As filed with the U.S. Securities and Exchange Commission on August 14, 2019
Registration No. 333-[ ]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION ON JULY 1, 1998.
REGISTRATION NO. 333-52863
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT ON
FORM S-3
UNDER
THE SECURITIES ACT OF 1933
SPATIALIZER AUDIO LABORATORIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
AMERI Holdings, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 95-4484725 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
5000 Research Court, Suite 750,
Suwanee, Georgia, 30024
(770) 935-4152
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Brent Kelton
Chief Executive Officer
5000 Research Court, Suite 750,
Suwanee, Georgia, 30024
(770) 935-4152
(Name, address including zip code, and telephone number, including area code, of agent for service)
With copies to:
Richard A. Friedman, Esq.
Sheppard, Mullin, Richter & BUXBAUMHampton LLP
515 SOUTH FLOWER STREET, SUITE 3500
LOS ANGELES, CALIFORNIA 90071-2201
(213) 228-0288
DIRECT DIAL: (213) 426-6260
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable
30 Rockefeller Plaza, 39th Floor
New York, NY 10112-0015
Telephone: (212) 653-8700
Fax: (212) 655-1729
Approximate date of commencement of proposed sale to the public: From time to time, after the effective date of this Registration Statement.
registration statement.
If the only securities being registered on this formForm are being 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 formForm 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]
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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. [ ]
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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. [ ]
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If delivery ofthis Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the prospectus is expected to be madeCommission pursuant to Rule 434,
please462(e) under the Securities Act, check the following box. [ ]
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If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ | Accelerated filer ☐ |
Non-accelerated filer ☒ | Smaller reporting company ☒ |
Emerging growth company ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. ☐
CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered | Amount to be registered | Proposed maximum offering price per share | Proposed maximum aggregate offering price(3) | Amount of registration fee(3) | |||||||
| Common Stock, $0.01 par value per share | |||||||||||
| Preferred Stock, $0.01 par value per share | |||||||||||
| Debt Securities | |||||||||||
| Warrants | |||||||||||
| Units | |||||||||||
Total | (1) | (2) | $ | 25,000,000 | $ | 3,030 | |||||
| (1) | An indeterminate number of securities or aggregate principal amount, as the case may be, of common stock and preferred stock, such indeterminate principal amount of debt securities, such indeterminate number of warrants to purchase common stock, preferred stock or debt securities, and such indeterminate number of units, as shall have an aggregate initial offering price not to exceed $25,000,000. If any debt securities are issued at an original issue discount, then the offering price of such debt securities shall be in such greater principal amount as shall result in an aggregate offering price not to exceed $25,000,000, less the aggregate offering price of any securities previously issued hereunder. Any securities issued hereunder may be sold separately or as units with other securities issued hereunder. The proposed maximum initial offering price per |
| (2) | The proposed maximum aggregate offering price per |
| (3) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act. |
| (4) | The registration fee has been calculated in accordance with Rule 457(o) under the Securities Act. |
The Registrant hereby amends this Registration Statement relateson such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may not sell these securities or accept an offer to buy these securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
Subject to completion, dated August 14, 2019
AMERI Holdings, Inc.
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
We may offer and sell, from time to time in one or more offerings, any combination of common stock, preferred stock, debt securities, warrants to purchase common stock, preferred stock or debt securities, or any combination of the foregoing, either individually or as units comprised of one or more of the other securities, having an aggregate initial offering price not exceeding $25,000,000.
This prospectus provides a general description of the securities we may offer. Each time we sell a particular class or series of securities, we will provide specific terms of the securities offered in a supplement to this prospectus. The prospectus supplement and any related free writing prospectus may also add, update or change information contained in this prospectus. We may also authorize one or more free writing prospectuses to be provided to you in connection with these offerings. You should read carefully this prospectus, the applicable prospectus supplement and any related free writing prospectus, as well as any documents incorporated by reference herein or therein before you invest in any of our securities.
The specific terms of any securities to be offered, and the specific manner in which they may be offered, will be described in one or more supplements to this prospectus. This prospectus may not be used to consummate sales of any of these securities unless it is accompanied by a prospectus supplement. Before investing, you should carefully read this prospectus and any related prospectus supplement.
Our common stock is presently listed on The Nasdaq Capital Market under the symbol “AMRH.” On August 12, 2019, the last reported sale price of our common stock was $0.3234 per share. The applicable prospectus supplement will contain information, where applicable, as to any other listing on The Nasdaq Capital Market or any securities market or other exchange of the securities, if any, covered by the prospectus supplement. Prospective purchasers of our securities are urged to obtain current information as to the resalemarket prices of 1,967,250 sharesour securities, where applicable.
These securities may be sold directly by us, through dealers or agents designated from time to time, to or through underwriters, dealers, or through a combination of Common Stock issued priorthese methods on a continuous or delayed basis. See “Plan of Distribution” in this prospectus. We may also describe the plan of distribution for any particular offering of our securities in a prospectus supplement. If any agents, underwriters or dealers are involved in the sale of any securities in respect of which this prospectus is being delivered, we will disclose their names and the nature of our arrangements with them in a prospectus supplement. The price to the filing date hereof, 4,284,000 sharespublic of Common Stock which are required to be registered in the event they are
issuable on conversion of the Series A, 7% convertible Preferred Stock
("Series A Preferred Stock") issued in the 1998 Placement (as hereinafter
defined),such securities and the resalenet proceeds we expect to receive from any such sale will also be included in a prospectus supplement.
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The aggregate market value of up to 2,088,550 shares of Common Stock issuable
on the exercise of currentlyour outstanding Options and Warrants. The number of
shares underlying the Series A Preferred Stock iscommon stock held by non-affiliates was approximately $17,887,017 which was calculated based on a
$1.00 per share effective Conversion Price (as hereinafter defined) but
subject to registration45,982,047 shares of the maximum numberoutstanding common stock held by non-affiliates as of shares that is allowable
pursuant to Rule 4310(c)(25)(H) of The NASDAQ Stock Market Rules.
(2) Pursuant to Rule 457(c), the fee calculation is based on the average of the
highAugust 9, 2019, and low prices of the Registrant's Shares on the Small Capital Company
listings of the National Association of Securities Dealers Automated
Quotation system on April 15, 1998. The Registration Fee is calculated based
on 8,339,800 shares at a proposed offering price per share of $1.06.
THE REGISTRANT HEREBY FILES 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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
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SPATIALIZER AUDIO LABORATORIES, INC.
CROSS-REFERENCE SHEET
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NO PERSON IS AUTHORIZED IN CONNECTION WITH THIS PROSPECTUS TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS ABOUT THE COMPANY, THE SELLING
STOCKHOLDER, THE SECURITIES REFERENCED HEREIN, OR ANY MATTER REFERENCED HEREIN,
OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS PROSPECTUS. IF
ANY OTHER INFORMATION OR REPRESENTATION IS GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY SELLING STOCKHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF SUCH SECURITIES IN ANY
JURISDICTION OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF
SECURITIES IN ACCORDANCE HEREWITH SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.
8,339,800 SHARES
SPATIALIZER AUDIO LABORATORIES, INC.
(A DELAWARE CORPORATION)
The 8,339,800 shares of Common Stock, $.01 U.S. par value ("Common Stock")
of Spatializer Audio Laboratories, Inc., a Delaware corporation (the "Company")
being offered hereby for resale by certain stockholders of the Company (the
"Selling Stockholders"), include 1,967,250 shares of Common Stock which are
currently outstanding and 2,088,550 shares of Common Stock reserved for issuance
on the exercise of outstanding Options and Warrants and up to 4,284,000 shares
of Common Stock reserved for issuance on conversion of the Series A 7%
Convertible Preferred Stock ("Series A Preferred Stock") issued in the private
placement completed in April 1998 ("April 1998 Placement"). Of these, 336,800
shares of the Common Stock are, or upon exercise of Options and Warrants will
be, held by Selling Stockholders who are officers or directors of the Company.
The Company's Common Stock is listed on the National Association of
Securities Dealers Automated Quotation System SmallCap Market ("NASDAQ") under
the symbol "SPAZ." On April 30, 1998$0.389, the closing price of our common stock on June 17, 2019. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell securities pursuant to this registration statement with a value more than one-third of the Common Stockaggregate market value of our common stock held by non-affiliates in any 12-month period, so long as the aggregate market value of our common stock held by non-affiliates is less than $75.0 million. In the event that subsequent to the effective date of this registration statement, the aggregate market value of our outstanding common stock held by non-affiliates equals or exceeds $75.0 million, then the one-third limitation on sales shall not apply to additional sales made pursuant to this registration statement. We have sold no securities pursuant to General Instruction I.B.6 of Form S-3 during the NASDAQ was $1.0012 calendar months prior to, and including, the date of this registration statement.
Investing in our securities involves various risks. See “Risk Factors” contained herein for more information on these risks. Additional risks will be described in the related prospectus supplements under the heading “Risk Factors.” You should review that section of the related prospectus supplements for a discussion of matters that investors in our securities should consider.
Neither the U.S.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. SIMILARLY,
NO CANADIAN FEDERAL OR PROVINCIAL COMMISSION HAS APPROVED OR
DISAPPROVED THESE SECURITIES NOR HAS ANY CANADIAN FEDERAL OR
PROVINCIAL COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS.
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SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED
BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED FOR RESALE HEREBY. SEE
PAGE 3.
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CERTAIN MATTERS AND RISKS RELATED TO THE BUSINESS OF THE COMPANY, INCLUDING
THE FACT THAT THE COMPANY HAS INCURRED LOSSES FROM ITS INCEPTION THROUGH ITS
MOST RECENT FISCAL YEAR AND FISCAL QUARTER, ARE DISCUSSED IN "INVESTMENT
CONSIDERATIONS AND RISK FACTORS."
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THE DATE OF THIS PROSPECTUS IS JUNE , 1998
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all
information incorporated by reference, amendments and exhibits and schedules
thereto,nor any state securities commission has approved or disapproved of these securities, or passed upon the "Registration Statement") under the Securities Actadequacy or accuracy of 1933, as
amended (the "1933 Act"), with respectthis prospectus or any accompanying prospectus supplement. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2019.
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This prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or SEC, using a “shelf” registration process. Under this shelf registration statement, we may sell from time to time in one or more offerings of common stock and preferred stock, various series of debt securities offered hereby.and/or warrants to purchase any of such securities, either individually or as units comprised of a combination of one or more of the other securities in one or more offerings up to a total dollar amount of $25,000,000. This Prospectusprospectus provides you with a general description of the securities we may offer. Each time we sell any type or series of securities under this prospectus, we will provide a prospectus supplement that will contain more specific information about the terms of that offering.
This prospectus does not contain all of the information included in the registration statement. For a more complete understanding of the offering of the securities, you should refer to the registration statement, including its exhibits. We may add, update or change in a prospectus supplement or free writing prospectus any of the information contained in this prospectus or in the documents we have incorporated by reference into this prospectus. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. This prospectus, together with the applicable prospectus supplement, any related free writing prospectus and the documents incorporated by reference into this prospectus and the applicable prospectus supplement, will include all material information relating to the applicable offering. You should carefully read both this prospectus and the applicable prospectus supplement and any related free writing prospectus, together with the additional information described under “Where You Can Find More Information,” before buying any of the securities being offered.
We have not authorized any dealer, agent or other person to give any information or to make any representation other than those contained or incorporated by reference in this prospectus, any accompanying prospectus supplement or any related free writing prospectus that we may authorize to be provided to you. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus or an accompanying prospectus supplement, or any related free writing prospectus that we may authorize to be provided to you. This prospectus, the accompanying prospectus supplement and any related free writing prospectus, if any, do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the registered securities to which they relate, nor do this prospectus, the accompanying prospectus supplement or any related free writing prospectus, if any, constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. You should not assume that the information contained in this prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate on any date subsequent to the date set forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference (as our business, financial condition, results of operations and prospects may have changed since that date), even though this prospectus, any applicable prospectus supplement or any related free writing prospectus is delivered or securities are sold on a later date.
We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus were made solely for the Registration
Statement, partbenefit of which has been omittedthe parties to such agreement, including, in accordancesome cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
This prospectus may not be used to consummate sales of our securities, unless it is accompanied by a prospectus supplement. To the extent there are inconsistencies between any prospectus supplement, this prospectus and any documents incorporated by reference, the document with the most recent date will control.
As permitted by the rules and regulations of the Commission. In addition,SEC, the Registration Statement andregistration statement, of which this Prospectus incorporate by reference certain materials previously filed with the
Commission. For furtherprospectus forms a part, includes additional information with respect to the Company and the Common
Stock offered hereby, reference is made to the Registration Statement the
exhibits thereto and the materials incorporated by reference. Statementsnot contained in this Prospectus as toprospectus. You may read the contents of any contractregistration statement and the other reports we file with the SEC at the SEC’s web site or other
document referred to herein are not necessarily complete, and in each instance
reference is made to such contract or other document for a more complete
description and each such statement is qualified in its entirety by such
reference. The Company became subject toat the reporting requirements imposedSEC’s offices described below under the Securities Exchange Actheading “Where You Can Find Additional Information.”
Company References
In this prospectus “the Company,” “we,” “us,” and “our” refer to AMERI Holdings Inc., and its subsidiaries together, unless the context indicates otherwise.
SUMMARY
Our Company
We specialize in delivering SAP cloud, digital and enterprise services to clients worldwide. SAP is a leader in providing enterprise resource planning (“ERP”) software and technologies to enterprise customers worldwide. We deliver a wide range of solutions and services across multiple domains and industries. Our services center around SAP and include technology consulting, business intelligence, cloud services, application development/integration and maintenance, implementation services, infrastructure services, and independent validation services, all of which can be delivered as a set of managed services or on August 21, 1995,an on-demand service basis, or a combination of both.
Our SAP focus allows us to provide technological solutions to a broad base of clients. We are headquartered in Suwanee, Georgia, and has filed all reports requiredhave offices across the United States, which are supported by offices in India and Canada. Our model inverts the conventional global delivery model wherein offshore information technology (“IT”) service providers are based abroad and maintain a minimal presence in the United States. With a strong SAP focus, our client partnerships anchor around SAP cloud and digital services. In 2018, we signed a strategic partnership agreement with Google Cloud to offer SAP S/4 HANA (a next generation enterprise system) migration services. This partnership will allow us to offer our clients a broader spectrum of services.
Our primary business objective is to provide our clients with a competitive advantage by enhancing their business capabilities and technologies with our expanding consulting services portfolio. Our strategic acquisitions allow us to bring global service delivery, SAP S/4 HANA, SAP Business Intelligence, SAP Success Factors, SAP Hybris and high-end SAP consulting capabilities to a broader geographic market and customer base. We continue to leverage our growing geographical footprint and technical expertise to simultaneously expand our service and product offering. Our goal is to identify business synergies that will allow us to bring new services and products from one subsidiary to customers at our other subsidiaries. While we generate revenues from the consulting businesses of each of our acquired subsidiaries, we believe that additional revenues will be filed since such date.
The Company furnishes its stockholders with annual reports containing
audited financial statementsgenerated through new business relationships and quarterly or other interim reports containing
financial and other information to the extent requiredservices developed through our business combinations.
Background
We were incorporated under the 1934 Act or by
NASDAQ or other applicable authorities. The Registration Statement and the
reports, proxy statements and other information may be inspected and copied at
the public reference facilitieslaws of the Commission located at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's regional offices located
at Seven World Trade Center, Suite 1300, New York, New York 10048, and at 5760
Wilshire Boulevard, 11th Floor, Los Angeles, California 90036. CopiesState of these
materials can also be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Such documents may also be obtained at the Web site maintained by the Commission
(http://www.sec.gov). The Company's Common Stock is quoted on the NASDAQ
SmallCap Market and such reports, proxy statements and other information may be
inspected at the National Association of Securities Dealers, Inc., 1735 K Street
N.W., Washington, D.C. 20006.
