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As Filed with Securities and Exchange Commission on June 27, 1997
Registration No. 333-26305
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ROMTECH, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2694937
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2000 Cabot Boulevard, Suite 110
Langhorne, Pennsylvania 19047
(215) 750-6606
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
Joseph A. Falsetti
Chairman and Chief Executive Officer
RomTech, Inc.
2000 Cabot Boulevard, Suite 110
Langhorne, PA 19047
(215) 750-6606
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Ellen Pulver Flatt, Esquire
McCausland, Keen & Buckman
Radnor Court, Suite 160
259 Radnor-Chester Road
Radnor, PA 19087
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
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If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Shares to be Amount to be Aggregate Price Per Aggregate Offering Amount of
Registered Registered (1) Share (2) Price Registration Fee (3)
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<S> <C> <C> <C> <C>
Common Stock 2,661,422 $1.625 $4,206,596.88 $2,425.70
</TABLE>
(1) This Registration Statement covers shares owned by certain selling
shareholders which shares may be offered from time to time by the selling
shareholders. Of the 2,661,422 shares to be registered, 901,658 of the
shares represent a good faith estimate of the maximum number of shares to
be issued upon conversion of the Registrant's Class Two Convertible
Preferred Stock based on an assumed conversion price of $1.41, and
1,146,790 of the shares represent a good faith estimate of the maximum
number of shares to be issued upon conversion of the Registrant's Class
Three Convertible Preferred Stock based on an assumed conversion price of
$1.09. Since the number of shares is presently an indeterminate number,
such number may be adjusted in accordance with Rule 416.
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457 based upon the average of the bid and asked price of
Registrant's Common Stock on June 23, 1997 on the Nasdaq SmallCap Market.
(3) The amount of Registration Fee represents the fee paid upon initial filing
of this Registration Statement of $1,822.32, plus an additional filing fee
of $603.38 based upon the additional 1,225,325 shares being registered
pursuant to this Registration Statement at an estimated maximum aggregate
offering price per share of $1.625.
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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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 JUNE 27, 1997
PROSPECTUS
ROMTECH, INC.
2,661,422 shares of Common Stock
Up to 2,661,422 shares (the "Shares") of Common Stock, no par value
(the "Common Stock"), of RomTech, Inc., a Pennsylvania corporation ("RomTech" or
the "Company"), may be offered from time to time under this prospectus by the
selling shareholders listed herein under "Selling Shareholders" (collectively,
the "Selling Shareholders"). This prospectus shall also cover an additional
indeterminate number of shares of Common Stock issuable upon conversion of the
Company's Class Two Convertible Preferred Stock and Class Three Convertible
Preferred Stock, which number is based upon fluctuating market prices. RomTech
shall pay all expenses incident to the registration of the Common Stock,
including, without limitation, the filing of this Registration Statement,
including all registration and filing fees, fees and expenses of compliance with
state securities or "blue sky" laws, printing expenses, messenger and delivery
expenses, fees and disbursements of counsel for the Company and all independent
certified public accountants retained by the Company. Each Selling Shareholder
shall pay all expenses relating to the sale of the Shares including any
commissions, discounts or other fees payable to broker-dealers and any attorney
fees or other expenses incurred by such Selling Shareholder. RomTech will not
receive any of the proceeds from the sale of the Shares by the Selling
Shareholders. RomTech will receive the proceeds from the issuance of Shares to
the Selling Shareholders upon exercise of certain warrants, which will be used
for debt repayment, redemption of preferred stock, product development, sales
and marketing and general working capital purposes.
The Selling Shareholders have not advised RomTech of any specific plans
for the distribution of the Shares covered by this Prospectus, but it is
anticipated that the Shares will be sold from time to time primarily in
transactions (which may include block transactions) in the Nasdaq SmallCap
Market at the market price then prevailing, although sales may also be made in
negotiated transactions or otherwise. The Selling Shareholders and the brokers
and dealers through whom sales of the Shares may be made may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), and their commissions or discounts and other compensation may
be regarded as underwriters' compensation. See "Plan of Distribution."
The Company's Common Stock is traded on the Nasdaq SmallCap Market
under the symbol "ROMT". The average of the bid and asked price of the Common
Stock as reported by the Nasdaq SmallCap Market on June 23, 1997 was $1.625 per
share.
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE RISK FACTORS
BEGINNING ON PAGE 3.
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.
THE DATE OF THIS PROSPECTUS IS June 27, 1997
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AVAILABLE INFORMATION
RomTech has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act (the
"Registration Statement") with respect to the registration of RomTech Common
Stock issuable to the Selling Shareholders. This Prospectus constitutes a part
of the Registration Statement and, in accordance with the rules of the
Commission, omits certain of the information contained in the Registration
Statement. For such information, reference is made to the Registration Statement
and the exhibits thereto.
RomTech is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. The Registration Statement, as well as such reports, proxy
statements and other information, 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. 20549, and at the Commission's regional offices at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, and at Seven World Trade Center, Suite 1300, New York, New York
10048. Copies of such material also can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Such materials and other information concerning RomTech are
also filed electronically with the Commission and are accessible via the
Worldwide Web at http://www.sec.gov.
The Company's Common Stock is traded on the Nasdaq SmallCap Market
under the symbol "ROMT." Reports, proxy statements and other information
concerning the Company will also be available for inspection at the offices of
the National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
hereby incorporated by reference into this Prospectus and made a part hereof:
(i) the Annual Report on Form 10-KSB for the year ended June 30, 1996;
(ii) the Quarterly Reports on Form 10-QSB for the quarters ended September
30, 1996, December 31, 1996, and March 31, 1997;
(iii) the Definitive Proxy Statement in connection with the Company's 1996
Annual Meeting of Shareholders;
(iv) the Current Report on Form 8-K dated November 22, 1996;
(v) the Current Report on Form 8-K dated February 4, 1997; and
(vi) the Current Report on Form 8-K dated April 9, 1997.
All documents filed by RomTech pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus shall be deemed to
be incorporated by reference herein and to be a part hereof from the date of
filing thereof. Any statement contained herein or in any 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 that also is or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus, except as so modified or superseded.
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The Company hereby undertakes to provide without charge to each person,
including any beneficial owner to whom a copy of this Prospectus has been
delivered, upon written or oral request of such person, a copy of any or all of
the information that has been incorporated by reference in this Prospectus (not
including exhibits to such information unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates). Written or oral requests for such copies should be directed to
RomTech, Inc., 2000 Cabot Boulevard, Suite 110, Langhorne, Pennsylvania 19047,
Attention: Joyce Falsetti, Secretary, telephone (215) 750-6606.
