As Filed with the Securities and Exchange Commission on November 24, 1998
Registration No. 333-64755
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
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 43-1641533
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 Royal Palm Way, Suite 4
Palm Beach, Florida 33480
(561) 366-4800
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Garrett A. Sullivan
400 Royal Palm Way, Suite 410
Palm Beach, Florida 33480
(561) 366-4800
(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
Reducing the Number of Shares Registered,
Amending the Prospectus and adding exhibits
CALCULATION OF REGISTRATION FEE
================================================================================
Title of each class of Proposed maximum Amount of
securities to be registered aggregate offering registration
price fee(2)
================================================================================
Common Stock, $.001 par
value per share $18,579,425 $5,481
================================================================================
(1) Pursuant to Rule 457(b), the proposed offering price and registration fee
has been calculated on the basis of the average of the high and low trading
prices for the Common Stock on November 23, 1998 as reported on the Nasdaq
National Market.
(2) At the time of initial filing of this Registration Statement, the
registrant paid a registration fee of $5,750, reflecting the proposed
registration of 7,796,119 shares. The number of shares being registered is
being reduced by this amendment to 7,431,770.
Amending the Prospectus and adding exhibits
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
================================================================================
SUBJECT TO COMPLETION, DATED NOVEMBER 24, 1998
PRELIMINARY PROSPECTUS
7,431,770 Shares
APPLIED CELLULAR TECHNOLOGY, INC.
[Graphic Omitted]
Common Stock
------------------
This Prospectus relates to the proposed sale from time to time of up to
7,431,770 shares (the "Shares") of the common stock, par value $.001 per share
(the "ACT Common Stock"), of Applied Cellular Technology, Inc., a Missouri
corporation ("ACT" or 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 National
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 may also pledge certain of the
Shares from time to time, and this Prospectus also relates to any sale of Shares
that might take place following any foreclosure of such a pledge. 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 issued by the Company from time to time (a) in various
acquisition transactions or (b) in consideration for services rendered,
including services under employment agreements and employee bonuses, 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 ACT Common Stock of the Company is listed on the Nasdaq National Market
under the symbol "ACTC." On November 16, 1998, the last reported sale price of
the ACT Common Stock on the Nasdaq National Market was $2 9/32 per share. See
"Price Range of ACT 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
ACT 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 November [__], 1998.
<PAGE>
AVAILABLE INFORMATION
ACT 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 can 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 Analysis and Retrieval (EDGAR) System. This Web site can be
assessed at http://www.sec.gov. Quotations relating to the ACT Common Stock
appear on the Nasdaq National Market, and such reports, proxy statements and
other information concerning ACT can also be inspected at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
ACT 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
ACT 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-K for the fiscal year ended
December 31, 1997 (filed with the Commission on March 30, 1998);
2. the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998 (filed with the Commission on May 14, 1998);
3. the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1998 (filed with the Commission on August 14, 1998):
4. the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998 (filed with the Commission on November 16, 1998):
5. the Company's Current Reports on Form 8-K and 8-K/A filed with the
commission on June 26, 1998, June 29, 1998 and September 23, 1998;
6. the Company's Current Reports on Form 8-K and 8-K/A filed with the
commission on July 15, 1998, and September 23, 1998; and
7. the Company's Current Report on Form 8-K filed with the commission
on November 4, 1998.
All documents filed by ACT 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
2
<PAGE>
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, 1866 N. Deffer Drive, 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 ACT 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
ACT since such date.
-------------------------------------
TABLE OF CONTENTS
Available Information..................................2
Incorporation Of Certain Documents By Reference........2
Risk Factors...........................................4
The Company............................................6
Selling Shareholders...................................7
Description Of Act Capital Stock......................11
Plan Of Distribution..................................12
Legal Matters.........................................12
Experts...............................................12
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.
Uncertainty of Future Financial Results
While the Company has been profitable for the last three 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 November 17, 1998, there were 33,771,952 shares of ACT Common Stock
outstanding. In addition, 3,753,472 shares of ACT Common Stock are reserved for
issuance in exchange for the exchangeable shares of ACT-GFX Canada, Inc. and the
exchangeable shares of Commstar, Ltd., both wholly owned subsidiaries of ACT.
