As Filed with the Securities and Exchange Commission on October 10, 1997
Registration No. 333-
-------
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
APPLIED CELLULAR TECHNOLOGY, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MISSOURI
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(State or other jurisdiction of incorporation or organization)
43-1641533
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(I.R.S. Employer Identification No.)
James River Professional Center
Highway 160 & CC, Suite 5, P.O. Box 2067
Nixa, Missouri 65714
(417) 725-9888
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(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Richard J. Sullivan
James River Professional Center
Highway 160 & CC, Suite 5, P.O. Box 2067
Nixa, Missouri 65714
(417) 725-9888
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all correspondence to:
Denis P. McCusker, Esq.
Bryan Cave LLP
One Metropolitan Square
211 North Broadway, Suite 3600
St. Louis, Missouri 63102-2750
(314) 259-2000
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. [ ]
<PAGE>
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
================================================================================================================
Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered registered offering price per aggregate offering registration fee
unit(1) price(1)
============================= ==================== ===================== ====================== ================
<S> <C> <C> <C> <C>
Common Stock, $.001 par
value per share 8,858,516 shares $9.5625 $83,048,588 $25,166
================================================================================================================
<FN>
(1) Pursuant to Rule 457(b), the proposed offering price and registration fee
have been calculated on the basis of the average of the high and low
trading prices for the Common Stock on October 9, 1997 as reported on the
Nasdaq Small-Cap Market.
</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 10, 1997
PRELIMINARY PROSPECTUS
8,858,516 Shares
[CORPORATE LOGO]
Common Stock
------------------
This Prospectus relates to the proposed sale from time to time of up to
8,858,516 shares (the "Shares") of the common stock, par value $.001 per share
(the "Common Stock"), of Applied Cellular Technology, Inc., a Missouri
corporation (the "Company"), in the amount and in the manner and on terms and
conditions described herein, by the Selling Shareholders. See "Selling
Shareholders." The Selling Shareholders may sell the Shares in one or more
transactions (which may include "block transactions") on the Nasdaq Small-Cap
Market, in the over-the-counter market, in negotiated transactions or in a
combination of such methods of sales, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Shareholders may
effect such transactions by selling the Shares directly to purchasers, or may
sell to or through agents, dealers or underwriters designated from time to time,
and such agents, dealers or underwriters may receive compensation in the form of
discounts, concessions or commissions from the Selling Shareholders and/or the
purchaser(s) of Shares for whom they may act as agent or to whom they may sell
as principals, or both. The Selling Shareholders and the brokers and dealers
through which the sales of the Shares may be made may be deemed to be
"underwriters" within the meaning set forth in the Securities Act of 1933, as
amended (the "Securities Act"), and their commissions and discounts and other
compensation may be regarded as underwriters' compensation. See "Plan of
Distribution" and "Selling Shareholders." The Company will not receive any
proceeds from the sale of Shares by the Selling Shareholders and will bear all
the expenses incurred in connection with registering this offering of the
Shares.
The Shares have been or will be issued by the Company from time to time (a)
in various acquisition transactions, (b) in consideration for services rendered
to the Company or (c) on exercise of warrants previously issued by the Company,
all as described herein. See "Selling Shareholders." The registration of the
Shares has been effected pursuant to agreements entered into by the Company with
the Selling Shareholders. Although such registration will allow the sale of the
Shares by the Selling Shareholders from time to time as described herein, the
Company believes that the Selling Shareholders do not currently intend to sell
all or substantially all of the Shares.
The Common Stock of the Company is listed on the Nasdaq Small-Cap Market
under the symbol "ACTC." On October 9, 1997, the last reported sale price of the
Common Stock on the Nasdaq Small-Cap Market was $9.562 per share. See "Price
Range of Common Stock."
--------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 4 IN THE PROSPECTUS FOR A DISCUSSION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
COMMON STOCK OFFERED HEREBY.
--------------------------
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 , 1997.
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). These reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's regional
offices located at Northeast Regional Office, Seven World Trade Center, Suite
1300, New York, New York 10048 and Midwest Regional Office, Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can also be obtained from the Public Reference Section of the
Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a Web site that contains reports,
proxy and information statements and other materials that are filed through the
Commission's Electronic Data Gathering, Analysis and Retrieval (EDGAR) system.
This Web site can be accessed at http://www.sec.gov. Quotations relating to the
Company's Common Stock appear on the Nasdaq Small-Cap Market, and such reports,
proxy statements and other information concerning the Company can also be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act with respect to the
shares of Common Stock offered hereby. This Prospectus does not contain all of
the information set forth in the Registration Statement or the exhibits thereto.
