<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 3, 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, AS AMENDED
------------------------
AMERICAN PHOENIX GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 13-3768554
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
</TABLE>
------------------------
<TABLE>
<S> <C>
930 EAST ARQUES AVENUE DANIEL A. FRANCE
SUNNYVALE, CALIFORNIA 94086 930 EAST ARQUES AVENUE
(408) 523-8000 SUNNYVALE, CALIFORNIA 94086
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (408) 523-8000
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
EXECUTIVE OFFICES) NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
------------------------
COPIES TO:
RICHARD F. HOROWITZ, ESQ.
IRVING ROTHSTEIN, ESQ.
HELLER, HOROWITZ & FEIT, P.C.
292 MADISON AVENUE
NEW YORK, NEW YORK 10017
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of the
registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered 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. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(3) PRICE(3) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock(1)................................. 1,850,005 $3.15625 $ 5,839,078 $1,769.42
Common Stock Purchase Warrants(1)(2)............ 6,149,018 $.65625 $ 4,035,293 $1,222.82
Common Stock(2)(3).............................. 6,149,018 $3.75 $23,058,817 $6,987.52
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Total Registration Fee.......................... $32,933,188 $9,979.76
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</TABLE>
(1) To be offered by selling security holders, at their discretion, from time to
time beginning from the effective date of this Registration Statement, at
prevailing market prices at time of sale.
(2) Pursuant to Rule 416, there is also being registered such additional
securities as may become issuable pursuant to the anti-dilution provisions
of the Warrants.
(3) Represents shares of Common Stock underlying the Common Stock Purchase
Warrants.
(3) Estimated solely for the purpose of calculating the registration fee.
Proposed maximum offering price per share is estimated based upon the
closing price on January 27, 1997.
------------------------
THE REGISTRANT HEREBY AMENDS THE 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> 2
KUSHI MACROBIOTICS CORP.
CROSS REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS OF
INFORMATION REQUIRED THEREIN BY ITEM 1 THROUGH 13 OF FORM S-3
<TABLE>
<CAPTION>
REGISTRATION STATEMENT PROSPECTUS CAPTION
ITEM AND HEADING OF LOCATION
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<C> <S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus..... Outside Front Cover
2. Inside Front and Outside Back Cover Pages
and Prospectus............................. Inside Front Cover Page
3. Summary Information, Prospectus Summary and
Ratio of Earnings to Fixed Charges......... Outside Front Cover, Risk Factors
4. Use of Proceeds............................ Use of Proceeds
5. Determination of Offering Price............ Not Applicable
6. Dilution................................... Not Applicable
7. Selling Security Holders................... Selling Security Holders
8. Plan of Distribution....................... Cover Page, Plan of Distribution
9. Description of the Securities to be
Registered................................. Not Applicable
10. Interest of Named Experts and Counsel...... Not Applicable
11. Material Changes........................... Not Applicable
12. Incorporation of Certain Information by
Reference.................................. Incorporation of Certain Documents by
Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................ Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities
</TABLE>
<PAGE> 3
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 FEBRUARY , 1997
------------------------
AMERICAN PHOENIX GROUP, INC.
------------------------
This Prospectus covers the offer and proposed sale of up to (i) 1,850,005
shares of Common Stock, $.001 par value (the "Common Stock"), of American
Phoenix Group, Inc., formerly called Kushi Macrobiotics Corp. (the "Company")
held by security holders who acquired them directly from the Company and in
payment of services or in settlement of claims; (i) 6,149,018 Common Stock
Purchase Warrants issued by the Company as a distribution to all of its
stockholders and in payment of services or in settlement of claims (the
"Warrants"); and (iii) 6,149,018 shares of Common Stock underlying the Warrants
(the "Underlying Shares" and collectively with the Common Stock and the
Warrants, the "Securities"). See "Selling Securityholders."
The holders of the Securities are collectively referred to herein as the
"Selling Securityholders."
Each of the Selling Securityholders may be deemed to be an "underwriter" of
the Company's securities offered hereby, as that term is defined under the
Securities Act of 1933, as amended (the "Act"). Each of the Selling
Securityholders intends to sell the Securities offered hereby from time to time
for their own account in the open market at the prices prevailing therein, or in
individually negotiated transactions at such prices as may be agreed upon. Each
of the Selling Securityholders will bear all expenses with respect to the
offering of the Securities by them except the costs associated with registering
the Securities under the Act and preparing and printing this Prospectus.