Since January 1, 1998, the Company has issued an aggregate of 13,378,546 shares
of ACT Common Stock, of which 11,953,749 shares of ACT Common Stock were issued
in acquisitions, 850,000 shares of ACT Common Stock were issued upon the
exercise of warrants, 100,000 shares of ACT Common Stock were sold to certain
directors and an officer of the Company, and 474,797 shares of ACT Common Stock
were issued for services rendered, including services under employment
agreements and employee bonuses.
Although the Company has recently announced that it intends to limit the
use of stock in future acquisitions, and to focus on cash transactions, the
Company may effect acquisitions or contract for certain services through the
issuance of ACT Common Stock or other equity securities of the Company, as it
has typically done in the past. Such issuances of additional securities may be
viewed as being dilutive of the value of the ACT Common Stock in certain
circumstances and may have an adverse impact on the market price of the ACT
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 September 30, 1998, the total assets of the Company
were approximately $122.2 million. As of December 31, 1997, the total assets of
the Company were approximately $61.3 million, compared to approximately $33.2
million at December 31, 1996 and approximately $4.1 million at the end of 1995.
Net operating revenues for the nine months ended September 30, 1998 were
approximately $151.5 million. Net operating revenues for the year ended December
31, 1997 were approximately $103.2 million compared to approximately $19.9
million in 1996 and $2.3 million in 1995. 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.
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.
4
<PAGE>
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. In July of 1998, the Company
announced that it had formed an executive search committee to locate and
interview candidates for the new position of President and Chief Operating
Officer.
Lack of Dividends on Common Stock; Issuance of Preferred Stock
The Company does not have a history of paying dividends on ACT 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.
Possible Volatility of Stock Price
ACT Common Stock is quoted on the Nasdaq National 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
ACT 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 ACT Common Stock to fluctuate substantially. During the 12 months
preceding the date of this Prospectus, the price per share of ACT Common Stock
has ranged from a high of $7 1/16 to a low of $1 17/32.
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, (a) the Company's growth strategies, (b) anticipated trends in the
Company's business and demographics and (c) 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
ACT is a diversified communications technology company. The Company
operates its business in four groups:
ACT Communications Group
This group consists of companies that provide products and services
including telephone systems, computer telephony, interactive voice response
systems, flat rate extended area calling services, long distance and local
telephone services, digital satellite services, call centers, networking
services, fiber optic cabling, power distribution services and communication
towers.
ACT Software and Services Group
This group consists of companies that develop and market software products
and services for wireless-enabled applications, data acquisition, field support,
decision support, point of sale and multi-function peripheral devices.
ACT Computer Group
This group consists of companies that provide computer systems,
peripherals, components, specialty systems, cabling, consulting, rental
services, system integration, transportation and de-installation services.
ACT Specialty Manufacturing Group
This group consists of companies that manufacture and market electrical
components, control panels, global positioning systems, satellite modems,
transceivers, controllers, communication devices, orbit modeling applications,
as well as provide design and manufacturing engineering services.
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 $2.3 million. For 1996, net operating revenues were
$19.9 million, of which almost $14 million was from the Company's then services
and solutions segment. In 1997, the Company completed 14 additional
acquisitions, of companies whose aggregate net revenues for 1997 were $62.4
million, or 60.5% of the Company's total revenues of $103.2 million in 1997.
Since January 1, 1998, the Company has completed 14 additional acquisitions of
companies whose aggregate net revenues for 1997 were $109.4 million.