UntilDelaware in February 1997 when the Company terminated its listing on the
Vancouver Stock Exchange, the Company and its predecessor,1994 as Spatializer Audio Laboratories, Inc., which was a Yukonshell company immediately prior to our completion of a “reverse merger” transaction on May 26, 2015, in which we caused Ameri100 Acquisition, Inc., a Delaware corporation ("Spatializer-Yukon"and our newly created, wholly owned subsidiary, to be merged with and into Ameri and Partners Inc. (“Ameri and Partners”), also were
subject,a Delaware corporation (the “Merger”). As a result of the Merger, Ameri and Partners became our wholly owned subsidiary with Ameri and Partners’ former stockholders acquiring a majority of the outstanding shares of our common stock. The Merger was consummated under Delaware law, pursuant to an Agreement of Merger and Plan of Reorganization, dated as applicable,of May 26, 2015 (the “Merger Agreement”), and in connection with the Merger we changed our name to AMERI Holdings, Inc. and do business under the brand name “Ameri100”.
Ameri Holdings, Inc., along with its eleven subsidiaries, Ameri and Partners, Ameri Consulting Service Private Ltd., Ameri100 Georgia Inc. (“Ameri Georgia”), Bellsoft India Solutions Private Ltd., Ameri100 Canada Inc. (formerly BSI Global IT Solutions Inc.), Linear Logics, Corp., Ameri100 Virtuoso Inc. (“Virtuoso”), Ameri100 Arizona LLC (“Ameri Arizona”), Bigtech Software Private Limited (“Bigtech”), Ameri100 California Inc. (“Ameri California) and Ameritas Technologies India Private Limited, provides SAP cloud, digital and enterprise services to clients worldwide.
Organizational Chart
Our Industry
Background
We operate in an intensely competitive IT outsourcing services industry, which competes on quality, service and costs. Though we are able to differentiate our company on all of these axes, our India-based capabilities ensure that labor arbitrage is our fundamental differentiator. Most offshore IT services providers have undertaken a “forward integration” to boost their capabilities and presence in their client geographies (large offshore presence with a small local presence). Conversely, large U.S. system integrators focus on “backward integration” to scale and boost their offshore narrative (offshore being the “back office” for the local operations). Today, the IT services industry is marked by the following characteristics:
| Characteristic | Description | |
Mature Market | • | Most large global companies have already outsourced what they wanted to outsource. |
Commoditized Business Model | • | North America and Europe continue to be the markets with attractive spending potential. However, increased regulations and visa dependencies prove to be a major drawback of the model. |
| • | The benefits realized from the business model are largely based on labor arbitrage, productivity benefits and portfolio restructuring. These contours have changed due to commoditization. | |
Insourcing | • | Extremely rapid changes in technology are forcing IT services–traditionally an outsourcing business—to adopt an insourcing model. |
Rapid Technology Shifts | • | Cloud services, robotic process automation, artificial intelligence and internet of things are increasingly in demand as part of outsourcing engagements. Smart robots increasingly operate in the cloud, and a ‘labor-as-a-service’ approach has emerged, as clients and providers find that intelligent tools and virtual agents can be easily and flexibly hosted on cloud platforms. |
• | Social media, cloud computing, mobility and big data will continue to be mainstays for any IT ecosystem. | |
• | The convergence of cloud computing, virtualization (applications and infrastructure) and utility computing is around the corner. The ability of a vendor to offer an integrated basket of services on a SaaS model, will be a key differentiator. | |
• | Enterprises are becoming more digital. There is a strong convergence of human and machine intelligence thanks to drivers like advanced sensors and machine learning. Operations and technology are converging. | |
Contracts & Decision Making | • | Large multi-year contracts will be renegotiated and broken down into shorter duration contracts and will involve multiple vendors rather than sole sourcing. |
• | The ability to demonstrate value through Proof of Concepts (POCs) and willingness to offer outcome based pricing are becoming critical considerations for decision making, Requests for Proposal (RFP)-driven decisions are increasingly rare. | |
The SAP Industry
SAP as an ERP and Cloud product has become an industry by itself. The core SAP enterprise offering has been reinforced with cloud-based products that make the entire SAP ecosystem extremely attractive from our perspective due to the following attributes:
The alignment of SAP to enterprises is extremely strong. Given the reliance of enterprises on applications, clients tend to make long-term bets on SAP as an enterprise solution.
According to the September 2014 “HfS Blueprint Report” from by HfS Research Ltd., the SAP market is a multi-billion-dollar market that is very fragmented (there are over 5,000 consulting firms), with the three largest service providers capturing an increasing share of the market.
A significant number of SAP customers must move to S/4 HANA by 2025.
Our Approach
Our solutions deliver significant business efficiency outcomes through turnkey projects, consulting and offshore services. We believe that our strategic service portfolio, deep industry experience and strong global talent pool offer a compelling proposition to clients. In 2017 we acquired ATCG Technology Solutions, Inc., which has become our wholly-owned subsidiary Ameri California. In 2016, we acquired three companies: Virtuoso, L.L.C. and DC&M Partners, L.L.C.in the U.S. (now Virtuoso and Ameri Arizona, respectively) and Bigtech in India. These strategic acquisitions have brought offshore delivery, SAP S/4 HANA, SAP SuccessFactors, SAP Hybris and high-end SAP consulting capabilities to our service portfolio.
Our Portfolio of Service Offerings
Our portfolio of service offerings expanded significantly since 2016 with our acquisitions of Ameri Georgia, Ameri Arizona, Ameri California, Virtuoso and Bigtech.
Our current portfolio of services is divided into three categories:
Cloud Services
An increasing trend in the IT services market is the adoption of cloud services. Historically, clients have resorted to on-premise software solutions, which required capital investments in infrastructure and data centers. Cloud services enable clients to build and host their applications at much lower costs. Our services offerings leverage the low cost and flexibility of cloud computing.
We have expertise in deploying SAP’s public, private and hybrid cloud services, as well as SAP S/4 HANA, SAP SuccessFactors and SAP Hybris cloud migration services. Our teams are experienced in the rapid delivery of cloud services. We perform SAP application and cloud support and SAP cloud development. Additionally, we provide cloud automation solutions that focus on business objectives and organizational growth.
Digital Services
We have developed several cutting-edge mobile solutions, including Simple Advance Planning and Optimization (“APO”) and SAP IBP/S&OP Mobile Analytics App. The Simple APO mobile application (app) provides sales professionals with real-time collaboration capabilities and customer data, on their mobile devices. It increases the efficiency of the sales process and the accuracy of customer needs forecasting. The SAP IBP mobile app enables the real-time management and analysis of sales and operations planning (S&OP) related data from mobile devices. SAP is an implementation partner for this app. SAP has recognized the app’s value to the ecosystem, as S&OP apps are complex and difficult to design.
We are also active in robotic process automation (“RPA”), which leverages the capability of artificially intelligent software agents for business process automation. We have expertise in automating disparate and redundant data entry tasks by configuring software robots that seamlessly integrate with existing software systems. We also provide RPA solutions for reporting and analysis and deliver insights into business functions by translating large data into structured reports. Lastly, we have a working partnership with Blue Prism, a leading RPA solutions provider, which makes it possible for us to automate up to one-third of all standard back-office operations.
Enterprise Services
We design, implement and manage Business Intelligence (“BI”) and analytics solutions. BI helps our clients navigate the market better by identifying new trends and by targeting top-selling products. We also enable clients to use BI for generating instant financial reports and analytics of customer, product and cost information over time. In addition, we provide solutions for metadata repository, master data management and reporting requirementsdata quality. Finally, we determine BI demands across various platforms.
Other key enterprise services that we offer include consulting services for global and regional SAP implementations, SAP/IT solution advisory and architectural services, project management services, IT/ERP strategy and vendor selection services. Often clients have relied on us to deliver services in non-SAP packages, as well.
Strategy
The integration of each of our acquisitions into our business enterprise requires establishing our company’s standard operating procedures at each acquired entity, seamlessly transitioning each acquired entity’s branding to the “Ameri100” brand and assessing any necessity to transition account management. The integration process also requires us to evaluate any product-line expansions made possible by the acquired entity and how to bring new product lines to the broader customer base of the entire Company. With the integration of each acquisition, we face challenges of maintaining cross-company visibility and cooperation, creating a cohesive corporate culture, handling unexpected customer reactions and changes and aligning the interests of the acquired entity’s leadership with the interests of the Company.
Sales and Marketing
We combine traditional sales with our strength in industries and technology. Our sales function is composed of direct sales and inside sales professionals. Both work closely with our solutions directors to identify potential opportunities within each account. We currently have over 100+ active clients. Using a consultative selling methodology (working with clients to prescribe a solution that suits their need in terms of efficiency, cost and timelines), target prospects are identified and a pursuit plan is developed for each key account. We utilize a blended sales model that combines consultative selling with traditional sales methods. Once the customer has engaged us, the sales, solutions and marketing teams monitor and manage the relationship with the help of customer relationship management software.
Our marketing strategy is to build a strong, sustainable brand image for our company, position us in the SAP arena and facilitate business opportunities. We use a variety of marketing programs across traditional and social channels to target our prospective and current customers, including webinars, targeted email campaigns, co-sponsoring customer events with SAP to create customer and prospect awareness, search engine marketing and advertising to drive traffic to our web properties, and website development to engage and educate prospects and generate interest through white papers, case studies and marketing collateral.
Revenues and Customers
We generate revenue primarily through consulting services performed in the fulfillment of written service contracts. The service contracts we enter into generally fall into two categories: (1) time-and-materials contracts and (2) fixed-price contracts.
When a customer enters into a time-and-materials or fixed-price, (or a periodic retainer-based) contract, we recognize revenue in accordance with an evaluation of the deliverables in each contract. If the deliverables represent separate units of accounting, we then measure and allocate the consideration from the arrangement to the separate units, based on vendor-specific objective evidence of the value for each deliverable.
The revenue under time-and-materials contracts is recognized as services are rendered and performed at contractually agreed upon rates. Revenue pursuant to fixed-price contracts is recognized under the Yukon Territory Business Corporations Actproportional performance method of accounting. We routinely evaluate whether revenue and profitability should be recognized in the current period. We estimate the proportional performance on our fixed-price contracts on a monthly basis utilizing hours incurred to date as a percentage of total estimated hours to complete the project.
For the twelve months ended December 31, 2018 and December 31, 2017, sales to five major customers accounted for approximately 39% and 43% of our total revenue, respectively.
Technology Research and Development
We regard our services and solutions and related software products as proprietary. We rely primarily on a combination of copyright, trademark and trade secret laws of general applicability, employee confidentiality and invention assignment agreements, distribution and software protection agreements and other intellectual property protection methods to safeguard our technology and software products. We have not applied for patents on any of our technology. We also rely upon our efforts to design and produce new applications and upon improvements to existing software products to maintain a competitive position in the marketplace.
We did not make any material expenditures on research or development activities for the twelve months ended December 31, 2018 and December 31, 2017.
Strategic Alliances
Through our Lean Enterprise Architecture Partnership (“LEAP”) methodology, we have strategic alliances with technology specialists who perform services on an as-needed basis for clients. We partner with niche specialty firms globally to obtain specialized resources to meet client needs. Our business partners include executive recruiters, staffing firms and niche technology companies. The terms of each strategic alliance arrangement depend on the nature of the particular partnership. Such alliance arrangements typically set forth deliverables, scope of the services to be delivered, costs of services and terms and conditions of payment (generally 45 to 90 days for payment to be made). Each alliance arrangement also typically includes terms for indemnification of our company, non-solicitation of each partner’s employees by the other partner and dispute resolution by arbitration.
Alliances and partnerships broaden our offerings and make us a one-stop solution for clients. Our team constantly produces services that complement our portfolio and build strategic partnerships. Our partner companies range from digital marketing strategy consulting firms to large infrastructure players.
On any given project we evaluate a client’s needs and make our best effort to meet them with our full-time specialists. However, in certain circumstances, we may need to go outside the Company, and in this case we approach our strategic partners to tap into their pools of technology specialists. Project teams are usually composed of a mix of our full time employees and outside technology specialists. Occasionally, a project team may consist of a Company manager and a few outside technology specialists. While final accountability for any of our projects rests with the Company, the outside technology specialists are incentivized to successfully complete a project with project completion payments that are in addition to hourly billing rates we pay the outside technology specialists.
Competition
The large number of competitors and the British Columbiaspeed of technology change make IT services and outsourcing a challenging business. Competitors in this market include systems integration firms, contract programming companies, application software companies, traditional large consulting firms, professional services groups of computer equipment companies and facilities management and outsourcing companies. Examples of our competitors in the IT services industry include Accenture, Cartesian Inc., Cognizant, Hexaware Technologies Limited, Infosys Technologies Limited, Mindtree Limited, RCM Technologies Inc., Tata Consultancy Services Limited, Virtusa, Inc. and Wipro Limited.
We believe that the principal factors for success in the IT services and outsourcing market include performance and reliability; quality of technical support, training and services; responsiveness to customer needs; reputation and experience; financial stability and strong corporate governance; and competitive pricing.
Some of our competitors have significantly greater financial, technical and marketing resources and/or greater name recognition, but we believe we are well positioned to capitalize on the following competitive strengths to achieve future growth:
well-developed recruiting, training and retention model;
successful service delivery model;
broad referral base;
continual investment in process improvement and knowledge capture;
investment in research and development;
strong corporate governance; and
The Securities Act. Spatializer-YukonWe May Offer
We may offer shares of our common stock and preferred stock, various series of debt securities and warrants to purchase any of such securities, either individually or in units, from time to time under this prospectus, together with any applicable prospectus supplement and related free writing prospectus, at prices and on terms to be determined by market conditions at the time of offering. If we issue any debt securities at a discount from their original stated principal amount, then, for purposes of calculating the total dollar amount of all securities issued under this prospectus, we will treat the initial offering price of the debt securities as the total original principal amount of the debt securities. Each time we offer securities under this prospectus, we will provide offerees with a prospectus supplement that will describe the specific amounts, prices and other important terms of the securities being offered, including, to the extent applicable:
designation or classification;
aggregate principal amount or aggregate offering price;
maturity, if applicable;
original issue discount, if any;
rates and times of payment of interest or dividends, if any;
redemption, conversion, exchange or sinking fund terms, if any;
conversion or exchange prices or rates, if any, and, if applicable, any provisions for changes to or adjustments in the conversion or exchange prices or rates and in the securities or other property receivable upon conversion or exchange;
ranking;
restrictive covenants, if any;
voting or other rights, if any; and
important United States federal income tax considerations.
A prospectus supplement and any related free writing prospectus that we may authorize to be provided to you may also add, update, or change information contained in this prospectus or in documents we have incorporated by reference. However, no prospectus supplement or free writing prospectus will offer a security that is not registered and described in this prospectus at the time of the effectiveness of the registration statement of which this prospectus is a part.
We may sell the securities to or through underwriters, dealers or agents or directly to purchasers. We, as well as any agents acting on our behalf, reserve the sole right to accept and to reject in whole or in part any proposed purchase of securities. Each prospectus supplement will set forth the names of any underwriters, dealers or agents involved in the sale of securities described in that prospectus supplement and any applicable fee, commission or discount arrangements with them, details regarding any over-allotment option granted to them, and net proceeds to us. The following is a summary of the securities we may offer with this prospectus.
Common Stock
We currently have authorized 100,000,000 shares of common stock, par value $0.01 per share. As of August 9, 2019, 52,417,688 shares of common stock were issued and outstanding. We may offer shares of our common stock either alone or underlying other registered securities convertible into or exercisable for our common stock. Holders of our common stock are entitled to such dividends as our board of directors (the “Board of Directors” or “Board”) may declare from time to time out of legally available funds, subject to the preferential rights of the holders of any shares of our preferred stock that are outstanding or that we may issue in the future. Currently, we do not pay any dividends on our common stock. Each holder of our common stock is entitled to one vote per share. In this prospectus, we provide a general description of, among other things, the rights and restrictions that apply to holders of our common stock.
