[DESCRIPTION] MICROS-TO-MAINFRAMES, INC FORM S-3
As filed with the Securities and Exchange Commission on November __, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
Micros-to-Mainframes, Inc.
(Exact Name of Registrant as Specified in its Charter)
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New York 614 Corporate Way 13-3354896
(State or other jurisdiction of Valley Cottage, New York 10989 (I.R.S. Employer Identification No.)
incorporation or organization) Telephone: (914) 268-5000
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(Address and telephone number of principal executive offices)
_______________
Steven H. Rothman
Chief Executive Officer and President
MICROS-TO-MAINFRAMES, INC.
614 Corporate Way
Valley Cottage, New York 10989
*Telephone: (914) 268-5000
Telecopier: (914) 268-9695
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
______________
A copy of all communications, including communications sent to the agent
for service should be sent to:
Jack Becker, Esq.
Snow Becker Krauss P.C.
605 Third Avenue
New York, N.Y. 10158-0125
Telephone: (212) 687-3860
Telecopier: (212) 949-7052
Approximate Date of Proposed Sale to the Public: As soon as practicable
after the effective date of this registration statement.
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 or 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
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Title Of Each Class of Section 4.01 Proposed Proposed Amount of
Securities to Be Amount to Be Maxium Maxium Registration
Registered Registered Offering Aggregate Fee(3)
Price per Offering
Share (1) Price(1)
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1) Common Stock, 330,000 $2.75 $915,750 $239.58
$.001 par value shares (2)
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(1) Estimated solely for the purpose of calculating the registration fee under
Rule 457 of the Securities Act.
(2) Represents shares to be sold by the selling securityholders named herein.
Includes an indeterminate number of shares that the selling
securityholders may acquire upon exercise of warrants in the event of a
stock split, stock dividend or similar transaction involving the common
stock pursuant to the antidilution provisions of the warrants.
(3) Calculated solely for the purpose of determining the registration fee
under rule 457(c) based upon the closing price of the Common Stock on
the NASDAQ National Market on November 10, 2000.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933, as amended, 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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Preliminary Prospectus, Subject to Completion, Dated November __, 2000
330,000 Shares
Micros-to-Mainframes, Inc.
Common Stock
The selling securityholders named in this prospectus are offering
and selling up to 330,000 shares of our common stock.
Our common stock is quoted on The Nasdaq National Market under the
symbol "MTMC."
The common stock is a speculative investment and involves a high
degree of risk. You should read the description of certain risks under
the caption "Risk Factors" commencing on page 3 before purchasing our
common stock.
Our executive offices are at 614 Corporate Way, Valley Cottage, New
York 10989, and our telephone number is (914) 268-5000
_______________
These securities have not been approved or disapproved by the SEC or
any state securities commission nor has the SEC 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 , 2000
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Information in this prospectus is not complete and is subject to
completion or amendment. A registration statement relating to these
securities has been filed with the Securities and Exchange Commission.
The selling securityholders may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy nor shall there be
any sale of these securities in any state where the offer or sale is
prohibited.
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TABLE OF CONTENTS
Page
Risk Factors ...................................... 3
Forward Looking Statements ........................ 9
Selling Securityholders ........................... 10
Plan of Distribution .............................. 12
Information About the Company ..................... 13
Legal Matters ..................................... 13
Experts............................................ 14
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This prospectus is part of a registration statement we filed with
the SEC. You should rely only on the information or representations
provided in this prospectus. We have not authorized anyone to provide
you with different information. The common stock will not be offered
in any state where an 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 cover of this prospectus.
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Risk Factors
Risks Relating to MTM
We expect to have substantial future financing requirements in
connection with the expansion of our network services business and to
take advantage of other business opportunities that may become
available to us.
As part of our growth objectives, we plan to expand our network
services business. We intend to enhance and expand our service
offerings and to develop a channel program to provide our services
through a network of technology providers. In addition, we are
considering a spin-off of our network services business to our
shareholders. We will need substantial financing, in addition to the
proceeds from this offering, to expand our network services business.
We have incurred, and expect to continue to incur, significant
operating and marketing expenses, as well as capital expenditures, in
connection with the expansion of our network services business. Our
operating expenses have increased due to the addition of engineering,
technical, sales and administrative personnel to support the expansion
of our network services business. We also may need substantial
capital to take advantage of opportunities such as strategic alliances
and acquisitions or to respond to changing business conditions and
unanticipated competitive pressures. Our ability to obtain financing
depends, in part, upon generally prevailing market conditions which
have been less favorable for technology-related companies in recent
months. If we are unable to obtain financing in an amount and on
terms satisfactory to us, our ability to expand our network services
business will be impeded and we may decide not to pursue the spin-off.