The net proceeds from the Securities to be sold by the Selling
Securityholders will inure entirely to their benefit and not that of the
Company.
The Company's Common Stock and Warrants are traded on NASDAQ
(Symbols -- "APHX" and "APHXW" respectively). The closing price of the Company's
Common Stock and Warrants on January 27, 1997 was $3.15625 and $.65625,
respectively.
------------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SUBSTANTIAL DILUTION AS
DESCRIBED HEREIN. SEE "RISK FACTORS".
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
<PAGE> 4
With respect to the proposed sale of the Securities by the Selling
Securityholders (if any of such holders are deemed to be an "affiliate" of the
Company), the Company is taking steps either to register the Securities or
permit such sales (or resales) pursuant to exemption from registration under the
laws only of New York. However, if purchasers of the Securities are not
residents of the aforementioned state, the Company will not be able to permit
them to effect transfers of the Securities sold by the Selling Securityholders,
unless the purchaser resides in a state which permits such transactions as
exempt from registration. Under such circumstances, the only alternatives may be
to sell to a resident of the aforementioned state or to sell to an entity, such
as a state registered broker-dealer, which may be exempt under applicable state
laws. Potential purchasers of the Securities should consult with their broker
and/or attorney to determine what actions should be taken to comply with the
laws of their state with respect to any such Securities to be purchased by them.
To the extent any state laws require, transactions may only be conducted through
state registered broker-dealers.
The Company will furnish to each person to whom this Prospectus is
delivered, upon written request, a copy of any or all of the documents referred
to by reference, other than exhibits to such documents unless such exhibits are
specifically incorporated herein by reference. Requests should be addressed to:
Mr. Daniel A. France, Chief Financial Officer, American Phoenix Group, Inc., 960
East Arques Avenue, Sunnyvale, California, 94086. The Company's telephone number
is (408) 523-8000.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS. ANY INFORMATION OR REPRESENTATION NOT HEREIN CONTAINED, IF GIVEN OR
MADE, MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN RESPECT OF THE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. DELIVERY OF THIS PROSPECTUS SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE OF THIS PROSPECTUS.
ADDITIONAL INFORMATION
The Company has filed with the headquarters office of the Securities and
Exchange Commission located at 450 Fifth Street, N.W., Washington, D.C. 20549, a
Registration Statement on Form S-3 under the Securities Act of 1933 with respect
to the securities offered hereby. This Prospectus filed as part of such
Registration Statement does not contain all the information set forth in, or
annexed as exhibits to, the Registration Statement. For further information
pertaining to the securities offered hereby and the Company, reference is made
to the Registration Statement and the exhibits thereto. The Registration
Statement and exhibits thereto may be inspected at the Headquarters Office of
the Securities and Exchange Commission located at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549 and at certain of the Commission's regional offices
at the following addresses: 7 World Trade Center, 13th Floor, New York, New York
10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such material may be obtained from the Public Reference Section of the SEC,
at 450 Fifth Street, N.W., Room 1024, Washington, D.C. at prescribed rates. The
Commission also maintains a Web Site that contains reports, proxy and
information statements and other information regarding registrants such as the
Company, that file electronically with the Commission. This material can be
found at http://www.sec.gov.
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<PAGE> 5
THE COMPANY
The Company was formed under the laws of the State of Delaware in May 1994
under the name Kushi Macrobiotics Corp., to develop, produce and/or market a
full line of high quality natural foods based on Michio Kushi's Standard
Macrobiotic Diet. In August 1995, the Company raised approximately $4.8 million
in its initial public offering ("IPO") of common stock and warrants, which
proceeds were used to fund activities undertaken during the Company's
development phase. The sale and shipment of product began in the last quarter of
fiscal 1995. In early 1996, management determined that revenues and profit
margins were not adequate to sustain the business as a going concern. The
Company's management then focused on finding a merger, joint venture or
strategic alliance partner to protect stockholder equity. To conserve its
working capital pending fulfillment of this objective, the Company reduced its
staff and liquidated or otherwise resolved certain of its contractual
obligations. In May 1996, the Company executed a definitive agreement to merge
(the "Merger") with American Phoenix Group, Inc. a Nevada corporation ("American
Phoenix"), which was subsequently amended in July 1996 (the "Merger Agreement").
The Merger was consummated on September 26, 1996, whereupon the Company changed
its name to "American Phoenix Group, Inc."
