<PAGE>
As filed with the Securities and Exchange Commission on November 27, 1996
Registration Statement No. ______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------
MULTI-MEDIA TUTORIAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 7812 73-129314
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation) Classification Code Number) Identification No.)
Multi-Media Tutorial Services, Inc. Morris Berger, CEO
205 Kings Highway Multi-Media Tutorial Services, Inc.
Brooklyn, New York 11223 205 Kings Highway
(718) 234-0404 Brooklyn, New York 11223
(Address, including zip code, and (718) 234-0404
telephone number, including area (Name, address, including zip code,
code, of registrant's principal and telephone number, including
executive offices) area code, of agent for service)
--------------------
Copies To:
Oscar D. Folger, Esq.
521 Fifth Avenue
New York, New York 10175
Approximate date of commencement of proposed sale to public: From time to time
after the effective date of this Registration Statement depending on market
conditions.
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 only in connection with dividend or
interest reinvestment plans, check the following box. /X/
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================================
Proposed Proposed Maximum Amount of
Title of Each Class of Securities Amount Being Maximum Offering Aggregate Offering Registration
Being Registered Registered Price per Share (1) Price Fee
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 5,644,341 $0.84375 $4,762,413 $1,443.16
=====================================================================================================================
</TABLE>
(1) Estimated for purposes of computing the registration fee pursuant to Rule
457(c) at $0.84375 per share based upon the average of the closing bid and asked
prices of $0.75 and $0.9375 respectively, on November 25, 1996.
-----------------------
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>
PROSPECTUS
MULTI-MEDIA TUTORIAL SERVICES, INC.
5,644,341 Shares of Common Stock
--------------------------------
This Prospectus relates to an aggregate of 5,644,341 shares of Common
Stock of Multi-Media Tutorial Services, Inc. (the "Company"), par value $.01 per
share (the "Common Stock"). This Prospectus does not relate to the sale or
issuance by the Company of any securities. Any securities will be offered for
the respective accounts of the Selling Security Holders, who either currently
own Common Stock or who will acquire Common Stock upon exercise of warrants or
options which are owned by them. See "Selling Security Holders." The Company
will receive the exercise prices payable upon such exercises. However, the
Company will not receive any proceeds from the sale of the shares of Common
Stock by the Selling Security Holders. The Company has been advised by the
Selling Security Holders that there are no underwriting arrangements with
respect to the sale of the Common Stock, that the Common Stock will be sold from
time to time in the over-the-counter market at then prevailing prices and in
private transactions at negotiated prices, and that usual and customary
brokerage fees, if any, will be paid by the Selling Security Holders in
connection therewith.
The Company's Common Stock is traded on the Nasdaq Small-Cap Market under
the symbol MMTS. As reported by Nasdaq for November 25, 1996, the closing bid
price for the Company's Common Stock was $0.75.
---------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
================================================================================
Price to Underwriting Discounts Proceeds to Selling
Public (1) and Commissions Security Holders(1)
---------- --------------- -------------------
Per Share ..... -0-
------------------------------------------------------
================================================================================
(1) Not determinable at present time.
The date of this Prospectus is November __, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission").
Reports, registration statements, proxy statements and other information filed
by the Company with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C., and at the Commission's Regional Offices: Suite
1400, Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois; 7
World Trade Center, New York, New York, and Suite 500, 5757 Wilshire Boulevard,
Los Angeles, California, and with respect to registration statements, Suite 788,
1375 Peachtree Street, Atlanta, Georgia. Copies of such materials can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C.
20549, at prescribed rates.