If we are unable to spin-off the network services business, it will be
more difficult for us to sell our network services to other resellers
who compete with us.
If we are unable to manage effectively our growth and to transition
a stand-alone network services company, we may not be successful in
providing our network services.
Our planned growth and transition to a network services business
will place significant demands on our management and operations. Our
ability to manage successfully this growth and transition will depend
on a number of factors, including:
* expanding our management resources, infrastructure,
information and reporting systems and controls;
* expanding, training and managing our employee base;
* evaluating new markets;
* monitoring operations;
* controlling costs; and
* developing our marketing channels.
We are dependent upon two customers.
PaineWebber accounted for approximately 19%, 21% and 13% of our
revenues for the fiscal years ended March 31, 2000, 1999 and 1998,
respectively, and AI Credit accounted for approximately 19% of our
revenues for the fiscal year ended March 31, 2000. If one or both of
these principal customers discontinues or substantially reduces the
use of our services, our business may be adversely affected.
Our business will be adversely affected if we cannot counteract
future declines in gross margins.
Gross margins on product sales and network services declined
over the past several years because of product price reductions and
intense competition. Although we have improved our gross margins for
our network services business in the most recent year by decreasing
our use of outside contractors to perform certain services and by
improving the efficiency of our technical and engineering staff and
from product sales as a result of a change in product mix, we may not
be able to do so in the future. A material decrease in our gross
margins could have a material adverse effect on our business.
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If we do not generate substantial revenues from our network
services business, we may not operate profitably.
We have incurred significant operating and marketing expenses in
connection with the expansion of our network services business.
Operating expenses include the addition of engineering, technical,
sales and administrative personnel to support the expansion of our
network services business. If we do not generate substantial revenues
from our network services business, our future operations may not be
profitable, and we may have to limit the planned expansion of our
network services business.
Our quarterly results may fluctuate.
Our revenues and results of operations are difficult to predict
and may fluctuate significantly from quarter to quarter.
Our revenues are difficult to forecast and may fluctuate for a
number of reasons:
* the market for network management services is relatively
new, and we have no reliable means to assess overall
customer demand;
* we may not be able to attract technology providers to
market our services, particularly if we are unable to
separate our network services business from our reseller
business;
* we anticipate that our revenues from product sales will
decline as we seek to manage our mix of revenues;
* we may not add new customers for our network services;
* we may lose customers as the result of competition and
problems with our services; and
* we may not be able to develop new or improved services as
rapidly as they are needed.
In addition, it is difficult to predict gross margins on
product sales and network services, particularly due to
competitive pressures within our industry. As a result, a
variation in the product mix or timing of revenues could
significantly affect our results of operations from quarter
to quarter and could result in quarterly losses.
We may not be able to retain our key personnel or hire additional
personnel we need to succeed.
Our success will be largely dependent upon the personal efforts
of Howard Pavony, our Chairman of the Board, and Steven H. Rothman,
our President and Chief Executive Officer. The loss of the services of
either Messrs. Pavony or Rothman could have a material adverse effect
on our business and prospects. Although Messrs. Pavony and Rothman are
employed under employment agreements which expire on September 1,
2001, there can be no assurance that we will be able to retain their
services. In addition, our success will be dependent upon our ability
to hire and retain additional qualified management, marketing,
financial and technical personnel. We will compete with other
companies with greater financial and other resources for such
personnel.
Our principal executive officers control matters upon which
shareholders vote, as well as our management and policies.
Howard Pavony and Steven H. Rothman beneficially own in the
aggregate approximately 39% of our common stock. Consequently, they
have the ability to significantly influence the election of our
directors and the outcome of all other issues submitted to our
shareholders.
Risks Relating to Our Reseller Business
We are dependent on our suppliers for microcomputer and related products.
We purchase microcomputers and related products directly from
numerous suppliers as either an authorized dealer or a value added
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reseller. We have entered into authorization agreements with our major
suppliers. Typically, these agreements provide that we have been
appointed, on a non-exclusive basis, as an authorized dealer and
systems integrator of specified products of the supplier at specified
locations. Most of the authorization agreements provide that the
supplier may terminate the agreement with or without cause upon 30 to
90 days notice or immediately upon the occurrence of certain events.
In addition, although each agreement is generally subject to renewal
on an annual basis, there can be no assurance that such agreements
will be renewed.