Upon effectiveness of the Merger, American Phoenix merged with and into the
Company, the separate existence of American Phoenix ceased and the Company was
the surviving corporation. As a consequence of the Merger, title to all of the
property and assets of American Phoenix vested in the Company and the Company is
subject to all of the liabilities of American Phoenix.
Following the Merger, the Company's objective was to create shareholder
value by acquiring, financing and developing technology-related companies.
Upon consummation of the Merger, the Company had three subsidiaries: Marine
Turbine Australian Pty., Ltd. ("MTA"), an Australian proprietary limited
company; Masling Industries Pty. ("Masling"), an Australian proprietary limited
company; and Tokan Holdings, Inc. ("Tokan"), a Delaware corporation through
which American Phoenix has a minority interest in Barlile Corp., Ltd.
("Barlile"), an Australian entity engaged in a variety of agricultural ventures
with a portfolio of notes and investments. MTA has developed a prototype modular
power unit for use in high speed ocean pursuit craft. Masling is an aircraft
component overhaul and engineering facility.
On October 24, 1996, the Company entered into an agreement to acquire all
of the capital stock of Tetherless Access Asia Ltd. ("TAAL"), a privately held
Australian corporation, in exchange for shares of Common Stock and Preferred
Stock to be issued to the shareholders of TAAL. On a fully diluted basis, the
shareholders of TAAL would be the beneficial owners of 60% of the Company's
Common Stock. As a condition to closing, the Company was required to sell its
business assets and make the proceeds generated from such disposition available
to fund the business of TAAL.
The TAAL transaction was consummated on November 13, 1996. In connection
with the consummation of the TAAL transaction, the Company's MTA/Masling
subsidiary and its Barlile and note portfolio investments were sold for a total
consideration of approximately $10.3 million payable incrementally and in full
by February 28, 1997. Payments totalling $5 million were due on January 31,
1997. These funds have not been received to date, but the Company is confident
the funds will be paid.
TAAL is a wireless data communications service provider capitalizing on the
exploding demand for alternatives to the high cost of wire line communications
networks in developing economies. TAAL provides leading-edge technology and
network services for wireless Transaction Control Protocol/Internet Protocol
("TCP/IP") data communications utilizing spread-spectrum packet radio technology
to deliver a high-speed, scalable, secure networking solution. TAAL delivers
virtual TCP/IP networking services, including high speed Internet access and
providing solutions to customers in a range of industries including defense,
education, finance, government, manufacturing and retail.
The Company's corporate office is located at 930 East Arques Avenue,
Sunnyvale, California 94086 at which its telephone number is (408) 523-8000.
3
<PAGE> 6
The Company's Common Stock and Warrants are traded on NASDAQ
(Symbols -- "APHX" and "APHXW" respectively). The closing price of the Company's
Common Stock and Warrants on January 27, 1997 was $3.15625 and $.65625,
respectively.
RISK FACTORS
The Securities being offered hereby represent a speculative investment and
a high degree of risk. Therefore, prospective investors should thoroughly
consider all of the risk factors discussed below and should understand that they
could lose all or part of their investment. No person should consider investing
who cannot afford to lose a substantial part or all of his investment or who is
in any way dependent upon the funds that he is investing.
NASDAQ LISTING. The Company's securities currently are listed and trade on
the Nasdaq SmallCap Market. However, the rules of The Nasdaq Stock Market
provide that any Nasdaq-listed company that experiences a change in control and
a change in its business or financial structure must comply with the criteria
for initial listing, which are greater than the requirements for continued
listing. In connection with the TAAL Transaction, on November 13, 1996, the
Company filed an Application for listing on the Nasdaq SmallCap Market, which is
pending. As part of Nasdaq's review, the Company is continuing to submit
additional information pertaining to the TAAL transaction and the earlier Kushi
merger. The Company believes that it meets the initial listing requirements and
is optimistic that its application will be approved. Nonetheless, there can be
no assurance that the Company's listing application will be approved. If Nasdaq
does not approve the Company's application at a hearing or on appeal, the
Company's securities will be delisted. In that event, the Company's securities
will trade on the OTC Bulletin Board.
NECESSITY OF AN EFFECTIVE REGISTRATION STATEMENT: BLUE SKY REGISTRATION OR
EXEMPTION. The Company will endeavor promptly to maintain a current effective
registration statement under the Act covering the Securities. If the Company is
unable to maintain a current registration statement for any reason, holders of
the Securities may not be able to transfer them and even if there is a current
registration statement covering the Securities it is possible that they or their
intended transferee could reside in a state where such transactions would not be
permitted under state securities laws.
