the resales.
Brokers, dealers or agents may receive compensation in the form of commissions,
discounts or concessions from selling security holders in amounts to be
negotiated in connection with the sale. Such broker-dealers and agents and any
other participating broker-dealers, or agents may be deemed to be "underwriters"
within the meaning of the Act, in connection with such sales. In addition, any
securities covered by this prospectus that qualify for sale pursuant to Rule 144
might be sold under Rule 144 rather than pursuant to this prospectus.
In connection with distributions of the shares or otherwise, the
selling security holders may enter into hedging transactions with
broker-dealers. In connection with such transactions, broker-dealers may engage
in short sales of the shares registered hereunder in the course of hedging the
positions they assume with selling security holders. The selling security
holders may also sell shares short and deliver the shares to close out such
short positions. The selling security holders may also enter into option or
other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares registered hereunder, which the broker-dealer may
resell pursuant to this prospectus. The selling security holders also may enter
into options or other transactions with broker-dealers which require the
delivery to the broker-dealer of the shares registered hereunder, which the
broker-dealer may resell pursuant to this prospectus. The selling security
holders may also pledge the shares registered hereunder to a broker or dealer
and upon a default, the broker or dealer may effect sales of the pledged shares
pursuant to this prospectus.
Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling securityholders in amounts to
be negotiated in connection with the sale. The selling securityholders and any
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting
compensation.
Information as to whether an underwriter(s) who may be selected by the
selling security holders, or any other broker-dealer, is acting as principal or
agent for the selling security holders, the compensation to be received by
underwriters who may be selected by the selling security holders, or any broker-
dealer, acting as principal or agent for the selling security holders and the
compensation to be received by other broker-dealers, in the event the
compensation of such other broker-dealers is in excess of usual and customary
commissions, will, to the extent required, be set forth in a supplement to this
prospectus. Any dealer or broker participating in any distribution of the shares
may be required to deliver a copy of this prospectus, including the supplement,
if any, to any person who purchases any of the shares from or through such
dealer or broker.
We have advised the selling security holders that during such time as
they may be engaged in a distribution of the shares included herein they are
required to comply with Regulation M promulgated under the Exchange Act. With
certain exceptions, Regulation M precludes any selling security holders, any
affiliated purchasers and any broker-dealer or other person who participates in
such distribution from bidding for or purchasing, or attempting to induce any
person to bid for or purchase any security which is the subject of the
distribution until the entire distribution is complete. Regulation M also
prohibits any bids or purchase made in order to stabilize the price of a
security in connection with the distribution of that security. All of the
foregoing may affect the marketability of our common stock.
It is anticipated that the selling security holders will offer all of
the shares for sale. Further, because it is possible that a significant number
of shares could be sold at the same time hereunder, such sales, or the
possibility thereof, may have a depressive effect on the market price of our
common stock.
DESCRIPTION OF SECURITIES
Common Stock
Subject to the dividend rights of the holders of preferred stock, if
any, holders of our common stock are entitled to share, on a ratable basis, such
dividends as may be declared by our board of directors, out of funds legally
available therefor. Upon our liquidation, dissolution or winding up, after
payment to creditors and holders of preferred stock, if any, that may be
outstanding, our assets will be divided pro rata on a per share basis among the
holders of our common stock.
Each share of common stock entitles the holder to one vote. Holders of
common stock do not have cumulative voting rights which means that the holders
of more than 50% of the shares voting for the election of directors can elect
all of the directors if they choose to do so, and, in such event, the holders of
the remaining shares will not be able to elect any directors. Our By-Laws
require that only a majority of the issued and outstanding shares need be
represented to constitute a quorum and to transact business at a shareholders'
meeting. Our common stock has no preemptive, subscription or conversion rights
and is not redeemable by us.
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Convertible Debentures
We have authorized, and there are currently outstanding, an aggregate
of $925,000 principal amount of our Debentures. The Debentures bear interest at
the rate of 6% per year, which may be paid by us in cash or by the issuance of
common stock. Debentures in the aggregate amount of $50,000 mature on December
1, 2001 and Debentures in the aggregate amount of $875,000 mature on May 26,
2002. The outstanding principal amount of the Debentures, and accrued but unpaid
dividends thereon, may be converted at the option of the holder into our common
stock at a 75% discount or 80% discount (for such $50,000 and $875,000 amounts
respectively) to the market price for our shares at the time of conversion,
subject to a minimum conversion price of $$.70 per share (for the $50,000
amount) and $1.00 per share (for the $875,000 amount) and a maximum conversion
price of $2.00 per share with respect to all outstanding Debentures.