As permitted by the rules and regulations of the Commission, this Prospectus
omits certain information contained or incorporated by reference in the
Registration Statement. Statements contained in this Prospectus as to the
contents of any contract or other document filed or incorporated by reference as
an exhibit to the Registration Statement are not necessarily complete, and in
each instance reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement. For further information,
reference is hereby made to the Registration Statement and exhibits thereto,
copies of which may be inspected at the offices of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 or obtained from the Commission at the same
address at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference:
(1) the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1996 (filed on March 31, 1997);
(2) the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997 (filed on May 13, 1997);
(3) the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997 (filed on August 13, 1997);
(4) the Company's Current Report on Form 8-K filed on February 3,
1997;
(5) the Company's Current Report on Form 8-K filed on February
19, 1997;
(6) the Company's Current Report on Form 8-K filed on April 2,
1997;
(7) the Company's Current Report on Form 8-K filed on April 11,
1997;
(8) the Company's Current Report on Form 8-K filed on April 15,
1997; and
2
<PAGE>
(9) the Company's Registration Statement on Form 8-A filed on May
5, 1995, registering the Company's Common Stock under Section 12(g) of
the Exchange Act.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the offering shall hereby be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated herein by reference 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 incorporated or deemed to be incorporated herein by reference, which
statement is also incorporated herein by reference, 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.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. Copies of these documents (excluding exhibits
unless such exhibits are specifically incorporated by reference into the
information incorporated herein) will be provided by first class mail without
charge to each person to whom this Prospectus is delivered, upon written or oral
request by such person to Applied Cellular Technology, Inc., James River
Professional Center, Highway 160 & CC, Suite 5, P.O. Box 2067, Nixa, Missouri
65714; Attention: Kay Langsford, Corporate Controller (telephone: (417)
725-9888.)
No person has been authorized in connection with this offering to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company,
the Selling Shareholders or any other person. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to purchase, any
securities other than those to which it relates, nor does it constitute an offer
to sell or a solicitation of an offer to purchase by any person in any
jurisdiction in which it is unlawful for such person to make such an offer or
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information contained herein is correct as of any time subsequent to the date
hereof or that there has been no change in the affairs of the Company since such
date.
3
<PAGE>
RISK FACTORS
In addition to the other information contained herein, the following
factors should be considered carefully in evaluating the Company and its
business before purchasing any of the Common Stock offered hereby.
Uncertainty of Future Financial Results
While the Company has been profitable for the last two fiscal years, future
financial results are uncertain. There can be no assurance that the Company will
continue to be operated in a profitable manner. Profitability depends upon many
factors, including the success of the Company's various marketing programs, the
maintenance or reduction of expense levels and the ability of the Company to
successfully coordinate the efforts of the different segments of its business.
Future Sales of and Market for the Shares
As of September 30, 1997, the Company has 16,281,849 shares of Common Stock
outstanding. The Shares to which this Prospectus relates consist of 6,568,516
outstanding shares of Common Stock subject to certain restrictions on transfer
and 1,770,000 shares of Common Stock issuable under currently exercisable
warrants at $3.00 per share. Since January 1, 1997, the Company has issued an
aggregate of 10,483,148 shares of common stock, of which 6,286,053 shares were
issued in acquisitions, 2,000,000 shares were issued on exercise of warrants,
1,354,167 shares were issued on conversion of 100,000 shares of the Company's
Preferred Stock, 495,928 shares were issued for services rendered, 175,000 were
sold to officers of the Company or its subsidiaries, and 172,000 were issued in
private placement transactions.
Management of the Company anticipates that the Company will continue to
effect acquisitions and contract for certain services primarily through the
issuance of Common Stock or other equity securities of the Company. Such
issuances of additional securities may be viewed as being dilutive of the value
of the Common Stock in certain circumstances and may have an adverse impact on
the market price of the Common Stock.
Risks Associated with Acquisitions and Expansion
The Company has engaged in a continuing program of acquisitions of other
businesses which are considered to be complementary to the lines of business
carried on by the Company, and it is anticipated that such acquisitions will
continue to occur. As of June 30, 1997, the total assets of the Company were
approximately $51 million. As of December 31, 1996, the total assets of the
Company were approximately $33 million, compared to approximately $4 million at
the end of 1995. Net operating revenues for the six month period ended June 30,
1997 were approximately $43 million. Net operating revenues for 1996 were
approximately $20 million, compared with $2.3 million in 1995 and $0.3 million
in 1994. Managing these dramatic changes in the scope of the business of the
Company will present ongoing challenges to management, and there can be no
assurance that the Company's operations as currently structured, or as affected
by future acquisitions, will be successful. The businesses acquired by the
Company may require substantial additional capital, and there can be no
assurance as to the availability of such capital when needed, nor as to the
terms on which such capital might be made available to the Company. It is the
Company's policy to retain existing management of acquired companies and to
allow the new subsidiary to continue to operate in the manner which has resulted
in its success in the past, under the overall supervision of senior management
of the Company. Accordingly, the success of the operations of these subsidiaries
will depend, to a great extent, on the continued efforts of the management of
the acquired companies.
