As filed with the Securities and Exchange Commission on January 11, 1999
Registration No. 333-
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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EUROWEB INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
Delaware 13-3696015
- ------------------------------ -----------------------------------
State or jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
445 Park Avenue, New York, New York 10022
(212) 758-9870
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(Address and telephone number of principal executive offices)
Frank R. Cohen, Cohen & Cohen
445 Park Avenue, 15th Floor New York, New York 10022, (212) 758-9870
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(Name, address and telephone number of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE 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, 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|_|.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, ($.001 PAR VALUE)(2)............... 1,806,666(2) $1.81 $2,935,832 $866.00
=========================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee on
the basis of the average high/low price on January 6, 1999 as quoted on
the Nasdaq system on January 6, 1999.
(2) Includes (i) 866,000 shares of Common Stock, $.001 par value per share
("Common Stock") of EuroWeb International Corp. (the "Company") issued to
private placement purchasers and (ii) 940,000 shares of Common Stock
issuable upon the exercise of warrants and options to purchase Common
Stock and options issued to private placement purchasers and consultants
to the Company.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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SUBJECT TO COMPLETION, DATED , 1999
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
1,806,666 Shares
EUROWEB INTERNATIONAL CORP.
COMMON STOCK
This prospectus relates to the offering of 1,806,666 shares of Common Stock
("Shares") of EuroWeb International Corp. (the "Company") of which 866,666
shares may be offered for sale by certain stockholders of the Company and to
940,000 shares issuable upon exercise of warrants ("Warrants") and/or options
("Options") to purchase shares of Common Stock issued to certain private
placement purchasers and consultants to the Company. The shareholders, warrant
holders and option holders are collectively referred to as the "Selling
Stockholders").
The Company will not receive any proceeds from the sale of Shares by the
Selling Stockholders. All expenses incurred in connection with this offering
are being borne by the Company, other than any commissions or discounts paid or
allowed by the Selling Stockholders to underwriters, dealers, brokers or
agents.
The Selling Stockholders have not advised the Company of any specific plans
for the distribution of the Shares, but no underwriting arrangements have been
entered into by any of the Selling Stockholders. It is anticipated that the
Shares may be sold by the Selling Stockholders from time to time in
transactions (which may include block transactions) on the NASDAQ SmallCap
Market at the market prices then prevailing. Sales of the Shares may also be
made through negotiated transactions or otherwise. The Selling Stockholders and
the brokers and dealers through which the sales of the Shares may be made may
be deemed to be "underwriters" within the meaning set forth in the Securities
Act of 1933, as amended, and their commissions and discounts and other
compensation may be regarded as underwriters' compensation. See "Plan of
Distribution."
The Common Stock is traded on the NASDAQ SmallCap Market under the trading
symbol of "EWEB." The last reported sales price of the Common Stock as reported
on the NASDAQ SmallCap Market on January 6, 1999 was $1.81 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is January 11, 1999
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AVAILABLE INFORMATION
A Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), has been filed with the Commission with respect to the
shares of Common Stock offered hereby. This Prospectus omits certain
information contained in the Registration Statement, including exhibits
thereto. For further information with respect to the Company and the Common
Stock, reference is made to the Registration Statement and exhibits thereto,
copies of which may be inspected at the offices of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, or obtained from the Commission at the
same address at prescribed rates.
The Company is subject to the informational requirements of the Securities
and Exchange Commission (the "Exchange Act") and in accordance therewith files
reports, proxy statements and other information with Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549; at its Regional Offices located at 7 World Trade
Center, New York, New York 10048; and at 500 West Madison Street, Chicago,
Illinois 60661-2511. Copies of such material can also be obtained from the
Public Reference Section of the Securities and Exchange Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition,
registration statements and certain other filings made electronically with the
Commission through its "EDGAR" system are publicly available through the
Commission's site on the Internet's World Wide Web, located at
http;//www.sec.gov. This Registration statement, including all exhibits
thereto, has been filed with the Commission through EDGAR. Reports, proxy and
information statements and other information concerning the Company can also be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission, as stated above (Commission File No. 1-1200), are hereby
incorporated by reference in this Prospectus:
1. The Company's annual report on Form 10-KSB for the year ended December
31, 1997 and the amendments to our annual report filed with the SEC on
November 19, 1998 and December 1, 1998.
2. The Company's proxy statement dated June 15, 1998 with respect to its
annual meeting of shareholders held on July 15, 1998.
3. The Company's quarterly reports on Form 10-QSB for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998 and the
amendments to the quarterly reports filed on December 8, 1998.
4. The Company's current report for November 20, 1998 on Form 8K covering
the sale of 51% of the stock of EuroWeb Rt. to PanTel Rt. filed on
December 7, 1998 and amended on January 8, 1999.
5. The description of Common Stock contained in Company's Registration
Statement filed under Section 12(b) of the Exchange Act. See
"Description of Securities" in this Prospectus for a description of
Company's Securities.
In addition, all documents and reports filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange subsequent to the date of
this Prospectus and prior to the termination of the offering shall be deemed to
be incorporated by reference herein from their respective dates of filing. Any
statements contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
the Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to any person who receives a copy
of this Prospectus, upon written or oral request of such person, a copy of any
of the information that is incorporated by reference in this Prospectus. Any
such request should be directed to the attention of Frank R. Cohen, Chairman of
the Board, EuroWeb International Corp. at 445 Park Avenue, New York, New York
10022, telephone number: (212) 758-9870.