Shares Eligible for Future Sale
As of June 30, 2000, there were 15,689,581 shares of common stock
issued and outstanding. Of such shares, 15,384,407 shares comprise the public
float and 1,457,947 shares are being registered for sale pursuant to this
prospectus. The balance of 305,174 shares are "restricted securities which may
be sold in compliance with Rule 144. In general, Rule 144 permits a shareholder
who has beneficially owned restricted shares for at least one year to sell
without registration, within a three-month period, a number of shares not
exceeding the greater of one percent of the then outstanding shares of common
stock or, generally, the average weekly trading volume during the four calendar
weeks preceding the sale, assuming our compliance with certain reporting
requirements of Rule 144. Furthermore, if such shares are held for at least two
years by a person not affiliated with us (in general, a person who is not an
executive officer, director or principal shareholder during the three month
period prior to resale), such restricted shares can be sold without any volume
limitation.
We have also registered on Form S-8 under the Act 4,376,500 shares of
common stock issuable upon exercise of options, of which 2,694,000 have been
granted and are currently available for exercise. An additional 140,000 shares
are covered by an effective registration statement on Form S-3.
The public sale of shares, under Rule 144 or pursuant to a registration
statement, can be expected to have a depressive effect on the market price of
our common stock.
NASDAQ SmallCap Market
Our common stock is traded on the Nasdaq SmallCap Market under the
symbol "LOCK".
Transfer and Warrant Agent and Registrar
Our transfer agent and registrar for the common stock is Florida
Atlantic Stock Transfer, Inc. 7130 Nob Hill Road, Tamarac, Florida 33321,
telephone number (954) 726-4954.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby will be
passed upon for us by Ruben & Aronson, LLP, Washington, D.C.
EXPERTS
Our audited consolidated financial statements, as of December 31, 1999
and 1998, and for each of the two fiscal years in the period ended December 31,
1998, incorporated by reference into this prospectus, have been audited by
Goldberg Wagner Stump & Jacobs L.L.P. f/k/a Goldberg & Company, P.A.,
independent certified public accountants, as indicated in their report with
respect thereto, and incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said reports.
INDEMNIFICATION
The Florida Business Corporation Act permits the indemnification of
directors, employees, officers and agents of a Florida corporation. Our articles
of incorporation and bylaws provide that we shall indemnify to the fullest
extent permitted by the Florida Business Corporation Act any person whom we may
indemnify under the act.
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<PAGE>
The provisions of Florida law that authorize indemnification do not
eliminate the duty of care of a director, and in appropriate circumstances
equitable remedies such as injunctive or other forms of non-monetary relief will
remain available. In addition, each director will continue to be subject to
liability for:
violations of criminal laws, unless the director has reasonable
cause to believe that his or her conduct was lawful or had no
reasonable cause to believe his conduct was unlawful, deriving an
improper personal benefit from a transaction, voting for or
assenting to an unlawful distribution and willful misconduct or
conscious disregard for our best interests in a proceeding by or in
our right to procure a judgment in its favor or in a proceeding by
or in the right of a shareholder.
The statute does not affect a director's responsibilities under any
other law, such as the federal securities laws.
The effect of Florida law, our articles of incorporation and our bylaws
is to require us to indemnify our officers and directors for any claim arising
against such persons in their official capacities if such person acted in good
faith and in a manner that 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.
To the extent indemnification for liabilities arising under the
Securities Act, may be permitted to our directors, officers or control persons
control, we have been informed that in the opinion of the SEC, this
indemnification is against public policy as expressed in the Securities Act and
is unenforceable.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
Registration Fees - Securities and
Exchange Commission $ 374.39
Cost of Printing 1,000.00*
Legal Fees and Expenses 7,500.00*
Accounting Fees and Expenses 1,000.00*
Blue Sky Fees and Expenses 500.00*
Miscellaneous 1,750.00*
----------
Total $12,124.39*
==========
*Estimated
Item 15. Indemnification of Directors and Officers.
The Florida Business Corporation Act permits the indemnification of
directors, employees, officers and agents of a Florida corporation. Our articles
of incorporation and bylaws provide that we shall indemnify to the fullest
extent permitted by the Florida Business Corporation Act any person whom we may
indemnify under the act.