HISTORY OF LOSSES AND ANTICIPATED FUTURE LOSSES; UNCERTAINTY OF FUTURE
PROFITABILITY. As of September 30, 1996, TAAL had an accumulated deficit of
$7,593,481 since the inception of its business by its predecessor company in
1990, and it has experienced continuing net losses and negative cash flows from
operations. These losses have resulted from its research and development
activities and the general and administrative expenses associated with these
activities. The Company anticipates incurring substantial losses and negative
cash flows from operations for at least the immediate future. The extent of
losses and negative cash flows from operations and the time required to reach
profitability, if ever, or that profitability, if achieved, can be sustained on
an ongoing basis. Moreover, if profitability is achieved, the level of that
profitability cannot accurately be predicted.
RAPID TECHNOLOGICAL CHANGE. The industry in which the Company now operates
is characterized by rapid technological change. As a result, other technologies
may emerge that offer technological, price or other marketing advantages over
technologies to which the Company presently or hereafter becomes committed.
Characteristically of participants in industries experiencing rapid
technological change, the Company is likely to use product components that are
not of then current standard industry design and products and services supplied
by only a small number of suppliers. Although these suppliers may be
replaceable, the Company could face significant production delays if any
components or services were to become unavailable. The
Company's ability to exploit emerging technologies will be subject to all of the
foregoing risks as well as being dependent upon its ability to develop and
market applications of emerging technologies.
ADDITIONAL FUNDING WILL BE REQUIRED CAUSING DILUTION. Achievement of
Management's objectives will be dependent upon its ability to access significant
capital. Current Management believes that it can raise sufficient capital
through private placements, registered public offerings or exercise of
outstanding warrants. If, for any reason, sufficient capital is unavailable, the
ability to develop and market existing businesses and to
4
<PAGE> 7
acquire new or additional businesses will be adversely affected. In any event,
any success of the Company in raising additional funds in this manner will cause
the current stockholders to be diluted on a percentage basis and possibly also
on a net worth basis.
INTERNATIONAL RISKS. The Company currently operates in Australia,
Argentina, China, Philippines and South Africa and expects to conduct
substantial business activities in underdeveloped countries. Foreign
manufacturing and sales activities are subject to the risks of operating in an
international environment. These risks include unstable political and economic
environments, local labor laws and customs, local laws and taxes, the potential
imposition of trade or foreign exchange restrictions, tariff increases and
transportation delays. In addition, financial results are subject to
fluctuations in foreign currency exchange rates within the countries where it
operates. The risk of foreign exchange losses has been mitigated by the conduct
of most of the Company's foreign business transactions in local currency. It is
anticipated that this practice will be continued by the Company.
COMPETITION. The industry in which the Company operates is intensely
competitive. This competition is expected to increase with the pace of
technological developments. Current and future competitors may have
significantly greater financial, technical, manufacturing and marketing
resources than the Company and its subsidiaries.
DILUTIVE EFFECT OF WARRANT EXERCISE. The Company currently has 6,052,906
warrants outstanding in addition to the 6,149,018 Warrants offered hereby.
Although in the opinion of management the infusion of capital resulting from
exercise of the Warrants would benefit the Company by providing a source of
funding for the acquisition and development expenses associated with its
corporate objectives, any such exercise of Warrants would dilute the percentage
ownership of the Company. Moreover, the issuance of substantial amounts of
Common Stock upon the exercise of the Warrants could negatively impact the
market price of such stock.
INTENT TO INCREASE AUTHORIZED CAPITAL. The Company currently intends to
increase its authorized capital of 50,000,000 shares of common stock and
10,000,000 shares of preferred stock to 100,000,000 and 60,000,000 shares,
respectively. If the Company successfully implements this change, Management
will have the ability to issue a large amount of additional shares thereby
diluting the holdings of the current stockholders or any investors in this
Offering.
COMMITMENT TO ISSUE LARGE AMOUNT OF SHARES. Pursuant to the terms of the
agreement with TAAL, the Company is obligated to issue 48,000,000 shares of
common stock to the former shareholders of TAAL over the next four years. The
issuance of this number of shares will dilute the holdings of the current
stockholders or any investor in this Offering, and may have a depressive effect
on the market value of the Company's Common Stock.