The principal office of the Company is located at 400 Royal Palm Way, Suite
410, Palm Beach, Florida, 33480. 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 a Group Vice President and ultimately to the
Company's 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 issued by the Company from time to time (a) in various
acquisition transactions or (b) in consideration for services rendered,
including services under employment agreements and employee bonuses, 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 The
Ownership Prior to The Number of Shares Offering if all Shares
Selling Shareholder Offering Offered Hereby are Sold
- ------------------------------- ---------------------- ----------------- ----------------------
Shares % Shares %
----------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Kerry G. Burst 362,500 * 362,500 (1) -- *
Lance J. Umbertis 3,222 * 3,222 (2) -- *
Eric J. Steinmann 90,620 * 2,820 (2) 87,800 *
Scott A. Capistrano 1,208 * 1,208 (2) -- *
John Dixson 806 * 806 (2) -- *
Amherst Systems, Inc. 66,667 * 66,667 (3) -- *
Bradley A. Haslett 538,462 1.40% 538,462 (4) -- *
James S. Bosshart 538,461 1.40% 538,461 (4) -- *
William A. Forkner 63,067 * 25,210 (5) 37,857 *
Scott R. Silverman 70,884 * 22,069 (6) 48,815 *
Marc Sherman 616,968 1.60% 131,750 (7) 485,218 1.30%
Edward L. Cummings 80,951 * 31,751 (8) 49,200 *
Michael E. Sham 392,157 1.00% 392,157 (9) -- *
Sherri Sheerr 226,217 * 30,933 (10) 195,284 *
Donn J. Wagner 96,154 * 96,154 (11) -- *
Angela S. Wagner 96,154 * 96,154 (11) -- *
Edward M. Kelly 96,154 * 96,154 (11) -- *
Eileen E. Kelly 96,154 * 96,154 (11) -- *
Joseph S. Keats 3,692 * 3,692 (12) -- *
Patrick C. Chai 192,308 * 192,308 (13) -- *
Robert W. Borra 194,808 * 192,308 (13) 2,500 *
Maple Business Consultants, Inc. 9,231 * 9,231 (14) -- *
Michael Metropolis 90,257 * 90,257 (15) -- *
Michelle Metropolis 90,256 * 90,256 (15) -- *
Joseph T. Gabriel 90,256 * 90,256 (15) -- *
David Cairnie 10,571 * 10,571 (16) -- *
John Booker 32,115 * 32,115 (16) -- *
Robin Tyler 32,114 * 32,114 (16) -- *
Frederick Bassett 7,693 * 7,693 (16) -- *
Alan Cook 2,501 * 2,501 (16) -- *
7
<PAGE>
Trevor Gage 2,501 * 2,501 (16) -- *
Peter Sayles 2,501 * 2,501 (16) -- *
ECI Ventures Nominees Limited 1,489,821 4.00% 1,489,821 (16) -- *
Fisher Karpark Holdings PLC 759,886 2.00% 759,886 (16) -- *
Kevin O'Keeffe and Associates 23,082 * 23,082 (17) -- *
Frank Lusko 66,552 * 66,552 (18) -- *
Mark R. Kruger 66,552 * 66,552 (18) -- *
Strategic Alliance Funding &
Equity, Inc. 9,655 * 9,655 (19) -- *
William A. Husa 3,664 * 3,664 (20) -- *
Ralph E. Davies 3,664 * 3,664 (20) -- *
John K. Murray 450,411 1.20% 400,411 (21) 50,000 *
Anat Ebenstein 25,333 * 3,258 (21) 22,075 *
Sidney L. Karp Holding Company,
Inc. 25,333 * 3,258 (21) 22,075 *
Capital Alliance Corporation 111,094 * 3,258 (21) 107,836 *
David C. Gerber 961,708 2.60% 116,344 (22) 845,364 2.20%
Toby J. Quesinberry 386,141 1.00% 46,714 (22) 339,427 *
Albert F. Butters, Jr. 262,284 * 31,730 (22) 230,554 *
James C. Millerberg 163,200 * 19,744 (22) 143,456 *
Edelson Technology Partners
II, LP 1,028,341 2.70% 80,067 (23) 948,274 2.50%
Michael S. Andison 66,038 * 9,790 (23) 56,248 *
James G. Knight 66,038 * 9,790 (23) 56,248 *
Georges H. Roy 66,038 * 9,790 (23) 56,248 *
M. L. Carole Boisvert 607 * 90 (23) 517 *
Johna L. Giraldi 607 * 90 (23) 517 *
J. Daniel Grondin 607 * 90 (23) 517 *
Edward Lorinez 455 * 67 (23) 388 *
Paul Pappas 50,467 * 8,728 (24) 41,739 *
James M. Shaver 1,923,509 5.10% 516,409 (25) 1,407,100 3.70%
Herman J. Valdez 873,813 2.30% 259,413 (25) 614,400 1.60%
Richard J. Sullivan 159,249 * 56,140 (26) 103,109 *
Frank Giacona 8,364 * 8,364 (27) -- *
The Bay Group 310,598 * 117,333 (28) 193,265 *
Dana M. Barbera 2,803 * 2,803 (29) -- *
Hayden, Buczek & Associates 10,000 * 10,000 (29) -- *
Merra, Kanakis, Creme & Mellor,
P.C. 7,232 * 4,277 (29) 2,955 *
---------- --------- ----------
Totals 13,580,756 7,431,770 43,042,902
========== ========= ==========
- ---------------------------
</TABLE>
8
<PAGE>
1. Represents 161,111 shares issued and 201,389 shares to be issued as "Price
Protection Shares" in connection with the Company's acquisition of The
Americom Group, Inc.