Our future results of operations are dependent upon continued
demand for microcomputer products. Distributors in the microcomputer
industry currently face a number of adverse business conditions,
including price and gross profit margin pressures and market
consolidation. In recent years, all major hardware vendors have
instituted extremely aggressive price reductions in response to lower
component costs and discount pricing by certain microcomputer
manufacturers. The increased price competition among major hardware
vendors has resulted in declining gross margins for many microcomputer
resellers, and has caused some of our direct competitors to
discontinue business operations. Moreover, increased price competition
among vendors may result in a reduction in existing vendor subsidies.
Although discounted prices have enabled us to increase our sales
volume in recent years, they have resulted in lower gross margins for
some of our product lines. We may not be able to continue to compete
effectively in this industry, given the intense price reductions and
competition currently existing in the microcomputer industry.
Significant consolidation and manufacturers selling direct to
consumers may cause competition to increase in intensity.
The reseller business is highly competitive and continues to
experience a significant amount of consolidation. In the future, we
may face fewer but larger and better financed competitors as a
consequence of such consolidation. In addition, several computer
manufacturers have expanded their channels of delivery, pricing and
product positioning and compete with our marketing network for
potential clients. To the extent that the reseller business continues
to consolidate or computer manufacturers continue to compete directly
for our customers, our business could be adversely affected.
We face intense competition from distributors and other resellers
of microcomputer products.
The microcomputer market is highly competitive. We are in direct
competition with local, regional and national distributors of
microcomputer products and related services. Several of these
competitors offer most of the same basic products as us. We compete
with other resellers and believe our prices and delivery terms are
competitive. Many competitors may sell their products at lower prices
than us, but generally do not offer the same range of support services
after installation of equipment that we offer to our customers.
In addition, the tri-state Metropolitan New York area and New
England, to which we market our products and services, are
particularly characterized by highly discounted pricing on
microcomputer products from various sources of competition. We face
competition from microcomputer suppliers that sell their products
through direct sales forces and from manufacturers and distributors
that emphasize mail order and telemarketing.
Depending on the customer, the principal areas of competition may
include price, pre-sales and post-sales technical support and service,
availability of inventory and breadth of product line. We have an
insignificant market share of sales in the microcomputer industry and
the service markets which we serve. Certain of our competitors at the
regional and national level are substantially larger, have more
personnel, have materially greater financial and marketing resources
than us and operate within a larger geographic area than us.
Risks Relating to Our Network Services Business
We face intense competition from many sources that could
adversely affect our business.
Many companies offer one or more of the network services we
perform. These competitors include telecommunications carriers, value-
added resellers of network and communications equipment, information
technology consultants, systems integrators and network equipment and
computer systems vendors. Furthermore, our business plan depends upon
developing a distribution channel that involves some of these
competitors.
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We also compete with the internal network management
organizations of the businesses that we seek to service. These
organizations may have developed, or may develop in the future, tools
and methodologies to manage their network processes, and they may be
reluctant to use the services offered by third parties like us.
Competition is likely to increase significantly as new network
management services companies enter the market and current competitors
expand their service and product lines. Many of these potential
competitors are likely to enjoy substantial competitive advantages
including:
* larger technical staffs;
* more established sales channels;
* greater name recognition; and
* substantially greater financial, marketing, technical and
other resources.
We may not be able to compete successfully against our existing
and future competitors. Any pricing pressures, reduced margins, loss
of market share or inability to gain market share resulting from this
competition or our failure to compete effectively could seriously
damage our business.
If the market for outsourced network services does not grow as we
expect, our ability to generate revenues will suffer.
Our long-term viability depends significantly on the acceptance
and use of network services by mid-sized companies. The market for
these services, particularly our remote network management services,
is new and rapidly evolving. If the trend toward outsourcing network
services declines or if businesses decide to perform services
previously outsourced themselves, our ability to generate revenues and
implement our business plan may suffer. A number of factors may affect
the demand for our services, including:
* during an economic downturn, businesses may decide to
perform services previously outsourced themselves or
eliminate the use of some of these services;
* changes in technology and the availability of qualified
information technology professionals or other factors may
make internal network management more cost- effective than
outsourcing these services to third parties, like us; and
* the expected continued growth of the Internet, which drives
much of the development of large-scale, complex networks
that we support, may not occur.
If we fail continually to enhance our services to keep pace with
the rapid technological changes in our industry, we may not be
successful in offering competitive services.