The Company undertakes to provide without charge to each person to whom
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any and all of the information that has been incorporated by reference
in the Prospectus (not including exhibits to the information that is
incorporated by reference unless such exhibits are specifically incorporated by
reference into the information that the Prospectus incorporates). Such request
should be directed to the Secretary, Multi-Media Tutorial Services, Inc., 205
Kings Highway, Brooklyn, New York 11223.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY
JURISDICTION TO ANY PERSON TO WHOM SUCH OFFER WOULD BE UNLAWFUL OR AN
OFFERING OF ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH
IT RELATES. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE
MADE HEREUNDER AT ANY TIME SHALL IMPLY THAT THE INFORMATION PROVIDED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
2
<PAGE>
THE COMPANY
Multi-Media Tutorial Services, Inc. (the "Company") produces and markets
tutorial education programs, primarily in videotape, for use by adults and
children in homes, workplaces, schools, libraries and other locales. Its
principal products consist of a series of 100 videotapes and supplemental
materials on mathematics.
The Company was incorporated under the laws of the State of Oklahoma in
January 1987 under the name Intechnica Learning Systems, Inc., and was
reincorporated in Delaware in July 1989 when its name was changed to Intechnica
International, Inc. The name of the Company was changed to Multi-Media Tutorial
Services, Inc. in November 1994 shortly after its acquisition of Video Tutorial
Services, Inc. ("VTS"), which is a New York corporation organized in 1985. The
executive offices of the Company are located at 205 Kings Highway, Brooklyn, New
York 11223. Its telephone number at that address is 718-234-0404.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE IN NATURE AND INVOLVE A
HIGH DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE
FOLLOWING FACTORS IN ANALYZING THIS OFFERING:
Need for Additional Financing
The Company will require additional financing in order to expand its
current operations and meet its debt repayment obligations. In addition, the
Company may require additional capital in order to maintain its listing on the
Nasdaq Small-Cap Market. There are no definitive plans or arrangements in effect
currently to obtain such additional funds, which could consist of additional
borrowing or the issuance of equity securities on a private placement basis. The
timing and amount of any additional financing that is required to continue the
development and marketing of the Company's products, to meet its debt repayment
obligations, maintain its Nasdaq Small-Cap Market listing, and for other
purposes will depend on the ability of the Company to improve its operating
results and other factors. There can be no assurance that any additional
financing will be available to the Company on terms acceptable to the Company or
that such additional financing, if available, would not result in substantial
dilution of the equity interests of existing stockholders.
Maintenance Criteria for Nasdaq Securities; Penny Stock Rules
The Company's Common Stock is quoted on the National Association of
Securities Dealers Automated Quotation System ("Nasdaq") for the Small-Cap
Market. To maintain its listing on the Nasdaq Small-Cap Market, the Company must
continue to be registered under Section 12(g) of the Securities Exchange Act of
1934 (the "Exchange Act") and have total assets of at least $2,000,000, total
stockholders' equity of at least $1,000,000, a public float of at least 100,000
shares with a market value of at least $200,000, at least 300 holders, a minimum
bid price of $1.00 per share and at least two market makers. In addition, Nasdaq
has proposed increasing the requirements for maintaining a Nasdaq Small-Cap
listing to require either: (1) net tangible assets of at least $2,000,000, (2) a
market capitalization of $35,000,000 or (3) net income in at least two of the
last three years of $500,000 and a public float of at least 500,000 shares with
a market value of at least $1,000,000. The Company has been notified by Nasdaq
that the Company's Common Stock has been trading below $1.00 per share and that
the Company must present a plan for curing this shortfall. There can be no
assurance that the Company will be able to cure this shortfall or otherwise
continue to meet the requirements for maintaining its listing on the Nasdaq
Small-Cap Market, particularly if the maintenance requirements are increased.
See "Material Changes." If the Company's securities fail to maintain Nasdaq
Small-Cap Market listing, the market value of the Common Stock likely would
decline and purchasers likely would find it more difficult to dispose of, or to
obtain accurate quotations as to the market value of, the Common Stock.