FORWARD-LOOKING STATEMENTS
This Registration Statement contains certain forward-looking statements
which involve risks and uncertainties that could cause actual results to differ
materially from those anticipated, including, without limitation, economic and
competitive conditions in the software business affecting the demand for the
Company's products, the Company's need for additional funds, the development,
market acceptance and timing of new products, access to distribution channels
and the renewal of licenses for key software products.
THE COMPANY
RomTech develops, publishes, markets and resells a diversified line of
personal computer software for consumer, educational and business applications.
The Company offers software titles and personal productivity application
products in the education, astronomy and business application markets for use at
home and in the office. The Company's product line enables it to serve customers
who are seeking a broad range of high-quality software titles and personal
productivity application software products. RomTech is a Pennsylvania
corporation that was organized in July 1992. RomTech's principal executive
offices are located at 2000 Cabot Boulevard, Suite 110, Langhorne, PA 19047, and
its telephone number is (215) 750-6606.
RISK FACTORS
The following factors should be considered carefully in evaluating the
Company and its business.
Early Stage Company; Multimedia Software Business; Losses. The Company
commenced operations in July 1992. The Company has experienced losses since
inception. The accumulated deficit for the Company through June 30, 1996 and
March 31, 1997 is $5,655,004 and $7,205,982, respectively. The Company's
operations to date have been funded primarily through proceeds from the
Company's initial public offering of common stock in October 1995 and through
the sale in private offerings of preferred stock and common stock warrants in
November 1996 and April 1997. The Company's operations are subject to all of the
risks inherent in the development of an early stage business, particularly in a
highly competitive industry, including, but not limited to, development,
production and marketing difficulties, competition and unanticipated costs and
expenses. The Company's future success will depend upon its ability to increase
revenues from the development and marketing of its current and future software
products. The development of multimedia software products, which combine text,
sound, high quality graphics, images and video, is difficult and time consuming,
requiring the coordinated participation of various technical and marketing
personnel. Other factors affecting the Company's future success include, but are
not limited to, the ability of the Company to overcome problems and delays in
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product development, market acceptance of products and successful implementation
of sales and marketing programs. There can be no assurance that the Company will
successfully develop a sustainable multimedia or personal productivity software
business and achieve profitability.
Potential Inability to Manage Growth. The Company's ability to manage
growth effectively will depend on its ability to improve and expand its
operations, including its financial and management information systems, and to
recruit, train and manage additional sales, software development and
administrative personnel. There can be no assurance that management will be able
to manage growth effectively, or that it will be able to recruit and retain such
personnel, and the failure to do either will have a material adverse effect on
the Company.
Need for Additional Funds. The Company's future capital requirements
will depend on many factors, including cash flow from operations, continued
progress in its software development program, competing technological and market
developments and the Company's ability to market its products successfully. If
the Company is not able to increase cash flow from operations to a level
sufficient to support continued growth of its business, the Company may require
additional funds to sustain and expand its product development activities.
Adequate funds for these purposes may not be available or may be available only
on terms that would result in significant dilution or otherwise be unfavorable
to existing shareholders. If the Company is unable to secure additional funding,
or if the Company is unable to obtain adequate funds from operations or external
sources when required, the Company's inability to do so would have a material
adverse effect on the long-term viability of the Company.
Shares Eligible for Future Sale. Shares of a substantial number of the
Company's Common Stock in the public market could adversely affect the market
price for the Common Stock. Of the 6,524,699 shares of Common Stock outstanding
on March 31, 1997, approximately 4,974,699 shares are "restricted securities"
which may be sold publicly pursuant to an effective registration statement under
the Securities Act or in reliance upon an applicable exemption from the
registration requirements of the Securities Act. Of the 4,974,699 shares of
restricted securities, 634,667 shares have been registered pursuant to a
registration statement on Form S-3, 7,000 shares are subject to piggyback
registration rights and 4,043,461 shares are presently eligible for sale under
Rule 144 promulgated under the Securities Act. As of March 31, 1997, options and
warrants to purchase 1,181,348 shares of Common Stock were outstanding and were
exercisable within 60 days of March 31, 1997, of which 647,385 were immediately
exercisable, and 1,000,000 shares of Class One Convertible Preferred Stock
("Class One Preferred Stock") were convertible into 303,030 shares of Common
Stock beginning on October 17, 1997. Shares issuable upon the exercise of these
options and warrants and upon conversion of the Class One Preferred Stock will
be eligible for sale pursuant to an effective registration statement or in
reliance upon an applicable exemption from the registration requirements of the
Securities Act.
Recent Sales of Securities. On January 30, 1997, the Company completed
a private placement to accredited investors of 1,271,340 shares of Class Two
Convertible Preferred Stock (the "Class Two Preferred Stock") and 355,975 Common
Stock Warrants (the "Class Two Warrants") which entitle the holders to purchase
355,975 shares of the Company's Common Stock. The Class Two Preferred Stock is
convertible beginning six months following the date of issuance into shares of
Common Stock equal to the number of shares of Class Two Preferred Stock
surrendered for conversion divided by the conversion price, which will be the
lower of (i) $3.97 or (ii) ninety percent (90%) of the average of the closing
bid price of the Company's Common Stock for the ten (10) business days
immediately preceding the date on which the Securities and Exchange Commission
declares effective the registration statement of which this Prospectus is a
part.
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On April 22, 1997, the Company completed a private placement to
accredited investors of 1,250,000 shares of Class Three Convertible Preferred
Stock (the "Class Three Preferred Stock") and 62,500 Common Stock Warrants (the
"Class Three Warrants") to purchase 62,500 shares of the Company's Common Stock.
One-half of the Class Three Preferred Stock is convertible at the option of the
holder beginning five days following the date that the SEC declares effective
the registration statement of which this Prospectus is a part (the "First
Conversion Date"). The remaining one-half of the Class Three Preferred Stock
will become convertible thirty days after the First Conversion Date. The
conversion price per share (the "Conversion Price") for the Class Three
Preferred Stock will range from a high of 80% of the average closing bid price
of the Company's Common Stock (the "Average Quoted Price") for the five (5)
trading days immediately preceding the date of conversion to a low of 70% of the
Average Quoted Price for the five (5) trading days immediately preceding the
date of conversion; provided that the Conversion Price will not exceed $5.95 or
be less than $.66.
The issuance of the Class Three Preferred Stock has resulted in
anti-dilution adjustments to the Company's Class Two Preferred Stock in
accordance with the terms of the Class Two Preferred Stock. The aforementioned
sales of securities may result in significant dilution to the current holders of
Common Stock. In addition, due to specific accounting guidance recently
promulgated by the SEC, the Company's loss per share will be negatively impacted
since certain securities issued by the Company contain "in the money" conversion
features that will be accounted for in a manner similar to a preferred stock
dividend.