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PROSPECTUS SUMMARY
The following summary is intended to set forth certain pertinent facts and
highlights from material contained in the body of this Prospectus and the
Company's Report on Form 10-KSB, as amended, for the fiscal year ended December
31, 1997 (the "Form 10-KSB"), the Form 10-QSB, as amended, for the quarters
ended March 31, 1998, June 30, 1998 and September 30, 1998 (collectively, the
"Forms 10-QSB"), the 8K filed on December 7, 1998 relating to the sale of 51%
of the stock of EuroWeb Rt. to PanTel Rt. on November 20, 1998, and amended on
January 8, 1999, and the Company's Proxy Statement with respect to its Annual
Meeting of Shareholders held on July 15, 1998 (the "Proxy Statement"), all of
which are incorporated herein by reference. The summary is qualified in its
entirety by reference to the more detailed information and consolidated
financial statements appearing elsewhere in this Prospectus and Form 10-KSB,
Forms 10-QSB and Proxy Statement. Each prospective investor is urged to read
this Prospectus and the Form 10-KSB, Forms 10-QSB and Proxy Statement in their
entirety. All references to $ or Dollars are to United States Dollars; all
references to "HUF" are to Hungarian Forints. As of January 7, 1999, the
Exchange Rate was HUF 216 to $1.
THE COMPANY
EuroWeb International Corp. ("EuroWeb" or the "Company") owns 49% of
EuroWeb Rt., a Hungarian company which is a full service Internet service
provider ("ISP") operating in Hungary, supplying international leased lines and
MCI VSAT data connections to the World Wide Web and providing access to managed
lease lines and dial-up subscribers, complete Internet graphic services
including designing and creation of Web sites and hosting of Web sites,
Internet fax discount services, and development of software to provide
electronic commercial Internet based solutions to perform many business
processes.
The Company was organized on November 9, 1992 under the laws of the State
of Delaware as Hungarian Teleconstruct Corp., and changed its name to EuroWeb
International Corp. on July 9, 1997. It was a development stage company through
December 31, 1993. It originally had two subsidiary Hungarian corporations, one
of which was engaged as a general contractor in the construction of buildings
and the other was engaged in the construction of local telephone exchanges for
community sponsored telecom companies in Hungary. It had two operating business
segments: (1) building of condominium apartments and (2) design and laying of
underground fiber optic telephone and cable lines. The latter segment was
discontinued in 1994.
The Company built two luxury 14-unit condominium buildings in Budapest,
which were completed in early 1998, at which time the Company ceased its
construction activities. One of such buildings was sold in March 1998. On
December 22, 1998, the Company sold the stock of its wholly owned construction
subsidiary Teleconstruct Epitesi, Kft. which owned the second building.
On January 2, 1997, the Company entered the Internet service provider
business in Hungary acquiring three Hungarian Internet Service companies,
namely EUNET Hungary Ltd. (EUNET"), MS Telecom Rt. ("MS Telecom"), and E-Net
Hungary Telecommunications and Multimedia, Kft. ("E-Net"). EUNET was a provider
of managed leased line Internet access to corporate customers, MS Telecom was a
provider of dial-up Internet access to small businesses, and E-Net was a
developer of Web Sites. Each of these companies had separate facilities,
marketed their services through different channels, had different customer
bases, different personnel and different bookkeeping systems. By the end of
April 1997, the Company rented a new facility, combined all three companies
into one operating facility, eliminated approximately 35% of the personnel to
avoid duplication, established a common accounting department and was able to
retain the customer bases of each of the acquired companies.
In 1998 the Company started a division to develop Internet software to
provide electronic commercial based solutions to perform many business
processes. This division was retained by Fornex, an agent of the Budapest Stock
Exchange ("BSE"), to develop software to record all transactions on the BSE in
real time, which information can be obtained by subscribers through the
Internet. This division has been also retained by the BSE to create the
database containing information on all of the companies on the BSE. The
division also has been retained by Posta Bank, Hungary's second largest bank,
to help develop software for home banking use by customers of the bank and to
provide access for the customers to enable the
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customers to transfer funds on deposit at the bank by the Internet
electronically to third parties. The Company is also working on software for
credit card processing and transaction validation.
The Company also added discount fax service for its customers in 1998.
These services enable customers to send faxes anywhere in the world at a cost
substantially lower than what the customers would pay using ordinary telephone
lines. Customers are able to access this new service using a regular fax
machine or through their computers. Recipients are able to receive the
transmission on a computer or on a fax machine. The Company is also the node
for faxes sent to Hungary from locations around the world by members of a
worldwide alliance of Internet service providers known as GRIC (Global Research
Internet Connection).
EuroWeb further expanded its capabilities in 1998 by leasing satellite
space on a satellite owned by MCI.
On November 20, 1998, the Company sold 51% interest of its stock of its
wholly owned subsidiary EuroWeb Rt. to PanTel Rt. on November 20, 1998. The
Company will use the quity method of accounting to account for the retained 49%
interest in EuroWeb Rt.
The Company's objective is for EuroWeb Rt. to become the leading Hungarian
Internet professional services firm. To achieve its goal, the Company's
strategy is to expand EuroWeb Rt.'s Internet services and solutions, both
through internal growth and through related business acquisitions.
Unless the context otherwise requires, when used herein, the term
"Company" shall include EuroWeb International Corp. and its Hungarian
subsidiary, EuroWeb Rt., which administers the Internet Company's operations in
Hungary. The office of the Company in the United States is 445 Park Avenue, New
York, NY 10022; Telephone number: (212) 758-9870. The office of both
subsidiaries in Hungary is H-1122 Budapest, Varosmajor utca 13; Telephone
number: (361) 2244-000.