4
<PAGE>
Competition
Each segment of the Company's business is highly competitive, and it is
expected that competitive pressures will continue. Many of the Company's
competitors have far greater financial and other resources than the Company. The
areas which the Company has identified for continued growth and expansion are
also target market segments for some of the largest and most strongly
capitalized companies in the United States. There can be no assurance that the
Company will have the financial, technical, marketing and other resources
required to compete successfully in this environment in the future.
Dependence on Key Individuals
The future success of the Company is highly dependent upon the Company's
ability to attract and retain qualified key employees. The Company is organized
with a small senior management team, with each of its separate operations under
the day-to-day control of local managers. If the Company were to lose the
services of any members of its central management team, the overall operations
of the Company could be adversely affected, and the operations of any of the
individual facilities of the Company could be adversely affected if the services
of the local managers should be unavailable.
Lack of Dividends on Common Stock
The Company does not have a history of paying dividends on its Common
Stock, and there can be no assurance that such dividends will be paid in the
foreseeable future. The Company intends to use any earnings which may be
generated to finance the growth of the Company's businesses. The Board of
Directors has the right to authorize the issuance of preferred stock, without
further stockholder approval, the holders of which may have preferences as to
payment of dividends.
Potential Conflicts of Interests
Mr. Richard Sullivan, the Chief Executive Officer of the Company, is also
Chairman of Great Bay Technology, Inc. and Managing General Partner of the Bay
Group. Both these companies conduct business with the Company, and receive
compensation from the Company for various services, including assistance in
identifying potential acquisition candidates and in negotiating acquisition
transactions. The relationships among such companies, Mr. Sullivan and the
Company may involve conflicts of interest.
Possible Volatility of Stock Price
The Common Stock is quoted on the Nasdaq Small-Cap Market, which stock
market has experienced and is likely to experience in the future significant
price and volume fluctuations which could adversely affect the market price of
the Common Stock without regard to the operating performance of the Company. In
addition, the Company believes that factors such as the significant changes to
the business of the Company resulting from continued acquisitions and
expansions, quarterly fluctuations in the financial results of the Company,
shortfalls in earnings or sales below analyst expectations, changes in the
performance of other companies in the same market sectors as the Company and the
performance of the overall economy and the financial markets could cause the
price of the Common Stock to fluctuate substantially.
Forward-Looking Statements and Associated Risk
This Prospectus, including the information incorporated herein by
reference, contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements regarding, among
other items, (i) the Company's growth strategies, (ii) anticipated trends in the
Company's business and demographics and (iii) the Company's ability to
successfully integrate the business operations of recently acquired companies.
These forward-looking statements are based largely on the Company's expectations
and are subject to a number of risks and uncertainties, certain of which are
beyond the Company's control. Actual results could differ materially from these
forward-looking statements as a result of the factors described in "Risk
Factors," including, among others, regulatory, competitive or other economic
influences. In light of these risks and uncertainties, there can be no assurance
that the forward-looking information contained in this Prospectus will be
accurate.
5
<PAGE>
THE COMPANY
The Company is a diversified technology company, operating predominantly in
three industry segments, as follows:
- The services group (formerly the retail group) installs, sells,
services and supports cellular phone and other wireless services,
business telephone systems, voice mail and interactive voice
response systems, commercial long distance and local telephone
services, residential long distance telephone services, digital
satellite television services to business and consumer end-users,
and computer systems, offering custom and custom-tailored
software and hardware systems for manufacturers, wholesales,
distributors and field sales and service organizations, and
construction and installation of microwave cellular and digital
PCS towers.
- The computer group provides leasing, remarketing,
parts-on-demand, consulting and business continuity services for
mainframe, midrange and PC systems to industrial, commercial and
retail organizations.
- The manufacturing group manufactures customized analog and
digital and off-the-shelf industrial temperature controls and
custom analog and digital electrical products, and satellite dish
positioning systems.
The largest part of the Company's current operations are the result of
acquisitions completed during the last two years. During 1995, the net operating
revenues of the Company were $2.34 million. For 1996, net operating revenues
were $19.76 million, of which almost $14 million was from the Company's services
segment. Since January 1, 1997, the Company has completed 8 additional
acquisitions, of companies whose aggregate net revenues for 1996 were
approximately $ million.
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The principal office of the Company is located at Highway 160 and CC, Suite
5, Nixa, Missouri 65714, phone 417-725-9888. Satellite corporate offices are
located in Amherst, New Hampshire, Cambridge, Massachusetts and St. Louis,
Missouri.
Each operating business is conducted through a separate subsidiary company
directed by its own management team, and each subsidiary company has its own
marketing and operations support personnel. Each management team reports to the
President, who is responsible for overall corporate control and coordination, as
well as financial planning. The Chairman is responsible for the overall business
and strategic planning of the Company.