Rapid Technological Change; Product Development. The market for the
Company's products is characterized by rapid technological developments,
evolving industry standards, swift changes in customer requirements and frequent
new product introductions and enhancements. The Company's continued success will
be dependent upon its ability to continue to enhance its existing products,
develop and introduce in a timely manner new products incorporating
technological advances and respond to customer requirements. To the extent one
or more of the Company's competitors introduce products that more fully address
customer requirements, the Company's business could be adversely affected. There
can be no assurance that the Company will be successful in developing and
marketing enhancements to its existing products or new products on a timely
basis or that any new or enhanced products will adequately address the changing
needs of the marketplace. If the Company is unable to develop and introduce new
products or enhancements to existing products in a timely manner in response to
changing market conditions or customer requirements, the Company's business and
operating results could be adversely affected. From time to time, the Company or
its competitors may announce new products, capabilities or technologies that
have the potential to replace or shorten the life cycles of the Company's
existing products. There can be no assurance that announcements of currently
planned or other new products will not cause customers to delay their purchasing
decisions in anticipation of such products, which could have a material adverse
effect on the Company's business and operating results.
Uncertainty of Future Operating Results; Fluctuations in Quarterly
Operating Results. Historical results of the Company's operating results should
not necessarily be considered indicative of future growth, or of future
operating results. Future operating results will depend upon many factors,
including the demand for the Company's products, the level of product and price
competition, the length of the Company's sales cycle, seasonality of individual
customer buying patterns, the size and timing of new product introductions and
product enhancements by the Company and its competitors, the mix of sales by
products, services and distribution channels, levels of international sales,
acquisitions by competitors, changes in foreign currency exchange rates, the
ability of the Company to develop and market new products and control costs, and
general domestic and international economic and political conditions. As a
result of these factors, revenues and operating results for any quarter are
subject to variation and the
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Company believes that period-to-period comparisons of its results of operations
are not necessarily meaningful until a representative historical time period is
established and should not be relied upon as indications of future performance.
Highly Competitive Market; Pricing Concerns; Rapidly-Changing Marketing
Environment. The markets for personal computer software for consumer,
educational and business applications are highly competitive, particularly at
the retail shelf level where a rapidly increasing number of software titles are
competing for the same amount of shelf space. There are certain competitors of
the Company with substantially greater sales, marketing, development and
financial resources. The Company believes that the competitive factors affecting
the market for its products and services include the traditional attributes used
in determining a product's value such as: vendor and product reputation; product
quality, performance and price; the availability of products on multiple
platforms; product salability; product integration with other enterprise
applications; product functionality and features; product ease-of-use; and the
quality of customer support services and training. The relative importance of
each of these factors depends upon the specific customer involved and while the
Company believes it competes favorably in each of these areas, there can be no
assurance that it will continue to do so. Moreover, the Company's present or
future competitors may be able to develop products comparable or superior to
those offered by the Company, offer lower price products or adapt more quickly
than the Company to new technologies or evolving customer requirements.
Competition is expected to intensify. In order to be successful in the future,
the Company must respond to technological change, customer requirements and
competitors' current products and innovations. There can be no assurance that it
will be able to continue to compete effectively in its market or that future
competition will not have a material adverse effect on its business operating
results and financial condition.
Possible Inadequacy of Protection of Software Technology, Tradenames.
and Other Proprietary Rights. The Company's success depends in part on its
ability to protect its proprietary rights to the technologies and concepts used
in its principal products. The Company relies on a combination of copyrights,
trademarks, trade secrets, confidentiality procedures and contractual provisions
to protect its proprietary rights. There can be no assurance that the Company's
existing or future copyrights, trademarks, trade secrets or other intellectual
property rights will be of sufficient scope or strength to provide meaningful
protection or commercial advantage to the Company. The Company has no software
patents. Also, in selling certain of its products, the Company relies on "shrink
wrap" licenses that are not signed by licensees and, therefore, may be
unenforceable under the laws of certain jurisdictions. In addition, the laws of
some foreign countries do not protect the Company's proprietary rights to the
same extent as do the laws of the United States. There can be no assurance that
such factors would not have a material adverse effect on the Company's business
or operating results. The Company may from time to time be notified that it is
infringing certain patent or intellectual property rights of others.
Combinations of technology acquired through past or future acquisitions and the
Company's technology will create new products and technology which may give rise
to claims of infringement. While no actions are currently pending against the
Company for infringement of patent or other proprietary rights of third parties,
there can be no assurance that third parties will not initiate infringement
actions against the Company in the future. Any such action could result in
substantial cost to and diversion of resources of the Company. If the Company
were found to infringe upon the rights of others, no assurance can be given that
licenses would be obtainable on acceptable terms or at all, that significant
damages for past infringement would not be assessed or that further litigation
relative to any such licenses or usage would not occur. The failure to obtain
necessary licenses or other rights, or the advent of litigation arising out of
any such claims, could have a material adverse effect on the Company's operating
results.
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Dependence on Key Management and Technical Personnel. The Company's
success depends to a significant degree upon the continued contributions of its
key management, marketing, technical and operational personnel, including
members of senior management and technical personnel of acquired companies. The
Company has agreements providing for the continued employment of its key
employees for a period of one or two years. Notwithstanding the agreements, the
employees may voluntarily terminate their employment with the Company at any
time. The loss of the services of one or more key employees, including key
employees of acquired companies, could have a material adverse effect on the
Company's operating results. The Company also believes its future success will
depend in large part upon its ability to attract and retain additional highly
skilled management, technical, marketing, product development and operational
personnel. Competition for such personnel is intense, and there can be no
assurance that the Company will be successful in attracting and retaining such
personnel.
Reliance on and Unique Risks of International Sales. In fiscal 1996,
the Company derived approximately 14% of its total revenues from international
sales. International business is subject to certain risks including varying
technical standards, tariffs and trade barriers, political and economic
instability, reduced protection for intellectual property rights in certain
countries, difficulties in supporting foreign customers, difficulties in
managing foreign distributors, potentially adverse tax consequences, the burden
of complying with a wide variety of complex operations, customs, foreign laws,
regulations and treaties and the possibility of difficulties in collecting
accounts receivable.
Acquisition-Related Risks. The acquisitions completed by the Company
will present it with numerous challenges, including difficulties in the
assimilation of the operations, technologies and products of the acquired
companies and managing separate geographic operations. Since its initial public
offering, the Company has acquired Applied Optical Media Corporation and Virtual
Reality Laboratories, Inc. ("VRLI"). See "Mergers and Acquisitions."