RECENT DEVELOPMENTS
REGISTRATION STATEMENT AND WITHDRAWAL
On May 15, 1998 the Company filed a Registration Statement on Form SB-2
for the sale of 1,000,000 Units, each unit consisting of one share of Preferred
Stock and one Common Stock Purchase Warrant. The Units were priced at $6 per
unit and the offering was underwritten by J.W. Barclay & Company., Inc. The
Offering was withdrawn on September 1, 1998 due to Market Conditions. The
Company incurred approximately $137,000 in expenses in connection with the
offering which were charged to operations during the quarter ended September
30, 1998.
SALES OF UNREGISTERED SECURITIES
1. On September 2, 1998, the Company sold 533,333 shares of its Common Stock
for $400,000 through J. P. Carey Securities Inc as Placement Agents. The
sale price per share was based on a 25% discount from the NASDAQ closing
bid price of $1.00 per share on the date of the transaction. After
deducting the Placement Agents 10% commission of $40,000 and expenses of
$16,250, and Company expenses of $30,000, the net proceeds to the Company
were $313,750. In connection with the Private Placement through J.P. Carey
Securities Inc., the Company agreed to file a Registration Statement with
the SEC within two (2) months after September 12, 1998 (November 12, 1998)
in order to register the 533,333 shares of Common Stock issued in said
Private Placement. The Company has agreed to use its best efforts to have
the Registration Statement declared effective by January 12, 1999. The
Company has agreed to issue 2% of the purchase price (aggregate $8,000) to
the share purchasers if it fails to file the Registration Statement on
time and 3% of the purchase price (aggregate $12,000) in the event the
Registration Statement is not declared effective on or before January 12,
1999. All of the shares issued in connection with the transaction were
acquired for investment purposes only and the certificates representing
the shares have had restrictive legends imprinted thereon. Registration of
the above securities was not required since the issuance of the securities
was exempt from registration as an issuance not constituting a public
offering under Section 4(2) of the Securities Act of 1933.
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2. On September 12, 1998, the Company sold 333,333 shares of its Common Stock
directly to an unaffiliated investor for $250,000. The sales price per
share was based on a 25% discount from the NASDAQ closing bid price of
$1.00 per share on the date of the transaction. There was no underwriter
or broker involved in the transaction. The Company incurred no costs in
connection with this transaction and accordingly the gross proceeds and
the net proceeds to the Company from the transaction was $250,000. All of
the shares issued in connection with the transaction were acquired for
investment purposes only and the certificates representing the shares have
had restrictive legends imprinted thereon. Registration of the above
securities was not required since the issuance of the securities was
exempt from registration as an issuance not constituting a public offering
under Section 4(2) of the Securities Act of 1933.
UNREGISTERED WARRANT AND OPTIONS ISSUED
3. In October 1996, Registrant sold to 7 persons an aggregate of 22 units
(the "Units"), each Unit consisting of 25,000 shares of Common Stock
(aggregate 550,000) and 25,000 five year Common Stock Purchase Warrants
(aggregate 550,000 exercisable at $2 per share (reduced to $1.25 per share
on June 27, 1997) for a purchase price of $50,000 per Unit, or an
aggregate of $1,100,000. Ten thousand of these were sold in 1998 under
Rule 144 leaving a balance of 540,000 Warrants. In connection with the
financing, the Registrant paid a selling commission of $100,000 to an
unaffiliated finder. Each of the purchasers signed a letter indicating an
agreement to hold the shares for investment. The issuance of such
securities was exempt from registration under the Securities Act of 1933
pursuant to Section 4(2) thereof and Regulation D promulgated thereunder.
The 540,000 shares of Common Stock underlying the 540,000 Common Stock
Purchase Warrants are being registered in this offering.
4. In February 1997, the Company retained Peter E. Klenner as a consultant to
oversee the Company's real estate interests. He agreed to render
consulting services for a two-year period for a fee of 100,000 five-year
options exercisable at $2.00 per share for the period from February 1999
to February 2002.
5. In September 1998, the Company granted 100,000 five year Common Stock
Purchase Warrants to J.P. Carey Securities, Inc., exercisable at $1.10 per
share in partial consideration for services rendered to the Company as
Private Placement Agent in the private placement noted above. The high bid
closing price on NASDAQ on the date of the transaction was $1.00.
6. In September 1998, the Company also entered into a two year Consulting
Agreement with MJJ Management Group Corp., (the"MJJ Consulting Agreement")
to provide a range of services including the establishment of contact with
a number of brokers and the arrangement of Broker teleconferences. In
consideration of the services to be provided by MJJ, the Company granted
to MJJ 200,000 three year Warrants to purchase shares of Common Stock at
the exercise price of $1.00 per share.
The Shares offered hereby consist of 866,666 unregistered shares issued by
the Company in connection with transactions referred to under Sales of
Unregistered Securities above, and the 940,000 shares underlying the 940,000
warrants and options issued in connection with the transactions referred to
under Unregistered Warrants and Options for a total of 1,806,666.
SALE OF 51% OF INTERNET SUBSIDIARY
On November 20, 1998, the Company sold a 51% interest in its wholly owned
Hungarian Subsidiary, EuroWeb RT, to a Hungarian telecom corporation known as
PanTel for $2.2 million.
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THE OFFERING
Common Stock Outstanding (prior to
and after Offering ........................... 6,444,916 shares of Common
Stock
Preferred Stock Outstanding .................. 0
Warrants and Options Outstanding (1)
(prior to and after the offering) ............ 1,775,000
Use of Proceeds .............................. All of the proceeds of this
Offering will be paid to the
respective selling
stockholders and none of the
proceeds will be received by
the Company. See "Use of
Proceeds".
Risk Factors ................................. The offering involves a high
degree of risk. See "Risk
Factors".