Preferred Stock
We currently have authorized 1,000,000 shares of preferred stock, par value $0.01. 700,000 shares are designated as Series A Convertible Preferred Stock, of which 424,938 shares are outstanding as of August 9, 2019. Any authorized and undesignated shares of preferred stock may be issued from time to time in one or more additional series pursuant to a resolution or resolutions providing for such issue duly adopted by our Board of Directors (authority to do so being hereby expressly vested in the Board of Directors). The Board of Directors is further authorized, subject to limitations prescribed by law, to fix by resolution or resolutions the designations, powers, preferences and rights, and the Company, as applicable, filed periodic reports,
proxy materialsqualifications, limitations or restrictions thereof, of any wholly unissued series of preferred stock, including without limitation authority to fix by resolution or resolutions the dividend rights, dividend rate, conversion rights, voting rights, rights and other reports with the Superintendentterms of Brokers for British
Columbiaredemption (including sinking fund provisions), redemption price or prices, and liquidation preferences of any such series, and the VSE. Such reports can be inspectednumber of shares constituting any such series and copied, at the expensedesignation thereof, or any of the person requestingforegoing.
The rights, preferences, privileges, and restrictions granted to or imposed upon any series of preferred stock that we offer and sell under this prospectus and applicable prospectus supplements will be set forth in a certificate of designation relating to the report, atseries. We will incorporate by reference into the VSE offices at 609 Granville Street,
4th Floor, Vancouver, B.C. V7Y 1H1 and atregistration statement of which this prospectus is a part the officesform of any certificate of designation that describes the terms of the Superintendentseries of Brokers for British Columbia at 865 Hornby Street, Suite 1200, Vancouver, B.C.
V6Z 2H4, at prescribed rates.
Upon request,preferred stock we are offering before the Companyissuance of shares of that series of preferred stock. You should read any prospectus supplement and any free writing prospectus that we may authorize to be provided to you related to the series of preferred stock being offered, as well as the complete certificate of designation that contains the terms of the applicable series of preferred stock.
Debt Securities
We may offer general debt obligations, which may be secured or unsecured, senior or subordinated, and convertible into shares of our common stock. In this prospectus, we refer to the senior debt securities and the subordinated debt securities together as the “debt securities.” We may issue debt securities under a note purchase agreement or under an indenture to be entered between us and a trustee and forms of the senior and subordinated indentures are included as an exhibit to the registration statement of which this prospectus is a part. The indentures do not limit the amount of securities that may be issued under it and provides that debt securities may be issued in one or more series. The senior debt securities will provide copieshave the same rank as all of materialsour other indebtedness that is not subordinated. The subordinated debt securities will be subordinated to our senior debt on file atterms set forth in the Commissionapplicable prospectus supplement. In addition, the subordinated debt securities will be effectively subordinated to creditors and preferred stockholders including material incorporated herein by reference.
Requestsof our subsidiaries. Our Board of Directors will determine the terms of each series of debt securities being offered. This prospectus contains only general terms and provisions of the debt securities. The applicable prospectus supplement will describe the particular terms of the debt securities offered thereby. You should read any prospectus supplement and any free writing prospectus that we may authorize to be made in writingprovided to Spatializer Audio Laboratories, Inc. at
20700 Ventura Boulevard, Suite 134, Woodland Hills, California 91364, Attention:
Secretary, telephone (818) 227-3370.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documentsyou related to the series of debt securities being offered, as well as the complete note agreements and/or indentures that contain the terms of the debt securities. Forms of indentures have been filed byas exhibits to the Company withregistration statement of which this prospectus is a part, and supplemental indentures and forms of debt securities containing the Commission
and areterms of debt securities being offered will be incorporated by reference herein: (i)into the registration statement of which this prospectus is a part from reports we file with the SEC.
Warrants
We may offer warrants for the purchase of shares of our common stock or preferred stock or of debt securities. We may issue the warrants by themselves or together with common stock, preferred stock or debt securities, and the warrants may be attached to or separate from any offered securities. Any warrants issued under this prospectus may be evidenced by warrant certificates. Warrants may be issued under a separate warrant agreement to be entered into between us and the investors or a warrant agent. Our Board of Directors will determine the terms of the warrants. This prospectus contains only general terms and provisions of the warrants. The applicable prospectus supplement will describe the particular terms of the warrants being offered thereby. You should read any prospectus supplement and any free writing prospectus that we may authorize to be provided to you related to the series of warrants being offered, as well as the complete warrant agreements that contain the terms of the warrants. Specific warrant agreements will contain additional important terms and provisions and will be incorporated by reference into the registration statement of which this prospectus is a part from reports we file with the SEC.
Units
We may offer units consisting of our common stock or preferred stock, debt securities and/or warrants to purchase any of these securities in one or more series. We may evidence each series of units by unit certificates that we will issue under a separate agreement. We may enter into unit agreements with a unit agent. Each unit agent will be a bank or trust company that we select. We will indicate the name and address of the unit agent in the applicable prospectus supplement relating to a particular series of units. This prospectus contains only a summary of certain general features of the units. The applicable prospectus supplement will describe the particular features of the units being offered thereby. You should read any prospectus supplement and any free writing prospectus that we may authorize to be provided to you related to the series of units being offered, as well as the complete unit agreements that contain the terms of the units. Specific unit agreements will contain additional important terms and provisions and will be incorporated by reference into the registration statement of which this prospectus is a part from reports we file with the SEC.
An investment in our securities involves a high degree of risk. This prospectus contains, and the prospectus supplement applicable to each offering of our securities will contain, a discussion of the risks applicable to an investment in our securities. Prior to making a decision about investing in our securities, you should carefully consider the specific factors discussed under the heading “Risk Factors” in this prospectus and the applicable prospectus supplement, together with all of the other information contained or incorporated by reference in the prospectus supplement or appearing or incorporated by reference in this prospectus. You should also consider the risks, uncertainties and assumptions discussed under Item 1A, “Risk Factors,” in our Annual ReportsReport on Form 10-K for the fiscal year ended December 31, 1997; (ii)2018, as amended, and any updates described in our Quarterly ReportReports on Form 10-Q, forall of which are incorporated herein by reference, and may be amended, supplemented or superseded from time to time by other reports we file with the fiscal quarter ended March 31, 1998;SEC in the future and (iii) Proxy Statement dated May 22,
1998.
Allany prospectus supplement related to a particular offering. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. The occurrence of any of these known or unknown risks might cause you to lose all or part of your investment in the offered securities.
This prospectus and any accompanying prospectus supplement, including the documents filedthat we incorporate by reference, contains forward-looking statements within the Company pursuant tomeaning of Section 13(a), 13(c), 14 and
15(d)27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act subsequentof 1934, as amended (the “Exchange Act”). Any statements in this prospectus and any accompanying prospectus supplement about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as “believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” and “would.” For example, statements concerning financial condition, possible or assumed future results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future management and organizational structure are all forward-looking statements. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement.
You should read this prospectus and any accompanying prospectus supplement and the documents that we reference herein and therein and have filed as exhibits to the registration statement, of which this prospectus is part, completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the information appearing in this prospectus and any accompanying prospectus supplement is accurate as of the date on the front cover of this prospectus or such prospectus supplement only. Because the risk factors referred to in this prospectus and incorporated herein by reference could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the information presented in this prospectus and any accompanying prospectus supplement, and particularly our forward-looking statements, by these cautionary statements.
Except as described in any prospectus supplement and any free writing prospectus in connection with a specific offering, we currently intend to use the net proceeds from the sale of the securities offered under this prospectus for general corporate purposes, including the development and commercialization of our products, research and development, general and administrative expenses, license or technology acquisitions, and working capital and capital expenditures. We may also use the net proceeds to repay any debts and/or invest in or acquire complementary businesses, products, or technologies, although we have no current commitments or agreements with respect to any such investments or acquisitions as of the date of this Prospectus and priorprospectus. We have not determined the amount of net proceeds to be used specifically for the terminationforegoing purposes. As a result, our management will have broad discretion in the allocation of the net proceeds and investors will be relying on the judgment of our management regarding the application of the proceeds of any sale of the securities. Pending use of the net proceeds, we intend to invest the proceeds in short-term, investment-grade, interest-bearing instruments.
Each time we offer securities under this prospectus, we will describe the intended use of the net proceeds from that offering made hereby shall be deemedin the applicable prospectus supplement. The actual amount of net proceeds we spend on a particular use will depend on many factors, including, our future capital expenditures, the amount of cash required by our operations, and our future revenue growth, if any. Therefore, we will retain broad discretion in the use of the net proceeds.
General
The following description of our capital stock, together with any additional information we include in any applicable prospectus supplement or any related free writing prospectus, summarizes the material terms and provisions of our common stock and the preferred stock that we may offer under this prospectus. While the terms we have summarized below will apply generally to any future common stock or preferred stock that we may offer, we will describe the particular terms of any class or series of these securities in more detail in the applicable prospectus supplement. For the complete terms of our common stock and preferred stock, please refer to our amended and restated certificate of incorporation, as amended and our bylaws that are incorporated by reference into the registration statement of which this prospectus is a part or may be incorporated by reference hereinin this prospectus or any applicable prospectus supplement. The terms of these securities may also be affected by Delaware General Corporation Law (the “DGCL”). The summary below and that contained in any applicable prospectus supplement or any related free writing prospectus are qualified in their entirety by reference to be a part hereof fromour amended and restated certificate of incorporation, as amended, and our bylaws.
As of the date of filing such
documents.
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Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposesthis prospectus, our authorized capital stock consisted of this Prospectus or any Prospectus Supplement to100,000,000 shares of common stock, $0.01 par value per share, and 1,000,000 shares of preferred stock, $0.01 par value per share. Our Board may establish the extent that
a statement contained herein, or in any other subsequently filed document which
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, except as so modified or superseded, to constitute a part of this
Prospectus or any Prospectus Supplement. This Prospectus incorporates documents
by reference which are not presented herein or delivered herewith. Those
documents are available without charge upon request from the Company, at the
address listed in Additional Information, above.
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THE COMPANY
Spatializer Audio Laboratories, Inc. (the "Company") is a leading
developer, licensorrights and marketer of next generation technologies for the
consumer electronics, personal computing, enterprise computing and entertainment
industries. The Company has two business units (100% wholly owned subsidiaries),
Desper Products, Inc. ("DPI") and MultiDisc Technologies, Inc. ("MDT"), both of
which are in the business of technology development and licensing. DPI has
developed a full complement of patented and proprietary 3-D or virtual audio
signal processing technologies directed to the consumer electronics and
multimedia PC markets. The Company continues to expand its product offerings to
take advantagepreferences of the emerging digital audio marketplace specifically for
consumer products like Digital Versatile Disc ("DVD") for personal computers,
and home entertainment; and interactive positional audio for PC gaming on the
Windows 95/98(TM) platforms. As of March 31, 1998 more than 12 million licensed
units had been shipped. DPI's 3-D audio signal processing technologies have been
incorporated in over 380 products offered by global brand leaders including in
consumer electronics, Toshiba, Panasonic, JVC, Hitachi, Sanyo and Sharp, and in
the PC multimedia marketplace, Compaq, Dell, Gateway, Micron, Fujitsu, NEC and
AST, among others. In additionpreferred stock from time to continuing the Company's objective of
broadening recognition for the Spatializer brand name through association with
these and other globally recognized consumer electronics and multimedia computer
brand leaders, the Company has also placed a high priority on broadening its
technology basetime.
Common Stock
We are authorized to position itself for continued growth. The Company believes
that with the accelerating growth in the digital audio/video marketplace, the
market for virtual audio technologies, and therefore for the Company's products,
is entering a new phase of opportunity.
MultiDisc Technologies, Inc. was formed in June 1996 when the Company
acquired development stage optical disc storage and robotics assets and
technologies from Home Theater Products, International, Inc. ("HTP"), a debtor
in possession (the "MultiDisc transaction"). MDT is currently a development
stage enterprise creating a new product category, the MultiDisc Modular
Stackable Storage Library ("MSSL"), of 12 cm CD/DVD based scaleable optical disc
storage devices, a technology uniquely designed to combine the speed and
performance of CD/DVD server arrays, the low cost, flexibility and capacity of
CD Jukebox designs and next generation high speed, high volume robotics. The
target markets for the MDT technology currently include Internet and Intranet,
enterprise networking, backup/archiving, image and document storage, and
specialized vertical market applications including medical information
technology, data warehousing and video-on-demand.
The Company's executive offices are located at 20700 Ventura Boulevard,
Suite 134, Woodland Hills, California 91364, Telephone (818) 227-3370. World
Wide Web sites (http://www.spatializer.com), (http://www.multidisc.com). The
Company was incorporated in the State of Delaware in February, 1994.
THE OFFERING
The Offering relates to the resale ofissue up to 1,967,250 shares of Common
Stock which are currently outstanding and 2,088,550 shares of Common Stock
reserved for issuance upon exercise of presently outstanding Warrants and
Options (both as hereinafter defined), and up to 4,284,000 shares of Common
Stock reserved for issuance on conversion of the Series A Preferred Stock issued
in the April 1998 Placement. Common Stock offered for resale hereunder is to be
offered for resale for the account of the Selling Stockholders who already hold
stock, Warrants or Options, including certain officers, directors and
affiliates. The Company is not entitled to any of the proceeds of sale of any
such securities by the Selling Stockholders, but the Company will pay the
expenses of the filing of the Registration Statement.
The Company will receive the proceeds, in the ordinary course, from any
exercise of outstanding Options and Warrants. If all outstanding Options
registered herein are exercised, the Company will receive proceeds of
approximately $476,400. If all the Warrants registered herein are fully
exercised, the Company will receive a total of up100,000,000 shares of common stock, par value $0.01 per share. Holders of our common stock are entitled to approximately $2,652,700.
The proceeds fromone vote for each share held on all matters submitted to a vote of our stockholders. Holders of our common stock have no cumulative voting rights. All shares of common stock offered hereby will, when issued, be fully paid and nonassessable, including shares of common stock issued upon the exercise of Optionscommon stock warrants or subscription rights, if any.
Further, holders of our common stock have no preemptive or conversion rights or other subscription rights. Upon our liquidation, dissolution or winding- up, holders of our common stock are entitled to share in all assets remaining after payment of all liabilities and Warrants,the liquidation preferences of any of our outstanding shares of preferred stock. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of our common stock are entitled to receive dividends, if any, as may be declared from time to time will
be used to fund general corporate purposes and for strategic acquisitionsby our Board of Directors out of our assets which are legally available. Such dividends, if any, are payable in cash, in property or alliances.
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SALES BY SELLING STOCKHOLDERS
Thein shares of Commoncapital stock.
The holders of a majority of the shares of our capital stock, represented in person or by proxy, are necessary to constitute a quorum for the transaction of business at any meeting. If a quorum is present, an action by stockholders entitled to vote on a matter is approved if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, with the exception of the election of directors, which requires a plurality of the votes cast.
Preferred Stock being offered for resale
Our board of directors has the authority, without further action by the Selling
Stockholders pursuant to this Prospectus may be offered by them in varying
amounts and transactions so long as this Prospectus is then current under the
rules of the Commission and the Registration Statement has not been withdrawn by
the Company. The Offering may be through the facilities of NASDAQ, the VSE or
such other exchange or reporting system where the Common Stock may be traded.
Brokerage commissions may be paid or discounts allowed in connection with such
sales; however, it is anticipated that the discounts allowed or commissions paid
will be no more than the ordinary brokerage commissions paid on sales effected
through brokers or dealers. To the knowledge of the Company, as of the date
hereof, no one has made any arrangements with a broker or dealer concerning the
offer or sale of the Common Stock. See "Plan of Distribution."
OUTSTANDING SECURITIES
------------------------
This Prospectus includes references to MultiDisc(TM), Spatializer(R) 3D
Stereo, DDP(TM), N-2-2(TM), enCOMPASS(TM), vbx(TM), XNS(TM), eXpandable Network
Server(TM), and other trademarks, tradenames, and product names of the Company
and of other entities, some of which may not be designated as such.
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RISK FACTORS
Investment in the Company's securities is speculative. In evaluating the
Company's business, prospective investors should consider carefully the
following factors, in addition to the other information contained in or
incorporated by reference into this Prospectus, before making a decision to
purchase securities of the Company. A prospective purchaser should not consider
an investment in the Company unless such person is capable of sustaining an
economic loss of the investment.