The market for our services is characterized by rapidly changing
technology, frequent new service introductions and evolving industry
standards. Our continued success will depend, in part, on our ability
to remain abreast of these rapid technological developments and to
enhance our existing services and to integrate and introduce new
service offerings. If we cannot keep pace with these changes on a
cost-effective and timely basis, we will not be able to meet the
increasingly sophisticated network management needs of our clients and
our services will become less competitive. We may not be successful in
achieving these goals.
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We may be unable to develop and implement our distribution plan
for our services.
A key element of our business plan and marketing strategy is the
development of a distribution channel for offering our network
services through technology providers, including telecommunications
carriers, competitive local exchange carriers, direct local exchange
carriers, business consulting firms and value-added resellers of
communications and networking equipment. Our business plan assumes
that these technology providers will market our services directly to
their customers. Some of these technology providers may compete with
us in providing network services.
We must develop these alternative sales channels to increase our
revenues and become profitable. We only recently started to develop
our sales channels and may not be successful. We do not expect that
these technology providers will be required to sell any minimum level
of our services or that they will be prohibited from promoting
competitive services to business end-users. We cannot be sure that
these technology providers will dedicate resources or give priority to
selling our services. These intermediary companies have not generated
significant sales of our services to date. In addition, they may seek
to make us reduce the prices for our services in order to lower the
total price of their equipment, software and service offerings.
If we do not substantially increase sales of our services or if
our existing business end-user customers reduce or terminate our
services, we may be unable to generate sufficient revenue to implement
our business plan.
We currently provide our network services to a limited number of
business end-users. The success of our business depends on us
significantly increasing sales of our network services, particularly
our remote services. As of August 1, 2000, we provided network
services to approximately 200 clients, including 14 clients to whom we
provided automated remote services. If we are unable to significantly
increase the number of businesses that use our services or if a number
of these existing business end-users discontinues or substantially
reduces the use of our services, we may be unable to generate
sufficient revenues to implement our business plan.
Our customers may terminate the use of our network services on
short notice.
We provide, and expect to continue to provide, our network
services under short-term arrangements that the business end-user can
reduce or cancel without penalty and on short notice. If one or more
businesses that individually or in the aggregate account for a
significant portion of our revenues terminate their agreements for our
services or substantially reduce the services that they require, we
may not be able to replace these lost revenues and our business may
suffer.
If our remote network management systems fail to operate
properly, we may lose customers, face significant liability claims and
suffer decreased revenues.
Many of our services, particularly those involving remote network
management, are designed to provide critical network management
services. Our remote network management system is complex and requires
the coordination and integration of sophisticated and highly
specialized hardware and software technologies and equipment. These
remote services are provided from a single site, and we do not have
any redundant systems or facilities at a separate geographic location.
Operations risks to our systems include:
* power outages, fires and other natural disasters
affecting our network automation center;
* telecommunications failures;
* equipment failures or "crashes;"
* security breaches; and
* capacity limitations.
The failure of our systems to operate as required could disrupt
the operation of the networks and electronic communications
infrastructures of our customers. A failure that disrupts the
operation of a customer's network may:
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* require us to make payments on contractual performance
guarantees that we offer to businesses that use our
automated remote services;
* subject us to substantial liability claims if businesses
using our services seek damages for losses incurred;
* require us to spend more money for replacing existing
equipment or building redundant facilities;
* damage our reputation; and
* cause us to lose customers and revenues.
We may be unable to protect our intellectual property, and we
could incur substantial costs defending our intellectual property from
infringement or claims of infringement made by others.
Our business and financial performance depend upon our
proprietary technology, trade secrets and other intellectual property.
Unauthorized use of our intellectual property by third parties may
damage our brand and our reputation and have an adverse effect on our
future success. We rely on trademark and copyright law, trade secret
protection and confidentiality, license and other agreements with our
employees, customers and other businesses to protect our intellectual
property rights. Although we have filed applications for service mark
registrations for some of our marks, we do not have any patents or
patent or copyright applications pending and we cannot assure you that
our service mark applications will be granted. Existing trade secret,
trademark and copyright laws afford us only limited protection. The
steps we have taken may not be adequate to deter competitors from
misappropriating our proprietary information, and we may not be able
to detect unauthorized use and take appropriate remedial steps to
enforce our intellectual property rights. The laws of some foreign
jurisdictions also are uncertain or may not protect intellectual
property rights to the same extent as do the laws of the United
States.
