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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
AMTEC, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1989122
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
599 Lexington Avenue, 44th Floor
New York, New York 10022
(212) 319-9160
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Joseph R. Wright, Jr., Chairman and
Chief Executive Officer
AmTec, Inc.
599 Lexington Avenue, 44th Floor
New York, New York 10022
(212) 319-9160
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With copies to:
Yvonne E. Chester, Esq.
Troy & Gould Professional Corporation
1801 Century Park East, Suite 1600
Los Angeles, California 90067
(310) 553-4441
Approximate date of commencement of proposed sale to public:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, as amended (the "Securities Act"), 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, please 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. / /
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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PROSPECTUS
AMTEC, INC.
6,982,049 SHARES OF COMMON STOCK
This Prospectus relates to the offer by the securityholders named
herein ("Selling Securityholders") for sale from time to time of up to
6,982,049 shares (the "Shares") of Common Stock, $.001 par value (the "Common
Stock"), of AmTec, Inc., a Delaware corporation (formerly AVIC Group
International, Inc., and referred to herein as the "Company"). To the extent
required by applicable law or Securities and Exchange Commission regulations,
this Prospectus shall be delivered to purchasers upon resale of the Shares by
the Selling Securityholders. The Shares consist of (i) 2,649,049 currently
outstanding shares of Common Stock, (ii) 2,100,000 shares of Common Stock
issuable in connection with the conversion of currently outstanding shares of
Series C Convertible Preferred Stock (the "Series C Preferred Shares") of the
Company, together with any accrued but unpaid dividends on the Series C
Preferred Shares that the Company may pay in shares of Common Stock upon
conversion of the Series C Preferred Shares and (iii) 2,233,000 shares of
Common Stock issuable in connection with the conversion of currently
outstanding shares of Series D Convertible Preferred Stock (the "Series D
Preferred Shares") of the Company, together with any accrued but unpaid
dividends on the Series D Preferred Shares that the Company may pay in shares
of Common Stock upon conversion of the Series D Preferred Shares. The number
of shares of Common Stock issuable in connection with the conversion of the
Series C Preferred Shares and the Series D Preferred Shares is subject to
adjustment. The Company will not receive any proceeds from the sale of the
Shares offered hereby. The terms of the Series C Preferred Shares and the
Series D Preferred Shares provide that the Company may receive certain cash
consideration in connection with the conversion of such preferred stock. The
amount of such cash consideration is based in part on the market price of the
Common Stock during the 30 business day period immediately preceding the date
of conversion and is not susceptible to current calculation. See "Use of
Proceeds."
The Common Stock is listed on the American Stock Exchange under the
symbol "ATC." The closing price of the Common Stock reported on the American
Stock Exchange on August 19, 1997 was $3.00 per share.
The Selling Securityholders have advised the Company that they may
sell, directly or through brokers, all or a portion of the securities offered
hereby in negotiated transactions or in one or more transactions in the
market at the price prevailing at the time of sale. In connection with such
sales, the Selling Securityholders and any participating broker may be deemed
to be "underwriters" of the Common Stock within the meaning of the Securities
Act of 1933, as amended. It is anticipated that usual and customary
brokerage fees will be paid by the Selling Securityholders in all open market
transactions. The Company will pay all other expenses of this offering. See
"Plan of Distribution."
--------------------------
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES
A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON
PAGES 6 THROUGH 10 OF THIS PROSPECTUS.
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE 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 August 21, 1997
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files reports, proxy or information statements and other
information with the 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 Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as
at the following regional offices: Seven World Trade Center, New York, New
York 10048, and Citicorp Center, 500 W. Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, the
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission. The address of the Commission's Web site
is http://www.sec.gov. The Common Stock of the Company is listed on the
American Stock Exchange. Reports, proxy statements and other information
concerning the Company may be inspected at the offices of the American Stock
Exchange, Inc. at 86 Trinity Place, New York, New York 10006.
Additional information regarding the Company and the securities
offered hereby is contained in the Registration Statement of which this
Prospectus is a part, and the exhibits thereto, filed with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"). For
further information pertaining to the Company and the securities offered
hereby, reference is made to the Registration Statement and the exhibits
thereto, which may be inspected without charge at, and copies thereof may be
obtained at prescribed rates from, the office of the Commission at Judiciary
Plaza, 450 Fifth Street N.W., Washington, D.C. 20549. Statements contained
herein concerning the provisions of any document are not necessarily complete
and in each instance reference is made to the copy of the document filed as
an exhibit or schedule to the Registration Statement. Each such statement is
qualified in its entirety by reference to the copy of the applicable
documents filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
under the Exchange Act are incorporated in this Prospectus by reference: (a)
the Company's Annual Report on Form 10-KSB for the year ended March 31, 1997,
filed with the Commission on July 15, 1997; (b) the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997, filed with the
Commission on August 19, 1997; and (c) the description of the Common Stock
set forth in the Company's Registration Statement on Form 8-A under the
Exchange Act filed with the Commission on November 19, 1996, including any
amendment or report subsequently filed by the Company for the purpose of
updating that description. The file number of each of the foregoing
documents is 0-22520.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the securities
offered hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part of this Prospectus from the date of filing of
such documents. Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference (other than
exhibits to such documents that are not specifically incorporated by
reference in such documents). Written requests for such copies should be
directed to Timothy P. F. Crowley, Corporate Secretary, AmTec, Inc., 599
Lexington Avenue, 44th Floor, New York, New York 10022. Telephone requests
may be directed to Mr. Crowley at (212) 319-9160.
2.
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SAFE HARBOR STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS
DISCUSSED IN THIS PROSPECTUS ARE FORWARD-LOOKING STATEMENTS WHICH INVOLVE
RISKS AND UNCERTAINTIES, INCLUDING BUT NOT LIMITED TO ECONOMIC, COMPETITIVE,
GOVERNMENTAL, INTERNATIONAL AND TECHNOLOGICAL FACTORS AFFECTING THE COMPANY'S
REVENUES, OPERATIONS, MARKETS, PRODUCTS AND PRICES, AND OTHER FACTORS
DISCUSSED IN THE SECTION ENTITLED "RISK FACTORS" ON PAGES 6 THROUGH 10 OF
THIS PROSPECTUS.
3.
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SUMMARY OF COMPANY
The Company develops and finances communications networks in the
People's Republic of China ("PRC"). The Company's interests in its Chinese
communications networks include a Global Service Mobile system ("GSM") and a
multimedia network both in the northern province of Hebei, PRC. The Company
holds these interests through Sino-foreign joint ventures, which are the
legally authorized vehicle for foreign investment in China. Consistent with
PRC laws and regulations, the Company's Sino-foreign joint ventures have
entered into contracts with authorized network operators in the PRC to build
networks and sell the assets of such networks to the operators for a portion
of the cash-flow generated by operations of the networks.