6
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth information regarding the ownership of the
Common Stock by the Selling Shareholders as of the date of this Prospectus and
as adjusted to reflect the sale of the shares of Common Stock offered hereby.
The Shares have been or will be issued by the Company from time to time (a)
in various acquisition transactions, (b) in consideration for services rendered
to the Company or (c) on exercise of warrants previously issued by the Company,
all as described in the footnotes to the following table. The registration of
the Shares has been effected pursuant to agreements entered into by the Company
with the Selling Shareholders. Although such registration will allow the sale of
the Shares by the Selling Shareholders from time to time as described herein,
the Company believes that the Selling Shareholders do not currently intend to
sell all or substantially all of the Shares.
The percentage owned prior to and after the offering reflects all of the
then outstanding common shares. The amount and percentage owned after the
offering assumes the sale of all of the common shares being registered on behalf
of the selling shareholders.
<TABLE>
<CAPTION>
Ownership After
Number of Shares the Offering if
Ownership Prior to the Offered Hereby all Shares are
Selling Shareholder Offering Sold
- --------------------------------------------- -------------------------- -------------------- -------------------
Shares % Shares %
------ --- ------ --
<S> <C> <C> <C> <C> <C> <C>
James M. Shaver......................... 1,433,600 (1) 8.80% 1,433,600 0 --
Herman J. Valdez........................ 614,400 (1) 3.77% 614,400 0 --
Lee W. Murray........................... 28,800 (2) * 28,800 0 --
Russell S. Gardner, III................. 28,800 (2) * 28,800 0 --
Livingston Davies....................... 158,272 (3) * 158,272 0 --
Livingston Davies Irrevocable Trust..... 78,713 (3) * 78,713 0 --
John H. Knowles, Jr..................... 87,459 (3) * 87,459 0 --
Timothy Hilton--Knowles Minority Trust.. 10,344 (3) * 10,344 0 --
John Dillon Knowles Minority Trust...... 10,344 (3) * 10,344 0 --
Cameron LaCroix Knowles Minority Trust..
10,344 (3) * 10,344 0 --
Andor Co., Ltd.......................... 355,477 (3) 2.18% 355,477 0 --
Robin James Smith--Saville.............. 231,970 (4) 1.42% 231,970 0 --
Else Mayland Smith...................... 6,058 (4) * 6,058 0 --
Lawrence Jan Martin Smith............... 9,086 (4) * 9,086 0 --
Susan Mary Smith........................ 9,086 (4) * 9,086 0 --
Stephen Kingsley Barton................. 2,844 (4) * 2,844 0 --
Managed Technology Investors............ 160,705 (4) * 160,705 0 --
Geoffrey John Walker.................... 37,231 (4) * 37,231 0 --
Peter Martin Terrell.................... 6,058 (4) * 6,058 0 --
Melvin Barmat........................... 948 (4) * 948 0 --
Robin Bernard Michaelson................ 11,934 (4) * 11,934 0 --
D. J. Davis............................. 2,226 (5) * 2,226 0 --
Kevin O'Keefe & Associates.............. 10,016 (5) * 10,016 0 --
Lora R. Steinmann....................... 800,080 (6) 4.91% 800,080 0 --
E. Kurt Steinmann....................... 109,760 (6) * 109,760 0 --
Dolores L. Franco....................... 30,800 (6) * 30,800 0 --
Eric J. Steinmann....................... 123,840 (6) * 123,840 0 --
Lance J. Umbertis....................... 149,040 (6) * 149,040 0 --
Josef M. Steinman....................... 149,040 (6) * 149,040 0 --
Lohr N. Bangle.......................... 9,200 (6) * 9,200 0 --
Robert A. Bospflug...................... 17,040 (6) * 17,040 0 --
Scott A. Capistrano..................... 10,000 (6) * 10,000 0 --
Andrea L. Downs......................... 6,240 (6) * 6,240 0 --
Craig C. Gibble......................... 16,720 (6) * 16,720 0 --
7
<PAGE>
Pamela L. Pittman....................... 27,200 (6) * 27,200 0 --
Gaylord S. Poiry........................ 6,000 (6) * 6,000 0 --
Victor S. Ahern......................... 16,240 (6) * 16,240 0 --
Arie W. Bos............................. 13,040 (6) * 13,040 0 --
Patricia A. Miller...................... 2,160 (6) * 2,160 0 --
Heinz J. Steinmann...................... 18,000 (6) * 18,000 0 --
Lance R. Steinmann...................... 16,800 (6) * 16,800 0 --
Daniel P. Wolfe......................... 9,680 (6) * 9,680 0 --
Randy C. Zachary........................ 6,000 (6) * 6,000 0 --
STC Netcom, Inc. Employees' Trust....... 63,120 (6) * 63,120 0 --