We rely on proprietary technology developed by third
parties to provide our automated remote services. In some cases, we
must obtain licenses from third parties to continue using their
proprietary technology. If we are unable to continue to license the
third party proprietary technology upon which we rely, we may need to
license alternative proprietary technology or develop our own to
continue providing our automated remote services. These alternatives
may be significantly more expensive or less useful, and we might not
be able to deploy an alternative in a timely manner or at all. If we
lose the rights to continue using a third party's proprietary
technology, our business may be harmed.
We may be subject to legal proceedings and claims alleging
infringement by us of third party intellectual property rights and we
may be required to indemnify the information technology providers that
market our services for similar claims made against them. Any
infringement claim could require us to spend significant time and
money in litigation, pay damages, develop non-infringing intellectual
property or acquire licenses to the intellectual property that is the
subject of the infringement claims. As a result, any infringement
claim may disrupt and damage our business and may restrict us from
offering our intended services.
We may not be able to find suitable acquisition opportunities,
and even if we do, we may have difficulty in integrating newly
acquired businesses or technologies.
As part of our business strategy, we intend to pursue
acquisitions of, or investments in, businesses, technologies or
services to complement our existing business or enhance our
technological capabilities. We may not be able to identify, acquire or
make investments in attractive acquisition candidates on favorable
terms or at all. If we do acquire a company, business or technology,
we may have difficulty integrating acquired personnel, operations,
customers or vendors. These difficulties could disrupt our ongoing
business, distract our management and employees and increase our
expenses. Future acquisitions by us also could result in large and
immediate write-offs, incurrence of debt and contingent liabilities or
amortization of expenses related to goodwill and other intangibles,
any of which could harm our operating results.
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We may not be able to attract and retain qualified information
technology professionals, who are in extremely short supply.
Network services can be very complex and, in general, only highly
qualified, highly trained information technology professionals have
the skills necessary to develop and provide these services. In order
to support our network services business, we must attract, motivate
and retain a significant number of highly skilled information
technology professionals. These professionals are in short supply, and
we face significant competition for these professionals, not only from
our competitors but also from end-users, the technology providers
through whom we provide our services and other companies throughout
the network services industry. Other employers may offer information
technology professionals significantly greater compensation and
benefits and more attractive career paths than we are able to offer.
Our inability to attract and retain a sufficient number of qualified
information technology professionals may seriously damage our
business.
Forward Looking Statements
Some of the information in this prospectus may contain forward-
looking statements. Such statements can be identified by the use of
forward-looking terminology such as "may," "will," "expect,"
"believe," "intend," "anticipate," "estimate," "continue" or similar
words. These statements discuss future expectations, estimate the
happening of future events, anticipate our future financial condition
or state other "forward-looking" information. When considering such
forward-looking statements, you should keep in mind the risk factors
and other cautionary statements in this prospectus and the documents
that we incorporate by reference. The risk factors noted in this
section and other factors noted throughout this prospectus, including
certain risks and uncertainties, could cause our actual results to
differ materially from those contained in any forward-looking
statement.
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Selling Securityholders
The following table sets forth the names of the selling
securityholders, the number of shares of common stock that each
selling securityholder owned beneficially as of September 30, 2000,
the number of shares that each selling securityholder may offer, and
the number of shares of common stock that each selling securityholder
will own beneficially upon completion of the offering, assuming all of
the shares offered are sold. None of the selling securityholders has,
or within the past three years has had, any position, office or other
material relationship with us or any of our predecessors or
affiliates.
The selling securityholders purchased the shares of common stock
and warrants that may be exercised to acquire additional shares of
common stock offered by this prospectus in a private offering exempt
from the registration requirements of the Securities Act under Section
4(2) of the Securities Act and Rule 506 of Regulation D. fOR additional
information concerning the private offering, see "Information About Micros-
to-Mainframes--Recent Developments".
As of September 30, 2000, we had 5,135,569 shares of common stock
outstanding. For purposes of computing the number and percentage of
shares beneficially owed by a selling securityholder on September 30,
2000, any shares which such person has the right to acquire within 60
days after such date are deemed to be outstanding, but those shares
are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other selling securityholder.