Each of the Company's joint ventures, Hebei United Communications
Equipment Company Limited ("Hebei Equipment") and Hebei United
Telecommunications Engineering Company Limited ("Hebei Engineering"), is
organized under the laws of the PRC as a Sino-foreign equity joint venture
enterprise, a distinct legal entity with limited liability. Such entities
are governed by the Law of the People's Republic of China on Joint Ventures
Using Chinese and Foreign Investments, and implementing regulations related
thereto. The parties to the joint ventures have contractual rights to the
financial returns of the joint venture in proportion to the joint venture
interests that they hold. The transfer or increase of an interest in a
Sino-foreign equity joint venture enterprise requires agreement among the
parties to the venture and is effective upon approval of relevant government
agencies. For a discussion of the risks associated with PRC laws,
regulations and policies, see "Risk Factors -- Risks Relating to Doing
Business in the PRC -- PRC Laws; Evolving Regulations and Policies."
In March 1996, the Company formed a joint venture with a 60.8%
equity interest in Hebei Equipment. As a result, Hebei Equipment was
converted from a PRC enterprise into a Sino-foreign joint venture company.
On April 15, 1997, all PRC governmental approvals were finalized for the
conversion of Hebei Equipment to a Sino-foreign joint venture company.
The Company, through Hebei Equipment, is currently involved in the
development of two communications networks in Hebei Province: a digital
cellular telephone network (the "GSM Network") and a province-wide multimedia
network (the "Hebei Multimedia Network"). The GSM Network is being
constructed by Hebei Engineering, which is a 51%-owned subsidiary of Hebei
Equipment and is 49%-owned by Nippon Telegraph and Telephone International
("NTTI"), a subsidiary of Nippon Telegraph & Telephone Corporation. The
Hebei Multimedia Network, which will link existing cable television systems
in Hebei Province, is being constructed by Hebei Equipment.
Hebei Engineering is constructing the GSM Network pursuant to a
15-year agreement (the "UNICOM Agreement"), dated February 9, 1996, with
China United Communications Co. ("UNICOM"). UNICOM holds one of two licenses
to operate cellular telephone networks in the PRC. Under the terms of the
UNICOM Agreement, Hebei Engineering will build the GSM Network and sell
ownership of the GSM Network over the life of the agreement to UNICOM in
exchange for a majority share of cash flow generated by UNICOM from UNICOM's
operation of the GSM Network. Hebei Engineering will also provide consulting
assistance to UNICOM in the operation of the GSM Network. Hebei Engineering
will receive 78% of up front connection fees paid by new subscribers to
connect to the GSM Network, 78% of depreciation of fixed assets and 78% of
net income generated by UNICOM from operation of the GSM Network until
February 9, 2011. Through the Company's 60.8% interest in Hebei Equipment
and Hebei Equipment's 51% interest in Hebei Engineering, the Company holds an
indirect 31% interest in Hebei Engineering.
Under the UNICOM Agreement, the GSM Network will provide cellular
telephone service, using the Global Service for Mobile Telecommunications
technology, in the eleven major cities of Hebei Province, which have a total
population, including surrounding metropolitan areas, of approximately 50
million, or approximately 78% of Hebei Province's total population of
approximately 64 million. In the first phase of construction, the GSM
Network will be built in 7 major cities, and have a subscriber capacity of
40,000. In the second phase of construction, the GSM Network will be built
in the remaining four major cities of Hebei Province,thereby expanding the
total network capacity to 70,000. Based on market demand, management believes
the capacity of the GSM Network may be expanded in the future beyond 70,000
subscribers. In February 1997, the GSM Network commenced commercial
operations in Shijiazhuang, the capital of Hebei Province. Six additional
cities are anticipated to commence commercial operation before the end of
1997. Construction in the remaining four major cities of Hebei Province
4.
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is anticipated to commence during the first half of 1998. See "Risk Factors
- -- Risks Relating to the Company's Joint Venture Operations."
As of August 20, 1997, construction of the first phase of the GSM
Network had been financed with a $3 million equity investment from Hebei
Equipment and NTTI, and vendor financing guaranteed by NTTI and a $20 million
Term Loan facility from Bank of Tokyo Mitsubishi guaranteed by NTTI. Of
these amounts, the Company has provided $1.17 million of equity funding to
Hebei Engineering through the Company's investment in Hebei Equipment. At
present, all funding required for completion of the first phase of
construction has been obtained by Hebei Engineering.
On April 8, 1997, Hebei Equipment entered into a 20-year agreement
(the "Hebei Multimedia Agreement") with Hebei Cable Television Station, the
monopoly provider of cable television service in Hebei Province, pursuant to
which Hebei Equipment will (i) build a fiber-optic and microwave network to
connect the existing cable television systems in the eleven major cities in
Hebei Province, (ii) upgrade one city on a trial basis to a hybrid fiber
coaxial network ("HFC"), and (iii) hold the option to upgrade the network to
an HFC network. Under the Hebei Multimedia Agreement, Hebei Equipment will
sell ownership of the Hebei Multimedia Network to Hebei Cable Television
Station in exchange for a majority share of cash flow generated by Hebei
Cable Television Station from operation of the Hebei Multimedia Network.
Hebei Equipment will also provide operating personnel and assistance to Hebei
Cable Television Station in the operation of the Hebei Multimedia Network.
Until Hebei Equipment has recovered its investment, Hebei Equipment will
receive 80% of depreciation of fixed assets and 80% of net income generated
by Hebei Cable Television Station from operation of the Hebei Multimedia
Network. Thereafter, for the balance of 20 years from the commencement date
of formal commercial operations, Hebei Equipment will receive 30% of
depreciation of fixed assets and 30% of net income generated by Hebei Cable
Television Station from operation of the Hebei Multimedia Network. Hebei
Cable Television Station is a subsidiary enterprise of the Hebei Radio and
Television Department, under the jurisdiction of the Ministry of Radio, Film
and Television in the PRC.
The current funding requirement for the Hebei Multimedia Network is
estimated at approximately $23 million to link cable systems in the eleven
largest cities in Hebei Province. As of August 20, 1997, the Company had
invested approximately $1.0 million in Hebei Equipment for purposes of
investment in the Hebei Multimedia Network. The Company anticipates that the
balance of required funding will be provided in the form of equity and debt
investments in Hebei Equipment and additional joint venture entities that may
be established with strategic partners. See "Risk Factors -- Risks Relating
to the Company's Joint Venture Operations."