INCURRENCE OF LIABILITIES RELATING TO THE PRE-MERGER OPERATIONS OF THE
COMPANY. From the date of its inception and thereafter, the Company has
incurred debts and liabilities in the operation of its natural foods business.
Pursuant to the Merger Agreement, in conjunction with the spin-off of its
natural foods business (the "Spin-Off"), all of the liabilities of the Company,
subject to specified exceptions, were transferred to Kushi Natural Foods, Inc.
("Kushi Foods"). Although this transfer of liabilities is valid and effective as
between the Company and Kushi Foods, the Company will remain liable to third
parties for all of claims and debts arising out of the pre-Spin-Off business of
the Company. Moreover, notwithstanding the Spin-Off, the Company will remain
liable on the two leaseholds entered into by the Company in connection with its
natural foods business, although Kushi Foods will provide the Company with a
contractual indemnification of such leasehold obligations.
In the event that the assets of Kushi Foods are insufficient to satisfy any
claim, obligation or liability arising out of the pre-Spin-Off operations of the
Company, a creditor of Kushi Foods may seek satisfaction of any such claim,
obligation or liability from the assets of the Company. Any such claims which
may arise, to the extent that they are material and to the extent that the
assets of Kushi Foods are insufficient to satisfy such claims, may adversely
affect the financial condition of the Company.
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<PAGE> 8
DEPENDENCE UPON MANAGEMENT. The Company will be dependent upon the
international expertise of its new management team (which will be comprised of
one pre-Merger director, one former APHX director and three TAAL nominees,
including the Chief Executive Officer) and financial advisors to meet its
strategic objectives. None of these persons necessarily have significant
operational or marketing experience in public U.S. companies or in the
industries in which the Company now operates.
DILUTION. Certain stockholders of the Company acquired their interests in
the Company at an average cost per share which is significantly less than that
which purchasers of the Securities offered hereby will pay for their
stockholdings. Consequently, the purchasers of the Securities offered hereby
will bear a disproportionate share of the risk of any loss that may be incurred
in the Company's operations and an investment in the Securities will result in
an immediate substantial dilution of the offering price.
NO CASH DIVIDENDS AND NONE ANTICIPATED. The Company has not paid any cash
dividends and does not contemplate or anticipate paying any cash dividends in
the foreseeable future.
LIMITED MARKET FOR SECURITIES. The Company's securities currently trade on
NASDAQ as a small cap issue, and trading volume generally is not at a high
level. As a result, there is a limited market in the Company's securities, and
there can be no assurance that a more active market may develop. Accordingly,
any investments in the Company's securities may be highly illiquid. Further, no
assurance can be given that the Company will meet the criteria applicable to it
for maintaining a listing on NASDAQ as a small cap issue on an ongoing basis.
POSSIBLE ISSUANCE OF PREFERRED STOCK AND POSSIBLE ADVERSE EFFECT ON RIGHTS
OF HOLDERS OF COMMON STOCK. Regardless of how many shares of preferred stock
the Company is authorized to issue (currently 10,000,000 and proposed to
increase to 60,000,000), the Board of Directors has broad powers to fix the
rights and terms of any preferred stock, including without limitation, superior
liquidation and dividend rights, without requiring stockholder approval. The
issuance of preferred stock could have an adverse effect on the rights of
holders of the Company's Common Stock.
TEMPORARY LOSS OF MARKET-MAKERS. Pursuant to Rule 10b-6, any of the
Company's market-makers will be prohibited from engaging in any market-making
activities with respect to the Company's securities for the period of ten
business days prior to any solicitation by it of the exercise of any of the
Company's public warrants until the termination of such activity. Accordingly,
such market-maker may be unable to provide a market for the Company's securities
during certain periods and, as a result, holders of the Company's securities may
find it more difficult to sell their holdings.
REQUIRED DISCLOSURE CONCERNING TRADING OF PENNY STOCKS OR LOW-PRICED
SECURITIES. The Securities and Exchange Commission ("SEC") has adopted
regulations that define a "penny stock" to be any equity security that has a
market price (as defined) of less than $5.00 per share or an exercise price of
less than $5.00 per share, subject to certain exceptions. Effective July 15,
1992, for any transaction involving a penny stock, unless exempt, the rules
require the delivery, prior to the transaction of a disclosure schedule prepared
by the SEC relating to the penny stock market. Commencing January 1, 1993, the
broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must disclose this fact and the broker-dealer's presumed control over the
market. Finally, monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks.