On September 27, 1996, the Company entered into an agreement in
principle to acquire FileABC(TM), a Nevada Limited Partnership ("FileABC"), in
exchange for cash and shares of the Company's Common Stock. FileABC develops,
publishes and markets document imaging, management and archiving software for
the Windows(TM) operating systems. The completion of the acquisition of FileABC
was subject to certain conditions, including the condition that FileABC continue
to have a distribution relationship with Franklin Quest Company ("Franklin
Quest") for the distribution of software products. On June 11, 1997, the Company
informed FileABC that it would not complete the acquisition of FileABC as a
result of Franklin Quest's termination of its distribution relationship with
FileABC. The Company is currently evaluating the recoverability of the amounts
previously provided to FileABC.
Other acquisitions may be contemplated by the Company from
time-to-time. The Company currently does not have any plans, proposals,
arrangements or understandings for the completion of any future mergers or
acquisitions. The Company does not have a formal policy regarding related party
transactions, but any transactions, including those with related parties, would
be subject to review and approval by the Company's Board of Directors and, if
required, would be disclosed in the Company's periodic public filings. The
process of integrating the business operations of acquired companies into the
Company's operations may result in unforeseen operating difficulties and
expenditures and may absorb significant management attention that would
otherwise be available for the ongoing development of the Company's business. If
the Company's management does not respond to these challenges effectively, the
Company's results of operations could be adversely affected. Moreover, there can
be no assurance that the anticipated benefits of the acquisitions will be
realized. The Company and the acquired companies could experience difficulties
or delays in integrating their respective technologies or
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developing and introducing new products. Delays in, or the non-completion of,
the development of these new products, or lack of market acceptance of such
products, could have an adverse impact on the Company's future results of
operations and result in a failure to realize anticipated benefits of the
acquisitions.
The Company will seek to continue to increase its market share in the
home and business software marketplace by focusing on new product development,
entering into new distribution agreements and completing additional
acquisitions. The Company considers companies that offer products and services
similar to those marketed by the Company which would enhance the Company's
product offerings and/or broaden the Company's distribution capabilities and
increase future revenues and earnings as potential acquisition candidates. No
related entities are currently under consideration as acquisition candidates.
Potential Failure of Product Liability Limitations. The Company's
license agreements with customers typically contain provisions designed to limit
their exposure to potential product liability claims. However, it is possible
that such limitation of liability provisions may not be effective under the laws
of certain jurisdictions. Although the Company has not experienced any product
liability claims to date, the sale and support of products may entail the risk
of such claims, and there can be no assurance that the Company will not be
subject to such claims in the future. A successful product liability claim
brought against the Company could have a material adverse effect upon the
Company's business, operating results and financial condition.
Stock Price Volatility. The Company believes that a variety of factors
could cause the price of its Common Stock to fluctuate, perhaps substantially,
including quarter to quarter variations in operating results; announcements of
developments related to its business; fluctuations in its order levels; general
conditions in the technology sector or the worldwide economy; announcements of
technological innovations; new products or product enhancements by the Company
or its competitors; key management changes; changes in joint marketing and
development programs; developments relating to patents or other intellectual
property rights or disputes; and developments in the Company's relationships
with its customers, distributors and suppliers. In addition, in recent years the
stock market in general, and the market for shares of software and high
technology stock in particular, has experienced extreme price fluctuations which
have often been unrelated to the operating performance of affected companies.
Such fluctuations could adversely affect the market price of the Company's
Common Stock.
Possible Delisting of Securities. The Common Stock is listed for
trading on the Nasdaq SmallCap Market under the symbol ROMT. A listed company
may be delisted if it fails to maintain minimum levels of stockholders' equity,
shares publicly held, number of stockholders or aggregate market value, or if it
violates other aspects of its listing agreement. Although as of March 31, 1997,
the Company did not satisfy the minimum level of stockholders' equity required
to be listed ($1,000,000), on April 22, 1997, the Company completed a private
placement to accredited investors of 1,250,000 shares of Class Three Preferred
Stock and Class Three Warrants, which, on a pro forma basis, resulted in the
Company's satisfaction of the minimum stockholders' equity requirement for
continued listing. The Company continues to seek additional capital and attempts
to effect other equity transactions to, among other things, increase its
stockholders' equity so that it can continue to meet the minimum stockholders'
equity requirements of the Nasdaq SmallCap Market. There can be no assurance
that the Company will be able to raise such additional capital or effect other
equity transactions to permit the Company to continue to meet Nasdaq's
requirements. If the Company fails to satisfy the criteria for continued
listing, its Common Stock would be delisted. Public trading, if any, would
thereafter be conducted in the over-the-counter market in the so-called "pink
sheets," or on the NASD's "Electronic Bulletin Board." If the Common Stock were
delisted,
8
<PAGE>
it might be more difficult to dispose of, or even to obtain quotations as to the
price of, the Common Stock and the price, if any, offered for the Common Stock
could be substantially reduced.
Risk of Low Priced Stock. If the Common Stock were delisted from
trading on the Nasdaq SmallCap Market, and the trading price of the Common Stock
were less than $5.00 per share, or the Company had less than $2 million in net
tangible assets, trading in the Common Stock would be subject to the
requirements of Rule 15g-9 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Under this rule, broker/dealers who
recommend such securities to persons other than established customers and
accredited investors (generally institutions with assets in excess of $5 million
or individuals with a net worth in excess of $1 million or an annual income
exceeding $200,000 or $300,000 jointly with their spouses) must make a special
written suitability determination for the purchaser and receive the purchaser's
written agreement to a transaction prior to sale. The requirements of Rule
15g-9, if applicable, may affect the ability of broker/dealers to sell the
Company's securities and may also affect the ability of purchasers in this
offering to sell their shares in the secondary market. The Securities
Enforcement Remedies and Penny Stock Reform Act of 1990 (the "Penny Stock Rule")
also requires additional disclosure in connection with any trades involving a
stock defined as penny stock (any non-Nasdaq equity security that has a market
price or exercise price of less than $5.00 per share and less than $2 million in
net tangible assets, subject to certain exceptions). Unless exempt, the rules
require the delivery, prior to any transaction involving a penny stock, of a
disclosure schedule prepared by the SEC explaining important concepts involving
the penny stock market, the nature of such market, terms used in such market,
the broker/dealer's duties to the customer, a toll-free telephone number for
inquiries about the broker/dealer's disciplinary history and the customer's
rights and remedies in case of fraud or abuse in the sale. Disclosure must also
be made about commissions payable to both the broker/dealer and the registered
representative, and current quotations for the securities. 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.