The Company was originally founded as a Colorado corporation on May
10, 1982, and was reincorporated under the laws of the State of Delaware on
July 10, 1996. Since April 1995, the Company has been engaged in the
business of developing telecommunications networks in the PRC. In January
1996, the Company sold substantially all of the assets of ITV Communications,
Inc., the former primary operating subsidiary of the Company. On July 8,
1997, the Company changed its name to "AmTec, Inc." from "AVIC Group
International, Inc." The Company's principal executive office is located at
599 Lexington Avenue, 44th Floor, New York, New York 10022. Its telephone
number is (212) 319-9160.
5.
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RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE IN NATURE, INVOLVE A
HIGH DEGREE OF RISK, AND SHOULD NOT BE PURCHASED BY ANY INVESTOR WHO CANNOT
AFFORD THE LOSS OF HIS ENTIRE INVESTMENT. PRIOR TO MAKING AN INVESTMENT
DECISION WITH RESPECT TO THE SECURITIES OFFERED HEREBY, PROSPECTIVE INVESTORS
SHOULD CAREFULLY CONSIDER, ALONG WITH THE OTHER MATTERS DISCUSSED IN THIS
PROSPECTUS, THE FOLLOWING RISK FACTORS:
COMPANY AND FINANCIAL RISKS
PRIOR AND ANTICIPATED LOSSES. To date, the Company's current
operations have not generated revenue and the Company has experienced net
losses of $4,064,885 and $5,281,730 during the fiscal years ended March 31,
1997 and 1996, respectively. The Company does not expect to achieve
profitability during the current fiscal year. The ability of the Company to
achieve profitability is dependent upon numerous factors, including the
operations of the Company's joint venture projects and its ability to
finance, develop and implement its PRC telecommunications projects. There
can be no assurance that the Company will achieve profitability in any future
period.
HOLDING COMPANY. The Company is a holding company. The Company's
operating assets and only source of income and operational cash flow are its
interests in its existing subsidiaries. The ability of the Company to pay
any dividends on its capital stock is entirely dependent on the Company's
ability to receive distributions from its subsidiaries. See "Risk Factors --
Risks Relating to the Company's Joint Venture Operations" and "-- Risks
Relating to Doing Business in the PRC."
EARLY STAGE PROJECTS. The telecommunications projects which
constitute the Company's entire business are in the early stages, and are
subject to all of the risks inherent in the establishment of new
telecommunications projects. The likelihood of the success of the Company's
PRC telecommunications operations must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered in connection with the construction and operation of a new
telecommunications network. There can be no assurance that the Company's
existing or future PRC telecommunications operations will be successfully
implemented or that any of them will generate any revenue for the Company.
See "Risk Factors -- Risks Relating to the Company's Joint Venture
Operations."
EXPLANATORY PARAGRAPH IN AUDITORS' REPORT. Both of the Company's
independent auditors have included an explanatory paragraph in their
Independent Auditors' Reports in the Annual Report on Form 10-KSB for the
fiscal years ended March 31, 1997 and 1996 and the Transition Report on Form
10-KSB for the fiscal year ended March 31, 1995 to the effect that the
Company's substantial capital requirements and the Company's operating losses
since inception raise substantial doubt about the Company's ability to
continue as a going concern. Realization of the Company's assets is dependent
upon the Company's ability to raise capital to meet its financing and
operating requirements and the success of its majority owned subsidiary in
the PRC to complete its projects and to obtain profitable operations. There
can be no assurance that the Company can meet its capital requirements on
terms favorable to the Company or at all, or that the business of the
Company's subsidiary will ever achieve profitable operations.
POSSIBLE NEED FOR ADDITIONAL CAPITAL. The Company's future capital
requirements will depend on many factors, including, but not limited to, the
financial success of the Company's PRC telecommunications operations, future
capital requirements of the Company's operations and capital requirements
arising out of participation in other telecommunications networks in the
future. At present, the Company's only contractual obligation is for the
Hebei Multimedia Network. To the extent that existing funds are insufficient
to fund the Company's activities, the Company may need to raise additional
capital through public or private financing. If additional funds are raised
through the issuance of equity securities, the percentage ownership of
existing shareholders of the Company will be reduced, and such equity
securities may have rights, preferences, or privileges senior to those of the
holders of the existing securities. No assurance can be given that
additional financing will be available or that, if available, it can be
obtained on terms favorable to the Company and its shareholders. If adequate
funds are not available, the Company may default on commitments for existing
projects, which may have a material adverse effect on the business and
financial condition as well as cash flow of the Company.
6.
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COMPETITION. The opportunity to profit from growth in the PRC's
telecommunications sector has attracted participants from around the world.
Many such competitors have greater marketing resources and technological
capability as well as greater financial resources than the Company.
Accordingly, there can be no assurance that the Company will be successful in
securing roles in additional PRC telecommunications networks or, if able to
do so, will be able to negotiate favorable terms.
POTENTIAL ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS. The
Company's Certificate of Incorporation includes certain provisions which are
intended to protect the Company's stockholders by rendering it more difficult
for a person or persons to obtain control of the Company without cooperation
of the Company's management. These provisions include certain super-majority
requirements for the amendment of the Company's Certificate of Incorporation
and Bylaws. Such provisions are often referred to as "anti-takeover"
provisions. The inclusion of such provisions in the Certificate of
Incorporation may delay, deter or prevent a takeover of the Company which the
stockholders may consider to be in their best interests, thereby possibly
depriving holders of the Company's securities of certain opportunities to
sell or otherwise dispose of their securities at above-market prices, or
limit the ability of stockholders to remove incumbent directors as readily as
the stockholders may consider to be in their best interests.
CONTROL BY PRINCIPAL STOCKHOLDERS. Tweedia International Limited
("Tweedia") is the Company's principal stockholder and has the beneficial
ownership of approximately 43.9% of the outstanding Common Stock. As a
result of such Common Stock ownership, Tweedia is in a position to exercise
significant control with respect to the affairs of the Company and the
election of the Company's directors. In addition, a potential buyer might be
deterred from an effort to acquire the Company, absent the consent of Tweedia
or its participation in the transaction.
EFFECT OF TECHNOLOGICAL CHANGE ON OPERATIONS. The market in the
telecommunications industry is characterized by rapidly changing technology.
There can be no assurance that technologies developed by others will not
render obsolete or otherwise significantly diminish the value of the business
operations of the joint ventures in which the Company participates.