NEED FOR CAPITAL TO COMMERCIALIZE MDT TECHNOLOGY
MDT is still developing its technologies which have been in development for
more than nine years at an aggregate cost of approximately $8 million, $4.6
million of which was expended by the Company on behalf of MDT subsequent to its
acquisition in June 1996. It is anticipated that the Company will need to commit
substantial capital beyond its current working capital reserves to complete
development, begin manufacturing and launch MDT's initial products. There can be
no assurance that the Company will be able to raise the needed capital or obtain
such capital on terms favorable to the Company.
MDT TECHNOLOGY IN DEVELOPMENT STAGE
The Company has not yet fully completed development and testing of its
Windows NT(R) Changer File System, Drivers, Graphical User Interface (GUI),
Database Manager, Control Panel Applet and supporting utilities, nor its initial
data interface and robotics interface components. There can be no assurance that
MDT's software components can be successfully completed and integrated, or that
they can be cost effectively migrated to other operating systems, or next
generation data or robotics interfaces as might be demanded by a rapidly
changing market.
Although the Company has satisfactorily completed a number of MDT
proof-of-concept designs, and an initial technology demonstrator [TD Series]
prototype which MDT debuted at COMDEX in November, 1997, MDT has yet to have
completed a fully integrated device proving the efficacy of its designs,
concepts, software and other technologies. There can be no assurance that the
Company will be able to successfully complete the required integration for MDT,
or that the MDT products designed based upon its technologies will be able to be
manufactured at costs which will permit competitive pricing when those products
would come to market.
In addition, there can be no assurance that the Company will be able to
make satisfactory arrangements for the manufacture of its products, or the
distribution or the purchase of such products on an OEM basis.
The MDT technologies under development consist of a wide spectrum of
robotics, motion control, hardware, electronics, and firmware disciplines. There
can be no assurance that the Company will be able to attract and retain
employees, consultants or form appropriate strategic alliances to obtain the
technical expertise necessary to ensure satisfactory completion of all of the
hardware and software components needed to implement the MDT technology.
Significant engineering challenges unique to the Company's MSSL design exist and
there can be no assurance that these challenges will be successfully overcome,
or overcome at a cost which will permit the MDT products to be manufactured at a
competitive price.
DEPENDENCE ON NEW TECHNOLOGIES FOR MDT
The success of MDT's business plan is largely dependent upon the widespread
availability, speed and performance capabilities, low price point, and industry
support for re-writeable DVD technologies. There can be no assurance that such
technologies will become available on a basis which permits the DVD Library
systems to become price and performance competitive with other competing
technologies.
DEPENDENCE ON LICENSING REVENUES AND AGREEMENTS AND RELATIONSHIPS WITH CHIP
FOUNDRIES
The MDT business model is a hybrid model combining technology licensing and
manufacturing on an OEM basis. Although the Company has expertise in audio
technology licensing, it has no expertise in hardware licensing, manufacturing,
or OEM sales. There can be no assurance that the Company will be able
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to successfully recruit and retain the necessary internal manufacturing, sales
and marketing expertise, or to build the necessary strategic relationships with
manufacturers, channel partners, distributors, Value Added Resellers (VAR's) or
Independent Software Vendors (ISV's) necessary to insure its success in the OEM
business for its MDT plan.
The proposed MDT licensing agreements provide for a combination of up-front
Non-Recurring Engineering (NRE) fees and running royalties based on product
shipments by licensees. License negotiations are very lengthy and hardware
product development times are long, requiring the Company to be dependent on
anticipated NRE fees. The Company has not yet finalized any licensing
arrangements with respect to its MDT CD/DVD server technologies, and there can
be no assurance that any licenses can be finalized on a basis which provides for
satisfactory NRE fees or running unit royalties.
For all Company activities in both audio and MDT enterprises, licensing
revenues are dependent on the accuracy of the reporting by the licensee. License
agreements do not, in general, call for minimum orders, and the licenses may be
cancelled at any time upon required notice. In addition, the Company's audio
technologies may be easily designed out of a product or line without notice to
the Company. In large measure, the Company's audio business is dependent on the
production, sales and marketing capabilities of its various chip foundries.
TECHNOLOGY -- PENDING PATENT INFRINGEMENT SUIT
The Company's success will depend significantly on its ability to obtain
and enforce intellectual property protection for its technologies in the United
States and in other jurisdictions. The Company holds a U.S. patent comprising
forty claims covering major aspects of the Spatializer(R) 3-D audio technologies
and holds additional patent applications or rights to other audio enhancement
technologies and to the MultiDisc server technologies. However, there is no
assurance that these rights will not be challenged, invalidated or circumvented,
or that the Company's competitors will not independently develop or patent
technologies that are equivalent or superior to the Company's technology.
In response to a competitor's claim that the Company's Spatializer(R) 3-D
audio technology has infringed patents held by QSound Labs, Inc. ("QSound"), a
competitor, the Company initiated a declaratory relief action against the
competitor seeking, inter alia, a determination that the Company does not
infringe the competitor's patents and for damages. On August 29, 1996, the Court
granted the Company's summary judgment motion in its entirety and denying
QSound's cross-motion. The ruling confirms the Company's position that its
patents and all of the implementations of Spatializer's ICs do not infringe any
patents of QSound. While the developments in the litigation have, to date,
supported the Company, the existence of the litigation is costly for the
Company, has tempered acceptance of the Company's products and is indicative of
the business and litigation risks faced by any technology enterprise.
In granting the Company's summary judgment motion, the Court found that the
Company's IC (Integrated Circuit) does not infringe the QSound patent and denied
QSound's motion with respect to infringement. The Company's claim that the
QSound patent is invalid was not decided and, since the issues which the Court
would need to consider on the patent invalidity claim are similar to certain
issues considered in the infringement claim, QSound was granted the right to
immediately appeal the denial of its motion and trial on the invalidity issue
was deferred until after that appeal. In substance, the Court's finding confirms
the Company's position that there is no infringement by the Company's IC of any
patent held by QSound and that the claims by QSound were without merit. If the
appeal is denied and the Court's decision is confirmed on appeal, the Company
intends to pursue the remaining claims for damages and for a decision that the
QSound patent is invalid. If the appeal is granted and the Court's decision on
the motion is overruled, a trial on the merits would follow at which time the
Company will again assert its current position, which already was adopted in the
grant of the Company's summary judgment motion, and will assert its remaining
claims against QSound.
After submission of papers by the parties, the Court of Appeals for the
Federal Circuit heard oral argument on November 5, 1997, with respect to
QSound's appeal. The parties are now waiting for the decision of the appellate
court. To date, the Company has incurred costs aggregating approximately
$500,000 in
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connection with the litigation. The Company expects that it will ultimately
prevail in the litigation, and therefore, the disposition of this matter is not
expected to have a material effect on the financial position or results of
operations of the Company. However, the outcome of this litigation cannot be
predicted at this time and, if the outcome of the litigation decision is
ultimately adverse to the Company, such a result could materially impact the
Company's ability to license its 3-D Stereo technology in the future, but it
should not impact the Company's ability to license its more advanced audio
technologies, such as its Positionial Audio technology (enCOMPASS(TM)) and its
2-Speaker Virtualization technology (N-2-2(TM)).
INTELLECTUAL PROPERTY
The Company's success will depend significantly on its ability to obtain
and enforce intellectual property protection for its technologies in the United
States and in other jurisdictions. Desper Products, Inc. holds certain patents
in the field of audio signal processing and has a number of additional patent
applications on file with the U.S. PTO. MultiDisc Technologies has more than 50
U.S. patent applications on file. There can be no assurance that any U.S. patent
will grant on pending applications, or that such patents will provide the
breadth of coverage intended. In addition, there is no assurance that any of the
rights obtained from the Company's patents will not be challenged, invalidated
or circumvented, or that the Company's competitors will not independently
develop or patent technologies that are equivalent or superior to the Company's
technology.
While the Company has attempted to protect its technology and general
intellectual property rights, there is no assurance that the Company's efforts
will effectively protect against piracy or theft. Monitoring and identifying
unauthorized use of such technology may prove difficult, and the cost of
litigation may impact the Company's ability to adequately guard against such
piracy and infringement. While the Company believes the steps it has taken to
guard against such abuses are reasonable, there is no assurance it will be
successful in this effort.
IMPACT OF POSSIBLE DELAYS
It is impossible to predict the timing or the amount, if any, of revenues
which the Company will receive from current or future product sales and
licensing activities. Since its inception, the Company has experienced delays in
bringing its products to market and commercial application as a result of delays
inherent in technology development, financial resource limits and industry
responses and maturity. These delays have resulted in delays in revenues. In the
future, new delays in product development or technology introduction on behalf
of the Company, its OEMs or IC foundries could result in further delays in
revenues and could allow competitors to reach the market with products before
the Company. In view of the emerging nature of the technology involved, the
Company's expansion into other technology areas and the uncertainties concerning
the ability of the Company's products to achieve meaningful commercial
acceptance, there can be no assurance of when or if the Company will achieve or
sustain profitability.
HISTORY OF LOSSES
While the Company's audio licensing subsidiary DPI, was profitable for the
first time during the third and fourth quarters of 1997, the overall results for
1997 reflect continuing losses from operations because of the funding
requirements of the development of the MDT server technology. During 1998, the
Company anticipates that its audio business will continue to reflect positive
operating results, but that these results will be offset by the losses incurred
from funding the MDT technology. Given the level of planned operating and
capital expenditures, particularly for MDT, the Company anticipates that, on a
consolidated basis, it will continue to incur losses, at least through 2000.
There can be no assurance that the Company will ever achieve or sustain an
overall positive profit position.
DEPENDENCE ON MANAGEMENT
The future success of the Company primarily depends on the abilities and
efforts of a small number of individuals, with particular management
obligations. Loss of the services of any of these persons could
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adversely affect the Company's business prospects. While the Company believes
that it will be able to recruit and retain personnel with the skills required
for future growth, there can be no assurance that it will be successful in such
efforts. Failure to do so could have an adverse impact upon the Company's
business, the results of its operations and its prospects. Currently, the
Company has employment agreements with Steven D. Gershick, Henry R. Mandell,
Michael Bolcerek, Theodore Tanner, Eric Rene Bos, and Robert Montelius for
various terms expiring between June 1998 and March 1999. The Company has key man
life insurance in face amounts of $1,000,000, $0, $500,000, $500,000, $250,000
and $250,000 on each of these key employees, respectively.
CONTINUED NEED FOR ADDITIONAL CAPITAL
The Company has funded its operations from revenues and from a number of
equity financings. The Company continues to acquire new financing. While the
Company's audio subsidiary, DPI, was profitable for the first time during the
last two quarters of 1997, these revenues have been consumed in financing
operations and funding the MDT technology development.
Funds generated by these financing activities as well as cash generated
from the Company's existing operations is expected to be sufficient for the
Company to meet its operating obligations and the anticipated additional
research, development, and commercial prototype cost for the MultiDisc business
during the next twelve months. However, if the MultiDisc funding which the
Company is now pursuing is not completed, the Company will require additional
capital, and need to identify other debt, equity or strategic investment sources
to complete the research development and commercial introduction of the
MultiDisc CD/DVD server technology and for marketing costs related to such
activities. If the Company is unsuccessful in completing the MultiDisc funding,
management will be required to modify or delay the timing of the additional
MultiDisc development and marketing activities.
COMPETITION
The Company is seeking commercial acceptance of its products in highly
competitive markets. The Company's future success is dependent on establishing
and maintaining the technological superiority of its products over those of
competitors and its ability to successfully identify and bring other compatible
technologies and products to market. Certain of the Company's current
competitors have access to greater financial resources than the Company. There
is no assurance that the Company's present or contemplated future products will
achieve or maintain sufficient commercial acceptance, or if they do, that
functionally equivalent products will not be developed by current or future
competitors with access to significantly greater resources.
DPI -- 3-D AUDIO SIGNAL PROCESSING MARKETPLACE
The market for 3D Virtual Audio technologies is characterized by intense
competition and commodity pricing pressures. The Company competes with a number
of entities that produce various stereo audio enhancement processes,
technologies and products in both traditional two-speaker environments such as
consumer electronics and multimedia computing, and in multi-channel,
multi-speaker applications such as Home Theater.
In the field of 3-D or Virtual Audio, the Company's principal competitors
are SRS Labs, Inc., QSound Labs, Inc., Aureal Semiconductor, Inc., and Harman
International, some of which have considerably greater capitalization and
resources than the Company. In the future, the Company's products and
technologies may also compete with audio technologies and products developed by
other companies, including entities that have business relationships with the
Company.
There can be no assurance that the Company will be able to favorably
compete in this market in the future.
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MDT -- OPTICAL DISC SERVER/JUKEBOX MARKETPLACE
The overall data storage market, the market in which MDT competes, includes
not only compact disc, but also magnetic disk and tape technologies,
magneto-optical disks, disk and tape arrays, micrographic technologies, and
hardcopy.
The compact disc library or "jukebox" industry is limited at present and is
currently characterized by the market leader NSM, a German based entity which
has adapted its audio jukebox expertise to CD-ROM. NSM sells products under its
own label and as an OEM for other manufacturers. As is traditional in this
marketplace, NSM offers hardware only and is dependent on third parties for
control and interface software, and on system integrators and value added
resellers (VARs) to implement the hardware for individual solutions. Also in
this marketplace is Pioneer, Panasonic, JVC, Sony and others.
Other directly competitive technologies include M-O Optical Library
management systems. Hewlett Packard and Plasmon are the leaders in this business
segment.
In addition to magnetic and optical disc technologies, the Company will be
subject to new competitive mass storage technologies which may be introduced in
the future. Typical of such new technology is "Near Field Recording" under
development by Terastor in San Jose.
NO ASSURED MARKET FOR STOCK
The Common Stock of the Company trades on the NASDAQ SmallCap market under
the symbol "SPAZ." To the extent the market price of the Company's Common Stock
continues to trade below U.S. $5.00 per share, additional requirements imposed
on broker-dealers by the Penny Stock Reform Act of 1990 are applicable.
Compliance with those requirements could impact the Company's trading market.
There is no assurance that the Company's current trading will be sustained or
expanded as to correspond with an investor's desire for a ready market for
shares owned in the Company.
IMPACT OF ISSUANCE OF ADDITIONAL PREFERRED STOCK
The Company is authorizedstockholders, to issue up to 1,000,000 shares of preferred stock ("Preferred Stock") in one or more series and to fix the designations, powers, preferences, privileges, and relative participating, optional, or special rights as well as the qualifications, limitations, or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of which are to be
determined by the Board of Directors, without further action by shareholders,
and may include voting rights (including the right to vote as a class on
particular matters), preferences as to dividendsredemption, and liquidation preferences, any or all of which may be greater than the conversion
feature and dilution impact and redemption rights and sinking fund provisions.
Since the Board of Directors has the authority to determine, from time to time,
the terms of the Preferred Stock to be issued in the future, there is no limit
on the amountcommon stock. Our board of Common Stock (or the related dilution impact)directors, without stockholder approval, can issue convertible preferred stock with voting, conversion, or other rights that could be
issuable underadversely affect the terms of future series of Preferred Stock authorized by the
Board of Directors. Of the 1,000,000 shares of Preferred Stock, 60,000 shares of
Series A, 7% Convertible Preferred Stock ("Series A Preferred Stock") are issuedvoting power and outstanding and the issuance of additional shares of Series A Preferred
Stock or any other Preferred Stock could affect the rights of the holders of Common Stock and the value of the Common Stock, and could also make it more
difficult for the holders of the Common Stock to control voting with respect to
significant corporate transactions. See "Description of Capital Stock."
CONTROL BY OFFICERS AND DIRECTORS
Current directors and officers of the Company and the executive officers of
its subsidiaries beneficially own or control or have rights to acquire 8,688,891
shares of Common Stock or approximately 35% of the fully diluted Common Stock of
the Company. As a result, in addition to their influence as officers and
directors, if such persons act together as stockholders, they can substantially
control actions by the stockholders with respect to the business and affairs of
the Company.