3
<PAGE>
In addition, if the Company fails to maintain Nasdaq Small-Cap Market
listing for its securities, and no other exclusion from the definition of a
"penny stock" under the Exchange Act is available, then any broker engaging in a
transaction in the Company's securities would be required to provide any
customer with a risk disclosure document, disclosure of market quotations, if
any, disclosure of the compensation of the broker-dealer and its salesperson in
the transaction and monthly account statements showing the market values of the
Company's securities held in the customer's accounts. The bid and offer
quotation and compensation information must be provided prior to effecting the
transaction and must be contained on the customer's confirmation. If brokers
become subject to the "penny stock" rules when engaging in transactions in the
Company's securities, they would become less willing to engage in such
transactions, thereby making it more difficult for purchasers in this offering
to dispose of their shares.
Seasonality and Availability of Media Time
The Company's math and reading business is highly seasonal. Demand for its
products tends to peak during the first and fourth fiscal quarters when school
is in session. Demand is especially slow during the school vacation periods.
This seasonality greatly affects the Company's advertising campaigns which must
be timed to coincide with the annual periods when demand is traditionally high.
The Company does not reserve advertising time in advance and purchases air time
at the lowest possible rates. Consequently, its reservations are subject to last
minute cancellation by the radio and television stations. In addition, as a
result of the Company's dependence on the availability of media time, operating
results can be negatively impacted by difficulty in purchasing media time such
as occurs during elections and holidays. For example, the Company incurred
difficulty in purchasing media time prior to the November 1996 elections and
expects this difficulty to reduce anticipated results for the fiscal quarter
ending November 30, 1996. Any significant decrease in sales during the season
when business activity is high, could have a material adverse impact upon the
Company's operations. Although the Company is trying to reduce its dependence on
curriculum based products, it will in all likelihood continue to experience a
certain amount of seasonality.
Breakdown of Telephone Systems
The Company has periodically experienced complete or partial breakdowns of
its telephone system which may last from a few hours to several days. In
addition, telephone companies are from time to time are unable to provide the
Company with accurate computerized telephone logs which advise the Company of
the relation between an 800 number and a particular radio or television station
which has been keyed to such 800 number. Such logs are essential to the
Company's evaluation of the effectiveness of its advertising campaigns. Although
the Company has taken steps to prevent the occurrence of such breakdowns and to
mitigate their effect, including upgrading its existing system and rerouting
calls to an answering service in the event of a breakdown, there can be no
assurance that such breakdowns will not occur in the future. Frequent or
prolonged system breakdowns would have a material adverse effect on the
Company's operating results and financial condition.
Dependence on Telemarketers
There is a high turnover rate among telemarketers as a result of the
frustrations associated with the telemarketing process, the high pressure
atmosphere, and the reliance on commissions as a major component of salaries.
The training of telemarketers is a lengthy process that involves learning a
complex product line and special sales techniques. There can be no assurance
that the Company will be able to continue to recruit and retain a qualified team
of telemarketers.
Payment Terms
Credit cards are the preferred method of payment for the Company. However,
credit card fraud perpetrated by disreputable telemarketing operations has
increased the reluctance of consumers to make use of their credit cards by
telephone. This may adversely affect the Company's ability to secure credit card
orders.
4
<PAGE>
The Company also accepts checks by phone and through the mail, sends products
cash on delivery (C.O.D.) and offers installment credit plans to credit-worthy
customers.
Dependence on Management
The Company's business is significantly dependent upon the personal
efforts and continued availability of Morris Berger, its Chief Executive
Officer. The loss or unavailability to the Company of Mr. Berger could have a
materially adverse effect upon the Company's business operations and prospects.
To the extent that the services of Mr. Berger are unavailable to the Company for
any reason, the Company would be required to procure other personnel to manage
and operate the Company. There can be no assurance that the Company would be
able to locate or employ such personnel on acceptable terms, if at all.
High Level of Returned Merchandise
The Company experiences a high level of returns, which generally range
from 25% to 35% for its various products. The Company believes that an important
reason for the high level of returns is that a substantial number of purchasers
return their videotapes after being unable to motivate their children to view
the tapes or having illegally copied them. There are currently no cost-effective
ways to prevent the illegal copying of the Company's videotapes as newer
technologies constantly develop to override such techniques. In addition, the
Company does not currently have the funds to prosecute infringers. There can be
no assurance that the Company will be able to successfully prosecute
infringements even if the Company is adequately funded.