NASDAQ Symbols:
Common Stock ............................ EWEB
(1) Reserved as follows: (i) 350,000 shares reserved for outstanding options
granted pursuant to the Company' Stock Option Plan; (ii)460,000 shares reserved
to cover exercise of outstanding Options granted to Management Employees; (iii)
565,000. Warrants granted to Private Placement Purchasers (iv) 300,000
Warrants; and 100,000 Options granted to Company Consultants.
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RISK FACTORS
An investment in the Shares offered hereby involves a high degree of risk.
The following factors, in addition to those discussed elsewhere in this
Prospectus should be considered carefully in evaluating the Company and its
business. An investment in the Shares is suitable only for those investors who
can bear the risk of loss of their entire investment.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENT AND RISK FACTORS
Certain statements in this Prospectus constitute or may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Litigation Reform Act"). The Company
desires to avail itself of certain "safe harbor" provisions of the Litigation
Reform Act and is therefore including this special note to enable the Company
to do so. Forward-looking statements included in this Prospectus or hereafter
included in other publicly available documents filed with the Commission,
reports to the Company's stockholders and other publicly available statements
issued or released by the Company involve known and unknown risks,
uncertainties , and other factors which could cause the Company's actual
results, performance (financial or operating) or achievements to differ from
the future results, performance (financial or operating) achievements expressed
or implied by such forward looking statements. Such future results are based
upon management's best estimates based upon current conditions and the most
recent results of operations. These risks include, but are not limited to, need
for additional capital, certain technology considerations, competition and
technological changes, governmental regulations, dependence upon key personnel
and other risks detailed in the Company's Commission filings, each of which
could adversely affect the Company's business personnel and other risks
detailed in the Company's Commission filings, each of which could adversely
affect the Company's business and the accuracy of the forward-looking
statements contained herein. Risk factors and investment considerations which
may materially affect the Company, impact upon any forward looking statements,
and which otherwise should carefully be considered, include the following:
1. Limited Operating History; Accumulated Deficit. Although the Company was
founded in November 1992, it only entered the Internet business in January
1997 by acquiring three operating Internet businesses. Accordingly, the
Company has only a limited operating history on which to base an
evaluation of its present business and prospects. The Company and its
prospects must be considered in light of the risks, expenses and
difficulties frequently encountered by companies in an early stage of
development, particularly companies in new and rapidly evolving markets
such as Internet. Such risks for the Company include, but are not limited
to, an evolving business model and the management of both internal and
acquisition~based growth. To address these risks, the Company must, among
other things, continue to expand its client base, continue to develop the
strength and quality of its operations, maximize the value delivered to
clients, respond to competitive developments and continue to attract,
retain and motivate qualified employees. There can be no assurance that
the Company will be successful in meeting these challenges and addressing
such risks and the failure to do so could have a material adverse effect
on the Company's business, results of operations and financial condition.
The Company has incurred net losses since inception, and as of September
30, 1998 had an accumulated deficit of approximately $17.0 million. In
1997, the only complete year in which the Company had Internet operations,
the Company incurred a net loss of approximately $2.5 million. In the
first nine month period ended September 30, 1998 the Company had a net
loss of $766,462. On a pro forma basis, assuming that the acquisition by
the Company of the three Internet services providers occurred on January
1, 1996, the Company's consolidated net loss for the year ended December
31, 1996 would have been approximately $4.6 million. Although the Company
has experienced revenue growth in recent months, such growth rates may not
be sustainable or indicative of future operating results. There can be no
assurance that the Company will achieve or sustain profitability.
2. Risks Related to Expansion. The Company has limited experience in
effectuating rapid expansion and there can be no assurance that the
Company will be able to successfully expand its operations or manage
growth.
3. Possible Future Capital Needs. The Company currently anticipates that its
available cash resources will be sufficient to meet its presently
anticipated working capital and capital expenditure requirements for at
least the next 12 months. However, the Company may need to raise
additional funds in order to support more rapid expansion, acquire
complementary businesses or technologies or take advantage of
unanticipated opportunities through public or private financing, strategic
relationships or other arrangements. There can be no assurance that such
additional funding, if
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needed, will be available on terms acceptable to the Company, or at all.
If adequate funds are not available on acceptable terms, the Company may
be unable to develop or enhance its services and products or take
advantage of future opportunities either of which could have a material
adverse effect on the Company's business, results of operations and
financial condition. The Company may determine, depending upon the
opportunities available to it, to seek additional debt or equity financing
to fund the cost of acquiring subscriber bases or service firms. To the
extent that the Company finances an acquisition with equity securities,
any such issuance of equity securities would result in dilution to the
interests of the Company's stockholders. Additionally, to the extent that
the Company incurs indebtedness or issues debt securities in connection
with any acquisition, the Company will be subject to risks associated with
incurring substantial indebtedness, including the risks that interest
rates may fluctuate and cash flow may be insufficient to pay principal and
interest on any such indebtedness.
4. Recruitment and Retention of Internet Solutions Professionals. The
Company's business of delivering Internet services is labor intensive.
Accordingly, the Company's success depends in part on its ability to
identify, hire, train and retain employees who can provide the Internet
strategy, technology, marketing, audience development and creative skills
required by clients. There is currently a shortage of such personnel, and
this shortage is likely to continue for the foreseeable future, The
Company competes intensely for qualified personnel with other companies,
and there can be no assurance that the Company will be able to attract,
assimilate or retain other highly qualified technical, marketing and
managerial personnel in the future. The inability to attract and retain
the necessary technical, marketing and managerial personnel would have a
material adverse effect on the Company's business, results of operations
and financial condition.
5. Competition, Low Barriers to Entry. The market for Internet services is
relatively new, intensely competitive, rapidly evolving and subject to
rapid technological change. The Company expects competition to persist,
intensify and increase in the future. The Company's principal competitors
are Datanet, which has a customer base similar to that of the Company but
larger than the Company's, and MATAV, the national Hungarian telephone
company, which targets residential rather than business subscribers. The
Company believes it can compete on the basis of the quality and
reliability of its services, but there can be no assurance that it will be
able to compete successfully.