2. Represents finder's fees in connection with the Company's acquisition of
The Americom Group, Inc.
3. Represents shares issued in connection with certain assets acquired by the
Company's subsidiary, Atlantic Systems, Inc.
4. Represents shares issued in connection with the Company's acquisition of
Aurora Electric, Inc.
5. Represents finder's fees in connection with the Company's acquisition of
Aurora Electric, Inc. and the "Price Protection Shares" issued in
connection with the Company's acquisition of the Fromehill Company dba
Winward Electric, Inc.
6. Represents finder's fees in connection with the Company's acquisition of
Aurora Electric, Inc. and of Teledata Concepts, Inc. Mr. Silverman is a
Vice President of the Company.
7. Includes (a) 100,000 shares purchased from the Company, and (b) 31,750
shares received as finder's fees in connection with the Company's
subsidiary, Universal Commodities Corp.'s acquisition of Blue Star
Electronics, Inc., Consolidated Micro Components, Inc., Data Path
Technologies, Inc., GDB Software Services, Inc., and Service Transport
Company. Mr. Sherman is President of Universal Commodities Corp. and a
Group Vice President of the Company.
8. Represents shares received as finder's fees in connection with the
Company's subsidiary, Universal Commodities Corp.'s acquisition of Blue
Star Electronics, Inc., Consolidated Micro Components, Inc., Data Path
Technologies, Inc., GDB Software Services, Inc., and Service Transport
Company. Mr. Cummings is a Vice President of Universal Commodities Corp.
9. Represents shares issued in connection with the Company's subsidiary,
Universal Commodities Corp.'s acquisition of Consolidated Micro Components,
Inc.
10. Represents a finder's fee in connection with the Company's subsidiary,
Universal Commodities Corp.'s acquisition of Consolidated Micro Components,
Inc. and the "Price Protection Shares" issued in connection with the
Company's acquisition of Cybertech Station, Inc.
11. Represents shares issued in connection with the Company's subsidiary,
Universal Commodities Corp.'s acquisition of Data Path Technologies, Inc.
12. Represents shares received as finder's fees in connection with the
Company's subsidiary, Universal Commodities Corp.'s acquisition of Data
Path Technologies, Inc., and GDB Software Services, Inc. Mr. Keats is a
Vice President of Universal Commodities Corp.
13. Represents shares issued in connection with the Company's subsidiary,
Universal Commodities Corp.'s acquisition of GDB Software Services, Inc.
14. Represents a finder's fee in connection with the Company's subsidiary,
Universal Commodities Corp.'s acquisition of GDB Software Services, Inc.
15. Represents shares issued in connection with the Company's acquisition of
Innovative Vacuum Solutions, Inc.
16. Represents shares issued in connection with the Company's acquisition of
Signature Industries Limited.
17. Represents a finder's fee in connection with the Company's acquisition of
Signature Industries Limited.
18. Represents shares issued in connection with the Company's acquisition of
Teledata Concepts, Inc.
19. Represents a finder's fee in connection with the Company's acquisition of
Teledata Concepts, Inc.
20. Represents the "Price Protection Shares" issued in connection with the
Company's acquisition of CT Specialists, Inc.