MERGERS AND ACQUISITIONS
The Company and Applied Optical Media Corporation ("AOMC") merged (the
"Merger") concurrently with the consummation of the Company's initial public
offering in October 1995. Under the terms of the Agreement and Plan of Merger
(the "Merger Agreement") entered into by the Company and AOMC, all of the
outstanding common shares of AOMC were exchanged for 1,575,000 shares of the
Company's Common Stock and 425,000 warrants (the "Merger Warrants"). Each Merger
Warrant is exercisable for one share of Common Stock for seven years from the
date of issuance at an exercise price of $.50 per share. In addition, as a
condition precedent to and concurrently with the Merger, Odyssey Capital Group,
L.P. ("Odyssey"), one of the three principal shareholders of AOMC, forgave
$371,000 of AOMC debt and exchanged a note for approximately $1,000,000 owed by
AOMC to Odyssey for 1,000,000 shares of convertible preferred stock of the
Company (the "Odyssey Preferred Stock"). Odyssey also exercised a warrant to
acquire 220,662 shares of the Company's Common Stock at an aggregate exercise
price of $100,000 concurrently with the closing of the Merger. The Odyssey
Preferred Stock has a face value of $1,000,000 and is convertible, beginning
October 18, 1997, into Common Stock at a price of $3.30 per share. Prior to the
Company's initial public offering, Odyssey had invested $200,000 in the Company
as part of a $300,000 bridge financing pending the completion of the initial
public offering. Odyssey and John J. Brown, a former officer and director of the
Company, were the principal shareholders of AOMC prior to the Merger. John J.
Brown and a representative of Odyssey were elected to the
9
<PAGE>
Company's Board of Directors prior to the consummation of the Merger. The terms
of the transactions between Odyssey, the Company and AOMC were the product of
arm's length negotiations on terms that management of the Company believes
represented market terms for such transactions.
The Company acquired VRLI in April 1996 in a merger of VRLI with a
newly-formed, wholly-owned subsidiary of the Company. In connection with the
acquisition, the Company issued a total of 1,284,440 shares of its Common Stock
in exchange for all of the equity interest in VRLI, which included common stock,
stock options, convertible subordinated debt and a $100,000 promissory note to
an officer and director of VRLI. The principal shareholders of VRLI prior to the
acquisition were Lance Woeltjen, who is currently an officer and director of the
Company, and Clint Woeltjen. The purchase price and other terms of the
transaction with VRLI were negotiated at arm's length.
USE OF PROCEEDS
RomTech will not receive any proceeds from the sale of the Shares by
the Selling Shareholders. RomTech will receive the proceeds from the issuance of
Shares to the Selling Shareholders upon exercise of the Class Two Warrants, the
Class Three Warrants, and certain warrants issued to PJM Trading Company (the
"PJM Warrants") and Sterling Capital LLC (the "Sterling Warrants"). Assuming the
exercise of all of the Class Two Warrants, the Class Three Warrants, the PJM
Warrants and the Sterling Warrants outstanding during fiscal 1998, the Company
anticipates that it would use the proceeds as follows:
Debt repayment $1,400,000
Redeem Class One Convertible Preferred Stock 1,000,000
Product development 500,000
Sales and marketing 500,000
General working capital 300,000
----------
Total use of proceeds $3,700,000
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<PAGE>
SELLING SHAREHOLDERS
The following table sets forth certain information as of May 31, 1997
regarding the ownership of shares of RomTech Common Stock by each Selling
Shareholder and as adjusted to give effect to the sale of the Shares offered
hereby. The Shares are being registered to permit public secondary trading of
the shares and the Selling Shareholders may offer the shares for resale from
time to time. See "Plan of Distribution."
<TABLE>
<CAPTION>
No. of Shares No. of Shares Number of % of Shares
Name of Owned Before Shares Being Shares Owned Owned After
Selling Shareholder the Offering(1) Offered for Sale After the Offering the Offering
- ------------------- --------------- ---------------- ------------------ ------------
<S> <C> <C> <C> <C>
Sanford I. Feld...................... 505,852 (2)(3) 346,227 159,625 2.4%
Nick J. Spatola...................... 75,289 (2)(3) 65,289 10,000 *
Rosario Spatola...................... 32,177 (2)(3) 29,677 2,500 *
Robert W. Gordon..................... 33,013 (2)(3) 30,013 3,000 *
Daniel Zelinsky...................... 160,275 (2)(3)(4) 49,461 2,000 *
Ann Zelinsky Trust, dtd 7/27/89 ..... 108,814 (2)(3)(5) 108,814 --- *
Alan D. Zelinsky Trust, dtd 5/28/92 . 98,922 (2)(3)(6) 98,922 --- *
Herman L. Brockman................... 77,299 (2)(3) 64,299 13,000 *
Marco & Barbara Cutinello ........... 11,242 (2)(3) 9,892 1,350 *
Franklin H. Spirn, M.D. and
Anthony J. Inverno, M.D.............. 202,458 (2)(3) 148,383 54,075 *
Sycamore Group, Ltd., Inc............ 104,816 (2)(3)(7) 74,191 30,625 *
James Souza, Jr...................... 21,338 (2)(3) 14,838 6,500 *
Jeffrey H. London.................... 21,684 (2)(3) 19,784 1,900 *
Marvin F. Kraushar, M.D.............. 74,191 (2)(3) 74,191 --- *
Robert Bier, D.P.M................... 29,230 (2)(3) 24,730 4,500 *
Odyssey Capital Group, L.P........... 1,334,864 (8) 98,922 1,235,942 18.8%
Stanley Dickson, Jr.................. 229,358 (9)(10) 241,858 --- *
Sovereign Partners, L.P.............. 458,716 (9)(10)(11) 483,716 --- *
FT Trading Company................... 229,358 (9)(12) 241,858 --- *
Thomson Kernaghan & Co., Ltd......... 229,358 (9)(10)(13) 241,858 --- *
Sterling Capital, LLC................ 0 (14) 9,511 --- *
PJM Trading Company, Inc............. 391,488 (15) 177,988 213,500 *
H.J. Meyers & Co., Inc............... 7,000 (16) 7,000 --- *
</TABLE>
- ----------
* Less than one percent of the outstanding Common Stock of RomTech, Inc.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "SEC") and generally includes
voting or investment power with respect to securities. In accordance with
SEC Rules, shares which may be acquired upon exercise of stock options,
warrants or other rights which are currently exercisable or which become
exercisable within sixty days of the date of the information in the table
are deemed to be beneficially owned by the Selling Shareholder. Except as
indicated by footnote, and subject to community property laws where
applicable, the persons or entities named in the table above have sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.