Competition
The Company's educational videotape offerings compete with a variety of
programs, including Hooked on Phonics, the Video Professor and MegaMath. In the
school market, the Company competes with Video Aided Instruction, Video Tutor
and Educational Video Resources. Other companies sell integrated learning
systems in which a wide variety of curricula, including areas covered by the
Company's products, are taught through networked computer stations. Almost all
of these competitors have greater financial resources, greater public and
industry recognition and broader marketing capabilities than the Company. The
market is characterized by numerous small companies, with whose products the
Company may be unfamiliar, and which may be competitive with the Company's
products. The Company's products also compete with other methods of education
such as private tutors and televised programs.
The Company's generic telemarketing services compete with a variety of
companies, including Apac Teleservices, Sykes Enterprises, ICT Group, Precision
Response, Teletech Teleservices, West Telemarketing, Iti Marketing, Matrixx and
Dial America. Because of the size of this market, the Company believes that no
one entity dominates this business. Nevertheless, a number of the Company's
competitors in this area have greater financial resources, greater public and
industry recognition and broader marketing capabilities than the Company.
Government Regulation
In response to the concerns of consumer advocacy groups and as a result of
the practices of a number of unscrupulous telemarketing companies, the Federal
Trade Commission and the Federal Communications Commission have promulgated
rules regulating the telemarketing industry. The rules applicable to the Company
include, among other things, an obligation to advise customers of their rights,
an obligation to ship merchandise in a timely fashion and an obligation to
notify a customer of delays in shipments and to offer a refund in the event of a
delay. In addition, many states are enacting their own laws regulating the
telemarketing industry which are, to the extent applicable to the Company,
similar to the Federal rules in most respects. Furthermore, there exist both
state and federal laws governing false advertising and deceptive trade
practices. Due to the subjective nature of interpreting and enforcing such laws,
there can be no assurance that the Company will be in compliance with such laws
at all times. Although such regulations are expected to have a minimal impact on
the
5
<PAGE>
Company's ability to operate its business in its present form, such regulations
generally tend to add significant recordkeeping requirements and, consequently,
expenses.
No Dividends
The Company has never paid any dividends on its Common Stock. The payment
of future dividends will be dependent upon earnings, financial requirements of
the Company and other factors deemed relevant by the Company's Board of
Directors. For the foreseeable future it is anticipated that any earnings which
may be generated from operations of the Company will be used to finance the
growth of the Company and that cash dividends will not be paid to holders of
Common Stock.
USE OF PROCEEDS
Should all the options and warrants held by Selling Security Holders for
which the underlying Common Stock is being registered be exercised, the net
proceeds to the Company would be approximately $8,367,000 after deducting
expenses of the offering estimated at $15,000. All such proceeds will be added
to the Company's working capital. The Company has not made any specific
allocations as to the use of any such proceeds. Prior to expenditure, the
proceeds will be invested in short-term interest bearing securities or money
market funds. Any income from such investments will also be added to working
capital. There can be no assurances that the Company will receive any proceeds
from the exercise of the options and warrants and not all options and warrants
may be exercised which could result in the proceeds of this offering to the
Company being minimal.
The Company will not be entitled to the proceeds of any shares of Common
Stock which are sold by the Selling Security Holders.
To meet its long-term objectives, the Company will be required to generate
significant revenues from operations or to obtain additional financing.
6
<PAGE>
SELLING SECURITY HOLDERS
The securities being offered hereby are for the accounts of the following
persons. Except as otherwise indicated, none of the Selling Security Holders is
an officer or director of the Company or would own in excess of 1% of the
Company's outstanding Common Stock after the completion of this offering.