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Shares of Shares of Shares of
Common Stock Common Stock Common Stock
Beneficially Owned Offered in the Beneficially Owned
Before Offering(1) Offering(1) After Offering
Name of Selling ----------------- ------------- ------------------
Securityholder Number Percent(2) Number Number Percent
--------------- ------- ---------- --------- ------ -------
State Capital Partners 37,500(3) * 37,500 (3) 0 ---
P.O. Box 87
Line & Grove Street
Nantioke, PA 18634
Penn Footware 75,000(4) 1.5% 75,000 (4) 0 ---
P.O. Box 87
Line & Grove Street
Nantioke, PA 18634
Lone Star Holding 37,500(3) * 37,500 (3) 0 ---
Partnership, LP
14 South High Street
P.O. Box 673
New Albany, OH 43054
Riviera-Enid Limited 19,000(5) * 12,500 (5) 7,500 *
Partnership
1501 Venera Avenue #205
Coral Gables, FL 33146
Alan W. Steinberg Limited 40,000(6) * 25,500 (6) 15,000 *
Partnership
1501 Venera Avenue #205
Coral Gables, FL 33146
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Shares of Shares of Shares of
Common Stock Common Stock Common Stock
Beneficially Owned Offered in the Beneficially Owned
Before Offering(1) Offering(1) After Offering
Name of Selling ----------------- ------------- ------------------
Securityholder Number Percent(2) Number Number Percent
--------------- ------- ---------- --------- ------ -------
Howard P. Milstein 112,500(7) 2.2% 112,500 (7) 0 ---
888 Park Avenue #8B
New York, NY 10021
Holders of Placement Agent Warrants:
Derek Caldwell(8) 3,000(9) * 3,000 (9) 0 ---
Preston Tsao(8) 3,000(9) * 3,000 (9) 0 ---
Marcia Kucher(8) 1,250(10) * 1,250(10) 0 ---
Philip E. Kassal(8) 853(11) * 853(11) 0 ---
Daniel M. Myers(8) 852(12) * 852(12) 0 ---
Richard Stone(8) 10,238(13) * 10,238(13) 0 ---
Paul Scharfer(8) 1,707(14) * 1,707(14) 0 ---
Nathan Low Roth IRA(8) 9,100(15) * 9,100(15) 0 ---
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* Less than one percent.
(1) Unless otherwise indicated, each person has sole investment
and voting power with respect to the shares indicated.
(2) Except as otherwise stated, calculated based upon 5,135,569
shares of common stock outstanding.
(3) Includes 7,500 shares that may be acquired upon the exercise
of warrants.
(4) Includes 15,000 shares that may be acquired upon the
exercise of warrants.
(5) Includes 2,500 shares that may be acquired upon the exercise
of warrants.
(6) Includes 5,000 shares that may be acquired upon the exercise
of warrants.
(7) Includes 22,500 shares that may be acquired upon the
exercise of warrants.
(8) Address is c/o Sunrise Securities Corp., placement agent for
the private offering, 135 East 57th Street, New York, New
York 10022
(9) Represents shares that may be acquired upon the exercise of
warrants.
We are registering the shares for resale by the selling
securityholders in accordance with registration rights granted to the
selling securityholders. We will pay the registration and filing fees,
printing expenses, listing fees, blue sky fees, if any, and fees and
disbursements of our counsel and the selling security holders' counsel
in connection with this offering, but the selling securityholders will
pay any underwriting discounts, selling commissions and similar
expenses relating to the sale of the shares. In addition, we have
agreed to indemnify the selling securityholders, underwriters who they
may select, and certain affiliated parties against certain liabilities,
including liabilities under the Securities Act, in connection with this
offering. The selling securityholders have agreed to indemnify us and
our directors and officers, as well as any person that controls us,
against certain liabilities, including liabilities under the Securities
Act. Insofar as indemnification for liabilities under the Securities
Act may be permitted to our directors or officers, or persons that
control us, we have been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable.
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<PAGE>
Plan of Distribution
The selling securityholders (or, subject to applicable law, their
pledgees, donees, distributees, transferees or other successors in
interest) may sell shares from time to time in public transactions, on
or off The Nasdaq National Market, or private transactions, at
prevailing market prices or at privately negotiated prices, including
but not limited to, one or any combination of the following types of
transactions:
* ordinary brokers' transactions;
* transactions involving cross or block trades or otherwise on the
Nasdaq National Market;
* purchases by brokers, dealers or underwriters as principal and
resale by such purchasers for their own accounts pursuant to
this prospectus;
* "at the market" to or through market makers or into an existing
market for the common stock;
* in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales
effected through agents;
* through transactions in options, swaps or other derivatives
(whether exchange-listed or otherwise);
* in privately negotiated transactions; or
* to cover short sales.
The selling securityholders also may sell shares that qualify under
Section 4(1) of the Securities Act or Rule 144.
In effecting sales, brokers or dealers engaged by the selling
securityholders may arrange for other brokers or dealers to participate
in the resales. The selling securityholders may enter into hedging
transactions with broker-dealers, and in connection with those
transactions, broker-dealers may engage in short sales of the shares.