(2) Includes the following number of shares of Common Stock issuable upon the
conversion of the Company's Class Two Preferred Stock within 60 days of May
31, 1997 based upon an assumed conversion price of $1.41 per share: Mr.
Feld, 248,227 shares; Nick Spatola,46,809 shares; Rosario Spatola, 21,277
shares; Mr. Gordon, 21,518 shares; Daniel Zelinsky, 113,475 shares; Ann
Zelinsky Trust dtd 7/27/89, 78,014 shares; Alan D. Zelinsky Trust dtd
5/28/92, 70,922 shares; Mr. Brockman, 46,099 shares; Mr. & Mrs. Cutinello,
7,092 shares; Messrs. Spirn and Inverno, 106,383
11
<PAGE>
shares; Sycamore Group, Ltd.,53,191 shares; Mr. Souza, 10,638 shares; Mr.
London, 14,184 shares; Dr. Kraushar, 53,191 shares; and Dr. Bier, 17,730
shares.
(3) Includes the following number of shares of Common Stock issuable upon
exercise of Class Two Warrants which are exercisable within 60 days of May
31, 1997: Mr. Feld, 98,000 shares; Nick Spatola, 18,480 shares; Rosario
Spatola, 8,400 shares; Mr. Gordon, 8,495 shares; Daniel Zelinsky, 44,800
shares; Ann Zelinsky Trust dtd 7/27/89, 30,800 shares; Alan D. Zelinsky
Trust dtd 5/28/92, 28,000 shares; Mr. Brockman, 18,200 shares; Mr. and Mrs.
Cutinello, 2,800 shares; Messrs. Spirn and Inverno, 42,000 shares; Sycamore
Group, Ltd., Inc., 21,000 shares; Mr. Souza, 4,200 shares; Mr. London,
5,600 shares; Dr. Kraushar, 21,000 shares; Dr. Bier, 7,000 shares; and
Odyssey Capital Group, 28,000 shares.
(4) Includes 108,814 shares issuable upon conversion of the Class Two Preferred
Stock and upon exercise of Class Two Warrants held by the Ann Zelinsky
Trust dated 7/27/89 (the "Ann Zelinsky Trust"), of which Daniel Zelinsky
shares investment and voting control as a trustee. Daniel Zelinsky is one
of two beneficiaries of the Ann Zelinsky Trust. Also includes 2,000 shares
of Common Stock held in trust for the benefit of Daniel Zelinsky's spouse.
Daniel Zelinsky shares voting and investment control of such shares.
(5) Voting and investment control of the shares beneficially owned by the Ann
Zelinsky Trust is shared by each of Alan D. Zelinsky and Daniel Zelinsky,
trustees of the Ann Zelinsky Trust. Alan D. Zelinsky and Daniel Zelinsky
are the beneficiaries of the Ann Zelinsky Trust.
(6) Excludes shares beneficially owned by Alan D. Zelinsky individually and as
a trustee of the Ann Zelinsky Trust.
(7) Voting and investment power of the shares of Common Stock beneficially
owned by Sycamore Group, Ltd., Inc. ("Sycamore") are controlled by George
M. Spiridis, President of Sycamore.
(8) Voting and investment power of the shares of Common Stock held by Odyssey
Capital Group L.P. ("Odyssey") are controlled by John P. Kirwin, III, Bruce
E. Terker and Kirk B. Griswold, the principals of Odyssey. Excludes 20,000
shares of Common Stock issuable upon exercise of stock options granted to
Mr. Kirwin, as a non-employee director of the Company, pursuant to the
Company's 1995 Amended and Restated Stock Option Plan. All of these options
are currently exercisable. Excludes 303,030 shares of Common stock issuable
upon the conversion of the shares of the Company's Class One Preferred
Stock, held by Odyssey, which Class One Preferred Stock cannot be converted
until October 18, 1997. Includes 70,922 shares of Common Stock issuable
upon conversion of the Company's Class Two Preferred Stock within sixty
(60) days of May 31, 1997 at an assumed conversion price of $1.41 per
share. Includes 28,000 shares of Common Stock issuable upon exercise of the
Class Two Warrants, which are exercisable within sixty (60) days of May 31,
1997 . Excludes an aggregate of 1,313 shares of Common Stock which Odyssey
has agreed to transfer to certain other shareholders within 60 days of the
date hereof.
(9) The number of shares beneficially owned before the offering, and the number
of shares being offered for sale, are subject to adjustment in accordance
with the terms of the Class Three Preferred Stock as set forth in the
certificate of designation for the Class Three Preferred Stock. The Company
is not able to determine the actual number of shares beneficially owned,
and the number of shares being offered for sale, since such number is based
on fluctuating market prices. See "Recent Sales of Securities" under "Risk
Factors."
(10) Includes the following number of shares of Common Stock issuable upon the
conversion of the Company's Class Three Preferred Stock (one half of which
is convertible beginning five (5) days after the Registration Statement (of
which this Prospectus is a part) is declared effective by the SEC, and the
remaining half of which is convertible beginning 30 days thereafter), based
upon an assumed conversion price of $1.09: Mr. Dickson, 229,358 shares;
Sovereign Partners, L.P., 458,716 shares; and Thomson Kernaghan & Company,
Ltd., 229,358 shares. Excludes the following number of shares of Common
Stock issuable upon exercise of the Class Three Warrants, which become
exercisable beginning on October 9, 1997; Mr. Dickson, 12,500 shares;
Sovereign Partners, L.P., 25,000 shares; and Thomson Kernaghan & Company,
Ltd., 12,500 shares.
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<PAGE>
(11) Voting and investment power of the shares of Common Stock beneficially
owned by Sovereign Partners, L.P. ("Sovereign") are controlled by Steve
Hicks, President of Southridge Capital Management, Inc., the corporate
general partner of Sovereign.
(12) Voting and investment power of the shares of Common Stock beneficially
owned by FT Trading Company ("FT") are controlled by John Porter and Brian
Porter, the principal owners of J&B Trading, LLC and Future Trade, LLC,
which companies are the principal owners of FT. Includes 229,358 shares of
Common Stock issuable upon the conversion of the Company's Class Three
Preferred Stock (one half of which is convertible beginning five (5) days
after the Registration Statement (of which this Prospectus is a part) is
declared effective by the SEC, and the remaining half of which is
convertible beginning 30 days thereafter), based on an assumed conversion
price of $1.09. Excludes 12,500 shares of Common Stock issuable upon
exercise of the Class Three Warrants, which become exercisable beginning on
October 17, 1997.