Securities Owned Securities Securities to be
Name Before Offering to be Sold Owned after Offering
- ---- --------------- ---------- --------------------
Irving Bader (1) 160,504 50,000 110,504
Morris Berger (2) 617,500 55,000 562,500
Sali Berger 70,000 70,000 0
Shaya Boymelgreen 62,500 62,500 0
Paulette Brodchandel 200,000 200,000 0
Sigismundo Brodchandel 112,591 112,591 0
Frank Brosens 750,000 750,000 0
Congregation Ohel Yonah 100,000 100,000 0
Elisabeth M. Custer, TTEE for 300,000 300,000 0
William M. Custer Trust
Oscar Folger (3) 523,084 25,000 498,084
Generation Capital Associates 300,000 300,000 0
Daniel German 300,000 300,000 0
Greendel Equities 187,500 187,500 0
Rose Grossman 100,000 100,000 0
Werner Haase (4) 626,720 50,000 576,720
Jerome and Maxine Kossoff 100,000 100,000 0
Sara Leifer 100,000 100,000 0
James Lucas (5) 291,260 25,000 266,260
Jiwat and Pushpa Mahtani 150,000 150,000 0
Gideon Meth (6) 288,648 125,000 163,648
Michael Nafash 100,000 100,000 0
Raymond Nafash 100,000 100,000 0
Paramount Acquisition Inc. 62,500 62,500 0
Private Investors Equity Group 93,750 93,750 0
7
<PAGE>
Anne Reichman (7) 344,250 88,000 256,250
Barry Reichman (7) 306,250 50,000 256,250
Morris Rubin 110,000 100,000 10,000
Philip Shapiro 100,000 100,000 0
Seafish Partners 200,000 200,000 0
Gary Simon (8) 160,000 100,000 60,000
Star Properties Limited 450,000 450,000 0
Target Capital Corp. 50,000 50,000 0
John M. Thompson 31,250 31,250 0
William M. Thompson 31,250 31,250 0
Track Data Corp. 62,500 62,500 0
The Trading Post Co. 100,000 100,000 0
Venetech Investments, Ltd. 162,500 162,500 0
William Walters Individual 100,000 100,000 0
Retirement A/C Cowen &
Company, custodian
Water-Jel Technologies, Inc. 200,000 200,000 0
Michael Weiss 100,000 100,000 0
Yeshiva Beth Hillel 100,000 100,000 0
Elaine Zinberg 100,000 100,000 0
- ----------
(1) Mr. Bader is a member of the Company's Board of Directors. Assuming the
sale of only his securities, after completion of this offering, Mr. Bader
would own approximately 1.8% of the Company's outstanding Common Stock.
(2) Mr. Berger is the Company's Chief Executive Officer and a member of the
Board of Directors. Assuming the sale of only his securities, after
completion of this offering, Mr. Berger would own approximately 9% of the
Company's outstanding Common Stock.
(3) Includes 498,084 shares owned by Mr. Folger's wife. Assuming the sale of
only Mr. Folger's securities, after completion of this offering, Mrs.
Folger would own approximately 8.1% of the Company's outstanding Common
Stock.
(4) Mr. Haase is a member of the Company's Board of Directors. Assuming the
sale of only his securities, after completion of this offering, Mr. Haase
would own approximately 9.3% of the Company's outstanding Common Stock.
8
<PAGE>
(5) Assuming the sale of only his securities, after completion of this
offering, Mr. Lucas would own approximately 4.3% of the Company's
outstanding Common Stock.
(6) Assuming the sale of only his securities, after completion of this
offering, Mr. Meth would own approximately 2.6% of the Company's
outstanding Common Stock.
(7) Barry and Anne Reichman are husband and wife. Includes for both 256,250
shares owned of record by Mr. Reichman. Ms. Anne Reichman is the Company's
Secretary and a member of the Board of Directors. Mr. Barry Reichman is
the Company's President and a member of the Board of Directors. Assuming
the sale of only their securities, after completion of this offering, Mr.
and Ms. Reichman would own approximately 4.1% of the Company's outstanding
Common Stock.