The selling securityholders also may sell shares short and deliver the
shares to close out such short positions. The selling securityholders
also may enter into option or other transactions with broker-dealers
that require the delivery to the broker-dealer of the shares, which the
broker-dealer may resell pursuant to this prospectus. The selling
securityholders also may pledge the shares 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 underwriters who the selling
securityholders may select, or any other broker-dealer, is acting as
principal or agent for the selling securityholders, the compensation to
be received by underwriters that the selling securityholders may select
or by any broker-dealer acting as principal or agent for the selling
securityholders, and the compensation to be paid to 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 a prospectus
supplement, if any, to any person who purchases any of the shares from
or through such dealer or broker.
We have advised the selling securityholders that during such time as
they may be engaged in a distribution of the shares they are required
to comply with Regulation M promulgated under the Securities Exchange
Act. With certain exceptions, Regulation M precludes any selling
securityholder, 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
12
<PAGE>
any security that is the subject of the distribution until the entire
distribution is complete. Regulation M also prohibits any bids or
purchases 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 the common stock.
Information About Micros-to-Mainframes
At Micros-to-Mainframes, Inc., we sell, install and service
microcomputers, microcomputer software products, supplies, accessories
and custom designed microcomputer systems. We are primarily an
authorized direct dealer and value added reseller.
We file reports, proxy statements and other information with the
SEC. You may read and copy any document we file at the Public Reference
Room of the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Regional Offices of the SEC at Seven World Trade
Center, Suite 1300, New York, New York 10048, and at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Please call 1-800-
SEC-0330 for further information concerning the Public Reference Room.
Our filings also are available to the public from the SEC's website at
www.sec.gov. We distribute to our stockholders annual reports
containing audited financial statements.
Recent Developments
On September 26, 2000, we sold a total of 240,000 shares of common
stock and warrants to purchase an additional 60,000 shares for a total
purchase price of $1,200,000 in private offering exempt from the
registration requirements of the Securities Act under Section 4(2) of
the Securities Act and Rule 506 of Regulation D. The warrants may be
exercised until September 25, 2003 at an initial exercise price of
$5.00 per share. In connection with the private offering, we issued to
designees of Sunrise Securities, Inc., placement agent for the
offering, warrants to purchase a total of 24,000 shares of common stock
plus 6,000 of the warrants issued to the investors in the private
offering. The warrants issued to the designees of the placement agent
may be exercised until September 25, 2005 at an initial exercise price
of $5.00.
Information Incorporated by Reference
The SEC allows us to "incorporate by reference" the information that
we file with it, which means that we can disclose important information
to you by referring to those documents. The information incorporated by
reference is considered to be part of this prospectus, and information
we file later with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below and
any future filings that we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act until the offering is
completed:
1. Annual Report on Form 10-K for the fiscal year ended March 31, 2000.
2. Proxy Statement dated September 25, 2000.
3. Quarterly Reports on Form 10-Q for the fiscal quarters ended June
30, 2000 and September 30,2000.
You may request a copy of these filings, at no cost, by writing or
calling us at:
Micros-to-Mainframes, Inc.
614 Corporate Way
Valley Cottage, New York 10989
Attention: Chief Financial Officer
Telephone: (914) 268-5000
Legal Matters
The validity of the shares of common stock offered hereby has been
passed upon by Snow Becker Krauss P.C., 605 Third Avenue, New York, New
York 10158. An investment partnership affiliated with Snow Becker
Krauss P.C. owns 14,000 shares of common stock.
<PAGE>
Experts
The financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K of Micros-to-Mainframes,
Inc. for the year ended March 31, 1998, have been so incorporated in
reliance upon the report of Ernst & Young LLP, and the financial
statements incorporated by reference to the Annual Report on Form 10-K
of Micros-to-Mainframes, Inc. for the two years ended March 31, 2000,
have been so incorporated in reliance on the report of Goldstein Golub
Kessler, LLP, both independent public accountants, given upon the
authority of such firms as experts in accounting and auditing for such
years.
14
<PAGE>
Part II
Information Not Required in the Prospectus
Item 14. Other Expenses of Issuance and Distribution
The expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered are
estimated below:
SEC registration fee ..........$ 239.58
Listing fees ................... 7,500.00
Legal fees and expenses ........ 5,000.00
Accounting fees ................ 2,500.00
Miscellaneous .................. 760.42
---------
Total ..................$16,000.00
==========
Item 15. Indemnification of Directors and Officers.