21. Represents the "Price Protection Shares" issued in connection with the
Company's acquisition of Information Products Center, Inc.
22. Represents the "Price Protection Shares" issued in connection with the
Company's acquisition of the Fromehill Company dba Winward Electric, Inc.
23. Represents the "Price Protection Shares" issued in connection with the
Company's acquisition of Canadian Network Services, Inc.
24. Represents the "Price Protection Shares" issued in connection with the
Company's acquisition of Blue Star Electronics, Inc.
25. Represents the "Price Protection Shares" issued in connection with the
Company's acquisition of Advanced Telecommunications, Inc.
26. Represents shares issued pursuant to Mr. Sullivan's employment agreements
at $3.56 per share in lieu of cash compensation for the period from June 1,
1998 through May 31, 1999. Mr. Sullivan is Chairman and Chief Executive
Officer of the Company.
27. Represents shares issued in connection with a termination agreement. Mr.
Giacona was an officer of a subsidiary of the Company.
9
<PAGE>
28. Represents shares issued for investment banking services in connection with
various acquisitions made by the Company. The Bay Group is controlled by
Richard J. Sullivan, Chairman and Chief Executive Officer of the Company,
and Angela M. Sullivan, a Director of the Company.
29. Represents shares issued for professional services rendered.
10
<PAGE>
DESCRIPTION OF ACT CAPITAL STOCK
The Company's Amended and Restated Articles of Incorporation, as amended,
authorize the issuance of up to 80,000,000 shares of ACT 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 November 17, 1998, there were outstanding 33,771,952 shares of ACT
Common Stock and two Special Preferred Shares, par value $10 per share. In
addition, 3,753,472 shares of ACT Common Stock are reserved for issuance in
exchange for the exchangeable shares of ACT-GFX Canada, Inc. and the
exchangeable shares of Commstar, Ltd., both wholly owned subsidiaries of ACT.
As of November 17, 1998, (a) there were issued and outstanding warrants to
purchase 1,910,000 shares of ACT Common Stock at a weighted average exercise
price of $2.93 per share, and (b) options held by employees of the Company to
purchase 7,307,100 shares of ACT Common Stock at a weighted average exercise
price of $3.66 per share. All of the warrants are currently exercisable. Of the
outstanding options, 1,205,000 are now exercisable at a weighted average
exercise price of $4.43 per share, and the rest become exercisable at various
times over the next three years.
ACT's Common Stock trades on the Nasdaq National Market under the symbol
"ACTC." The following table sets forth the high and low sale prices of ACT
Common Stock as reported by the Nasdaq National Market for each of the quarters
since the beginning of 1996.
High Low
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 1/6
Fourth Quarter ...................... 9 3/4 3 15/16
1998
----
First Quarter ....................... 5 1/2 4 1/32
Second Quarter ...................... 4 7/8 3 1/8
Third Quarter........................ 3 1/2 1 9/16
Fourth Quarter....................... 2 7/16 1 17/32
11
<PAGE>
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 National
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 may also pledge certain of
the Shares from time to time, and this Prospectus also relates to any sale of
Shares that might take place following any foreclosure of such a pledge. 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 ACT Common Stock offered hereby
will be passed upon for the Company by Bryan Cave LLP, St. Louis, Missouri.
EXPERTS
The consolidated financial statements of the Company as of December 31,
1997 and 1996, and for each of the years in the three-year period ended December
31, 1997, 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-K for the fiscal year ended
December 31, 1997, 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 ................................... $ 5,750
Accounting Fees and Expenses............................ 2,500 *
Legal Fees and Expenses................................. 10,000 *
Miscellaneous Expenses.................................. 1,750 *
----------
Total ...................................... $ 20,000 *
==========
- -------------
* 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.
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.
II-1
<PAGE>
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 Amendment to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Palm Beach, State of Florida, on November 19,
1998.
APPLIED CELLULAR TECHNOLOGY, INC.