SHARES ELIGIBLE FOR FUTURE SALE -- MARKET OVERHANG -- ESCROWED PERFORMANCE
SHARES
Virtually all of the Company's currently outstanding Common Stock,
including the Common Stock held by affiliates of the Company, will be tradeable
currently or in the near future, either under this Prospectus,
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pursuant to Rule 144. Of the issued and outstanding shares of Common Stock,
5,445,115 are held by officers, directors and other founders or employees as
Escrowed Performance Shares. Under the currently effective Performance Share
Modification Agreements dated December 30, 1996, 5% of the original 5,776,700
Performance Shares were released on June 22, 1997 and the remainder of the
Performance Shares are scheduled to be released automatically as follows: 5% on
June 22, 1998; 10% on June 22, 1999; 20% on June 22, 2000; 30% on June 22, 2001;
and 30% on June 22, 2002. In addition to the automatic releases, performance
shares can be released based on the cash flow release criteria contained in the
original June 22, 1992 escrow agreement although, to maintain a stable market in
the Company's stock, in any year not more than 30% of the shares will be
released, based on the cash flow criteria.
In addition, under the revised arrangement the performance shares will vest
if the individual holder has not voluntarily terminated his or her service to
the Company prior to the applicable vesting dates. Any individual who is
involuntarily terminated by the Company will be entitled to an automatic
acceleration of the unvested performance shares. The Board, in its discretion,
may allow an individual who has voluntarily terminated his or her services to
the Company to retain a portion or all of any unvested performance shares.
DIVIDEND POLICY
The Company has not paid any cash dividends on its Common Stock and has no
present intention of paying any dividends. The current policy of the Company is
to retain earnings, if any, for use in operations and in the development of its
business. The future dividend policy of the Company will be determined from time
to time by the Board of Directors.
NASDAQ LISTING
The Company's Common Stock is listed on the NASDAQ SmallCap Market. The
Company is required to maintain net tangible assets of at least $2 million and a
$1.00 stock price and to comply with certain other governance and regulatory
requirements to assure the continued listing of its Common Stock. On April 23,
1998 the Company received an informal inquiry from NASDAQ with respect to its
maintenance and compliance with certain of these requirements. It has responded
to such inquiry. On June 24, 1998, NASDAQ extended time for the Company to
comply with the listing requirements until August 14, 1998. If the Company is
not in compliance by that date, it's Common Stock would be de-listed unless the
Company seeks the further hearing and other procedural remedies or otherwise
takes action acceptable to NASDAQ to be in compliance. However, there is no
assurance that it will continue to comply and in such event there would be no
public market for its securities.
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USE OF PROCEEDS
Securities offered for resale hereunder are to be offered for the account
of the Selling Stockholders. The Company is not entitled to any of the proceeds
of sale of any such securities, but the Company will pay the expenses of the
filing of the Registration Statement. The Company will receive the proceeds, in
the ordinary course, from any exercise of outstanding Options and Warrants and
will apply those proceeds to general corporate purposes. If all outstanding
Options registered herein are exercised, the Company will receive proceeds of
approximately $476,400. If all the Warrants registered herein are fully
exercised, the Company will receive proceeds of up to approximately $2,652,700.
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CAPITALIZATION
The following table sets forth the capitalization of the Company as of
March 31, 1998 (assuming none of the currently outstanding Options or Warrants
are exercised) and on a pro forma basis to reflect the April 1998 Placement.
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(1) Giving effect to the issuance of 60,000 shares of Series A Preferred Stock
in the April 1998 Placement, net of $370,000 in issuance costs.
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BUSINESS
This Prospectus incorporates by reference the documents listed herein,
including the business descriptions contained therein and, in particular, the
description of "Business" contained in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997.
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SELLING STOCKHOLDERS
The shares of Common Stock offered hereunder are to be offered for sale,
from time to time, by persons acquiring them in private placements since the
Domestication Transaction or who have or may acquire the shares on exercise,
from time to time, of Warrants or Options held by them.
The following tables set forth the names and addresses of each of the
Listed Selling Stockholders (other than officers and directors), indicates their
relationship to the Company or its predecessors and specifies security ownership
at April 15, 1998 before and after giving effect to the sale of common stock
registered hereunder.
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(1) Includes Escrowed Performance Shares of Common Stock.
(2) Denominator includes all shares reserved for issuance on exercise of Options
and Warrants, and shares issuable upon conversion of Series A Preferred
Stock.
(3) Clarion Finanz AG is a non-reporting investment company controlled by Carlo
Civelli. Holdings of Mr. Civelli and Clarion Finanz AG are combined, and
include all shares of the Company held of record or beneficially by either,
and all additional shares over which either currently exercises full or
partial control, without duplication through attribution.
* Denotes less than 1% ownership.
PLAN OF DISTRIBUTION
The shares of Common Stock held by the Selling Stockholders may be offered
by them in varying amounts and transactions, from time to time, including
through the facilities of the NASDAQ SmallCap Market or such other exchange or
reporting system where the Common Stock may be traded, at prices then obtainable
and satisfactory to them so long as this Prospectus is then current under the
rules of the Commission and the Registration Statement has not been withdrawn by
the Company. Brokerage commis-
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sions may be paid or discounts allowed in connection with such sales; however,
it is anticipated that the discounts allowed or commissions paid will be no more
than the ordinary brokerage commissions paid on sales effected through brokers
or dealers. To the knowledge of the Company, none of the Selling Stockholders
has made any arrangements with a broker or dealer concerning the offer or sale
of the Common Stock as of the date of this Prospectus. The Company will receive
the proceeds from the exercise of Options and Warrants but the Selling
Stockholders, not the Company, will receive the net proceeds of any sales of
their Common Stock hereunder after payment of any discounts and commissions. The
Company has paid the professional fees and related costs of this Registration
Statement from its general funds.
REGISTRATION RIGHTS OF CERTAIN SELLING STOCKHOLDERS
The Company has granted certain registration rights with respect to Common
Stock to the Selling Stockholders who are not affiliates of the Company and who
acquired 1,887,250 shares of Common Stock (in various private placements since
July 27, 1994), or who have or who could acquire 4,284,000 shares of Common
Stock on conversion of the Series A Preferred Stock in the April 1998 Placement,
or who could acquire 1,709,750 shares issuable on exercise of Warrants issued in
such private placements (the "Registrable Shares"). The Company also has agreed
that if the Company proposes to register any of its securities under the 1933
Act in connection with the public offering of such securities for cash (other
than a registration relating solely to the sale of securities to employees of
the Company pursuant to a stock option, stock purchase or similar plan, or
pursuant to a Rule 145 transaction) it will allow those holders to have their
Registrable Securities included in such Registration Statement. The Company has
agreed to bear all registration expenses in connection with the registration of
the Registrable Securities other than underwriting commissions.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital of the Company consists of 50,000,000 shares of
Common Stock (par value U.S. $.01) of which 21,423,345 were outstanding at April
15, 1998 and 1,000,000 shares of Preferred Stock (par value U.S. $.01) of which
60,000 shares of Series A Preferred Stock were issued and outstanding at April
15, 1998.
COMMON STOCK
All of the issued shares of Common Stock of the Company are fully paid and
non-assessable. Subject to the release and performance conditions relating to
Escrowed Performance Shares, all of the shares of Common Stock rank equally as
to voting rights, participation in the distribution of the assets of the Company
on a liquidation, dissolution or winding-up and the entitlement to dividends.
Each share of Common Stock entitles the holder to one vote. In the event of the
liquidation, dissolution or winding-up of the Company or other distribution of
assets of the Company, the holders of the Common Stock will be entitled to
receive, on a pro-rata basis, all of the assets remaining after the Company has
paid its liabilities. Subject to the rights granted to holders of Preferred
Stock, and the limitations on Escrowed Performance Shares, holders of the Common
Stock are entitled to dividends only when and to the extent declared by the
Board of Directors.
Of the 21,423,345 shares of Common Stock currently issued and outstanding,
5,445,115 are classified as Escrowed Performance Shares, are held in escrow by
the Company's transfer agent, Harris Trust Company of California, and will vest
under the modification arrangements.
The Company has Options outstanding which could result in the issuance of
up to 2,010,070 additional common shares of the Company and has Warrants
outstanding which could result in the issuance of up to 1,759,750 additional
shares of Common Stock of the Company. The Options have been granted to
officers, directors and employees and the Warrants have been issued in private
placements and as payment for services rendered. Warrants are non-transferable
and adjusted in the event of a share consolidation or subdivision or other
similar change to the Company's capital. See "Executive Compensation" in the
Company's Annual Report on Form 10-K or in its Proxy materials for further
information with respect to the Options.
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PREFERRED STOCK GENERALLY
The Board of Directors is authorized to issue, without stockholder action,
up to 1,000,000 shares of Preferred Stock. Preferred Stock may be issued in one
or more series, the terms of which may be determined at the time of issuance by
the Board of Directors, and may include voting rights (including the right to
vote as a series on particular matters), preferences as to dividends and
liquidation, conversion and redemption rights and sinking fund provisions.
SERIES A PREFERRED STOCK
In connection with the April 1998 Placement, the Board of Directors
authorized the issuance of up to 100,000 shares of Series A, 7% Convertible
Preferred Stock ("Series A Preferred Stock") with a par value of $.01 per share
and a stated value of $50.00 per share, with a 7% per annum dividend. In the
April 1998 Placement, 60,000 shares were issued. Under the terms of the April
1998 Placement, the holders or their designees may acquire up to 40,000
additional shares of Series A Preferred Stock based on the requirement that
Clarion Finanz AG or its designee invest an additional $1 million and, at the
option of if the Company, the other holders also may be required to invest an
additional $1 million.
The Series A Preferred Stock ranks: (i) prior to all of the Company's
Common Stock, and (ii) prior to any class or series of capital stock of the
Company hereafter created (unless such future class specifically, by its terms,
ranks on parity with the Series A Preferred Stock), in each case as to
distributions of assets upon liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary (all such distributions being referred
to collectively as "Distributions"). The Series A Preferred Stock will bear a 7%
per annum cumulative dividend, payable out of assets legally available therefor,
at the Conversion Date (as defined below) in cash or Common Stock at the
Conversion Price (as defined below), at the Company's option. No dividends shall
be paid on the Common Stock or any other subsequently issued stock.
In the event of any liquidation, dissolution or winding up of the Company,
either voluntary or involuntary, the holders of Series A Preferred Stock shall
be entitled to receive a liquidation preference of $50.00 per share plus any
accrued and unpaid dividends, subject to adjustments for certain change of
control and normal corporate reclassifications and to pro rata distributions in
the event that assets are insufficient to fully fund the liquidation preference.
Holders of the Series A Preferred Stock have a right to convert their shares, at
their option on the earlier of (x) ninety (90) days after issuance or (y) on the
effective date of this Registration (the "Conversion Date") with such conversion
to be based on a per share conversion price ("Conversion Price") equal to the
lesser of a price that reflects a discount (the "Conversion Discount") to the
average of any three (3) consecutive closing bid prices for the Company's Common
Stock within twenty (20) trading days immediately prior to the conversion date
(the "Floating Conversion Price") or a price which is equal to one hundred
thirty percent (130%) of the closing bid prices of the Company's Common Stock
for the ten (10) trading days immediately preceding the date of issuance (the
"Fixed Conversion Price") provided that in determining the Conversion Price, the
holder shall not count any day on which its sales account for greater than
twenty percent (20%) of the volume of the Company's Common Stock and on which
the holder has sales in the last hour of trading. The Conversion Discount shall
be equal to fifteen percent (15%) if the Conversion Rights are exercised within
one hundred twenty (120) days of first issuance of the Series A Preferred Stock,
shall be equal to seventeen and one-half percent (17.5%) if the Conversion
Rights are exercised after one hundred twenty (120) days and prior to one
hundred forty-nine days of first issuance of the Series A Preferred Stock; and
shall be equal to twenty percent (20%) if the Conversion Rights are exercised
after one hundred fifty (150) days from first issuance of the Series A Preferred
Stock. The time periods are adjusted in the event that a Registration Statement
becomes effective prior to the 90th day and the applicable Conversion Discount
shall increase by five percent (5%) if the Company is de-listed on NASDAQ. In
addition, the percentage of shares that can be converted at any one time is
limited during such time periods and the holders cannot own more than 4.99% of
the equity of the Company after the Conversion.
NASDAQ has adopted certain new governance requirements, which became
effective in February 1998, under which the Company is required to seek
Stockholder approval before it issues common stock (or securities convertible
into or exercisable for common stock) equal to 20% or more of the voting power,
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outstanding before the issuance, for less than the greater of book or market
value of the common stock. The Conversion Price of the Series A Preferred may be
below the greater of the book or market value of the common stock and will
constitute 20% or more of the voting power, if fully converted at the
anticipated pricing.
Thus, the Company is obligated to file this Registration Statement to cover
the maximum number of shares that is allowable pursuant to Rule 4310(c)(25)(H)
of The NASDAQ Stock Market Rules, based on the Company's calculations of the
number of shares of Common Stock which are required to accommodate the
conversion rights of the Series A Preferred Stock and the shares that underlie
Warrants issued in connection with the April 1998 Placement. Unless sooner
converted, and subject to certain conditions, the Series A Preferred Stock is
subject to mandatory conversion after three (3) years from the Closing Date, at
which time all shares of Series A Preferred Stock will automatically be
converted at the Conversion Price. To accommodate the new NASDAQ requirements,
the holders of the Series A Preferred Stock have agreed that they will not
convert Series A Preferred Stock until required stockholder approval has been
received to meet the applicable NASDAQ requirement.
After giving effect to the Series A Preferred Stock, the Company has
900,000 shares of Preferred Stock remaining reserved for issuance all of which
shares which could be issued quickly with terms calculated to delay or prevent a change inof control of the Company or to make removal of management more difficult. TheAdditionally, the issuance of preferred stock may have the effect of delaying,
deterring or preventing a change in control of the Company without any further
action by the stockholders or discouraging bids for the Company's Common Stock
at a premium. If the future preferred stock were to be issued with conversion
features that set the conversion price of the preferred stock at less than
current market, it could discourage interest in the Company's Common Stock and
could have the effect of decreasing the market price of our common stock, and may adversely affect the Common Stock.
APPLICATION OF CALIFORNIA CORPORATIONS CODE
Although incorporated in Delaware, the businessvoting and other rights of the Company has been
conducted through its operating subsidiaries in the Stateholders of California. Section
2115common stock. At present, we have no plans to issue any shares of the California Corporations Code ("Section 2115") provides that certain
provisionspreferred stock following this offering.
Anti-Takeover Effects of another state to the exclusionCertain Provisions of the
lawour Certificate of the state in which it is incorporated, if the corporation meets certain
tests regarding the business done in CaliforniaIncorporation, Bylaws and the numberDGCL
Pursuant to our Certificate of its California
shareholders.
An entity such as the Company can be subject to Section 2115 even though it
does not itself transact business in California if, on a consolidated basis, the
average of the property factor, payroll factor and sales factor is more than
fifty percent (50%) deemed to be in California during its latest full income
year and more than one-half of its outstanding voting securitiesIncorporation, we are held of
record by persons having addresses in California. Section 2115 does not apply to
corporations with outstanding securities listed on the New York or American
Stock Exchange, or with outstanding securities designated as qualified for
trading as a national market security on NASDAQ, if such corporation has at
least 800 beneficial holders of its equity securities. Since the Company
currently would be deemed not to meet these factors, it is not subject to Section 2115.
DELAWARE CORPORATE GOVERNANCE ISSUES
As a Delaware corporation, the Company is subject toprovisions of Section 203 of the Delaware General Corporation Law an anti-takeover provision which generally
prohibitsregulating corporate takeovers through a publicly-held Delaware corporation from engaging in“business combination” with a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder unless the business combination has been approved by the directors
and shareholders as provided in the Company's Certificate of Incorporation and
Bylaws. The Company's Certificate of Incorporation and Bylaws incorporate the
provisions of Section 203. For purposes of Section 203, a "business combination"
includes a merger, asset sale or other transaction resulting in a financial
benefit to the interested stockholder, and an "interested stockholder" is a
person who together with affiliates and associates, owns (or within three years
prior, did own) 15% or more of the corporation's
17
23our outstanding voting stock (otherwise known as an “interested stockholder”).