Under Section 722 of the New York Business Corporation Law
("NYBCL"), directors and officers may be indemnified against judgments,
fines and amounts paid in settlement and reasonable expenses (including
attorneys' fees), actually and necessarily incurred as a result of.
specified actions or proceedings (including appeals), whether civil or
criminal (other than an action by or in the right of the corporation--a
"derivative action") if they acted in good faith and for a purpose
which they 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 their conduct was
unlawful. A similar standard of care is applicable in the case of
derivative actions, except that indemnification only extends to amounts
paid in settlement and reasonable expenses (including attorneys' fees)
actually and necessarily incurred by them in connection with the
defense or settlement of such an action (including appeals), except in
respect of a (1) threatened action, or pending action which is settled
or otherwise disposed of and (2) 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 a court of competent jurisdiction deems
proper.
The Company maintains insurance, at its expense, to reimburse
itself and directors and officers of the Company and of its direct and
indirect subsidiaries against any expense, liability or loss arising
out of indemnification claims against directors and officers and to the
extent otherwise permitted under the NYBCL.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT MAY BE PERMITTED TO DIRECTORS, OFFICERS AND CONTROLLING
PERSONS OF THE REGISTRANT PURSUANT TO THE FOREGOING PROVISIONS, OR
OTHERWISE, THE REGISTRANT HAS BEEN ADVISED THAT IN THE OPINION OF THE
SECURITIES AND EXCHANGE COMMISSION SUCH INDEMNIFICATION IS AGAINST
PUBLIC POLICY AS EXPRESSED IN THE SECURITIES ACT AND IS, THEREFORE,
UNENFORCEABLE.
Item 16. Exhibits
Exhibit
No. Description
---- -----------------------------------
4.1 Form of Placement Agent Warrant
4.2 Form of Investor Warrant (included as Exhibit A
to Exhibit 4.1)
5.1 Opinion of Snow Becker Krauss, P.C.
23.1 Consent of Snow Becker Krauss P.C. (included in
Exhibit 5.1).
23.2 Consent of Goldstein Golub Kessler LLP, independent auditors.
23.3 Consent of Ernst & Young LLP, independent auditors.
II-1
<PAGE>
Item 17. Undertakings.
(a) Rule 415 Offering
The undersigned small business issuer hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section l0(a) (3) of the
Securities Act.
(ii) Reflect in the prospectus any facts or events which,
individually or in the aggregate, represent a
fundamental change in the information set forth in the
registrant statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not
exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) Include any material information with respect to the plan of
distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
(2) For determining any liability under the Securities Act, each such
post-effective amendment shall be deemed a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time to be the initial bona fide offering thereof.
(3) Remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the
termination of the offering.
(e) Request for Acceleration of Effective Date
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors,
officers and controlling persons of the small business issuer pursuant
to the foregoing provisions, or otherwise, the small business issuer
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the small business issuer of the expenses incurred or
paid by a director, officer, or controlling person of the small
business issuer in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the small business
issuer will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds the 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 Valley Cottage,
State of New York, on this 31st day of October, 2000.
MICROS-TO-MAINFRAMES, INC.
By: /s/ Steven H. Rothman
----------------------------
Steven H. Rothman, Chief
Executive Officer and President
(Principal Executive Officer and
Principal Financial and
Accounting Officer)
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Steven H. Rothman as his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution , for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) and supplements to
this Registration Statement, and to file the same with the Commission,
granting unto said attorney-in-fact and agent full power and authority
to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933 this
registration statement has been signed below by the following persons,
in the capacities indicated, on October 31, 2000.
/s/ Howard Pavony
------------------------------------
Howard Pavony, Chairman of the Board
/s/ Steven H. Rothman
------------------------------------
Steven H. Rothman, Director
/s/ William Lerner
------------------------------
William Lerner, Director
/s/ Arnold J. Wasserman
------------------------------
Arnold J. Wasserman, Director
/s/ Alvin E. Nashman
------------------------------
Alvin E. Nashman, Director
/s/ James W. Davis
------------------------------
James W. Davis, Director
II-3
<PAGE>
Exhibit Index
Exhibit
No. Description Page
---- ------------------------------------- -------
4.1 Form of Placement Agent Warrant
4.2 Form of Investor Warrant (included as
Exhibit A to Exhibit 4.1)
5.1 Opinion of Snow Becker Krauss, P.C.
23.1 Consent of Snow Becker Krauss P.C.
(included in Exhibit 5.1)
23.2 Consent of Goldstein Golub Kessler LLP,
independent auditors.
23.3 Consent of Ernst & Young LLP,
independent auditors.