The provisions of Florida law that authorize indemnification do not
eliminate the duty of care of a director, and in appropriate circumstances
equitable remedies such as injunctive or other forms of non-monetary relief will
remain available. In addition, each director will continue to be subject to
liability for:
violations of criminal laws, unless the director has reasonable
cause to believe that his or her conduct was lawful or had no
reasonable cause to believe his conduct was unlawful, deriving an
improper personal benefit from a transaction, voting for or
assenting to an unlawful distribution and willful misconduct or
conscious disregard for our best interests in a proceeding by or in
our right to procure a judgment in its favor or in a proceeding by
or in the right of a shareholder.
The statute does not affect a director's responsibilities under any
other law, such as the federal securities laws.
The effect of Florida law, our articles of incorporation and our bylaws
is to require us to indemnify our officers and directors for any claim arising
against such persons in their official capacities if such person acted in good
faith and in a manner that 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. To the extent indemnification for liabilities arising under the
Securities Act, may be permitted to our directors, officers or control persons
control, we have been informed that in the opinion of the Securities and
Exchange Commission, this indemnification is against public policy as expressed
in the Securities Act and is unenforceable.
Item 16. Exhibits and Consolidated Financial Statement Schedules.
a. The exhibits constituting part of the Registration Statement
are as follows:
4.1 Form of 6% Convertible Debenture (1)
5.1 Opinion and Consent of Ruben & Aronson, LLP (2)
10.1 Placement Agency Agreement between the Company and J.
P. Carey Securities, Inc. dated May 26, 2000 (1)
10.2 Form of Securities Purchase Agreement relating to the
Company's Debenture offering through J. P. Carey
Securities, Inc. (1)
10.3 Form of Registration Rights Agreement relating to the
Company's Debenture offering through J. P. Carey
Securities, Inc. (1)
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<PAGE>
23.1 Consent of Ruben & Aronson, LLP (included in opinion
filed as Exhibit 5.1(2)
23.2 Consent of Goldberg Wagner Stump & Jacobs L.L.P.(3)
27 Financial Data Schedule (4)
------------------------------------
(1) Incorporated by reference to the Company's Quarterly Report on Form 10-QSB
for the quarter ended June 30, 2000, as filed with the Securities and
Exchange Commission.
(2) To be filed by Amendment.
(3) Filed herewith.
(4) Incorporated by reference to Exhibit 27 to the Company's Quarterly Report
on Form 10-QSB for the quarter ended June 30, 2000, as filed with the
Securities and Exchange Commission.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement which
includes 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.
(b) That, for the purpose of determining any liability under the
Securities Act, each such 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.
(c) 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.
(d) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's Annual Report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities shall be deemed to
be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officer, 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 Securities 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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company 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, thereunto
duly authorized, in the City of West Palm Beach and the State of Florida, on the
17 day of August 2000.
SAF T LOK INCORPORATED
By: /s/ FRANKLIN W. BROOKS
-------------------------
FRANKLIN W. BROOKS, CEO
POWER OF ATTORNEY
The undersigned directors and officers of Saf T Lok Incorporated hereby
constitute and appoint Franklin W. Brooks and William Schmidt and each of them,
with full power to act without the other and with full power of substitution and
resubstitution, our true and lawful attorneys-in-fact with full power to execute
in our name and behalf in the capacities indicated below any and all amendments
(including post-effective amendments and amendments thereto) to this
registration statement and time to file the same, with all exhibits thereto and
other documents in connection therewith with the Securities and Exchange
Commission and hereby ratify and confirm that such attorneys-in-fact, or either
of them, or their substitutes shall lawfully do or use to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ FRANKLIN W. BROOKS Chairman of the Board, Chief August 17, 2000
---------------------------------------- ---------------------------- ------------------
FRANKLIN W. BROOKS Executive Officer and Director
(Principal Executive Officer)
/s/ JEFFREY W. BROOKS Vice President, Secretary August 17, 2000
---------------------------------------- ------------------------- ------------------
JEFFREY W. BROOKS and Director
/s/ WILLIAM M. SCHMIDT Chief Financial Officer, August 17, 2000
---------------------------------------- ------------------------ ------------------
WILLIAM M. SCHMIDT Principal Accounting Officer
and Director
/s/ DENNIS W. DECONCINI Director August 17, 2000
---------------------------------------- -------- -----------------
DENNIS W. DECONCINI
/s/ JAMES V. STANTON Director August 17, 2000
---------------------------------------- -------- -----------------
JAMES V. STANTON
</TABLE>
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