There are relatively low barriers to entry into the Company's business.
Because professional services firms such as the Company rely on the skill
of their personnel and the quality of their client service, the Company
has no patented technology that would preclude or inhibit competitors from
entering the Internet services market. The Company expects that it will
face additional competition from new entrants into the market in the
future. There can be no assurance that existing or future competitors will
not develop or offer services that provide significant performance, price,
creative or other advantages over those offered by the Company, which
could have a material adverse effect on the Company's business, results of
operations and financial condition.
6. Management of Growth. The Company's rapid growth has placed, and is
expected to continue to place, a significant strain on the Company's
managerial, operational, financial and other resources. The Company
expects that continued hiring of new personnel will be required to support
its business. The Company's future success will depend, in part, upon its
ability to manage its growth effectively, which will require that the
Company continue to implement and improve its operational, administrative
and financial and accounting systems and controls and to expand, train and
manage its employee base. There can be no assurance that the Company's
systems, procedures or controls will be adequate to support the Company's
operations or that the Company's management will be able to achieve the
rapid execution necessary to exploit the market for the Company's business
model. Furthermore, the Company's future performance will depend on the
Company's ability to integrate any organizations which it may acquire and
whose integration, which, even if successful, could take a significant
period of time and will place a significant strain on the Company. As a
result, there can be no assurance that the Company will be able to
integrate any acquisitions successfully or in a timely manner in
accordance with its strategic objectives. If the Company is unable to
manage internal or acquisition-based growth effectively, the Company's
business, results of operations and financial condition will be materially
adversely affected.
7. Rapid Technological Change. The market for Internet services is
characterized by rapid technological change, changes in user and client
requirements and preferences, frequent new product and service
introductions embodying new processes and technologies and evolving
industry standards and practices that could render the Company's existing
service practices and methodologies obsolete. The Company's success will
depend, in part, on its ability to improve its existing services, develop
new services and solutions that address the increasingly sophisticated and
varied needs of its
8
<PAGE>
current and prospective clients, and respond to technological advances,
emerging industry standards and practices, and competitive service
offerings. There can be no assurance that the Company will be successful
in responding quickly, cost-effectively and sufficiently to these
developments. If the Company is unable, for technical, financial or other
reasons, to adapt in a timely manner in response to changing market
conditions or client requirements, its business, results of operations and
financial condition would be materially adversely affected.
8. Dependence on Key Personnel; Limited Management; Need for Qualified
Management and Other Personnel. The success of the Company will be
dependent on the personal efforts of Csaba Toro, Managing Director of
Operations, Frank R. Cohen, Chairman of the Board and Chief Executive
Officer and Robert Genova, President. Although the Company has entered
into an employment agreement with Messrs. Cohen, Genova and Toro, the loss
of the services of any of such individuals could have a material adverse
effect on the Company's business and prospects. The Company does not have
and does not intend to obtain "key-man" insurance on the life of any of
its officers. Mr. Toro devotes all of his time to the affairs of the
Company, and Mr Cohen and Mr. Genova devote 75% of their time to the
affairs of the Company. Mr. Cohen is also a member of Cohen & Cohen, a law
firm that represents the Company. The success of the Company is largely
dependent upon its ability to hire and retain additional qualified
management, marketing, technical, financial and other personnel including
a Chief Financial Officer. Competition for qualified personnel is intense,
and there can be no assurance that the Company will be able to hire or
retain additional qualified personnel. Any inability to attract and retain
qualified management and other personnel will have a material adverse
effect on the Company.
9. Government Regulation and Legal Uncertainties. The Company is not
currently subject to direct government regulation other than laws and
regulations applicable to businesses generally, and there are currently
few laws or regulations directly applicable to access to or commerce on
the Internet. However, due to the increasing growth and use of the
Internet, it is likely that a number of laws and regulations may be
adopted at the local, state, national or international levels with respect
to the Internet covering issues such as user privacy, freedom of
expression, pricing of products and services, taxation, information
security or the convergence of traditional communications services with
Internet communications. Moreover, the adoption of any such laws or
regulations may decrease the growth of the Internet, which could in turn
decrease the demand for the Company's services or increase the cost bf
doing business or in some other manner have a material adverse effect on
the Company's business, results of operations or financial condition.
10. Foreign Currency and Exchange Risks and Rate Revaluation. The Company will
be subject to significant foreign exchange risk. There are currently no
meaningful ways to hedge currency risk in Hungary. Therefore, the
Company's ability to limit its exposure to currency fluctuations is
significantly restricted.
Although the Forint has recently become exchangeable outside Hungary,
there is not yet a freely convertible exchange market in place for the
Forint. In addition, Hungarian law permits the repatriation of foreign
currency only for dividends to the extent of capital investment and
earnings, as determined under applicable Hungarian law. There can no
assurances as to the future exchangeability or convertibility of Forints.
11. Dividends. The Company has not previously paid any dividends on its Common
Stock and intends to follow a policy of retaining all of its cash flow
from operations, if any, to finance the development and expansion of its
business.
12. Possible Delisting and Risk of Low-Priced Securities. The Common Stock is
currently being quoted on the NASDAQ SmallCap Market under the symbols
"EWEB." If the Company is unable to satisfy the NASDAQ SmallCap Market
maintenance criteria in the future, its Common Stock may be delisted from
trading on the NASDAQ SmallCap Market. If it did not qualify for such
listing, trading, if any, would thereafter be conducted in the
over-the-counter market in the so-called "pink sheets" or the "Electronic
Bulletin Board" of the National Association of Securities Dealers, Inc.