(13) Voting and investment power of the shares of Common Stock beneficially
owned by Thomson Kernaghan & Co. Ltd. are controlled by VMH Management,
Ltd., of which Mark Valentine is President.
(14) Excludes 9,511 shares of Common Stock issuable upon exercise of Common
Stock issuable upon exercise of common stock warrants which become
exercisable beginning on October 10, 1997.
(15) Voting and investment power of the shares of Common Stock beneficially
owned by PJM Trading Company, Inc. ("PJM") are controlled by Pamin
Koritsoglou and Marlene Koritsoglou, the principals of PJM. Includes
177,988 shares of Common Stock issuable upon exercise of common stock
warrants which become exercisable beginning on July 30, 1997.
(16) Voting and investment control of the shares of Common Stock beneficially
owned by H. J. Meyers & Co., Ltd. are controlled by James Villa, Secretary
of H.J. Meyers & Co., Ltd.
PLAN OF DISTRIBUTION
The Shares offered hereby by the Selling Shareholders may be sold from
time to time by the Selling Shareholders, or by pledgees, donees, transferees or
other successors in interest. Such sales may be made in the Nasdaq SmallCap
Market, or otherwise at prices and at terms then prevailing or at prices related
to the then-current market price, or in negotiated transactions. The Shares may
be sold by one or more of the following methods, without limitation: (a) a block
trade in which the broker-dealer so engaged will attempt to sell the Shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus; (c)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; and (d) privately negotiated transactions between the Selling
Shareholders and purchasers without a broker-dealer. In effecting sales, brokers
or dealers engaged by the Selling Shareholders may arrange for other brokers or
dealers to participate. Such brokers or dealers may receive commissions or
discounts from the Selling Shareholders in amounts to be negotiated immediately
prior to the sale. Such brokers or dealers and any other participating brokers
or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act, in connection with such sales. In addition, any securities
covered by this Prospectus that qualify for sale pursuant to Rule 144 might be
sold under Rule 144 rather than pursuant to this Prospectus.
Upon RomTech being notified by a Selling Shareholder that any material
arrangement has been entered into with a broker or dealer for the sale of Shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplemented Prospectus will
13
<PAGE>
be filed, if required, pursuant to Rule 424(c) under the Securities Act,
disclosing (a) the name of each such broker-dealer, (b) the number of Shares
involved, (c) the price at which such Shares were sold, (d) the commissions paid
or discounts or concessions allowed to such broker-dealer(s), where applicable,
(e) that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this Prospectus, as
supplemented, and (f) other facts material to the transaction.
RomTech shall pay all expenses incident to the registration of the
Common Stock, including, without limitation, the filing of the Registration
Statement of which this Prospectus is a Part, including all registration and
filing fees, fees and expenses of compliance with state securities or "blue sky"
laws, printing expenses, messenger and delivery expenses, fees and disbursements
of counsel for the Company and all independent certified public accountants
retained by the Company and all fees and expenses incurred in connection with
the listing of Common Stock on the Nasdaq SmallCap Market. Each Selling
Shareholder shall pay all expenses relating to the sale of the shares including
any commissions, discounts or other fees payable to broker-dealers and any
attorney fees or other expenses incurred by such Selling Shareholder.
LEGAL MATTERS
An opinion has been rendered by the law firm of McCausland, Keen &
Buckman, Radnor, Pennsylvania, to the effect that the shares of Common Stock
offered by the Selling Shareholders hereby are legally issued, fully paid and
non-assessable.
EXPERTS
The consolidated financial statements of RomTech as of June 30, 1996
and for each of the years in the two-year period ended June 30, 1996 have been
incorporated by reference herein and in the Registration Statement in reliance
upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
14
<PAGE>
No dealer, salesman or other person has beenauthorized 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 RomTech or the Selling Shareholders. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy to any person in any jurisdiction in which such offer or solicitation would
be unlawful or to any person to whom it is unlawful. Neither the delivery of
this Prospectus nor any offer or sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of RomTech or that information contained herein is correct as of any
time subsequent to the date hereof.
----------
TABLE OF CONTENTS
Available Information........................................................2
Incorporation of Documents by Reference......................................2
Forward-Looking Statements...................................................3
The Company..................................................................3
Risk Factors.................................................................3
Mergers and Acquisitions.....................................................9
Use of Proceeds.............................................................10
Selling Shareholders........................................................11
Plan of Distribution........................................................13
Legal Matters...............................................................14
Experts ...................................................................14
2,661,422 Shares
ROMTECH, INC.
COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
JUNE 27, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table shows the estimated expenses of the issuance and
distribution of the securities offered hereby.
Securities and Exchange Commission Registration Fee* ....... $ 2,425
Legal Fees and Expenses..................................... 15,000
Accounting Fees and Expenses................................ 3,500
Miscellaneous............................................... 2,000
---------
Total.................. $22,925
=========
* Exact, all other fees and expenses are estimates
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 1741 through 1750 of Subchapter D, Chapter 17, of the
Pennsylvania Business Corporation Law of 1988 (the "BCL") contain provisions for
mandatory and discretionary indemnification of a corporation's directors,
officers and other personnel, and related matters.
Under Section 1741, subject to certain limitations, a corporation has
the power to indemnify directors and officers under certain prescribed
circumstances against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
an action or proceeding, whether civil, criminal, administrative or
investigative, to which any of them is a party by reason of his being a
representative, director or officer of the corporation or serving at the request
of the corporation as a representative of another corporation, partnership,
joint venture, trust or other enterprise, 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 proceeding, had no reasonable
cause to believe his conduct was unlawful. Under Section 1743, indemnification
is mandatory to the extent that the officer or director has been successful on
the merits or otherwise in defense of any action or proceeding if the
appropriate standards of conduct are met.
Section 1742 provides for indemnification in derivative actions except
in respect of any claim, issue or matter as to which the person has been
adjudged to be liable to the corporation unless and only to the extent that the
proper court determines upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, the person is fairly
and reasonably entitled to indemnity for the expenses that the court deems
proper.
II-1
<PAGE>
Section 1744 provides that, unless ordered by a court, any
indemnification under Section 1741 or 1742 shall be made by the corporation only
as authorized in the specific case upon a determination that the representative
met the applicable standard of conduct, and such determination will be made by
the board of directors (i) by a majority vote of a quorum of directors not
parties to the action or proceeding; (ii) if a quorum is not obtainable, or if
obtainable and a majority of disinterested directors so directs, by independent
legal counsel; or (iii) by the shareholders.
Section 1745 provides that expenses incurred by an officer, director,
employee or agent in defending a civil or criminal action or proceeding may be
paid by the corporation in advance of the final disposition of such action or
proceeding upon receipt of an undertaking by or on behalf of such person to
repay such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by the corporation.