(8) Mr. Simon is the Company's Chief Financial Officer.
PLAN OF DISTRIBUTION
The securities are being offered for the respective accounts of the
Selling Security Holders. The Company will not receive any proceeds from the
sale of any securities by the Selling Security Holders, although it will receive
proceeds from the exercise of warrants and options by the Selling Security
Holders.
The sale of securities by the Selling Security Holders may be effected
from time to time in transactions in the over-the-counter market, in negotiated
transactions, or through a combination of such methods of sale, at fixed prices,
which may be charged at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Selling
Security Holders may effect such transactions by selling the securities to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from the Selling Security Holders
and/or the purchasers of the securities for which such broker-dealers may act as
agent or to whom they sell as principal, or both (which compensation as to a
particular broker-dealer may be in excess of customary compensation).
The Selling Security Holders and any broker-dealers who act in connection
with the sale of the securities hereunder may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, and any commissions
received by them and profit on any sale of the securities as principal might be
deemed to be underwriting discounts and commissions under the Securities Act.
EXPERTS
The financial statements and schedules as of February 29, 1996 and
February 28, 1995 have been incorporated by reference herein and in the
registration statement in reliance upon the report by Holtz Rubenstein & Co.,
LLP, independent public accountants, and are included herein in reliance upon
the authority of said firm as experts in accounting and auditing in giving said
reports.
LEGAL MATTERS
Certain legal matters in connection with this offering are being passed
upon for the Company by Oscar D. Folger, Esq., New York, New York. An option to
purchase 25,000 shares has been granted to Mr. Folger. The shares underlying
this option are being registered for sale herein. Also, Mr. Folger's wife owns
190,363 shares of the Common Stock of the Company and warrants to purchase an
additional 307,721 shares of Common Stock. James Lucas, who is of counsel to Mr.
Folger, owns 20,214 shares of the Common Stock of the Company and warrants to
purchase an additional 246,046 shares of Common Stock. Also, an option to
purchase
9
<PAGE>
25,000 shares has been granted to Mr. Lucas. The shares underlying this option
are being registered for sale herein.
MATERIAL CHANGES
The following material events have occurred in the Company's affairs since
the filing of its most recent quarterly report on Form 10-QSB on October 15,
1996:
In November 1996, the Company completed a private placement of 15 shares
of Series A Convertible Preferred Stock ("Series A Preferred"). Net proceeds of
the private placement were $675,000. Each share of Series A Preferred is
convertible after the earlier of: (a) the day following the day that this
registration statement is declared effective or (b) April 30, 1997, into a
number of shares (the "Conversion Shares") of the Company's Common Stock equal
to $50,000 divided by the Conversion Price. The Conversion Price means a price
per share equal to the lesser of (1) $1.00 or (2) the greater of (a) 70% of the
average of the closing bid prices of a share of Common Stock of the Company
during the ten trading days immediately prior to such conversion or (b) the
closing bid price of a share of Common Stock of the Company on the trading day
immediately prior to such conversion. The Conversion Price shall not be less
than $.50 per share. Also, commencing November 3, 1997, each share of Series A
Preferred is entitled to receive an annual dividend equal the number of shares
of Common Stock of the Company which is equal to $5,000 divided by the closing
bid price of the Common Stock of the Company on the first business day of
November. The Series A Preferred shall have a liquidation preference of $50,000
per share. The Company may redeem all of the Series A Preferred for $50,000 per
share at any time on or after the earlier of: (a) November 1, 1999 or (b) when
the closing bid price of a share of Common Stock of the Company has equaled or
exceeded $3.00 on each of twenty (20) consecutive trading days. In addition to
the Series A Preferred, the private placement investors will receive warrants to
purchase an aggregate of 843,750 shares of Common Stock at $1.50 per share. The
shares of Common stock issuable upon conversion of the Series A Preferred and
exercise of these warrants are included in this registration statement.