William A. Forkner...................... 35,000 (7) * 35,000 0 --
William A. Husa......................... 35,000 (7) * 35,000 0 --
Karen Clement........................... 1,000 (8) * 1,000 0 --
John Kunish............................. 20,000 (9) * 20,000 0 --
John McCarthy........................... 20,000 (9) * 20,000 0 --
Richard J. Sullivan..................... 98,109 (9)(10) * 98,109 0 --
Garrett A. Sullivan..................... 120,000 (9)(11) * 120,000 0 --
Kay E. Langsford........................ 5,000 (9) * 5,000 0 --
Andrew Werdeman......................... 2,000 (9) * 2,000 0 --
Phillip Tranbarger...................... 5,000 (9) * 5,000 0 --
John Beasley............................ 10,503 (12) * 10,503 0 --
J. Alexander Securities, Inc............ 1,000 (13) * 1,000 0 --
North American Corporate Consultants.... 500 (13) * 500 0 --
Reovest, Inc............................ 121 (13) * 121 0 --
Hayden, Buczeck & Associates............ 8,000 (13) * 8,000 0 --
Merra, Kanakis, Creme & Mellor, P.C..... 940 (13) * 940 0 --
The Bay Group........................... 243,265 (13) 2.75% 193,265 50,000 --
Ira Miller & Co......................... 62,500 (13) * 62,500 0 --
Scott Kelly............................. 12,500 (13) * 12,500 0 --
Vincent F. & Kim N. Lo Castro, Joint
Tenants............................... 550,000 (14) 3.38% 550,000 0 --
The Bruce Reale Revocable Trust dated
8/1/90, Bruce Reale & The Reale
Family Limited Partnership............ 1,932,966 (15) 11.87% 1,256,240 676,726 4.16%
Scott R. Silverman...................... 101,240 (16) * 101,240 0 --
David A. Loppert........................ 100,000 (17) * 100,000 0 --
Marc Sherman............................ 543,508 (18) 3.34% 9,990 533,518 3.28%
Daniel E. Penni......................... 81,865 (19) * 45,000 38,865 --
Angela M. Sullivan...................... 5,000 (20)(21) * 5,000 0 --
Arthur F. Noterman...................... 5,000 (20) * 5,000 0 --
Capital Alliance Corp................... 94,167 (22) * 94,167 0 --
Rigo Felix.............................. 6,726 (23) * 6,726 0 --
Great Bay Technology, Inc............... 1,007,000 (24) 6.18% 600,000 407,000 4.59%
Gary A. Gray............................ 140,000 (25) * 100,000 40,000 --
Atkisson, Carter & Akers................ 200,000 (26) 1.23% 200,000 0 --
Dominick & Dominick..................... 250,000 (27) 1.23% 250,000 0 --
Total........ 10,602,625 8,858,516 1,746,109
========== ========= =========
- -----------------
<FN>
* Represents ownership of less than one percent.
(1) Represents shares of Common Stock received pursuant to the Company's
acquisition of an 80% interest in Advanced Telecommunications, Inc.,
effective as of April 1, 1997.
(2) Represents shares of Common Stock received pursuant to the Company's
acquisition of a 100% interest in DLS Service Corporation, effective as of
July 1, 1997.
(3) Represents shares of Common Stock received pursuant to the Company's
acquisition of a 100% interest in Intermatica, Inc., effective as of June
30, 1997.
(4) Represents shares of Common Stock received pursuant to the Company's
acquisition of an 80% interest in Signal Processors, Ltd., effective as of
April 1, 1997.
8
<PAGE>
(5) Represents shares of Common Stock for acting as a broker in the Company's
acquisition of Signal Processors, Ltd.
(6) Represents shares of Common Stock received pursuant to the Company's
acquisition of an 80% interest in STC Netcom, Inc., effective as of July 1,
1997.
(7) Represents shares of Common Stock for acting as a broker in the Company's
acquisition of STC Netcom, Inc.
(8) Represents shares of Common Stock issued as a bonus on March 3, 1997. Ms.
Clement is an employee of a subsidiary of the Company.
(9) Represents shares of Common Stock issued as a bonus to certain employees of
the Company or its subsidiaries on January 11, 1996.
(10) Represents (a) 50,000 shares of Common Stock issued as a bonus to certain
employees of the Company or its subsidiaries on January 11, 1996 and (b)
48,109 shares of Common Stock received pursuant to an employment agreement
between the Company and Mr. Sullivan. Mr. Sullivan is Chairman of the Board
and Chief Executive Officer of the Company. Pursuant to the terms of the
Employment Agreement, Mr. Sullivan elected to receive his compensation for
the employment year beginning June 1, 1997 paid in shares of the Company's
common stock. Mr. Sullivan and his wife, Angela M. Sullivan, are the
controlling shareholders of The Bay Group, and Mr. Sullivan, Angela M.