Section 1746 provides generally that, except in any case where the act
or failure to act giving rise to the claim for indemnification is determined by
a court to have constituted willful misconduct or recklessness, the
indemnification and advancement of expenses provided by Subchapter 17D of the
BCL shall not be deemed exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of shareholders of disinterested directors or otherwise, both as
to action in his or her official capacity and as to action in another capacity
while holding that office.
Section 1747 also grants to a corporation the power to purchase and
maintain insurance on behalf of any director or officer against any liability
incurred by him or her in his or her capacity as officer or director, whether or
not the corporation would have the power to indemnify him or her against the
liability under Subchapter 17D of the BCL.
Section 1748 and 1749 extend the indemnification and advancement of
expenses provisions contained in Subchapter 17D of the BCL to successor
corporations in fundamental changes and to representatives serving as
fiduciaries of employee benefit plans.
Section 1750 provides that the indemnification and advancement of
expense provided by, or granted pursuant to, Subchapter 17D of the BCL, shall,
unless otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs and personal representative of such person.
For information regarding provisions under which a director or officer
of the Company may be insured or indemnified in any manner against any liability
which he or she may incur in his or her capacity as such, reference is made to
Article 23 of the Company's Bylaws, which provides in general that the Company
shall indemnify its officers and directors to the fullest extent authorized by
law.
ITEM 16. EXHIBITS.
NUMBER DOCUMENT
5.1 Opinion of McCausland, Keen & Buckman as to the validity of
the issuance of the shares of RomTech Common Stock to be
registered.
23.1 Consent of KPMG Peat Marwick LLP
II-2
<PAGE>
23.2 Consent of McCausland, Keen & Buckman (included in Exhibit
5.1).
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that:
(1) It will include any material information with respect to the
plan of distribution by means of a post-effective amendment
not previously disclosed in this registration statement or any
material change to such information in this registration
statement.
(2) 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) It will 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) For purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 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.
(5) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4), or
497(h) under the Securities Act of 1933 shall be deemed to be
part of this registration statement as of the time it was
declared effective.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of RomTech
pursuant to the foregoing provisions, or otherwise, RomTech has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by RomTech of expenses incurred
or paid by a director, officer or controlling person of RomTech 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, RomTech will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
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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 Langhorne, Pennsylvania, on the date indicated.
Date: June 27, 1997
ROMTECH, INC.
By: /s/ Joseph A. Falsetti
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Joseph A. Falsetti, Chairman, Chief
Executive Officer and Director
By: /s/ Gerald W. Klein
-----------------------------------------
Gerald W. Klein, Vice President, Chief
Financial Officer and Director
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated.
Lance Woeltjen * Chief Technological Officer, General Manager,
President of Virtual Reality Laboratories, and
Director
Thomas D. Parente * Director
John Paul Kirwin, III * Director
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* Joseph A. Falsetti, by signing his name hereto on the date indicated, does
sign this Registration Statement on behalf of each of the indicated
directors of the Registrant, pursuant to Powers of Attorney executed by
each of such directors and filed with the Securities and Exchange
Commission.
/s/ Joseph A. Falsetti Date: June 27, 1997
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Joseph A. Falsetti, Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
NUMBER DOCUMENT
5.1 Opinion of McCausland, Keen & Buckman
23.1 Consent of KPMG Peat Marwick LLP
<PAGE>
EXHIBIT 5.1
OPINION OF MCCAUSLAND, KEEN & BUCKMAN
June 27, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: RomTech, Inc./Registration Statement on Form S-3
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Ladies and Gentlemen:
We have acted as counsel to RomTech, Inc. (the "Company"), a
Pennsylvania corporation, in connection with the preparation and filing of a
registration statement on Form S-3, which is being filed with the Securities and
Exchange Commission on the date hereof (the "Registration Statement").
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Registration Statement.
The Registration Statement covers the following shares of the Company's
Common Stock, no par value:
a. 901,658 shares of Common Stock which may be sold by
certain of the Selling Shareholders and which are issuable upon conversion of
the Class Two Convertible Preferred Stock (the "Class Two Common Shares");
b. 1,146,790 shares of Common Stock which may be sold by
certain of the Selling Shareholders and which are issuable upon conversion of
the Class Three Convertible Preferred Stock (the "Class Three Common Shares");
and
c. 418,475 shares of Common Stock which may be sold by
certain Selling Shareholders and which are issuable upon exercise of the Class
Two Warrants and the Class Three Warrants (the "Warrant Shares");
d. 177,988 shares of Common Stock issuable upon exercise of
certain common stock warrants issued to PJM Trading Company (the "PJM Shares");
e. 9,511 shares of Common Stock issuable upon exercise of
certain common stock warrants issued to Sterling Capital, LLC (the "Sterling
Shares"); and
f. 7,000 shares of Common Stock held by H.J. Meyers & Co.,
Inc. (the "Meyers Shares").
<PAGE>
Securities and Exchange Commission
June 27, 1997
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We have examined the Registration Statement, including the exhibits
thereto, the Company's Articles of Incorporation, as amended, the Company's
Bylaws, as amended, the minutes of actions taken by the Board of Directors of
the Company and such other instruments as we deemed necessary for the opinions
rendered herein. In the foregoing examination, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals and the authenticity of all documents submitted to us as copies of
originals.
Based upon the foregoing, we are of the opinion that:
1. The Class Two Common Shares, when issued in accordance with the
terms of the Class Two Convertible Preferred Stock, will be validly issued,
fully paid and nonassessable.
2. The Class Three Common Shares, when issued in accordance with the
terms of the Class Three Convertible Preferred Stock, will be validly issued,
fully paid and nonassessable.
3. The Warrant Shares, when issued and paid for in accordance with the
Warrants and the Class Three Warrants, as applicable, will be validly issued,
fully paid and nonassessable.
4. The PJM Shares, when issued and paid for in accordance with the
terms of the common stock warrants issued to PJM Trading Company, will be
validly issued, fully paid and nonassessable.
5. The Sterling Shares, when issued and paid for in accordance with the
terms of the common stock warrants issued to Sterling Capital LLC, will be
validly issued, fully paid and nonassessable.
6. The Meyers Shares are validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving this consent, we do not hereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations thereunder.
Sincerely,
McCAUSLAND, KEEN & BUCKMAN
By: /s/ Nancy D. Weisberg
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Nancy D. Weisberg, Vice President
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
The Board of Directors
RomTech, Inc.:
We consent to the use of our report incorporated herein by reference
and to the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
Philadelphia, Pennsylvania
June 26, 1997