SECURITIES RISKS
VOLATILE MARKET FOR COMMON STOCK. There is no assurance that a
regular trading market for the Company's Common Stock will be sustained. The
market price for the Company's Common Stock may be significantly affected by
such factors as the Company's financial performance, the market price of its
competitors' stock, or market conditions in general. The Company's Common
Stock price has been particularly volatile. During the past 12 months, the
Company's Common Stock has traded in a range between $6.25 per share and
$2.25 per share. As of August 19, 1997, the closing price of the Common Stock
on the American Stock Exchange was $3.00. Additionally, in recent years, the
stock market has experienced a high level of price and volume volatility for
many companies, particularly small and emerging growth companies, and these
wide price fluctuations are not necessarily related to the operating
performance of these companies. Accordingly, there may continue to be
significant volatility in the market for the Company's Common Stock. The
Common Stock offered hereby may be offered and sold from time to time
throughout an indefinite and extended period of time. Such sales may have an
adverse effect on the prevailing market price for the Common Stock. The
extent of such adverse effect, if any, cannot be predicted, but based on the
volume of trading in the market and on the number of shares that could be
sold hereunder, such adverse effect may be material.
POSSIBLE DILUTIVE EFFECT OF OUTSTANDING OPTIONS, WARRANTS,
PREFERRED STOCK AND INVESTMENT AGREEMENT. As of August 20, 1997, there were
11,913,484 shares of Common Stock reserved for issuance upon exercise of
stock options and warrants that have been granted or issued. 6,272,284 of
the outstanding options and 2,344,200 of the outstanding warrants are currently
exercisable at exercise prices ranging from $0.125 to $9.27 per share.
Additional shares of Common Stock are reserved for issuance upon the exercise
of options available for future grant under the Company's stock option plans
and upon the conversion of certain outstanding shares of preferred stock.
Because the Company anticipates that the trading price of Common Stock at the
time of exercise of any such options or warrants will exceed the exercise
price, such exercise will have a dilutive effect on the Company's
stockholders. As the number of shares of Common Stock issuable upon the
conversion of the Series C Preferred Shares and the Series D Preferred Shares
is based on the lowest trading price during a period immediately preceding
the conversion, such conversion may have a dilutive effect on the Company's
stockholders. In addition, on March 31, 1997, the
7.
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Company entered into a Common Stock Investment Agreement with one of the
Selling Securityholders pursuant to which the Selling Securityholder may
provide up to $25 million in equity funding to the Company. The Company has
agreed to issue a minimum of $4,000,000 in Common Stock, at a 10% discount to
market price, to the Selling Securityholder. Such sales of shares of Common
Stock to the Selling Securityholder may have a dilutive effect on the
Company's stockholders.
LACK OF DIVIDENDS ON COMMON STOCK. The Company has paid no
dividends on its Common Stock to date and there are no plans for paying
dividends on the Common Stock in the foreseeable future. The Company has
certain obligations to pay dividends, which can be paid in common stock to
holders of the Series C and D Preferred Shares. Except for dividends which
may be payable on the shares of issued and outstanding preferred stock and
other preferred stock that may be issued from time to time in the future that
require such dividends, the Company intends to retain earnings, if any, to
provide funds for the expansion of the Company's business.
ISSUANCE OF ADDITIONAL SHARES; SHARES ELIGIBLE FOR FUTURE SALE.
Future sales of shares of Common Stock by the Company and its stockholders
could adversely affect the prevailing market price of the Common Stock.
Pursuant to its Certificate of Incorporation, the Company has the authority
to issue 67,043,836 additional shares of Common Stock and 8,475,322
additional shares of preferred stock. The issuance of such shares could
result in the dilution of the voting power and other rights of the currently
issued and outstanding shares of Common Stock. As of August 20, 1997, certain
investors who have held an aggregate of approximately 8.7 million shares of
restricted Common Stock may sell such shares without restriction. Such sales
may have a materially adverse effect on the prevailing market price of the
Common Stock. The extent of such adverse effect, if any, cannot be
predicted, but based on the volume of trading in the market and on the number
of shares that could be sold thereunder, such adverse effect may be material.
FUTURE ISSUANCE'S OF PREFERRED STOCK. The Company's Certificate of
Incorporation authorizes the issuance of up to 10,000,000 shares of preferred
stock with such designation, powers, rights and preferences as may be
determined from time to time by the Board of Directors, without stockholder
approval. In the event of the issuance of additional series of preferred
stock, such preferred stock could have voting, liquidation, dividend and
other rights superior to the rights of the outstanding stock of the Company
and, in addition, could be utilized, under certain circumstances, as a method
of discouraging, delaying or preventing a change in control of the Company.
RISKS RELATING TO THE COMPANY'S JOINT VENTURE OPERATIONS
CONSTRUCTION AND OPERATION OF PROPOSED TELECOMMUNICATIONS NETWORKS.
The telecommunications networks in the PRC which the Company's joint
ventures are currently engaged in developing may experience difficulties and
delays relating to the construction and operation of such networks. While
the Company's joint ventures have undertaken to obtain the technical
capability, personnel or resources to build, service and maintain a
telecommunications network in the PRC, the performance of all or any of the
Company's joint venture obligations under its agreements relating to PRC
telecommunications networks may require the cooperation and participation of
third parties. Such third parties may be parties to or independent
contractors with the Company's Sino-foreign joint ventures, for the purpose
of building, servicing or maintaining any such telecommunications network.
There can be no assurance that the Company's joint ventures will be able to
obtain such cooperation, if required, with respect to its PRC
telecommunications networks. Moreover, there can be no assurance that such
networks will be completed in a timely manner, if at all, or that any
financing which may be completed with respect to any such network will be
sufficient to complete or to operate any proposed project. The failure by
the joint ventures to achieve these goals, or any difficulties or delays, may
have a material adverse effect on the Company's business, financial
condition, cash flow and results of operations.
SIGNIFICANT ADDITIONAL FUNDING OF JOINT VENTURE PROJECTS REQUIRED.
The aggregate funding required from joint venture partners for the first
phase of construction for the Hebei Multimedia Network is approximately $23
million of which, to date, $1.0 million has been invested by the Company into
Hebei Equipment. While the Company and Hebei Equipment currently have
approximately $4 million of cash on hand and the Company has entered into a
$25 million Common Stock Investment Agreement, material limitations exist on
the Company's right to access funds under such agreement. At present there
can be no assurance that the Company will meet its funding requirement for
the Hebei Multimedia Network. Beyond this expansion phase, future capital
requirements for the GSM Network will depend on the rate of network capacity
growth which, in turn, will depend on the market
8.