Sullivan and Stephanie Sullivan are the controlling shareholders of Great
Bay Technology, Inc.
(11) Includes 100,000 shares issuable on exercise (at a purchase price of $3.00
per share) of Class N Warrants issued to Mr. Sullivan in 1997, in
consideration for his agreement to exercise certain previously-issued
warrants.
(12) Represents shares of Common Stock received pursuant to an Employment
Agreement between the Company, its subsidiary, Atlantic Systems, Inc., and
Mr. Beasley. Mr. Beasley is an employee of Atlantic Systems, Inc.
(13) Represents shares of Common Stock received in consideration for services
rendered to the Company. The Bay Group is owned by Richard J. Sullivan,
Chairman and Chief Executive Officer of the Company, and Angela M.
Sullivan, a Director of the Company.
(14) Represents 650,000 shares of Common Stock received in exchange for 48,000
shares of the Company's Redeemable Preferred Stock. Shortly after receiving
the shares of Common Stock, Mr. & Mrs. Lo Castro exchanged 100,000 of these
restricted shares of Common Stock for 100,000 shares of registered Common
Stock with The Reale Family Limited Partnership (see 15 below).
(15) Represents (a) 1,326,726 shares owned by The Bruce Reale Revocable Trust
dated 8/1/90, (b) 100,000 shares owned by The Reale Family Limited
Partnership, (c) 26,240 shares owned by Bruce Reale and (d) 480,000 shares
of Common Stock issuable on exercise (at a purchase price of $3.00 per
share) of Class P Warrants issued to The Bruce Reale Revocable Trust in
1997, in consideration for his agreement to exercise certain
previously-issued warrants.
(16) Represents (a) 75,000 restricted shares of Common Stock purchased from the
Company on June 23, 1997 under a note purchase agreement, and (b) 26,240
shares of Common Stock received for acting as a broker in the Company's
acquisition of Advanced Telecommunications, Inc. Mr. Silverman is an
officer of a subsidiary of the Company.
(17) Represents restricted shares of Common Stock purchased from the Company on
May 9, 1997 under a note purchase agreement. Mr. Loppert is Vice President,
Treasurer and Chief Financial Officer of the Company.
(18) Represents shares of Common Stock received by Mr. Sherman in connection
with an Amendment to Agreement of Sale dated as of September 30, 1997,
among the Company, Mr. Sherman and Universal Commodities Corp. ("UCC"). Mr.
Sherman is President of UCC, a subsidiary of the Company. Mr. Sherman
received 581,818 shares of Common Stock when the Company purchased 80% of
UCC. The Company's share registry does not reflect Mr. Sherman as an owner
of record of these shares as of September 30, 1997. As of September 30,
1997, Mr. Sherman has represented that he beneficially owns 543,508 shares
of Common Stock.
(19) Represents (a) 5,000 shares of Common Stock received for services rendered
as a Director of the Company, (b) 30,000 shares for prior services rendered
to the Company for the period from 1995 - 1997, and (c) 10,000 shares for
the conversion of a loan to the Company.
(20) Represents shares of Common Stock received for services rendered as a
Director of the Company.
9
<PAGE>
(21) Angela M. Sullivan and Richard J. Sullivan are the controlling shareholders
of The Bay Group, and Ms. Sullivan, Richard J. Sullivan and Stephanie
Sullivan are the controlling shareholders of Great Bay Technology, Inc. Ms.
Sullivan is married to Richard J. Sullivan.
(22) Represents 54,167 shares of Common Stock received in exchange for 4,000
shares of the Company's Redeemable Preferred Stock and 40,000 shares of
Common Stock issuable on exercise (at a purchase price of $3.00 per share)
of Class P Warrants issued to Capital Alliance Corp. in 1997, in
consideration for its agreement to exercise certain previously-issued
warrants.
(23) Represents 6,726 shares of Common Stock received in exchange for 21,158
shares of common stock in Cra-Tek Company. Effective as of August 1, 1996,
the Company purchased 80.1% of the outstanding common shares of Cra-Tek
Company and has an option to acquire the remaining 19.9%. The 21,158 shares
acquired represents an additional 1.8% of Cra-Tek's outstanding shares.
(24) Includes 100,000 shares issuable on exercise (at a purchase price of $3.00
per share) of Class N Warrants issued to Great Bay Technology Inc. in 1997,
in consideration for its agreement to exercise certain previously-issued
warrants. Richard J. Sullivan, Angela M. Sullivan and Stephanie Sullivan
are the controlling shareholders of Great Bay Technology, Inc.
(25) Represents shares of Common Stock issuable on exercise (at a purchase price
of $3.00 per share) of Class N Warrants issued to Mr. Gray in 1997, in
consideration for his agreement to exercise certain previously-issued
warrants.