While many NASDAQ-listed securities would be covered by the definition of
penny stock, transactions in a NASDAQ-listed security would be exempt from all
but the sole market-maker provision for (i) issuers who have $2,000,000 in
tangible assets ($5,000,000 if the issuer has not been in continuous operation
for three years), (ii) transactions in which the customer is an institutional
accredited investor, and (iii) transactions that are not recommended by the
broker-dealer. In addition, transactions in a NASDAQ security directly with a
NASDAQ market-maker for such securities would be subject only to the sole
market-maker disclosure, and the disclosure with respect to commissions to be
paid to the broker-dealer and the registered representative. Finally, all NASDAQ
securities would be exempt if NASDAQ raised its requirements for continued
listing so
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that any issuer with less than $2,000,000 in net tangible assets or
stockholders' equity would be subject to delisting. These criteria are more
stringent than the current NASDAQ maintenance requirements. Consequently, these
rules may restrict the ability of broker-dealers to sell the Company's
securities and may affect the ability of purchasers to sell the Company's
securities in the secondary market.
USE OF PROCEEDS
The net proceeds from the Securities to be sold by the Selling
Securityholders will inure entirely to their benefit and not that of the
Company.
PLAN OF DISTRIBUTION
It is anticipated that the Selling Securityholders will exercise the
Warrants and/or offer the Securities for sale at the prices prevailing in the
over-the-counter market (or other principal market, if any, on which the
Securities may then be traded) on the date of sale. Such holders also may sell
the Securities privately, either directly to the purchaser or through a broker
or brokers. There are no arrangements or agreements with any brokers or dealers
to act as underwriter of the Securities as of the date hereof. All costs,
expenses and fees incurred in connection with the registration of the
Securities, including but not limited to all registration and filing fees,
printing expenses and fees (if any) and disbursements of the Company's counsel
and accountants are being borne by the Company, but all selling and other
expenses incurred by the holders will be borne by the holders.
SELLING SECURITY HOLDERS
This Prospectus covers the proposed offer and resale of up to 1,805,005
shares of the Company's Common Stock and up to 6,149,018 Warrants and their
underlying shares of the Company's Common Stock. The shares of Common Stock were
issued to the Securityholders in exchange for services rendered or in settlement
of claims.
The majority of the Warrants (5,242,343) are being distributed to all
stockholders on the record date for such distribution on a one-to-four basis for
each outstanding share of common stock (the "Dividend Warrants") and the balance
(1,006,675) were issued in exchange for services rendered or in settlement of
claims. The officers, directors and 1% owners of the Company who are offering
Dividend Warrants and their percentage ownership is contained in the chart below
listing the Selling Securityholders as are the holders of the balance of the
Warrants. Except as indicated below, none of the shares of Common Stock offered
hereby are held by officers or directors of the Company or, to the Company's
knowledge, by any 1% holders of the Company's Common Stock. The Company will
receive no proceeds from the Securities being offered hereby.
COMMON STOCK
<TABLE>
<CAPTION>
SHARES
SHARES SHARES OWNED
NAMES HELD OFFERED AFTER SALE
- -------------------------------------------------------------- ------- ------- ----------
<S> <C> <C> <C>
Consortium Development Funds Pty. Ltd. ....................... 797,834 600,000 197,834
Harold Hanson................................................. 14,000 14,000 -0-
HBL Associates................................................ 36,000 36,000 -0-
Romillo Pty. Ltd. ............................................ 626,000 626,000 -0-
Wallace Seward................................................ 100,000 100,000 -0-
J. Holt Smith................................................. 64,005 64,005 -0-
Thomas A. Thornburgh.......................................... 150,000 150,000 -0-
The Whittaker Group........................................... 60,000 60,000 -0-
Arnold J. Wrobel.............................................. 200,000 200,000 -0-
</TABLE>
7
<PAGE> 10
WARRANTS
<TABLE>
<CAPTION>
WARRANTS
WARRANTS WARRANTS OWNED
NAMES HELD OFFERED AFTER SALE
- -------------------------------------------------------------- -------- -------- ----------
<S> <C> <C> <C>
Harold Hanson................................................. 3,500 3,500 -0-
Jay W. Hubbard(3)............................................. 5,334 5,334 -0-
The Whittaker Group........................................... 15,000 15,000 -0-
Wallace Seward................................................ 25,000 25,000 -0-
John Errecart................................................. 99,570 99,570 -0-
Consortium Development Funds Pty. Ltd. ....................... 150,000 150,000 -0-
Romillo Pty. Ltd. ............................................ 156,500 156,500 -0-
Arnold J. Wrobel.............................................. 185,000 50,000 135,000
Daniel A. France(2)........................................... 224,633 66,262 158,371
Geoff Player.................................................. 315,278 315,278 -0-
Consortium Investment Group, Pty. Ltd. ....................... 400,000 400,000 -0-
Patrick N. DiCarlo(1)......................................... 524,018 524,018 -0-
Rubywell Pty. Ltd. ........................................... 533,375 533,375 -0-
</TABLE>
- ---------------
(1) Chairman and Chief Executive Officer
(2) Chief Financial Officer, Secretary and Director
(3) Director
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) (1) The Company's Annual Report on Form 10-KSB for the fiscal year
ended August 31, 1996, filed pursuant to Section 13 of the Shares Exchange
Act of 1934, as amended (the "Exchange Act").