Listing
Our common stock is listed on The Nasdaq Capital Market under the trading symbol “AMRH.”
Transfer Agent and approvalRegistrar
The Transfer Agent and Registrar for our common stock is Corporate Stock Transfer, Inc.
The following description, together with the additional information we include in any applicable prospectus supplements or free writing prospectuses, summarizes the material terms and provisions of the debt securities that we may offer under this prospectus. We may issue debt securities, in one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt. While the terms we have summarized below will apply generally to any future debt securities we may offer under this prospectus, we will describe the particular terms of any debt securities that we may offer in more detail in the applicable prospectus supplement or free writing prospectus. The terms of any debt securities we offer under a prospectus supplement may differ from the terms we describe below. However, no prospectus supplement shall fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered and described in this prospectus at the time of its effectiveness. As of the date of this prospectus, we have no outstanding registered debt securities. Unless the context requires otherwise, whenever we refer to the “indentures,” we also are referring to any supplemental indentures that specify the terms of a particular series of debt securities.
We will issue any senior debt securities under the senior indenture that we will enter into with the trustee named in the senior indenture. We will issue any subordinated debt securities under the subordinated indenture and any supplemental indentures that we will enter into with the trustee named in the subordinated indenture. We have filed forms of these documents as exhibits to the registration statement, of which this prospectus is a part, and supplemental indentures and forms of debt securities containing the terms of the debt securities being offered will be filed as exhibits to the registration statement of which this prospectus is a part or will be incorporated by reference from reports that we file with the SEC.
The indentures will be qualified under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). We use the term “trustee” to refer to either the trustee under the senior indenture or the trustee under the subordinated indenture, as applicable.
The following summaries of material provisions of the senior debt securities, the subordinated debt securities and the indentures are subject to, and qualified in their entirety by reference to, all of the provisions of the indenture and any supplemental indentures applicable to a particular series of debt securities. We urge you to read the applicable prospectus supplements and any related free writing prospectuses related to the debt securities that we may offer under this prospectus, as well as the complete indentures that contains the terms of the debt securities. Except as we may otherwise indicate, the terms of the senior indenture and the subordinated indenture are identical.
General
The terms of each series of debt securities will be established by or pursuant to a resolution of our Board of Directors and set forth or determined in the manner provided in an officers’ certificate or by a supplemental indenture. Debt securities may be issued in separate series without limitation as to aggregate principal amount. We may specify a maximum aggregate principal amount for the debt securities of any series. We will describe in the applicable prospectus supplement the terms of the series of debt securities being offered, including:
the title;
the principal amount being offered, and if a series, the total amount authorized and the total amount outstanding;
any limit on the amount that may be issued;
whether or not we will issue the series of debt securities in global form, and, if so, the terms and who the depositary will be;
the maturity date;
whether and under what circumstances, if any, we will pay additional amounts on any debt securities held by a person who is not a United States person for tax purposes, and whether we can redeem the debt securities if we have to pay such additional amounts;
the annual interest rate, which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining such dates;
whether or not the debt securities will be secured or unsecured, and the terms of any secured debt;
the terms of the subordination of any series of subordinated debt;
the place where payments will be made;
restrictions on transfer, sale or other assignment, if any;
our right, if any, to defer payment of interest and the maximum length of any such deferral period;
the date, if any, after which, and the price at which, we may, at our option, redeem the series of debt securities pursuant to any optional or provisional redemption provisions and the terms of those redemption provisions;
provisions for a sinking fund purchase or other analogous fund, if any, including the date, if any, on which, and the price at which we are obligated, pursuant thereto or otherwise, to redeem, or at the holder’s option, to purchase, the series of debt securities and the currency or currency unit in which the debt securities are payable;
whether the indenture will restrict our ability or the ability of our subsidiaries, if any, to:
incur additional indebtedness;
issue additional securities;
create liens;
pay dividends or make distributions in respect of our capital stock or the capital stock of our subsidiaries;
redeem capital stock;
place restrictions on our subsidiaries’ ability to pay dividends, make distributions or transfer assets;
make investments or other restricted payments;
sell or otherwise dispose of assets;
enter into sale-leaseback transactions;
engage in transactions with stockholders or affiliates;
issue or sell stock of our subsidiaries; or
effect a consolidation or merger;
whether the indenture will require us to maintain any interest coverage, fixed charge, cash flow-based, asset-based or other financial ratios;
a discussion of certain material or special United States federal income tax considerations applicable to the debt securities;
information describing any book-entry features;
the applicability of the provisions in the indenture on discharge;
whether the debt securities are to be offered at a price such that they will be deemed to be offered at an “original issue discount” as defined in paragraph (a) of Section 1273 of the Internal Revenue Code of 1986, as amended;
the denominations in which we will issue the series of debt securities, if other than denominations of $1,000 and any integral multiple thereof;
the currency of payment of debt securities if other than U.S. dollars and the manner of determining the equivalent amount in U.S. dollars; and
any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities, including any additional events of default or covenants provided with respect to the debt securities, and any terms that may be required by us or advisable under applicable laws or regulations.
Conversion or Exchange Rights
We will set forth in the applicable prospectus supplement the terms under which a series of debt securities may be convertible into or exchangeable for our common stock, our preferred stock or other securities (including securities of a third party). We will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option. We may include provisions pursuant to which the number of shares of our common stock, our preferred stock or other securities (including securities of a third party) that the holders of the series of debt securities receive would be subject to adjustment.
Consolidation, Merger or Sale
Unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, the indentures will not contain any covenant that restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all of our assets. However, any successor to or acquirer of such assets must assume all of our obligations under the indentures or the debt securities, as appropriate. If the debt securities are convertible into or exchangeable for our other securities or securities of other entities, the person with whom we consolidate or merge or to whom we sell all of our property must make provisions for the conversion of the debt securities into securities that the holders of the debt securities would have received if they had converted the debt securities before the consolidation, merger or sale.
Events of Default under the Indenture
Unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, the following are events of default under the indentures with respect to any series of debt securities that we may issue:
if we fail to pay interest when due and payable and our failure continues for 90 days and the time for payment has not been extended;
if we fail to pay the principal, premium or sinking fund payment, if any, when due and payable at maturity, upon redemption or repurchase or otherwise, and the time for payment has not been extended;
if we fail to observe or perform any other covenant contained in the debt securities or the indentures, other than a covenant specifically relating to another series of debt securities, and our failure continues for 90 days after we receive notice from the trustee or we and the trustee receive notice from the holders of at least 25% in aggregate principal amount of the outstanding debt securities of the applicable series; and
if specified events of bankruptcy, insolvency or reorganization occur.
We will describe in each applicable prospectus supplement any additional events of default relating to the relevant series of debt securities.
If an event of default with respect to debt securities of any series occurs and is continuing, other than an event of default specified in the last bullet point above, the trustee or the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series, by notice to us in writing, and to the trustee if notice is given by such holders, may declare the unpaid principal, premium, if any, and accrued interest, if any, due and payable immediately. If an event of default arises due to the occurrence of certain specified bankruptcy, insolvency or reorganization events, the unpaid principal, premium, if any, and accrued interest, if any, of each issue of debt securities then outstanding shall be due and payable without any notice or other action on the part of the trustee or any holder.
The holders of a majority in principal amount of the outstanding debt securities of an affected series may waive any default or event of default with respect to the series and its consequences, except defaults or events of default regarding payment of principal, premium, if any, or interest, unless we have cured the default or event of default in accordance with the indenture. Any waiver shall cure the default or event of default.
Subject to the terms of the indentures, if an event of default under an indenture shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or powers under such indenture at the request or direction of any of the holders of the applicable series of debt securities, unless such holders have offered the trustee reasonable indemnity or security satisfactory to it against any loss, liability or expense. The holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the debt securities of that series, provided that:
the direction so given by the holder is not in conflict with any law or the applicable indenture; and
subject to its duties under the Trust Indenture Act, the trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders not involved in the proceeding.
The indentures will provide that if an event of default has occurred and is continuing, the trustee will be required in the exercise of its powers to use the degree of care that a prudent person would use in the conduct of its own affairs. The trustee, however, may refuse to follow any direction that conflicts with law or the indenture, or that the trustee determines is unduly prejudicial to the rights of any other holder of the relevant series of debt securities, or that would involve the trustee in personal liability. Prior to taking any action under the indentures, the trustee will be entitled to indemnification against all costs, expenses and liabilities that would be incurred by taking or not taking such action.
A holder of the debt securities of any series will have the right to institute a proceeding under the indentures or to appoint a receiver or trustee, or to seek other remedies only if:
the holder has given written notice to the trustee of a continuing event of default with respect to that series;
the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made a written request and such holders have offered reasonable indemnity to the trustee or security satisfactory to it against any loss, liability or expense or to be incurred in compliance with instituting the proceeding as trustee; and
the trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series other conflicting directions within 90 days after the notice, request and offer.
These limitations do not apply to a suit instituted by a holder of debt securities if we default in the payment of the principal, premium, if any, or interest on, the debt securities, or other defaults that may be specified in the applicable prospectus supplement.
We will periodically file statements with the trustee regarding our compliance with specified covenants in the indentures.
The indentures will provide that if a default occurs and is continuing and is actually known to a responsible officer of the trustee, the trustee must mail to each holder notice of the default within the earlier of 90 days after it occurs and 30 days after it is known by a responsible officer of the trustee or written notice of it is received by the trustee, unless such default has been cured or waived. Except in the case of a default in the payment of principal or premium of, or interest on, any debt security or certain other defaults specified in an indenture, the trustee shall be protected in withholding such notice if and so long as the Board of Directors, the executive committee or a trust committee of directors, or responsible officers of the trustee, in good faith determine that withholding notice is in the best interests of holders of the relevant series of debt securities.
Modification of Indenture; Waiver
Subject to the terms of the indenture for any series of debt securities that we may issue, we and the trustee may change an indenture without the consent of any holders with respect to the following specific matters:
to fix any ambiguity, defect or inconsistency in the indenture;
to comply with the provisions described above under “Description of Debt Securities — Consolidation, Merger or Sale;”
to comply with any requirements of the SEC in connection with the qualification of any indenture under the Trust Indenture Act;
to add to, delete from or revise the conditions, limitations and restrictions on the authorized amount, terms or purposes of issue, authentication and delivery of debt securities, as set forth in the indenture;
to provide for the issuance of, and establish the form and terms and conditions of, the debt securities of any series as provided under “Description of Debt Securities — General,” to establish the form of any certifications required to be furnished pursuant to the terms of the indenture or any series of debt securities, or to add to the rights of the holders of any series of debt securities;
to evidence and provide for the acceptance of appointment hereunder by a successor trustee;
to provide for uncertificated debt securities and to make all appropriate changes for such purpose;
to add such new covenants, restrictions, conditions or provisions for the benefit of the holders, to make the occurrence, or the occurrence and the continuance, of a default in any such additional covenants, restrictions, conditions or provisions an event of default or to surrender any right or power conferred to us in the indenture; or
to change anything that does not adversely affect the interests of any holder of debt securities of any series in any material respect.
In addition, under the indentures, the rights of holders of a series of debt securities may be changed by us and the trustee with the written consent of the holders of at least two-thirdsa majority in aggregate principal amount of the outstanding debt securities of each series that is affected. However, subject to the terms of the indenture for any series of debt securities that we may issue or otherwise provided in the prospectus supplement applicable to a particular series of debt securities, we and the trustee may only make the following changes with the consent of each holder of any outstanding debt securities affected:
extending the stated maturity of the series of debt securities;
reducing the principal amount, reducing the rate of or extending the time of payment of interest, or reducing any premium payable upon the redemption or repurchase of any debt securities; or
reducing the percentage of debt securities, the holders of which are required to consent to any amendment, supplement, modification or waiver.
Discharge
Each indenture provides that, subject to the terms of the indenture and any limitation otherwise provided in the prospectus supplement applicable to a particular series of debt securities, we may elect to be discharged from our obligations with respect to one or more series of debt securities, except for specified obligations, including obligations to:
register the transfer or exchange of debt securities of the series;
replace stolen, lost or mutilated debt securities of the series;
maintain paying agencies;
hold monies for payment in trust;
recover excess money held by the trustee;
compensate and indemnify the trustee; and
appoint any successor trustee.
In order to exercise our rights to be discharged, we will deposit with the trustee money or government obligations sufficient to pay all the principal of, and any premium and interest on, the debt securities of the series on the dates payments are due.
Form, Exchange and Transfer
We will issue the debt securities of each series only in fully registered form without coupons and, unless we otherwise specify in the applicable prospectus supplement, in denominations of $1,000 and any integral multiple thereof. The indentures will provide that we may issue debt securities of a series in temporary or permanent global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company or another depositary named by us and identified in a prospectus supplement with respect to that series. See “Legal Ownership of Securities” below for a further description of the terms relating to any book-entry securities.
At the option of the holder, subject to the terms of the indentures and the limitations applicable to global securities described in the applicable prospectus supplement, the holder of the debt securities of any series can exchange the debt securities for other debt securities of the same series, in any authorized denomination and of like tenor and aggregate principal amount.
Subject to the terms of the indentures and the limitations applicable to global securities set forth in the applicable prospectus supplement, holders of the debt securities may present the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed if so required by us or the security registrar, at the office of the security registrar or at the office of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities that the holder presents for transfer or exchange, we will make no service charge for any registration of transfer or exchange, but we may require payment of any taxes or other governmental charges.
We will name in the applicable prospectus supplement the security registrar, and any transfer agent in addition to the security registrar, that we initially designate for any debt securities. We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required to maintain a transfer agent in each place of payment for the debt securities of each series.
If we elect to redeem the debt securities of any series, we will not be required to:
issue, register the transfer of, or exchange any debt securities of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any debt securities that may be selected for redemption and ending at the close of business on the day of the mailing; or
register the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of any debt securities we are redeeming in part.
Information Concerning the Trustee
The trustee, other than during the occurrence and continuance of an event of default under an indenture, undertakes to perform only those duties as are specifically set forth in the applicable indenture and is under no obligation to exercise any of the powers given it by the indentures at the request of any holder of debt securities unless it is offered reasonable security and indemnity against the costs, expenses and liabilities that it might incur. However, upon an event of default under an indenture, the trustee must use the same degree of care as a prudent person would exercise or use in the conduct of his or her own affairs.
Payment and Paying Agents
Unless we otherwise indicate in the applicable prospectus supplement, we will make payment of the interest on any debt securities on any interest payment date to the person in whose name the debt securities, or one or more predecessor securities, are registered at the close of business on the regular record date for the interest payment.
We will pay principal of and any premium and interest on the debt securities of a particular series at the office of the paying agents designated by us, except that unless we otherwise indicate in the applicable prospectus supplement, we will make interest payments by check that we will mail to the holder or by wire transfer to certain holders. Unless we otherwise indicate in the applicable prospectus supplement, we will designate the corporate trust office of the trustee as our sole paying agent for payments with respect to debt securities of each series. We will name in the applicable prospectus supplement any other paying agents that we initially designate for the debt securities of a particular series. We will maintain a paying agent in each place of payment for the debt securities of a particular series.
All money we pay to a paying agent or the trustee for the payment of the principal of or any premium or interest on any debt securities that remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us, and the holder of the debt security thereafter may look only to us for payment thereof.
Governing Law
The indentures and the debt securities will be governed by and construed in accordance with the laws of the State of New York, except to the extent that the Trust Indenture Act is applicable.
Ranking Debt Securities
The subordinated debt securities will be unsecured and will be subordinate and junior in priority of payment to certain other indebtedness to the extent described in a prospectus supplement. The subordinated indenture does not limit the amount of subordinated debt securities that we may issue. It also does not limit us from issuing any other secured or unsecured debt.
The senior debt securities will be unsecured and will rank equally in right of payment to all our other senior unsecured debt. The senior indenture does not limit the amount of senior debt securities that we may issue. It also does not limit us from issuing any other secured or unsecured debt.