(26) Represents shares of Common Stock issuable on exercise (at a purchase price
of $3.00 per share) of Class O Warrants issued to Atkisson, Carter & Akers
in 1997 in consideration for investment banking services and assisting the
Company in private placements of warrants.
(27) Represents shares of Common Stock issuable on exercise (at a purchase price
of $3.00 per share) of Class Q Warrants issued to Dominick & Dominick in
1997, in consideration for its agreement to exercise certain
previously-issued warrants.
</TABLE>
DESCRIPTION OF CAPITAL STOCK
The Company's Certificate of Incorporation authorizes the issuance of up to
40,000,000 shares of Common Stock, and up to 5,000,000 shares of preferred stock
(the "Preferred Stock"). The Preferred Stock may be issued from time to time and
on such terms as are specified by the Company's Board of Directors, without
further authorization from the stockholders of the Company.
As of September 30, 1997, there were 16,281,849 shares of Common Stock and
9,000 shares of Preferred Stock outstanding, par value $10 per share, redemption
value $100 per share.
As of September 30, 1997, (i) there were outstanding warrants to purchase
2,486,464 shares of Common Stock at a weighted average exercise price of $5.21
per share, and (ii) options held by employees of the Company to purchase
3,216,100 shares of Common Stock at a weighted average exercise price of $4.38
per share. All of the warrants are currently exercisable. Of the outstanding
options, 1,355,000 are now exercisable and the rest become exercisable at
various times over the next three years. The Shares offered pursuant to this
Prospectus include 1,770,000 shares of Common Stock issuable on exercise of
outstanding warrants.
10
<PAGE>
The Company's Common Stock trades on the Nasdaq Small-Cap Market under the
symbol "ACTC." The following table sets forth the high and low sale prices of
the Common Stock as reported by the Nasdaq Small-Cap Market for each of the
quarters since the Common Stock began trading on the Nasdaq Small-Cap Market in
August 1995.
High Low
---- ---
1995
----
Third Quarter....................... 9 7 1/8
Fourth Quarter...................... 7 1/2 3 5/8
1996
----
First Quarter....................... 6 7/8 2 3/4
Second Quarter...................... 9 1/8 4
Third Quarter....................... 7 7/8 3 3/4
Fourth Quarter...................... 7 3/8 4 1/2
1997
----
First Quarter....................... 5 7/8 4
Second Quarter...................... 4 3/8 2 5/8
Third Quarter ........................ 8 3/4 3 1/16
On October 9, 1997, the last reported sale price of the Common Stock on the
Nasdaq Small-Cap Market was $9.5625. As of September 30, 1997, there were
approximately 1,057 shareholders of record of the Common Stock.
PLAN OF DISTRIBUTION
The Selling Shareholders may sell the Shares offered hereby in one or more
transactions (which may include "block" transactions) on the Nasdaq Small-Cap
Market, in the over-the-counter market, in negotiated transactions or in a
combination of such methods of sales, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Shareholders may
effect such transactions by selling the Shares directly to purchasers, or may
sell to or through agents, dealers or underwriters designated from time to time,
and such agents, dealers or underwriters may receive compensation in the form of
discounts, concessions or commissions from the Selling Shareholders and/or the
purchaser(s) of the Shares for whom they may act as agent or to whom they may
sell as principals, or both. The Selling Shareholders and any agents, dealers or
underwriters that act in connection with the sale of the Shares might be deemed
to be "underwriters" within the meaning of Section 2(11) of the Securities Act,
and any discount or commission received by them and any profit on the resale of
the Shares as principal might be deemed to be underwriting discounts or
commissions under the Securities Act.
The Company will receive no portion of the proceeds from the sale of the
Shares and will bear all of the costs relating to the registration of this
Offering (other than any fees and expenses of counsel for the Selling
Shareholders). Any commissions, discounts or other fees payable to a broker,
dealer, underwriter, agent or market maker in connection with the sale of any of
the Shares will be borne by the Selling Shareholders.
LEGAL MATTERS
Certain legal matters with respect to the Common Stock offered hereby will
be passed upon for the Company by Bryan Cave LLP, St. Louis, Missouri.
11
<PAGE>
INDEPENDENT AUDITORS
The consolidated financial statements of the Company as of December 31,
1996 and 1995, and for each of the years in the three-year period ended December
31, 1996, have been audited by Rubin, Brown, Gornstein & Co. LLP, independent
public accountants, as indicated in their report with respect thereto, and are
included in the Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996, and are incorporated herein by reference, in reliance upon
the authority of such firm as experts in accounting and auditing in giving said
reports.