<PAGE>
acceptance of the GSM cellular service, among other factors. There can be no
assurance that the Company's joint venture partners will meet their funding
commitments under the joint venture contracts. It is anticipated that debt
or equity contributions made by the Company and its partners to the joint
ventures, as well as additional loans made by third parties, will be used to
develop the GSM Network and the Hebei Multimedia Network. However, there can
be no assurance that the equity contributions and loans made, or to be made,
to the joint ventures by their respective partners will be sufficient to meet
the capital needs of either the GSM Network or the Hebei Multimedia Network,
or to successfully complete or support the competitive position of either
project. The Company may elect to make additional equity contributions or
loans to either joint venture to fund such additional capital needs, thus
creating an additional demand on the Company's capital, or may elect not to
make such payments, which may negatively affect the successful implementation
of the networks. Securing alternative sources of funds may dilute the
Company's ownership
ROLE IN FUTURE EXPANSION OF THE HEBEI GSM NETWORK. Further
expansion of the GSM Network is anticipated beyond Phase II of the Hebei GSM
Network, but the joint venture partners, timing and amount of investment have
not been finally determined. In the event of such expansion, UNICOM is to
give preferential consideration, in securing new investment, to investments
from the Company and its joint venture partners on the same terms as their
prior investments. However, at present there can be no assurance that further
expansion of the GSM Network will occur, or that the Company will be allowed
to participate in later stages of the Hebei GSM project.
COMPETITION WITH THE MINISTRY OF POSTS AND TELECOMMUNICATIONS AND
OTHERS. The two primary providers of telecommunications services in China,
the Ministry of Posts and Telecommunications (the "MPT") (through its
operating subsidiary China Telecom) and UNICOM, compete intensely. UNICOM
has entered into a contract with a subsidiary of the Company with respect to
the GSM Network, and, therefore, the Company indirectly competes with the MPT
in certain of its activities. The MPT has a dominant market share in all
sectors of telecommunications in China, and already has established a
fixed-wire network in the country. Moreover the MPT regulates and licenses
all public telephone service projects in China, including network access, and
maintains the ability to make important regulatory decisions with respect to
its competitors, including the Hebei GSM project. The Company's joint
venture may also have to compete with other telecommunications services
providers, some of which may have greater marketing and development budgets
and greater capital resources than the Company's joint ventures.
Accordingly, there can be no assurance that the Company will be able to
achieve and maintain a competitive position in the PRC telecommunications
industry. In addition, new competitors may be entering the market, including
the People's Liberation Army through it's Great Wall Communications Group.
GOVERNMENT APPROVAL FOR JOINT VENTURE PROJECTS. All the Company's
joint venture contracts will require approval at some level of the provincial
or related government in China. There can be no assurance that in the future
all necessary governmental approvals will be obtained for joint venture
projects that the Company may enter in the future.
RISKS RELATING TO DOING BUSINESS IN THE PRC
INTERNAL POLITICAL RISKS. The Company's business operations may be
adversely affected by the political environment in the PRC. The PRC has been
a socialist state since 1949 and is controlled by the Communist Party of
China. Changes in the political leadership of the PRC may have a significant
effect on laws and policies related to the current economic reforms program,
other policies affecting business and the general political, economic and
social environment in the PRC, including the introduction of measures to
control inflation, changes in the rate or method of taxation and imposition
of additional restrictions on currency conversion and remittances abroad and
foreign investment. These effects could substantially impair the Company's
business, profits or prospects in China. Moreover, economic reforms and
growth in the PRC have been more successful in certain provinces than in
others, and the continuation or increases of such disparities could affect
the political or social stability of the PRC.
GOVERNMENT CONTROL OVER ECONOMY. The PRC only recently has
permitted greater provincial and local economic autonomy and private economic
activities. The government of the PRC has exercised and continues to exercise
substantial control over virtually every sector of the Chinese economy
through regulation and state ownership. Accordingly, government actions in
the future, including any decision not to continue to support recent economic
reforms and to return to a more centrally planned economy or regional or
local variations in the
9.
<PAGE>
implementation of economic policies, could have a significant effect on
economic conditions in the PRC or particular regions thereof, and could
require the Company to divest the interests it then holds in Chinese
properties or joint ventures. Any such developments could have a material
adverse effect on the business prospects of the Company.
INFLATION AND ANTI-INFLATION POLICIES. In recent years, the
Chinese economy has experienced periods of rapid expansion and high rates of
inflation, which have led to the adoption by the PRC government, from time to
time, of various corrective measures designed to restrict the availability of
credit or regulate growth and contain inflation. While inflation has
moderated since 1995, high inflation may in the future cause the PRC
government to impose controls on credit and/or prices, or to take other
action which could inhibit economic activity in China, and, thereby,
adversely affect the Company's intended business operations in the PRC.
There can be no assurance that potential high rates of inflation and any PRC
anti-inflation policies adopted in the future will not have a material
adverse effect on the Company's liquidity and business operations.
RESTRICTIONS ON FOREIGN CURRENCY EXCHANGE. The Renminbi is not a
freely convertible currency at present. The Company's joint ventures will
receive nearly all of their revenue in Renminbi, which will need to be
converted to other currencies, primarily U.S. dollars, and remitted outside
of the PRC. Effective July 1, 1996, foreign currency "current account"
transactions by foreign investment enterprises, including Sino-foreign joint
ventures, are no longer subject to the approval of State Administration of
Foreign Exchange ("SAFE", formerly, "State Administration of Exchange
Control"), but need only a ministerial review, according to the
ADMINISTRATION OF THE SETTLEMENT, SALE AND PAYMENT OF FOREIGN EXCHANGE
PROVISIONS promulgated in 1996 (the "FX regulations"). "Current account"
items include international commercial transactions which occur on a regular
basis, such as those relating to trade and provision of services.
Distributions to joint venture parties also are considered a "current account
transaction." Other non-current account items, known as "capital account"
items, remain subject to SAFE approval.
EXCHANGE RATES LOSSES. Until 1994, the Renminbi had experienced a
gradual but significant devaluation against most major currencies, including
U.S. dollars, and there was a significant devaluation of the Renminbi on
January 1, 1994 in connection with the replacement of the dual exchange rate
system with a unified managed floating rate foreign exchange system. Since
1994, the value of the Renminbi relative to the U.S. dollar has remained
stable. However, if devaluation of the Renminbi were to occur in the future,
the Company's returns on its operations in China, which are expected to be in
the form of Renminbi, will be negatively affected upon conversion to U.S.
dollars.
PRC LAWS; EVOLVING REGULATIONS AND POLICIES. The PRC's legal
system is a civil law system based on written statutes in which decided legal
cases have little value as precedents, unlike the common law system prevalent
in the United States. The PRC does not have a well-developed, consolidated
body of laws governing foreign investment enterprises. As a result, the
administration of laws and regulations by government agencies may be subject
to considerable discretion and variation, and may be subject to influence by
external forces unrelated to the legal merits of a particular matter.