("NASD"), and consequently an investor could find it more difficult to
dispose of, or to obtain accurate quotations as to the price of the
Company's securities.
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure relating to the market for penny stocks in
connection with trades in any stock defined as a penny stock. Commission
regulations generally define a penny stock to be an equity security that
has a market price of less than $5.00 per share, subject to certain
exceptions. Such exceptions include any equity security listed on NASDAQ
and any equity security issued by an issuer that has net tangible assets
of at least $2,000,000, if such issuer has been in continuous operation
for three years. Unless an exception
9
<PAGE>
is available, the regulations require the delivery, prior to any
transaction involving a penny stock, of a disclosure schedule explaining
the penny stock market and the risks associated therewith. The regulations
also require that broker/dealers who recommend such securities to persons
other than established customers and accredited investors must make a
special written suitability determination for the purchaser and receive
the purchaser's written agreement to a transaction prior to sale.
If the Company's securities become subject to the regulations applicable
to penny stocks, the market liquidity for the Company's securities could
be severely affected. In such an event, the regulations on penny stocks
could limit the ability of broker/dealers to sell the Company's securities
and thus the ability of purchasers of the Company's securities to sell
their securities in the secondary market. The Company's Common Stock was
trading below $1 per share for more than a year prior to April 1998.
Furthermore, the Company's net tangible assets were below $2 million at
September 30, 1998. This maintenance requirement has been met since
September 30, 1998 by a private placement and by the sale of 51% interest
in the Company's Hungarian subsidiary, EuroWeb Rt. NASD found after a
hearing in December 1998 that the Company satisfied all of the NASDAQ
SmallCap maintenance criteria and expressed confidence in the Company's
ability to maintain compliance with all requirements for continued listing
going forward.
13. Limitation on Director Liability. As permitted by Delaware corporation
law, the Company's Certificate of Incorporation limits the liability of
Directors to the Company or its stockholders for monetary damages for
breach of a Director's fiduciary duty except for liability in certain
instances. As a result of the Company's charter provision and Delaware
law, stockholders may have a more limited right to recover against
Directors for breach of their fiduciary duty other than as existed prior
to the enactment of the law.
USE OF PROCEEDS
The Selling Stockholders will receive all of the net proceeds from the
sale of the securities offered hereby, and accordingly the Company will receive
no proceeds from the sales of Shares offered hereby.
DESCRIPTION OF SECURITIES
The Company's authorized capitalization consists of 15,000,000 shares of
Common Stock, par value $.001 per share and 5,000,000 shares of Preferred
Stock, par value $.001 per share, which may be issued in one or more series. As
of the date of this Prospectus, the Company had 6,444,916 shares of Common
Stock outstanding and no shares of Preferred Stock outstanding. All of the
issued and outstanding shares of Common Stock are validly issued, fully paid
and nonassessable. The following summary description of the Units, Common
Stock, and Preferred Stock are qualified in their entirety by reference to the
Company's Certificate of Incorporation, as amended.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share on all
matters to be voted upon by Stockholders. The holders of shares of Common Stock
are entitled to dividends when and as declared by the Board of Directors from
funds legally available therefor, and, upon liquidation, are entitled to share
pro rata in any distribution to stockholders after payments to creditors and
after paying, or providing for, any liquidation preferences of any outstanding
Preferred Stock. There are no conversion or redemption privileges, nor sinking
fund provisions with respect to the Common Stock, and stockholders have no
preemptive rights to acquire shares of Common Stock issued by the Company in
the future.
The Common Stock is traded on NASDAQ SmallCap Market under the symbol
EWEB.
PREFERRED STOCK
The Preferred Stock may be issued in one or more series, to be determined
and to bear such title or designation as may be fixed by resolution of the
Board of Directors prior to the issuance of any shares thereof. Each series of
Preferred Stock will have such voting powers, if any, preferences, and other
rights as determined by the Board of Directors, with such
10
<PAGE>
qualifications, limitations or restrictions as may be stated in the resolutions
of the Board of Directors adopted prior to the issuance of any shares of such
series of Preferred Stock. No shares of Preferred Stock have been issued to
date.
Because the terms of each series of Preferred Stock may be fixed by the
Company's Board of Directors without shareholder action, the Preferred Stock
could be issued with terms calculated to defeat a proposed takeover of the
Company, or to make the removal of the Company's management more difficult.
Under certain circumstances, this could have the effect of decreasing the
market price of the Preferred Shares, the publicly held Warrants, and the
Common Stock. Management of the Company is not aware of any such threatened
transaction to obtain control of the Company.
COMMON STOCK PURCHASE WARRANTS
The Warrants contain provisions that protect the holders thereof
against dilution by adjustment of the exercise price in certain events, such as
stock splits, recapitalizations, mergers and consolidations. No adjustment
exists for the issuance of shares of Common Stock, among other circumstances,
upon exercise of any of the Warrants or options granted under any stock option
plan. The holder of a Warrant does not possess any rights as a stockholder of
the Company unless he exercises his Warrant and obtains Common Stock. The
shares of Common Stock issued upon exercise of a Warrant, will be fully paid
and non-assessable. A Warrant may be exercised upon the surrender of a duly
completed warrant certificate on or prior to its expiration, accompanied by
cash or certified bank check for the exercise price.
TRANSFER AGENT
The Transfer Agent and registrar of the Common Stock is American Stock
Transfer and Trust Co., 40 Wall Street, New York, New York 10005.
REPORTS TO STOCKHOLDERS
The Company furnishes its stockholders with annual reports containing
audited financial statements and such other periodic reports as the Company may
determine to be appropriate or as may be required by law.