(2) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed pursuant to Section 12(g) of the
Exchange Act.
(3) The Company Registration Statement on Form S-4 declared effective
September 3, 1996 (Registration No. 333-10755).
(4) The Company's Current Reports on Form 8-K dated September 26, 1996
and filed on October 9, 1996; dated October 21, 1996 and filed November 4,
1996; dated November 13, 1996 and filed November 29, 1996 and amended on
January 16, 1997.
(b) In addition, all reports and other documents to be filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which deregisters all
securities offered hereby then remaining unsold, as well as all such
reports filed after the date hereof and prior to the termination of this
offering, shall be deemed to be incorporated by reference herein and shall
be deemed to be a part hereof from the date of the filing of each such
report or document.
LEGAL OPINIONS
Legal matters in connection with the securities being offered hereby will
be passed upon for the Company by Heller, Horowitz & Feit, P.C., 292 Madison
Avenue, New York, New York 10017.
8
<PAGE> 11
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SHARES ACT LIABILITIES
Section 145 of the Delaware General Corporation Law, as amended, authorizes
the Company to indemnify any director or officer under certain prescribed
circumstances and subject to certain limitations against certain costs and
expenses, including attorneys' fees actually and reasonably incurred in
connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which such person is a party by reason of
being a director or officer of the Registrant if it is determined that such
person acted in accordance with the applicable standard of conduct set forth in
such statutory provisions, Article 9 of the Registrant's Certificate of
Incorporation contains provisions relating to the indemnification of directors
and officers, to the full extent permitted by Delaware law.
The Company may also purchase and maintain insurance for the benefit of any
director or officer which may cover claims for which the Company could not
indemnify such person.
Insofar as indemnification for liabilities arising under the Shares Act of
1933 may be permitted to directors, officers and controlling persons of the
Small Business Issues pursuant to the foregoing provisions, or otherwise, the
Small Business Issues 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.
9
<PAGE> 12
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C>
THE COMPANY........................................................................... 4
RISK FACTORS.......................................................................... 5
USE OF PROCEEDS....................................................................... 10
PLAN OF DISTRIBUTION.................................................................. 10
SELLING SECURITY HOLDERS.............................................................. 10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE....................................... 12
LEGAL OPINIONS........................................................................ 12
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SHARES ACT LIABILITIES....... 12
</TABLE>
10
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following statement sets forth the estimated expenses in connection
with the offering described in the Registration Statement.
<TABLE>
<S> <C>
Securities and Exchange Commission Fee..................................... $ 9,980
NASDAQ Additional Listing Fee.............................................. 7,500
Accountants' Fees and Expenses............................................. 1,000
Legal Fees and Expenses.................................................... 13,000
Blue Sky Fees and Expenses................................................. 250
Miscellaneous.............................................................. 770
-------
Total............................................................ $32,500
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, as amended, authorizes
the Registrant to indemnify any director or officer under certain prescribed
circumstances and subject to certain limitations against certain costs and
expenses, including attorneys' fees actually and reasonably incurred in
connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which such person is a party by reason of
being a director or officer of the Registrant if it is determined that such
person acted in accordance with the applicable standard of conduct set forth in
such statutory provisions, Article 9 of the Registrant's Certificate of
Incorporation contains provisions relating to the indemnification of directors
and officers, to the full extent permitted by Delaware law.
The Registrant may also purchase and maintain insurance for the benefit of
any director or officer which may cover claims for which the Registrant could
not indemnify such person.