China's regulations and policies with respect to foreign investments are
evolving. Definitive regulations and polices with respect to such matters as
the permissible percentage of foreign investment and permissible rates of
equity returns have not yet been published, statements regarding these
evolving policies have been conflicting and any such policies, as
administered, are likely to be subject to broad interpretation and discretion
and to be modified, perhaps on a case-by-case basis. The uncertainties
regarding such regulations and policies present risks that the Company will
not be able to achieve its investment objectives. There can be no assurance
that the Company will be able to enforce any legal rights it may have under
its joint venture contracts or otherwise.
EXPROPRIATION. The PRC government has, in the past, renounced
various debt obligations incurred by predecessor governments, which
obligations remain in default, and expropriated assets without compensation.
There can be no assurance that the PRC government will not in the future
expropriate or nationalize assets which may relate to any current or
prospective business operations of the Company.
RELIANCE ON STATISTICS. Statistics relating to economic,
demographic, and general business data are not widely disseminated within or
outside of the PRC. Further, certain PRC statistics may not be compiled in
accordance with, or may not be subject to, Western standards of accuracy.
The resultant imperfect information naturally hinders the performance of the
Company's business planning or investment analysis and introduces risks in
conducting business in the PRC.
10.
<PAGE>
USE OF PROCEEDS
The Company may receive cash consideration in connection with the
conversion of the Series C Preferred Shares and the Series D Preferred Shares
if the lowest market price of the Common Stock during the 30 business day
period immediately preceding the conversion date of such preferred stock
exceeds certain levels. The Company intends to use any cash proceeds that it
may receive in connection with such conversion of preferred stock for
financing telecommunications networks in the PRC and for working capital
purposes. The Company will not otherwise receive any proceeds from the sale
by the Selling Securityholders of any of the Shares offered hereby. The
Company will pay all of the costs of this offering.
SELLING SECURITYHOLDERS
The Shares being offered hereby by the Selling Securityholders
represent Shares of Common Stock (i) previously issued by the Company in
connection with: a private placement financing by the Company in November
1996; the settlement in March 1997 of a lawsuit involving the lease of
certain property by a wholly-owned subsidiary of the Company; compensation
for legal services provided to the Company; compensation for consulting
services provided to the Company in October and November 1996; and the
sale of shares of Common Stock to an institutional investor pursuant to
an investment agreement; (ii) issuable in connection with the conversion of
the Company's currently outstanding Series C Preferred Shares, together with
any accrued but unpaid dividends on the Series C Preferred Shares that the
Company may pay in shares of Common Stock upon conversion of the Series C
Preferred Shares; and (iii) issuable in connection with the conversion of the
Company's currently outstanding Series D Preferred Shares, together with any
accrued but unpaid dividends on the Series D Preferred Shares that the
Company may pay in shares of Common Stock upon conversion of the Series D
Preferred Shares. In each of the foregoing transactions, the Company agreed
to provide registration rights that require the Company to register the
Shares of Common Stock issued or issuable to the Selling Securityholders.
The Shares have been registered pursuant to such registration rights.
The terms of the foregoing transactions were determined by
arm's-length negotiations between the Company and the Selling
Securityholders. Neither the Selling Securityholders nor their affiliates
had or has any material relationship with the Company or its officers,
directors or affiliates except as noted in the table below.
11.
<PAGE>
The following table sets forth as of the date of this Prospectus
the number and percent of shares of Common Stock beneficially owned by the
Selling Securityholders, the number of shares of Common Stock offered hereby
by the Selling Securityholders, and the number and percent of shares of
Common Stock to be held by the Selling Securityholders after the conclusion
of this offering.
<TABLE>
<CAPTION>
Before Offering After Offering
-------------------------- --------------------------
Number of Number of Number of
Shares Shares Shares
Beneficially Being Beneficially
Selling Securityholders Owned(1)(2) Percent Offered Owned(1)(3) Percent
----------------------- -------------- --------- ---------- -------------- ---------
<S> <C> <C> <C> <C> <C>
Jerome H. Lemelson 500,000 1.5 500,000 0 --
Neil Simon 250,000 * 250,000 0 --
Joan A. Stanton 125,000 * 125,000 0 --
Philip Suarez 125,000 * 125,000 0 --
6800 Owensmouth, Inc. 39,589 * 39,589 0 --
Troy & Gould Professional
Corporation(4) 33,462 * 33,462 0 --
Westergaard Publishing Corporation 5,000 * 5,000 0 --
Promethean Investment Group L.L.C. 1,570,998 4.8 1,570,998 0 --
Heracles Fund(5)(6) 2,443,000 7.2 2,443,000 0 --
Themis Partners, L.P.(5) 420,000 1.3 420,000 0 --
Sam Yang Merchant Bank(5) 630,000 2.0 630,000 0 --
Angelo, Gordon & Co., L.P.(5) 126,000 * 126,000 0 --
AG Super Fund International
Partners, L.P.(5) 84,000 * 84,000 0 --
GAM Arbitrage Investments, Inc.(5) 126,000 * 126,000 0 --
AG Super Fund, L.P.(5) 84,000 * 84,000 0 --
Raphael, L.P.(5) 168,000 * 168,000 0 --
MichaelAngelo, L.P.(5) 168,000 * 168,000 0 --
AG Long Term Super Fund, L.P.(5) 84,000 * 84,000 0 --
</TABLE>
- ----------------------------------
* less than 1%
(1) Pursuant to the rules promulgated under the Exchange Act, a person is
deemed to be the beneficial owner of a security if that person has the
right to acquire ownership of such security within 60 days.
(2) The number of Shares issuable to the Selling Securityholders in connection
with the conversion of the Series C Preferred Shares and the Series D
Preferred Shares is variable and depends upon the market price of the
Common Stock during the 30 business day period immediately preceding the
conversion dates of such preferred stock. The table reflects the issuance
pro-rata to the Selling Securityholders of the maximum number of Shares
covered by this Prospectus for issuance in connection with such conversion.
Thus certain Selling Securityholders may be entitled to receive more or
less shares of Common Stock than indicated in the table.
(3) The table assumes that the Selling Securityholders will dispose of all
Shares owned by them that are being registered for sale by this Prospectus.
(4) Troy & Gould Professional Corporation has provided legal services from time
to time to the Company. See "Legal Matters."
(5) Selling Securityholders of Shares issuable in connection with conversion of
the Series C Preferred Shares.
(6) Selling Securityholder of Shares issuable in connection with conversion of
the Series D Preferred Shares.
12.