On November 19, 1996, the Company received a letter from Nasdaq indicating
that the Company's Common Stock has been trading below $1.00 per share and that
the Company must present a plan for curing this shortfall within 90 days. The
Company is considering several possible solutions to comply with the Nasdaq
request. These include encouraging the exercise of warrants by reducing their
exercise price, effecting a reverse stock split, raising additional capital
through private placements, and engaging in financial public relations efforts.
In addition, Nasdaq has proposed increased standards for maintaining the listing
of the Company's securities on the Nasdaq Small-Cap Market. See "Risk Factors -
Need for Additional Financing" and "Risk Factors - Maintenance Criteria for
Nasdaq Securities; Penny Stock Rules."
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, which have been filed with the Commission by the
Company are incorporated herein by reference and made a part hereof. The
Commission file number for all documents which are incorporated by reference is
0-25758.
(1) Annual Report on Form 10-KSB for the fiscal year ended February
29, 1996.
(2) Quarterly Report on Form 10-QSB for the six months ended August
31, 1996.
(3) The section entitled "Description of Securities" in the Company's
Registration Statement on Form S-1 (Registration No. 33-88494)
declared effective on April 13, 1995.
In addition, any amendments to such document and all other reports, proxy
statements and other
10
<PAGE>
documents of the Company hereafter filed with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination
of the offering of the securities covered by this Prospectus, shall be deemed to
be incorporated in this Prospectus and made a part hereof by reference from the
date of filing of each such document. Any statement contained in an earlier
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
INDEMNIFICATION
The Company's Certificate of Incorporation provides that all directors,
officers, employees and agents of the Registrant shall be entitled to be
indemnified by the Company to the fullest extent permitted by law. Delaware law
allows the elimination or limitation of personal liability of the Company's
directors, except in situations where there has been a breach of the director's
duty of loyalty to the Company or its stockholders, acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, liability under Section 174 of the Delaware General Corporation Law
relative to unlawful payment of dividends stock purchases or redemptions, or any
transaction from which the director derived an improper personal benefit.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, or otherwise, the
Company 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, or otherwise, the
Company 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.
ADDITIONAL INFORMATION
This Prospectus contains certain information concerning the Company and
its securities, but does not contain all the information set forth in the
Registration Statement and the Exhibits thereto filed with the Commission under
the Securities Act of 1933, as amended, to which reference is made. Any summary
from the Exhibits contained in this Prospectus is necessarily incomplete and
must not be considered as a full statement of the provisions of such
instruments.
11
<PAGE>
MULTI-MEDIA TUTORIAL SERVICES, INC.
5,644,341 Shares of Common Stock
----------------------
PROSPECTUS
----------------------
November __, 1996
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and if given or made, such information or representations must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or a solicitation of any offer to buy any
securities in any jurisdiction in which such an offer or solicitation would be
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall under any circumstances create any implication that there has been no
change in the affairs of the Company since the date hereof.
<PAGE>
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the issuance and distribution of the
securities being registered under this Registration Statement are estimated as
follows:
Securities and Exchange Commission fee ... $ 1,443.16
Blue Sky fees and expenses................ 1,500.00
Legal fees and expenses................... 7,000.00
Accountant's fees and expenses............ 2,000.00
Miscellaneous............................. 3,056.84
---------
Total......................... $15,000
Item 15. Indemnification of Directors and Officers.
The Company has entered into agreements with each director in which the
Company agrees to indemnify each director and officer to the maximum extent
permitted by law.
The Company's Certificate of Incorporation provides that all directors,
officers, employees and agents of the Registrant shall be entitled to be
indemnified by the Company to the fullest extent permitted by law. The
Certificate of Incorporation also provides as follows:
A director, or former director, shall not be liable to the corporation or
to any of its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that this provision shall not eliminate or
limit the liability of a director: (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) under ss.174 of the General Corporation
Law of the State of Delaware, pertaining to the liability of directors for
unlawful payment of dividends or unlawful stock purchase or redemption; or
(iv) for any transaction from which the director derived an improper
personal benefit.