The following description, together with the additional information we may include in any applicable prospectus supplements and free writing prospectuses, summarizes the material terms and provisions of the warrants that we may offer under this prospectus, which may consist of warrants to purchase common stock, preferred stock or debt securities and may be issued in one or more series. Warrants may be offered independently or together with common stock, preferred stock or debt securities offered by any prospectus supplement, and may be attached to or separate from those securities. While the terms we have summarized below will apply generally to any warrants that we may offer under this prospectus, we will describe the particular terms of any series of warrants that we may offer in more detail in the applicable prospectus supplement and any applicable free writing prospectus. The terms of any warrants offered under a prospectus supplement may differ from the terms described below. However, no prospectus supplement will fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered and described in this prospectus at the time of its effectiveness.
We may issue the warrants under a warrant agreement that we will enter into with a warrant agent to be selected by us. If selected, the warrant agent will act solely as an agent of ours in connection with the warrants and will not act as an agent for the holders or beneficial owners of the warrants. If applicable, we will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from a Current Report on Form 8-K that we file with the SEC, the form of warrant agreement, including a form of warrant certificate, that describes the terms of the particular series of warrants we are offering before the issuance of the related series of warrants. The following summaries of material provisions of the warrants and the warrant agreements are subject to, and qualified in their entirety by reference to, all the provisions of the warrant agreement and warrant certificate applicable to a particular series of warrants. We urge you to read the applicable prospectus supplement and any applicable free writing prospectus related to the particular series of warrants that we sell under this prospectus, as well as the complete warrant agreements and warrant certificates that contain the terms of the warrants.
General
We will describe in the applicable prospectus supplement the terms relating to a series of warrants, including:
the offering price and aggregate number of warrants offered;
the currency for which the warrants may be purchased;
if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security;
if applicable, the date on and after which the warrants and the related securities will be separately transferable;
in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at, and currency in which, this principal amount of debt securities may be purchased upon such exercise;
in the case of warrants to purchase common stock or preferred stock, the number of shares of common stock or preferred stock, as the case may be, purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise;
the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreements and the warrants;
the terms of any rights to redeem or call the warrants;
any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;
the dates on which the right to exercise the warrants will commence and expire;
the manner in which the warrant agreements and warrants may be modified;
United States federal income tax consequences of holding or exercising the warrants;
the terms of the securities issuable upon exercise of the warrants; and
any other specific terms, preferences, rights or limitations of or restrictions on the warrants.
before exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such exercise, including:
in the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or
in the case of warrants to purchase common stock or preferred stock, the right to receive dividends, if any, or, payments upon our liquidation, dissolution or winding up or to exercise voting rights, if any.
Exercise of Warrants
Each warrant will entitle the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at any time up to the specified time on the expiration date that we set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants will become void.
Holders of the warrants may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with specified information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable prospectus supplement. We will set forth on the reverse side of the warrant certificate and in the applicable prospectus supplement the information that the holder of the warrant will be required to deliver to us or the warrant agent as applicable.
Upon receipt of the required payment and the warrant certificate properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants represented by the warrant certificate are exercised, then we will issue a new warrant certificate for the remaining amount of warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants may surrender securities as all or part of the exercise price for warrants.
Enforceability of Rights by Holders of Warrants
If selected, each warrant agent will act solely as our agent under the applicable warrant agreement and will not assume any obligation or relationship of agency or trust with any holder of any warrant. A single bank or trust company may act as warrant agent for more than one issue of warrants. A warrant agent will have no duty or responsibility in case of any default by us under the applicable warrant agreement or warrant, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a warrant may, without the consent of the related warrant agent or the holder of any other warrant, enforce by appropriate legal action its right to exercise, and receive the securities purchasable upon exercise of, its warrants.
The following description, together with the additional information we may include in any applicable prospectus supplements and free writing prospectuses, summarizes the material terms and provisions of the units that we may offer under this prospectus.
While the terms we have summarized below will apply generally to any units that we may offer under this prospectus, we will describe the particular terms of any series of units in more detail in the applicable prospectus supplement. The terms of any units offered under a prospectus supplement may differ from the terms described below. However, no prospectus supplement will fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered and described in this prospectus at the time of its effectiveness.
We will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from a Current Report on Form 8-K that we file with the SEC, the form of unit agreement that describes the terms of the series of units we are offering, and any supplemental agreements, before the issuance of the related series of units. The following summaries of material terms and provisions of the units are subject to, and qualified in their entirety by reference to, all the provisions of the unit agreement and any supplemental agreements applicable to a particular series of units. We urge you to read the applicable prospectus supplements related to the particular series of units that we sell under this prospectus, as well as the complete unit agreement and any supplemental agreements that contain the terms of the units.
General
We may issue units comprised of one or more debt securities, shares of common stock, shares of preferred stock and warrants in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date.
We will describe in the applicable prospectus supplement the terms of the series of units, including:
the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
any provisions of the governing unit agreement that differ from those described below; and
any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units.
The provisions described in this section, as well as those described under “Description of Capital Stock,” “Description of Debt Securities” and “Description of Warrants” will apply to each unit and to any common stock, preferred stock, debt security or warrant included in each unit, respectively.
Unit Agent
The name and address of the unit agent, if any, for any units we offer will be set forth in the applicable prospectus supplement.
Issuance in Series
We may issue units in such amounts and in numerous distinct series as we determine.
Enforceability of Rights by Holders of Units
Each unit agent will act solely as our agent under the applicable unit agreement and will not assume any obligation or relationship of agency or trust with any holder of any unit. A single bank or trust company may act as unit agent for more than one series of units. A unit agent will have no duty or responsibility in case of any default by us under the applicable unit agreement or unit, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a unit may, without the consent of the related unit agent or the holder of any other unit, enforce by appropriate legal action its rights as holder under any security included in the unit.
We, the unit agents and any of their agents may treat the registered holder of any unit certificate as an absolute owner of the units evidenced by that certificate for any purpose and as the person entitled to exercise the rights attaching to the units so requested, despite any notice to the contrary. See “Legal Ownership of Securities.”
We can issue securities in registered form or in the form of one or more global securities. We describe global securities in greater detail below. We refer to those persons who have securities registered in their own names on the books that we or any applicable trustee or depositary or warrant agent maintain for this purpose as the “holders” of those securities. These persons are the legal holders of the securities. We refer to those persons who, indirectly through others, own beneficial interests in securities that are not registered in their own names, as “indirect holders” of those securities. As we discuss below, indirect holders are not legal holders, and investors in securities issued in book-entry form or in street name will be indirect holders.
Book-Entry Holders
We may issue securities in book-entry form only, as we will specify in the applicable prospectus supplement. This means securities may be represented by one or more global securities registered in the name of a financial institution that holds them as depositary on behalf of other financial institutions that participate in the depositary’s book-entry system. These participating institutions, which are referred to as participants, in turn, hold beneficial interests in the securities on behalf of themselves or their customers.
Only the person in whose name a security is registered is recognized as the holder of that security. Global securities will be registered in the name of the depositary or its participants. Consequently, for global securities, we will recognize only the depositary as the holder of the securities, and we will make all payments on the securities to the depositary. The depositary passes along the payments it receives to its participants, which in turn pass the payments along to their customers who are the beneficial owners. The depositary and its participants do so under agreements they have made with one another or with their customers; they are not obligated to do so under the terms of the securities.
As a result, investors in a global security will not own securities directly. Instead, they will own beneficial interests in a global security, through a bank, broker or other financial institution that participates in the depositary’s book-entry system or holds an interest through a participant. As long as the securities are issued in global form, investors will be indirect holders, and not legal holders, of the securities.
Street Name Holders
We may terminate a global security or issue securities that are not issued in global form. In these cases, investors may choose to hold their securities in their own names or in “street name.” Securities held by an investor in street name would be registered in the name of a bank, broker or other financial institution that the investor chooses, and the investor would hold only a beneficial interest in those securities through an account he or she maintains at that institution.
For securities held in street name, we or any applicable trustee or depositary will recognize only the intermediary banks, brokers and other financial institutions in whose names the securities are registered as the holders of those securities, and we or any such trustee or depositary will make all payments on those securities to them. These institutions pass along the payments they receive to their customers who are the beneficial owners, but only because they agree to do so in their customer agreements or because they are legally required to do so. Investors who hold securities in street name will be indirect holders, not legal holders, of those securities.
Legal Holders
Our obligations, as well as the obligations of any applicable trustee or third party employed by us or a trustee, run only to the legal holders of the securities. We do not have obligations to investors who hold beneficial interests in global securities, in street name or by any other indirect means. This will be the case whether an investor chooses to be an indirect holder of a security or has no choice because we are issuing the securities only in global form.
For example, once we make a payment or give a notice to the holder, we have no further responsibility for the payment or notice even if that holder is required, under agreements with its participants or customers or by law, to alter, amend or repealpass it along to the foregoing provisions.
The Company has adopted certain provisionsindirect holders but does not do so. Similarly, we may want to limit the ability of
stockholders to change corporate management. The Company's Certificate of
Incorporation contains provisions which classifies the Board of Directors and
provides that Board members may only be removed for cause and withobtain the approval of the holders of two-thirdsto amend an indenture, to relieve us of the voting stock. The Certificateconsequences of Incorporation adoptsa default or of our obligation to comply with a particular provision of an indenture, or for other purposes. In such an event, we would seek approval only from the interested stockholder provisions described above.
While theselegal holders, and not the indirect holders, of the securities. Whether and how the legal holders contact the indirect holders is up to the legal holders.
Special Considerations for Indirect Holders
If you hold securities through a bank, broker or similar provisionsother financial institution, either in book-entry form because the securities are commonly adoptedrepresented by public corporations
formed under Delaware law, such provisions may allow managementone or more global securities or in street name, you should check with your own institution to retain their
positionsfind out:
how it handles securities payments and notices;
whether it imposes fees or charges;
how it would handle a request for the holders’ consent, if ever required;
whether and how you can instruct it to send you securities registered in your own name so you can be a legal holder, if that is permitted in the future;
how it would exercise rights under the securities if there were a default or other event triggering the need for holders to act to protect their interests; and
if the securities are in book-entry form, how the depositary’s rules and procedures will affect these matters.
Global Securities
A global security is a security that represents one or any other number of individual securities held by a depositary. Generally, all securities represented by the same global securities will have the same terms.
Each security issued in book-entry form will be represented by a global security that we issue to, deposit with and register in the name of a financial institution or its nominee that we select. The financial institution that we select for this purpose is called the depositary. Unless we specify otherwise in the applicable prospectus supplement, The Depository Trust Company, andNew York, NY, known as DTC, will be the depositary for all securities issued in book-entry form.
A global security may discourage third parties from attemptingnot be transferred to acquire controlor registered in the name of anyone other than the Company.depositary, its nominee or a successor depositary, unless special termination situations arise. We describe those situations below under “— Special Situations When A Global Security Will Be Terminated.” As a result stockholdersof these arrangements, the depositary, or its nominee, will be the sole registered owner and legal holder of all securities represented by a global security, and investors will be permitted to own only beneficial interests in a global security. Beneficial interests must be held by means of an account with a broker, bank or other financial institution that in turn has an account with the depositary or with another institution that does. Thus, an investor whose security is represented by a global security will not be a legal holder of the Company may
have reduced opportunities to sell their stock in transactions where third
parties are seekingsecurity, but only an indirect holder of a beneficial interest in the Companyglobal security.
If the prospectus supplement for a particular security indicates that the security will be issued as a global security, then the security will be represented by a global security at all times unless and until the global security is terminated. If termination occurs, we may issue the securities through another book-entry clearing system or decide that the securities may no longer be held through any book-entry clearing system.
Special Considerations For Global Securities
As an indirect holder, an investor’s rights relating to a global security will be governed by the account rules of the investor’s financial institution and of the depositary, as well as general laws relating to securities transfers. We do not recognize an indirect holder as a holder of securities and instead deal only with the depositary that holds the global security.
If securities are issued only as global securities, an investor should be aware of the following:
an investor cannot cause the securities to be registered in his or her name, and cannot obtain non-global certificates for his or her interest in the securities, except in the special situations we describe below;
an investor will be an indirect holder and must look to his or her own bank or broker for payments on the securities and protection of his or her legal rights relating to the securities, as we describe above;
an investor may not be able to sell interests in the securities to some insurance companies and to other institutions that are required by law to own their securities in non-book-entry form;
an investor may not be able to pledge his or her interest in the global security in circumstances where certificates representing the securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective;
the depositary’s policies, which may change from time to time, will govern payments, transfers, exchanges and other matters relating to an investor’s interest in the global security. We and any applicable trustee have no responsibility for any aspect of the depositary’s actions or for its records of ownership interests in the global security. We and the trustee also do not supervise the depositary in any way;
the depositary may, and we understand that DTC will, require that those who purchase and sell interests in the global security within its book-entry system use immediately available funds, and your broker or bank may require you to do so as well; and
financial institutions that participate in the depositary’s book-entry system, and through which an investor holds its interest in the global security, may also have their own policies affecting payments, notices and other matters relating to the securities. There may be more than one financial intermediary in the chain of ownership for an investor. We do not monitor and are not responsible for the actions of any of those intermediaries
Special Situations When A Global Security Will Be Terminated
In a few special situations described below, a global security will terminate and interests in it will be exchanged for physical certificates representing those interests. After that exchange, the choice of whether to hold securities directly or in street name will be up to the investor. Investors must consult their own banks or brokers to find out how to have their interests in securities transferred to their own names, so that they will be direct holders. We have described the rights of holders and street name investors above.
A global security will terminate when the following special situations occur:
if the depositary notifies us that it is unwilling, unable or no longer qualified to continue as depositary for that global security and we do not appoint another institution to act as depositary within 90 days;
if we notify any applicable trustee that we wish to terminate that global security; or
if an event of default has occurred with regard to securities represented by that global security and has not been cured or waived.
The applicable prospectus supplement may also list additional situations for terminating a global security that would apply only to the particular series of securities covered by the prospectus supplement. When a global security terminates, the depositary, and neither we, nor any applicable trustee, is responsible for deciding the names of the institutions that will be the initial direct holders.
We may sell the securities being offered hereby in one or more of the following ways from time to time:
through agents to the public or to investors;
to underwriters for resale to the public or to investors;
negotiated transactions;
block trades;
directly to investors; or
through a combination of any of these methods of sale.
As set forth in more detail below, the securities may be distributed from time to time in one or more transactions:
at a fixed price or prices, which may be changed;
at market prices prevailing at the time of sale;
at prices related to such prevailing market prices; or
at negotiated prices.
We will set forth in a prospectus supplement the terms of that particular offering of securities, including:
the name or names of any agents or underwriters;
the purchase price of the securities being offered and the proceeds we will receive from the sale;
any over-allotment options under which underwriters may purchase additional securities from us;
any agency fees or underwriting discounts and other items constituting agents’ or underwriters’ compensation;
any initial public offering price;
any discounts or concessions allowed or re-allowed or paid to dealers; and
any securities exchanges or markets on which such securities may be listed.
Only underwriters named in an applicable prospectus supplement are underwriters of the securities offered by that prospectus supplement.
If underwriters are used in an offering, we will execute an underwriting agreement with such underwriters and will specify the name of each underwriter and the terms of the transaction (including any underwriting discounts and other terms constituting compensation of the underwriters and any dealers) in a prospectus supplement. The securities may be offered to the public either through underwriting syndicates represented by managing underwriters or directly by one or more investment banking firms or others, as designated. If an underwriting syndicate is used, the managing underwriter(s) will be specified on the cover of the prospectus supplement. If underwriters are used in the sale, the offered securities will be acquired by the underwriters for their own accounts and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time. Unless otherwise set forth in the prospectus supplement, the obligations of the underwriters to purchase the offered securities will be subject to conditions precedent and the underwriters will be obligated to purchase all of the offered securities if any are purchased.