<PAGE>
PLAN OF DISTRIBUTION
The Selling Securityholders may sell, directly or through brokers,
the Shares in negotiated transactions or in one or more transactions in the
market through the facilities of the American Stock Exchange at the price
prevailing at the time of sale. In connection with such sales, the Selling
Securityholders and any participating broker may be deemed to be
"underwriters" of the Shares within the meaning of the Securities Act,
although the offering of these securities will not be underwritten by a
broker-dealer firm. Sales in the market may be made to broker-dealers making
a market in the Common Stock or other broker-dealers, and such
broker-dealers, upon their resale of such securities, may be deemed to be
"selling securityholders" in this offering. It is anticipated that usual and
customary brokerage fees will be paid by the Selling Securityholders in all
open market transactions. The Company will not receive any of the proceeds
from the sale of the Shares by the Selling Securityholders. The Company has
agreed to indemnify certain of the Selling Securityholders against such
liabilities as they may incur as a result of any untrue statement of a
material fact in the Registration Statement of which this Prospectus forms a
part, or any omission herein or therein to state a material fact necessary in
order to make the statements made, in the light of the circumstances under
which they were made, not misleading. Such indemnification includes
liabilities that such Selling Securityholders may incur under the Securities
Act.
The Company will bear all costs and expenses of the registration
under the Securities Act and certain state securities laws of the Common
Stock, other than fees of counsel (if any) for the Selling Securityholders
and any discounts or commissions payable with respect to sales of such
securities.
From time to time this Prospectus will be supplemented and amended
as required by the Securities Act. During any time when a supplement or
amendment is so required, the Selling Securityholders are required to cease
sales until the Prospectus has been supplemented or amended.
LEGAL MATTERS
The validity of the securities offered hereby has been passed upon
by Troy & Gould Professional Corporation, Los Angeles, California. As of the
date of this Prospectus, Troy & Gould Professional Corporation owns 33,462
shares of the Company's Common Stock, all of which may be offered pursuant to
this Prospectus. See "Selling Securityholders."
EXPERTS
The consolidated financial statements as of March 31, 1997 and for
the year then ended incorporated in this prospectus by reference from the
Company's Annual Report on Form 10-KSB for the year ended March 31, 1997,
have been audited by Deloitte & Touche LLP, independent auditors, as stated
in their report (which report expresses an unqualified opinion and includes
an explanatory paragraph relating to the Company's ability to continue as a
going concern), which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm, given upon their
authority as experts in auditing and accounting.
The audited consolidated financial statements as of March 31, 1996
and for the two years then ended contained in the Annual Report on Form
10-KSB of the Company for the year ended March 31, 1997, and incorporated in
this Prospectus by reference, have been so incorporated in reliance on the
reports of Singer Lewak Greenbaum & Goldstein LLP, independent public
accountants, given on the authority of said firm as experts in auditing and
accounting.
13.
<PAGE>
- -------------------------------------------------------------------------------
No dealer, salesman or other person has been authorized to give any
information or make any representations, other than those contained in this
Prospectus, in connection with the offering hereby, and, if given or made,
such information and representations must not be relied upon as having been
authorized by the Company or the Selling Securityholders. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy,
any securities to any person in any State or other jurisdiction in which such
offer or solicitation is unlawful. Neither the delivery of this Prospectus
nor any sale made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Company or
the facts herein set forth since the date hereof.
---------------
TABLE OF CONTENTS
PAGE
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . 2
Summary of Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Selling Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6,982,049 Shares of Common Stock
AMTEC, INC.
------------
PROSPECTUS
------------
August 21, 1997
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The Company estimates that expenses in connection with the
distribution described in this Registration Statement will be as follows.
All expenses incurred with respect to the distribution will be paid by the
Company, and such amounts, with the exception of the Securities and Exchange
Commission registration fees, are estimates.
SEC registration fee. . . . . . . . . . . . . . . . . $ 6,286
American Stock Exchange listing fees . . . . . . . . 0
Blue Sky fees and expenses. . . . . . . . . . . . . . 500
Accounting fees and expenses. . . . . . . . . . . . . 3,000
Legal fees and expenses . . . . . . . . . . . . . . . 10,000
Printing and engraving expenses . . . . . . . . . . . 3,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . 1,000
---------
Total . . . . . . . . . . . . . . . . . . . . . . . $ 23,786
---------
---------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Section 102(b)(7) of the General Corporation Law of the
State of Delaware (the "GCL"), the Certificate of Incorporation of the
Company eliminates the liability of the Company's directors to the Company or
its stockholders, except for liabilities related to breach of duty of
loyalty, actions not in good faith, and certain other liabilities.
The Certificate of Incorporation, and the Bylaws of the Company
provide for the indemnification of directors and officers to the fullest
extent permitted by the GCL.
Section 145 of the GCL authorizes indemnification when a person is
made a party to any proceeding by reason of the fact that such person is or
was a director, officer, employee or agent of the corporation or was serving
as a director, officer, employee or agent of another enterprise, at the
request of the corporation, and if such person acted in good faith and in a
manner reasonably believed by him or her to be in, or not opposed to, the
best interests of the corporation. With respect to any criminal proceeding,
such person must have had no reasonable cause to believe that his or her
conduct was unlawful. If it is determined that the conduct of such person
meets these standards, he or she may be indemnified for expenses incurred and
amounts paid in such proceeding if actually and reasonably incurred by him or
her in connection therewith.
If such a proceeding is brought by or on behalf of the corporation
(i.e., a derivative suit), such person may be indemnified against expenses
actually and reasonably incurred if he or she acted in good faith and in a
manner reasonably believed by him or her to be in, or not opposed to, the
best interests of the corporation. There can be no indemnification with
respect to any matter as to which such person is adjudged to be liable to the
corporation; however, a court may, even in such case, allow such
indemnification to such person for such expenses as the court deems proper.
Where such person is successful in any such proceeding, he or she is entitled
to be indemnified against expenses actually and reasonably incurred by him or
her. In all other cases, indemnification is made by the corporation upon
determination by it that indemnification of such person is proper because
such person has met the applicable standard of conduct.
In addition, the Company has adopted a form of indemnification
agreement (the "Indemnification Agreement") which provides the indemnitee
with the maximum indemnification allowed under applicable law. The Company
has not entered into Indemnification Agreements with any of its directors,
officers, employees or consultants as of August 20, 1997. Since the Delaware
statute is non-exclusive, it is possible that certain claims
(i)
<PAGE>
beyond the scope of the statute may be indemnifiable. The Indemnification
Agreements provide a scheme of indemnification which may be broader than that
specifically provided by Delaware law. It has not yet been determined,
however, to what extent the indemnification expressly permitted by Delaware
law may be expanded, and therefore the scope of indemnification provided by
the Indemnification Agreements may be subject to future judicial
interpretation.