Section 145 of the Delaware General Corporation Law concerning
indemnification of officers, directors, employees and agents is set forth below.
"Section 145. Indemnification of officers, directors, employees and
agents; insurance.
(a) 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, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) 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 (including attorneys'
fees), 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. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo
II-1
<PAGE>
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which 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 reasonable cause to
believe that his conduct was unlawful.
(b) 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 or
suit by or in the right of the corporation to procure a judgment in its favor 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 (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit 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 except that no indemnification shall be made in respect of 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 of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorney's fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer, to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorney's fees) incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who 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 any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
II-2
<PAGE>
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
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 Company pursuant to the foregoing provisions, or otherwise, the
Company 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 Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to the 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.
Item 16. Exhibits.
Exhibit No. Description
- ----------- -----------
(5) Opinion of Oscar D. Folger
(23)(a) Consent of Oscar D. Folger (Included in Exhibit (5))
(23)(b) Consent of Holtz Rubenstein & Co., LLP
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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II-3
<PAGE>
(ii) To reflect in the prospectus any fact or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in the volume
of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the high and low and of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply
if the registration statement is on Form S-3, or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference 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) That for purposes of determining any liability under the Securities
Act of 1933, each filing of Registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Brooklyn, New York on the 26th day of
November 1996.
Multi-Media Tutorial Services, Inc.
By: /s/ Morris Berger
---------------------------------
Morris Berger, CEO and Director
II-5
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Morris Berger as his or her true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him or her and in his or her
name, place and stead in any and all capacities to sign any and all amendments
(including post-effective amendments) to this Registration Statement on Form S-3
and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission under the
Securities Act of 1933.
--------
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Irving Bader
- -------------------------
Irving Bader Director /96
/s/ Morris Berger
- -------------------------
Morris Berger Director /96
/s/ Werner Haase
- -------------------------
Werner Haase Director /96
/s/ Anne Reichman Director /96
- -------------------------
Anne Reichman
/s/ Barry Reichman
- -------------------------
Barry Reichman Director /96
/s/ Gary Simon
- -------------------------
Gary Simon Chief Financial Officer /96
(Principal Financial and
Accounting Officer)
II-6
<PAGE>
Exhibit 5
LAW OFFICES OF OSCAR FOLGER
521 Fifth Avenue
New York, New York 10175
November 26, 1996
Multi-Media Tutorial Services, Inc.
205 Kings Highway
Brooklyn, New York 11223
Re: Form S-3 Registration Statement
Gentlemen:
We have acted as counsel for Multi-Media Tutorial Services, Inc., a Delaware
corporation (the "Company"), in connection with the registration by the Company
of 5,644,341 shares of Common Stock, par value $0.01 per share (the
"Securities"), which are the subject of a Registration Statement on Form S-3
under the Securities Act of 1933, as amended (the "Act").
As counsel to the Company we have examined and relied upon the original or
copies, certified or otherwise identified to our satisfaction, of such
documents, corporate records and other instruments as we have deemed necessary
in order to render the following opinion.
On the basis of and subject to the foregoing, it is our opinion that the
Securities issued or to be issued and sold or to be sold by the Company have
been duly authorized and are, or, when issued and sold, will be duly issued and
fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Registration Statement. In giving such consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Act or the Rules and Regulations of the
Securities and Exchange Commission thereunder.
This opinion is to be used only in connection with the offer and sale of the
Securities as variously referred to herein while the Registration Statement is
in effect.
Very truly yours,
/s/
Oscar D. Folger
<PAGE>
Exhibit 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the use in the Registration Statement on Form S-3 of
Multi-Media Tutorial Services, Inc. of our report dated May 29, 1996 (except for
Note 16b, as to which the date is June 11, 1996) incorporated herein by
reference and to the reference to our firm under the caption "Experts" in the
Prospectus.
/s/ Holtz Rubenstein & Co., LLP
Melville, New York
November 27, 1996