SELLING STOCKHOLDERS
The following tables sets forth the number of shares of Common Stock
beneficially owned by each of the Selling Stockholders as of December 31, 1998,
the number of Shares owned thereby covered by this Prospectus and the amount
and percentage ownership of each Selling Stockholder after the offering of the
Shares offered hereby assuming all the Shares covered by this Prospectus are
sold by the Selling Stockholders. Except as otherwise indicated by footnotes
below, none of the Selling Shareholders has had any position, office or other
material relationship with the Company within the past three years other than
as a result of the ownership of the Shares or other securities of the Company.
The Company will not receive any proceeds from the sale of the shares of Common
Stock offered hereby.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Shares of Common
Stock Owned Percentage of
Beneficially Shares Shares Owned Shares Owned
Name of Security Holder and of Record Offered After Offering After Offering
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Atlantis Capital Fund Ltd.(1).......... 533,333 533,333 0 0
Peter E. Klenner(2).................... 333,333 333,333 0 0
J.P. Carey, Inc.(3).................... 100,000 100,000 0 0
MJJ Management Group Corp.(4).......... 200,000 200,000 0 0
Peter E. Klenner(5).................... 100,000 100,000 0 0
Steve Altman(6)........................ 50,000 50,000 0 0
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Shares of Common
Stock Owned Percentage of
Beneficially Shares Shares Owned Shares Owned
Name of Security Holder and of Record Offered After Offering After Offering
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kenneth S. Grossman(6)................. 25,000 25,000 0 0
Edward S. Gutman(6).................... 50,000 50,000 0 0
Hudson Investment Partners(6).......... 15,000 15,000 0 0
Augustus La Rocca and
Joseph La Rocca(6)..................... 250,000 250,000 0 0
Joel Stuart(6)......................... 50,000 50,000 0 0
George Szajacs(6)...................... 100,000 100,000 0 0
- ---------------------------------------------------------------------------------------------------------------------------
Total................ 1,806,666 1,806,666 0 0
</TABLE>
1. Shares purchased in a private placement completed on September 12, 1998.
2. Shares purchased in a private placement completed on September 15, 1998.
Mr. Klenner was president and a director of the Company from its inception
in November 9, 1992 until October 30, 1996.
3. Includes 100,000 shares issuable upon exercise of 100,000 Warrants
received as compensation for acting as Placement Agent in connection with
a private placement.
4. Includes 200,000 shares issuable upon exercise of 200,000 Warrants
received for financial public relation services rendered and to be
rendered to the Company.
5. Includes 100,000 shares issuable upon exercise of 100,000 Warrants
received for real estate consulting services rendered and to be rendered
to the Company.
6 Includes 540,000 shares issuable upon exercise of 540,000 Warrants
purchased in connection with a private placement closed in October 1996.
PLAN OF DISTRIBUTION
The Shares may be offered and sold from time to time by the Selling
Stockholders as market conditions permit in the over-the-counter market, or
otherwise, at prices and terms then prevailing or at prices relating to the
then-current market price, or in negotiated transactions. The Shares may be
sold by one or more of the following methods, without limitation: (a) a block
trade in which a broker or 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; (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 transactions between sellers
and purchasers without a broker-dealer. In effecting sales, brokers or dealers
engaged by the Selling Stockholder may arrange for other brokers or dealers to
participate. Such brokers or dealers may receive commissions or discounts from
the Selling Stockholders in amounts to be negotiated immediately prior to the
sale. The Selling Stockholders and such brokers and dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act, in connection with such sales.
There is no assurance that the Selling Stockholders will sell any or all
of the Shares offered hereby. The Company will receive no proceeds from any
sales of the Shares offered hereby by the Selling Stockholders.
The Company has agreed to pay the filing fees, costs and expenses
associated with the Registration Statement, including compliance with any state
blue sky requirements, commissions and discounts of underwriters, dealers or
agents, if any, and any stock transfer taxes. The Company has also agreed to
indemnify the Selling Stockholders and any underwriters for certain civil
liabilities in connection with the Registration Statement and the securities
offered thereby and hereby, including liabilities under the Securities Act.
12
<PAGE>
LEGAL MATTERS
The validity of the shares offered hereby is being passed upon for the
Company by Cohen & Cohen, 445 Park Avenue, New York, New York, 10022. Frank R.
Cohen, a partner of Cohen & Cohen, beneficially owns 10,000 shares of Common
Stock and holds 235,000 options to purchase 240,000 shares of Common Stock
exercisable at prices from $1 to $1 5/8. In addition, Frank R. Cohen, also, is
Chairman of the Board, secretary and Treasurer of the Company.
EXPERTS
The financial statements incorporated by reference in this Prospectus have
been audited by BDO Seidman, LLP, independent certified public accountants, to
the extent and for the periods set forth in their report incorporated herein by
reference, and are incorporated herein in reliance u0on such report given upon
the authority of said firm as experts in auditing and accounting.
13
<PAGE>
- -------------------------------------------------------------------------------
No dealer, sales or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made hereby, and, if given or made,
such information or representation must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy, the securities offered hereby to any
person in any state or other jurisdiction in which such offer or solicitation
would be unlawful. The delivery of this Prospectus at any time does not imply
that information contained herein is correct as of any time subsequent to its
date.
TABLE OF CONTENTS
PAGE
Available Information....................... 2
Incorporation of Certain Documents
by Reference.............................. 2
Prospectus Summary.......................... 3
Risk Factors................................ 7
Use of Proceeds............................. 10
Description of Securities................... 10
Selling Stockholders........................ 11
Plan of Distribution....................... 12
Legal Matters............................... 13
Experts..................................... 13
- -------------------------------------------------------------------------------
1,806,666 SHARES OF
COMMON STOCK
EUROWEB
INTERNATIONAL CORP.