The Indemnification Agreement provides, in pertinent part, that the
Company shall indemnify an indemnitee who is or was a party or is threatened,
pending or completed action or proceeding whether civil, criminal,
administrative or investigative by reason of the fact that the indemnitee is
or was a director, officer, key employee or agent of the Company or any
subsidiary of the Company. The Company shall advance all expenses, judgments,
fines, penalties and amounts paid in settlement (including taxes imposed on
indemnitee on account of receipt of such payouts) incurred by the indemnitee
in connection with the investigation, defense, settlement or appeal of any
civil or criminal action or proceeding as described above. The indemnitee
shall repay such amounts advanced only if it shall be ultimately determined
that he or she is not entitled to be indemnified by the Company. The
advances paid to the indemnitee by the Company shall be delivered within 20
days following a written request by the indemnitee. Any award of
indemnification to an indemnitee, if not covered by insurance, would come
directly from assets of the Company, thereby affecting a stockholder's
investment.
The Company has obtained directors' and officers' liability
insurance with an aggregate liability for the policy year, inclusive of costs
of defense, in the amount of $3,000,000.
The registration rights agreements between the Company and certain
Selling Securityholders provide that the Company shall indemnify such Selling
Securityholder, and such Selling Securityholder shall indemnify the Company
and the officers and directors of the Company, for certain liabilities,
including certain liabilities under the Securities Act.
ITEM 16. EXHIBITS
The following exhibits, which are furnished with this Registration
Statement or incorporated by reference, are filed as part of this
Registration Statement:
EXHIBIT
NO. DESCRIPTION
--- -----------
4.1 Form of Common Stock certificate(1)
5.1 Opinion of Troy & Gould Professional Corporation(2)
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Singer Lewak Greenbaum & Goldstein LLP
23.3 Consent of Troy & Gould Professional Corporation
(contained in Exhibit 5.1)
24.1 Power of Attorney (contained in Part II)(2)
- -------------
(1) Previously filed as an exhibit to the Company's Annual Report on Form 10-
KSB for the fiscal year ended March 31, 1997, which exhibit is incorporated
herein by reference.
(2) Previously filed as an exhibit to this Registration Statement.
ITEM 17. UNDERTAKINGS
(a) 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 registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion
of the Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by
(ii)
<PAGE>
a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
(b) The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 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) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the securities registered hereby, 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 thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
this Registration Statement;
(iii) To 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;
provided, however, that (i) and (ii) do not apply if the Registration
Statement is on Form S-3, and the information required to be included in a
post-effective amendment is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each post-effective amendment that contains a form of
prospectus 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.
(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.
(iii)
<PAGE>
SIGNATURES
Pursuant to 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 for filing on Form S-3 and has duly caused this
Amendment No. 1 to this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized in the City of New York, State of
New York, on August 21, 1997.
AMTEC, INC.
By /s/ JOSEPH R. WRIGHT, JR.
----------------------------
Joseph R. Wright, Jr.,
Chairman of the Board,
Chief Executive Officer and President
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to this Registration Statement has been signed by the
following person in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JOSEPH R. WRIGHT, JR. Chairman of the Board, August 21, 1997
- ----------------------------
Joseph R. Wright, Jr. Chief Executive Officer and President
(Principal Executive Officer)
/s/ RICHARD T. MCNAMAR* Vice Chairman of the Board August 21, 1997
- ----------------------------
Richard T. McNamar
/s/ XIAO JUN* Executive Vice President - AVIC China August 21, 1997
- ----------------------------
Xiao Jun and Director
/s/ JAMES. R. LILLEY* Director August 21, 1997
- ----------------------------
James R. Lilley
/s/ MICHAEL H. WILSON* Director August 21, 1997
- ----------------------------
Michael H. Wilson
Director August __, 1997
- ----------------------------
Drew Lewis
Director August __, 1997
- ----------------------------
Ju Feng
Director August __, 1997
- ----------------------------
Teoh Set Seng
/s/ RICHARD S. BRADDOCK* Director August 21, 1997
- ----------------------------
Richard S. Braddock
/s/ MICHAEL J. LIM Executive Vice President - Operations August 21, 1997
- ----------------------------
Michael J. Lim (Principal Financial and Accounting
Officer)
- ---------------
* Executed on behalf of such person by Joseph R. Wright Jr. pursuant to the power of
attorney granted to Mr. Wright in the Registration Statement filed August 8, 1997.
</TABLE>
<PAGE>
EXHIBIT INDEX
The following exhibits, which are furnished with this Registration
Statement or incorporated by reference, are filed as part of this
Registration Statement:
EXHIBIT
NO. DESCRIPTION
--- -----------
4.1 Form of Common Stock certificate(1)
5.1 Opinion of Troy & Gould Professional Corporation(2)
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Singer Lewak Greenbaum & Goldstein LLP
23.3 Consent of Troy & Gould Professional Corporation
(contained in Exhibit 5.1)
24.1 Power of Attorney (contained in Part II)(2)
- --------------
(1) Previously filed as an exhibit to the Company's Annual Report on Form
10-KSB for the fiscal year ended March 31, 1997, which exhibit is
incorporated herein by reference.
(2) Previously filed as an exhibit to this Registration Statement.
<PAGE>
INDEPENDENT AUDITORS' CONSENT
To the Stockholders and Board of Directors of AmTec, Inc.:
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-33235 on Form S-3 of AmTec, Inc. of our report
dated June 20, 1997 and July 8, 1997 with respect to Note 16 (which report
expresses an unqualified opinion and includes an explanatory paragraph
relating to the Company's ability to continue as a going concern) appearing
in the Annual Report on Form 10-KSB of AmTec, Inc. for the year ended March
31, 1997 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Amendment No. 1 to the Registration
Statement
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
New York, New York
August 21, 1997
EXHIBIT 23.1
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of AmTec, Inc.:
We have issued our report dated June 18, 1996, accompanying the consolidated
financial statements included in the Annual Report of AmTec, Inc. (formerly
AVIC Group International, Inc.) on Form 10-KSB for the year ended March 31,
1997. We hereby consent to the incorporation by reference of said report in
the Amendment No. 1 to the Registration Statement of AmTec, Inc. (formerly
AVIC Group International, Inc.) on Form S-3 and to the use of our name as
it appears under the caption "Experts."
/s/ Singer Lewak Greenbaum & Goldstein LLP
Singer Lewak Greenbaum & Goldstein LLP
Los Angeles, California
August 20, 1997
EXHIBIT 23.2