12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses (other than underwriting
discounts and commissions), which other than the SEC registration fee are
estimates, payable by the Company in connection with the sale and distribution
of the shares registered hereby**:
SEC Registration Fee ........................................ $ 25,166
Accounting Fees and Expenses................................. 500 *
Legal Fees and Expenses...................................... 10,000 *
Miscellaneous Expenses....................................... 2,334 *
-----------
Total ....................................... $ 38,000 *
===========
- -------------
* Estimated
** The Selling Shareholders will pay any sales commissions or underwriting
discount and fees incurred in connection with the sale of shares
registered hereunder.
Item 15. Indemnification of Directors and Officers.
Sections 351.355(1) and (2) of The General and Business Corporation Law of
the State of Missouri provide that a corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful, except that, in the case of an action or suit by or in the right
of the corporation, the corporation may not indemnify such persons against
judgments and fines and no person shall be indemnified as to any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the corporation,
unless and only to the extent that the court in which the action or suit was
brought determines upon application that such person is fairly and reasonably
entitled to indemnity for proper expenses. Section 351.355(3) provides that, to
the extent that a director, officer, employee or agent of the corporation has
been successful in the defense of any such action, suit or proceeding or any
claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred in connection with
such action, suit or proceeding. Section 351.355(7) provides that a corporation
may provide additional indemnification to any person indemnifiable under
subsection (1) or (2), provided such additional indemnification is authorized by
the corporation's articles of incorporation or an amendment thereto or by a
shareholder-approved bylaw or agreement, and provided further that no person
shall thereby be indemnified against conduct which was finally adjudged to have
been knowingly fraudulent, deliberately dishonest or willful misconduct or which
involved an accounting for profits pursuant to Section 16(b) of the Securities
Exchange Act of 1934.
The bylaws of the Company provide that the Company shall indemnify, to the
full extent permitted under Missouri law, any director, officer, employee or
agent of the Company who has served as a director, officer, employee or agent of
the Company or, at the Company's request, has served as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise.
II-1
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to such provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is therefore unenforceable.
Item 16. Exhibits.
See Exhibit Index.
Item 17. Undertakings.
(a) The undersigned small business issuer hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered 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.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the 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 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 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 to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the County of St. Louis, State of Missouri, on October 10, 1997.
APPLIED CELLULAR TECHNOLOGY, INC.
By: /S/ David A. Loppert
----------------------------------------
David A. Loppert, Vice President,
Treasurer and Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Garrett A. Sullivan and David A. Loppert, and each of them (with full power to
each of them to act alone), the true and lawful attorney in fact and agent for
the undersigned, to act on behalf of and in the name of the undersigned in
connection with this Registration Statement, including the authority to sign any
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with exhibits and any and all other documents filed with
respect thereto, with the Securities and Exchange Commission (or any other
governmental or regulatory authority), and each such person ratifies and
confirms all that said attorneys in fact and agents 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 by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Chairman of the Board of
Directors, Chief Executive
Officer and Secretary
(Principal Executive
/S/ RICHARD J. SULLIVAN Officer) October 10, 1997
- --------------------------------
(Richard J. Sullivan)
President and Director
/S/ GARRETT A. SULLIVAN (Principal Operating Officer) October 10, 1997
- --------------------------------
(Garrett A. Sullivan)
Vice President, Treasurer
and Chief Financial Officer
(Principal Accounting
/S/ DAVID A. LOPPERT Officer) October 10, 1997
- --------------------------------
(David A. Loppert)
/S/ ANGELA M. SULLIVAN Director October 10, 1997
- --------------------------------
(Angela M. Sullivan)
/S/ DANIEL E. PENNI Director October 10, 1997
- --------------------------------
(Daniel E. Penni)
/S/ ARTHUR F. NOTERMAN Director October 10, 1997
- --------------------------------
(Arthur F. Noterman)
II-3
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 Amended and Restated Articles of Incorporation of the Company *
4.2 Bylaws of the Company (incorporated herein by reference to
Exhibit 3 to the Company's Registration Statement on Form S-1
(File No. 33-79678) filed with the Commission on June 3, 1994
5.1 Opinion of Bryan Cave LLP regarding the validity of the Common
Stock *
23.1 Consent of Rubin, Brown, Gornstein & Co. LLP
23.2 Consent of Bryan Cave LLP (included in Exhibit 5.1)*
24.1 Power of Attorney (included in Signature Page)
- --------------
* To be filed by amendment.
II-4
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Applied Cellular Technology, Inc. of our report, dated
March 7, 1997, on Applied Cellular Technology, Inc. and Subsidiaries, included
in Applied Cellular Technology, Inc.'s Form 10-KSB for the year ended December
31, 1996, and to the reference to us under the heading "Independent Auditors" in
the Prospectus which is a part of this Registration Statement.
/S/ RUBIN, BROWN, GORNSTEIN & CO. LLP
RUBIN, BROWN, GORNSTEIN & CO. LLP
St. Louis, Missouri
October 10, 1997