ITEM 16. EXHIBITS
Registrant hereby incorporates by reference the following documents files
as part of its Registration Statement on Form SB-2 (File No. 33-92154-NY),
declared effective August 11, 1995 (the "Registration Statement"):
3.1 Restated Certificate of Incorporation
3.2 By-Laws
4.1 Specimen Common Stock Certificate
Registrant hereby incorporates by reference the following documents that
were filed with Amendment No. 1 to the Registration Statement:
4.4 Specimen Warrant Certificate
4.5 Form of Warrant Agreement
II-1
<PAGE> 14
The following exhibits are filed herewith:
5 Opinion re: legality
23(a) Consent of Hollander, Gilbert & Co.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE> 15
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 City of Irvine, State of California, on January 15, 1997.
AMERICAN PHOENIX GROUP, INC.
By: /s/ PATRICK N. DI CARLO
------------------------------------
Name: Patrick N. Di Carlo
Title: Chief Executive Officer
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- --------------------------------- -----------------
<C> <S> <C>
/s/ PATRICK N. DI CARLO Chairman and Chief Executive January 15, 1997
- ---------------------------------------- Officer
Patrick N. Di Carlo
/s/ DANIEL A. FRANCE Director, Chief Financial Officer January 13, 1997
- ---------------------------------------- and Secretary
Daniel A. France
/s/ JOHN DAVIS Director January 16, 1997
- ----------------------------------------
John Davis
Director January , 1997
- ----------------------------------------
Jay W. Hubbard
</TABLE>
II-3
<PAGE> 16
EXHIBIT INDEX
Registrant hereby incorporates by reference the following documents files
as part of its Registration Statement on Form SB-2 (File No. 33-92154-NY),
declared effective August 11, 1995 (the "Registration Statement"):
3.1 Restated Certificate of Incorporation
3.2 By-Laws
4.1 Specimen Common Stock Certificate
Registrant hereby incorporates by reference the following documents that
were filed with Amendment No. 1 to the Registration Statement:
4.4 Specimen Warrant Certificate
4.5 Form of Warrant Agreement
The following exhibits are filed herewith:
5 Opinion re: legality
23(a) Consent of Hollander, Gilbert & Co.
<PAGE> 1
EXHIBIT 5
January 22, 1997
American Phoenix Group, Inc.
930 East Arques Avenue
Sunnyvale, California 94086
Attn: Mr. Daniel A. France
Gentlemen:
As counsel for your Company, we have examined your Articles of
Incorporation, By-Laws, such other corporate records, documents and proceedings
and such questions of law as we have deemed relevant for the purpose of this
opinion.
We have also, as such counsel, examined the Registration Statement (the
"Registration Statement") of your Company on Form S-3, covering the registration
under the Securities Act of 1933, as amended, of the proposed offer and resale
by selling security holders of up to (i) 1,850,005 shares of the Company's
Common Stock, par value $.001 (the "Common Stock"), (ii) 6,149,018 Common Stock
Purchase Warrants (the "Warrants"), and (iii) 6,149,018 shares of Common Stock
underlying the Warrants issuable to the holders of said Warrants upon exercise
thereof (collectively, items (i)-(iii), the "Registered Securities"). Our review
has also included the exhibits and form of prospectus (the "Prospectus") for the
resale of the Registered Securities.
On the basis of such examination, we are of the opinion that:
1. The Company is a corporation duly authorized and validly existing
and in good standing under the laws of the State of Delaware, with
corporate power to conduct the business which it conducts as described in
the Registration Statement.
2. The Common Stock identified in item (i) above have been duly and
validly authorized and created and have been duly and validly issued as
fully paid and nonassessable shares of Common Stock of the Company.
3. The Warrants identified in item (ii) above have been duly and
validly authorized and created and when exercised in accordance their
respective terms, the shares of Common Stock identified in item (iii) above
will be issued as fully paid and nonassessable shares of Common Stock of
the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Prospectus under the
caption "Legal Matters."
Very truly yours,
HELLER, HOROWITZ & FEIT, P.C.
HH&F:p
<PAGE> 1
EXHIBIT 23(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of the
Registration Statement on Form S-3, of our report dated November 29, 1997
relating to the Financial Statements of American Phoenix Group, Inc. which is
incorporated by reference in such Prospectus. We also consent to the reference
to us under the heading "Expert" in such Prospectus.
HOLLANDER, GILBERT & CO.
Los Angeles, California
January , 1997