By: /s/ DAVID A. LOPPERT
--------------------------------------
David A. Loppert, Vice President,
Treasurer and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to 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
RICHARD J. SULLIVAN* Directors, Chief Executive
- --------------------------- Officer and Secretary(Principal
(Richard J. Sullivan) Executive Officer) November 19, 1998
GARRETT A. SULLIVAN* President and Director (Principal
- --------------------------- Operating Officer) November 19, 1998
(Garrett A. Sullivan)
/s/ DAVID A. LOPPERT Vice President, Treasurer and
- --------------------------- Chief Financial Officer
(David A. Loppert) (Principal Accounting Officer) November 19, 1998
ANGELA M. SULLIVAN* Director November 19, 1998
- ---------------------------
(Angela M. Sullivan)
DANIEL E. PENNI* Director November 19, 1998
- ---------------------------
(Daniel E. Penni.)
ARTHUR F. NOTERMAN* Director November 19, 1998
- ---------------------------
(Arthur F. Noterman)
CONSTANCE K. WEAVER* Director November 19, 1998
- ---------------------------
(Constance K. Weaver)
*By: /s/ DAVID A. LOPPERT
----------------------------------
David A. Loppert, Attorney-in-Fact
II-3
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
4.1 Amended and Restated Articles of Incorporation of the Company
(incorporated herein by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-3 (File No.
333-37713) filed with the Commission on November 19, 1997)
4.2 Amendment of Restated Articles of Incorporation of the Company
(incorporated herein by reference to Exhibit 4.2 to the
Company's Registration Statement on Form S-3 (File No.
333-59523) filed with the Commission on July 21, 1998)
4.3 Amended and Restated Bylaws of the Company dated March 31, 1998
(incorporated herein by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-3 (File No.
333-51067) filed with the Commission on April 27, 1998)
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 *
-------------
* Previously filed.
II-4
Exhibit 5
BRYAN CAVE LLP
ONE METROPOLITAN SQUARE
211 N. BROADWAY, SUITE 3600
ST. LOUIS, MISSOURI 63102-2750
(314) 259-2000
FACSIMILE (314) 259-2020
DENIS P. MCCUSKER INTERNET ADDRESS
direct dial number [email protected]
(314) 259-2455
November 19, 1998
Board of Directors
Applied Cellular Technology, Inc.
400 Royal Palm Way, Suite 410
Palm Beach, Florida 33480
Gentlemen:
We are acting as counsel for Applied Cellular Technology, Inc., a Missouri
corporation (the "Company"), in connection with the preparation and filing of a
Registration Statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission under the Securities Act of 1933, as amended.
The Registration Statement relates to 7,431,770 shares of the Company's common
stock, $.001 par value per share (the "Shares").
In connection herewith, we have examined and relied without independent
investigation as to matters of fact upon such certificates of public officials,
such statements and certificates of officers of the Company and originals or
copies certified to our satisfaction of the Registration Statement, the Articles
of Incorporation and By-laws of the Company as amended and now in effect,
proceedings of the Board of Directors of the Company and such other corporate
records, documents, certificates and instruments as we have deemed necessary or
appropriate in order to enable us to render this opinion. In rendering this
opinion, we have assumed the genuineness of all signatures on all documents
examined by us, the due authority of the parties signing such documents, the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies.
Based upon and subject to the foregoing, it is our opinion that the
issuance of the Shares has been duly authorized by all requisite corporate
action of the Company, and that the Shares, when issued in accordance with such
authorization, will be legally issued, fully paid and non-assessable shares of
Common Stock of the Company.
We hereby consent to the reference to our name in the Registration
Statement under the caption "Legal Matters" and further consent to the filing of
this opinion as Exhibit 5 to the Registration Statement.
Very truly yours,
BRYAN CAVE LLP
II-5
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference in Amendment No. 1 to
the Registration Statement (Form S-3 No. 333-64755) of Applied Cellular
Technology, Inc. of our report, dated February 24, 1998, on Applied Cellular
Technology, Inc. and Subsidiaries, included in Applied Cellular Technology,
Inc.'s Form 10-K for the year ended December 31, 1997, and to the reference to
us under the heading "Experts" in the Prospectus which is a part of this
Registration Statement.
RUBIN, BROWN, GORNSTEIN & CO. LLP
St. Louis, Missouri
November 19, 1998
II-6