COMMON STOCK
PROSPECTUS
January 11, 1999
-----------------------------------------------------
<PAGE>
FORM S-3, PART II: INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses (other than underwriting
discounts and commissions) which other than the SEC registration fee are
estimates, payable by the Registrant in connection with the sale and
distribution of the shares registered hereby:
SEC registration fee........................................$866.00
Total ................. $866.00
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
("DGCL") provides, in general, that a corporation incorporated under the laws
of the State of Delaware, such as registrant, may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than a derivative action by or in
the right of the corporation) by reason of the fact that such person is or was
a director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonable 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 such
director, officer, employee or agent of the corporation person's conduct was
unlawful. In the case of a derivative action, a Delaware corporation may
indemnify any such person against expenses (including attorneys' fees) actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery of the State of Delaware or any other court in which such
action was brought determines such person is fairly and reasonably entitled to
indemnity for such expenses. Section 10 of the Company's Certificate of
Incorporation, and Article X of the Company's Bylaws filed in Exhibit 3(d) to
the Registrant's initial public offering on Form SB-2 under Registration Number
33-62672-NY provide that the Company shall indemnify its officers, directors,
employees and agents to the extent permitted by the DGCL. In addition, Section
9 of the company's Certificate of Incorporation filed as Exhibit 3(a) to the
Registrant's initial public offering on Form SB-2 under Registration Number
33-62672-NY provides, in general, that no director of the Company shall be
personally liable to the Company or its stockholders for monetary damages for
beach of fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Company or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the DGCL (which provides
that under certain circumstances, directors may be jointly and severally liable
for willful or negligent violations of the DGCL provisions regarding the
payment of dividends or stock repurchases or redemptions), or (iv) for any
transaction from which the director derived an improper personal benefit.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and persons controlling the
Company pursuant to the foregoing provisions or otherwise the Company 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 of
1933 and is, therefore, unenforceable.
ITEM 16. EXHIBITS
5. Opinion of Cohen & Cohen
II-1
<PAGE>
23. Consents
(a) BDO Seidman, LLP
(b) Cohen & Cohen (contained in opinion filed as Exhibit 5)
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which it offers or sells securities,
a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act; (ii) to reflect in the prospectus any facts or
events arising after the effective date of this
Registration Statement (or the most recent post-effective
amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth
in this Registration Statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement, provided,
however, that clauses (1) and (ii) do not apply if the
information required to be included in a post-effective
amendment by those clauses 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 this Registration Statement.
(2) 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, herein and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the Offering.
(b) The undersigned registrant hereby undertakes that for the purpose of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13 or 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) 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 at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the undersigned Registrant pursuant to the foregoing provisions, or
otherwise, the undersigned Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-2
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form S-3, and authorized this Registration
Statement to be signed on its behalf by the undersigned, in the City of New
York, State of New York, on January 11, 1999.
EUROWEB INTERNATIONAL CORP.
By: /s/Frank R. Cohen
---------------------------------
Frank R. Cohen, Chairman of the Board
Each of the undersigned does hereby appoint Robert Genova and Frank R.
Cohen and, each of them severally, its or his true and lawful attorneys to
execute on behalf of the undersigned any and all amendments (including
post-effective amendments) to this Registration Statement and to file the same
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission. Each of such attorneys shall have the power
to act hereunder with or without the other.
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed below by the following persons in the
capacities and on the dates stated:
SIGNATURE TITLE DATE
/s/Frank R. Cohen Chairman of the Board, Chief January 11, 1999
- ---------------------- Executive Officer, Principal Financial
Frank R. Cohen Officer, Secretary
/S/Robert Genova Director, President January 11, 1999
- ----------------------
Robert Genova
/s/Csaba Toro Director, Vice President January 11, 1999
- ---------------------- and Treasurer
Csaba Toro
/s/Richard G. Maresca Director January 11, 1999
- ----------------------
Richard G. Maresca
/s/Donald K. Roberton Director January 11, 1999
- ---------------------
Donald K. Roberton
II-3
EXHIBIT 5
January 11, 1999
Board of Directors
EuroWeb International Corp.
445 Park Avenue
New York, NY 10022
Re: REGISTRATION STATEMENT ON FORM S-3
Gentlemen:
Reference is made to the registration statement (the "Registration
Statement"), which EuroWeb International Corp. (the "Company") is filing on
this date with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, for the registration of 1,806,666 shares of the Common
Stock of the Company.
Pursuant to your request, we have examined those of the Company's records
deemed relevant by us for the purpose of furnishing you with our opinion
concerning the legality and validity of issuance of the shares of Common Stock
of the Company covered by the Registration Statement.
Based upon the foregoing, we are of the opinion that:
1. The Company is duly incorporated and validly existing as a corporation
under the laws of the State of Delaware.
2. All of the shares of Common Stock proposed to be registered by the
Registration Statement on behalf of the Selling Stockholders are
validly issued, fully paid and non-assessable by the Company with no
personal liability attaching to the ownership thereof.
We herewith give our consent to the use of this opinion as an exhibit to
the herein referred to Registration Statement and to the use of our name
therein.
Very truly yours,
COHEN & COHEN
/s/Frank R. Cohen
- ------------------
Frank R. Cohen
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of EuroWeb International
Corp. on Form S-3 of our report dated April 10, 1998, except for Note 11, which
is as of November 19, 1998, relating to the consolidated financial statements
of EuroWeb International Corp. and subsidiaries appearing in the Annual Report
on Form 10-KSB, as amended, of EuroWeb International Corp for the year ended
December 31, 1997.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
BDO Seidman, LLP
New York, New York
January 8, 1999