We may grant to the underwriters options to purchase additional securities to cover over-allotments, if any, at the public offering price, with additional underwriting commissions or discounts, as may be set forth in a related prospectus supplement. The terms of any over-allotment option will be set forth in the prospectus supplement for those securities.
If we use a dealer in the sale of the securities being offered pursuant to this prospectus or any prospectus supplement, we will sell the securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale. The names of the dealers and the terms of the transaction will be specified in a prospectus supplement.
We may sell the securities directly or through agents we designate from time to time. We will name any agent involved in the offering and sale of securities and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement states otherwise, any agent will act on a best-efforts basis for the period of its appointment.
We may authorize agents or underwriters to solicit offers by institutional investors to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation of these contracts in the prospectus supplement.
In connection with the sale of the securities, underwriters, dealers or agents may receive compensation from us or from purchasers of the common stock for whom they act as agents in the form of discounts, concessions or commissions. Underwriters may sell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of the securities, and any institutional investors or others that purchase common stock directly and then resell the securities, may be deemed to be underwriters, and any discounts or commissions received by them from us and any profit on the resale of the common stock by them may be deemed to be underwriting discounts and commissions under the Securities Act.
We may provide agents and underwriters with indemnification against particular civil liabilities, including liabilities under the Securities Act, or contribution with respect to payments that the agents or underwriters may make with respect to such liabilities. Agents and underwriters may engage in transactions with, or perform services for, us in the ordinary course of business.
We may engage in at the market offerings into an existing trading market in accordance with Rule 415(a)(4) under the Securities Act. In addition, we may enter into derivative transactions with third parties (including the writing of options), or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with such a transaction, the third parties may, be
discouragedpursuant to this prospectus and the applicable prospectus supplement, sell securities covered by this prospectus and the applicable prospectus supplement. If so, the third party may use securities borrowed from undertaking transactionsus or others to acquire a significant interestsettle such sales and may use securities received from us to close out any related short positions. We may also loan or pledge securities covered by this prospectus and the applicable prospectus supplement to third parties, who may sell the loaned securities or, in an event of default in the Company.
SHARES ELIGIBLE FOR FUTURE SALE
Ascase of April 15, 1998, there were 21,423,345 sharesa pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement. The third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement or in a post-effective amendment.
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To facilitate an offering of a series of securities, persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the market price of the Series A Preferred Stock basedsecurities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating in the offering of more securities than have been sold to them by us. In those circumstances, such persons would cover such over-allotments or short positions by purchasing in the open market or by exercising the over-allotment option granted to those persons. In addition, those persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to underwriters or dealers participating in any such offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. We make no representation or prediction as to the direction or magnitude of any effect that the transactions described above, if implemented, may have on the Estimated Conversion Ratios and 1,759,750
shares reserved for issuance on exerciseprice of outstanding Warrants and 2,010,070
shares reserved for issuance on exercise of outstanding Options, representingour securities.
Unless otherwise specified in the aggregateapplicable prospectus supplement, each class or series of securities will be a fully diluted totalnew issue with no established trading market, other than our common stock, which is listed on The Nasdaq Capital Market. We may elect to list any other class or series of 29,477,165 shares (assumingsecurities on any exchange or market, but we are not obligated to do so. It is possible that one or more underwriters may make a market in a class or series of securities, but the Series A
Preferred is converted based onunderwriters will not be obligated to do so and may discontinue any market making at any time without notice. We cannot give any assurance as to the Estimated Conversion Ratios). Of that total,
8,460,094 or 39.5%, were held by persons who are officers, directors or holders
of more than 5%liquidity of the Company's securities, or other persons deemed to be
"affiliates" (together, "Affiliates"). Of the 8,460,094 shares held by
Affiliates, 5,445,115 are Escrowed Performance Shares. Alltrading market for any of the sharessecurities.
In order to comply with the securities laws of Common Stock received bysome U.S. states or territories, if applicable, the Company's stockholderssecurities offered pursuant to this prospectus will be sold in exchange for their
Spatializer-Yukon sharesthose states only through registered or licensed brokers or dealers. In addition, in the Domestication Transaction are currently eligiblesome states securities may not be sold unless they have been registered or qualified for sale in the U.S. except shares which were then held by Affiliatesapplicable state or an exemption from the registration or qualification requirement is available and complied with.
Any underwriter may engage in overallotment, stabilizing transactions, short covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Overallotment involves sales in excess of the Company.offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Short covering transactions involve purchases of the securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a covering transaction to cover short positions. Those shares, otheractivities may cause the price of the securities to be higher than it would otherwise be. If commenced, the Escrowed Performance Shares whichunderwriters may discontinue any of these activities at any time.
Any underwriters who are subjectqualified market makers on The Nasdaq Capital Market may engage in passive market making transactions in the securities on The Nasdaq Capital Market in accordance with Rule 103 of Regulation M, during the business day prior to the escrow limitations, are eligible for resale in the U.S., subject
to the volume limitation, manner of sale and available public information
requirement of Rule 144.
INDEMNIFICATION AND PERSONAL LIABILITY
OF OFFICERS AND DIRECTORS
The Company's Certificate of Incorporation contains a provision authorized
by Delaware law which eliminates the personal liability of a director to the
Company, or to any of its stockholders, for monetary damages for a breach of his
fiduciary duty as a director, except in the case where the director breached his
duty of loyalty, failed to act in good faith, engaged in intentional misconduct
or knowingly violated a law, authorized the payment of a dividend or approved a
stock repurchase in violation of Delaware corporate law, or obtained an improper
personal benefit. This provision has no effect on the availability of equitable
remedies, such as an injunction or rescission for breach of fiduciary duty,
including the duty of care. This provision also does not affect a director's
responsibilities under any other laws, such as the federal securities laws or
state or federal environmental laws.
The Company's bylaws obligate it to indemnify its directors, officers,
employees and other agents to the fullest extent permitted by Delaware law, in
respect of expenses, judgments, penalties, fines, and settlement of claims paid
or incurred, including those resulting from liability under the 1933 Act, if the
indemnitee acted in good faith and in what he or she reasonably believed to be
in, or not opposed to, the best interestpricing of the Company, and, inoffering, before the casecommencement of criminal action, if the indemnitee had no reasonable cause to believe hisoffers or her
conduct was unlawful. The right to indemnity conferred by the Bylaws is a
contractual right.
Such indemnification may be made against (a) expenses (including attorneys'
fees), judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred in connection with any threatened, pending or completed
action, suit or proceeding (other than an action by, or in the rightsales of the Company) arising out ofsecurities. Passive market makers must comply with applicable volume and price limitations and must be identified as passive market makers. In general, a position with the Company (or with some other entitypassive market maker must display its bid at the Company's request),
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24
and (b) expenses (including attorneys' fees) and amounts paida price not in settlement
actually and reasonably incurred in connection with a threatened, pending or
completed action or suit by, or in the rightexcess of the Company, unlesshighest independent bid for such security. If all independent bids are lowered below the director or officer is found liable topassive market maker’s bid, however, the Company and an appropriate court does
not determine that he or she is nevertheless fairly and reasonably entitled to
indemnification.
Inpassive market maker’s bid must then be lowered when certain circumstances, Delaware law permits advances to cover such
expenses before a final determination that indemnification is permissible.
Delaware law requires indemnification for expenses in certain circumstances and,
in others, requires that the indemnification be approved by a majority vote of
directors not involved in the event. In certain actions brought by or on behalf
of the Company against a person, indemnification of that person is available
only after a judicial determination by the Court in which the matter was heard.
To the extent that an indemnitee is successful in the defense of any proceeding,
he or she is entitled to be indemnified against actual and reasonable expenses
incurred in connection with such defense. The Company's bylaws establish
procedures pursuant to which such a determination may be made.
Delaware law permits the Company to enter into written agreements
confirming (and in certain cases, extending its obligations to) the purchase of
insurance on behalf of any director, officer, employee or agent of the Company
or other corporation, partnership, joint venture, trust or other enterprise
whether or not the Company would have the power to indemnify such insured under
Delaware law, against liabilities arising out of their positions with the
Company. To date, the Company has not obtained any such insurance.
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers or persons controlling the Company pursuant
to the foregoing provisions, the Company has been informed that in the opinion
of the Commission, such indemnification is against public policy as expressed in
the 1933 Act and is therefore unenforceable.
limits are exceeded.
The validity of the Common Stockissuance of the securities offered hereby will be passed upon for us by Sheppard, Mullin, Richter & Hampton LLP, New York, NY. Additional legal matters may be passed upon for us or any underwriters, dealers or agents, by counsel that we will name in the Company by Brand Farrar & Buxbaum LLP.
applicable prospectus supplement.
The consolidated financial statements of Spatializer Audio Laboratories,
Inc. and subsidiariesthe Company as of December 31, 19972018 and 1996,2017 and for each of the two years in the three-year period ended December 31, 1997 have been2018 incorporated by reference herein and in the Registration Statementthis Prospectus have been so incorporated in reliance uponon the report of KPMG Peat Marwick LLP,Ram Associates, CPA, an independent certifiedregistered public accountants,accounting firm incorporated herein by reference, herein, andgiven upon thetheir authority of said firm as experts in accounting and auditing.
19
This prospectus constitutes a part of a registration statement on Form S-3 filed under the Securities Act. As permitted by the SEC’s rules, this prospectus and any prospectus supplement, which form a part of the registration statement, do not contain all the information that is included in the registration statement. You will find additional information about us in the registration statement. Any statements made in this prospectus or any prospectus supplement concerning legal documents are not necessarily complete and you should read the documents that are filed as exhibits to the registration statement or otherwise filed with the SEC for a more complete understanding of the document or matter.
You may read and copy the registration statement, as well as our reports, proxy statements, and other information, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the Public Reference Room. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The SEC’s Internet site can be found at http://www.sec.gov. You can also obtain copies of materials we file with the SEC from our website found at www.ameri100.com. Information on our website does not constitute a part of, nor is it incorporated in any way, into this prospectus and should not be relied upon in connection with making an investment decision.
We have filed a registration statement on Form S-3 with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended. This prospectus is part of the registration statement, however the registration statement includes and incorporates by reference additional information and exhibits. The SEC permits us to “incorporate by reference” the information contained in documents we file with the SEC, which means that we can disclose important information to you by referring you to those documents rather than by including them in this prospectus. Information that is incorporated by reference is considered to be part of this prospectus and you should read it with the same care that you read this prospectus. Information that we file later with the SEC will automatically update and supersede the information that is either contained, or incorporated by reference, in this prospectus, and will be considered to be a part of this prospectus from the date those documents are filed. We have filed with the SEC, and hereby incorporate by reference in this prospectus:
3. Our Current Reports on Form 8-K filed on January 25, ======================================================
NO PERSON IS AUTHORIZED IN CONNECTION WITH THIS PROSPECTUS TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS ABOUT THE COMPANY, THE SELLING
STOCKHOLDERS, THE SECURITIES REFERENCED HEREIN OR ANY MATTER REFERENCED HEREIN,
OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS PROSPECTUS. IF
ANY OTHER INFORMATION OR REPRESENTATION IS GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY SELLING STOCKHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF SUCH SECURITIES IN ANY JURISDICTION
OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES IN
ACCORDANCE HEREWITH SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAD BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
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TABLE OF CONTENTS
======================================================
8,339,800 SHARES
SPATIALIZER AUDIO
LABORATORIES, INC.
------------------------
PROSPECTUS
------------------------
THE DATE OF THIS PROSPECTUS IS 2019; February 14, 2019; April 2, 2019 and June 17, 2019; and
We also incorporate by reference all documents (other than Current Reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items) that are subsequently filed by us with the U.S. Securities and Exchange Commission pursuant to Sections 13(a), 1998
======================================================
26
13(c), 14, or 15(d) of the Exchange Act prior to the termination of the offering of the securities made by this prospectus (including documents filed after the date of the initial Registration Statement of which this prospectus is a part and prior to the effectiveness of the Registration Statement). These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, as well as proxy statements.
Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded to the extent that a statement contained in this prospectus or any subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement.
You may request, and we will provide you with, a copy of these filings, at no cost, by calling us at (770) 935-4152 or by writing to us at the following address:
AMERI Holdings, Inc.
5000 Research Court, Suite 750,
Suwanee, Georgia, 30024
(770) 935-4152
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
| Item 14. | Other Expenses of Issuance and Distribution. |
The following list itemizes all estimated expenses incurred bytable sets forth an estimate of the
Registrant in connection with this Registration Statement. The fees and expenses relating to the issuance and distribution of the Selling Stockholders aresecurities being paidregistered hereby, other than underwriting discounts and commissions, all of which shall be borne by the Company.
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Registrant. All of such fees and expenses, except for the SEC registration fee and the FINRA filing fee, are estimated:
| SEC registration fee | $ | 3,030 | ||
| Legal fees and expenses | * | |||
| Printing fees and expenses | * | |||
| Accounting fees and expenses | * | |||
| Miscellaneous fees and expenses | * | |||
| Total | $ | * |
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERSThese fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time. The Company is incorporated in Delaware. Under Section 145applicable prospectus supplement will set forth the estimated amount of the General
Corporation Law of the State of Delaware (the "DGCL"), a Delaware corporation
generally has the power to indemnify its present and former directors and
officers against expenses and liabilities incurred by them in connection with
any suit to which they are, or are threatened to be made, a party by reason of
their serving in those positions so long as they acted in good faith and in a
manner they reasonably believed to be in, or not opposed to, the best interests
of the Company, and with respect to any criminal action, they had no reasonable
cause to believe their conduct was unlawful. The statute expressly provides that
the power to indemnify authorized thereby is not exclusive of any rights granted
under any bylaw, agreement, voteoffering of stockholders or disinterested directors, or
otherwise. The Company'ssecurities.
| Item 15. | Indemnification of Officers and Directors. |
Our Certificate of Incorporation contains the following
provision:
"ARTICLE IX
INDEMNIFICATION
SECTION 1. The Corporation shall 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, by reason of the fact that he is or was a
director or an officer of the corporation, against expenses (including, but
not limited to, attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding to the fullest extent and in the manner set
forth in and permitted by Delaware law and any other applicable law as from
time to time in effect. Such right of indemnification shall not be deemed
to be exclusive of any other rights to which such director or officer may
be entitled apart from the foregoing provisions. The foregoing provisions
of this Section 1 shall be deemed to be a contract between the Corporation
and each director and officer who serves in such capacity at any time while
this Section 1 and the relevant provisions of Delaware law and other
applicable law, if any, are in effect, and any repeal or modification
thereof shall not affect any rights or obligations then existing with
respect to any state of facts then or theretofore existing or any action,
suit or proceeding theretofore or thereafter brought or threatened based in
whole or in part upon any such state of facts.
SECTION 2. The 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, by reason of the fact that he is or was an
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, but not limited to, attorneys' fees), judgments, fines
and amounts paid in settlement actually and
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reasonably incurred by him in connection with such action, suit or
proceeding to the extent and in the manner set forth in and permitted by
Delaware law and any other applicable law as from time to time in effect.
Such right of indemnification shall not be deemed to be exclusive of any
other rights to which any such person may be entitled apart from the
foregoing provisions."
Section 102(b)(7) of the DGCL provides that, a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director provided that such provision shall not eliminate
or limit the liability of a director (i) for such breach of the director's duty
of loyalty to the corporation or its stockholder, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 (relating to liability for unauthorized
acquisitions or redemptions of, or dividends on, capital stock) of the DGCL, or
(iv) for any transactions from which the director derived an improper personal
benefit.
The Company's Certificate of Incorporation contains the following relevant
provision:
"ARTICLE X
LIABILITY FOR BREACH OF FIDUCIARY DUTY
To the fullest extent permitted by the Delaware law, a director of theGeneral Corporation Law, our directors shall not be personally liable to the Corporationus or itsour stockholders for monetary damages for breach of fiduciary duty as a director. In furtherance
thereof, a director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (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 Section 174 of the
Delaware General Corporation Law, as the same exists or hereafter may be
amended, or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law
hereafter is amended to authorize the further elimination or limitation of
the liability of directors, then the liability of directors shall be
eliminated or limited to the full extent authorized by the General
Corporation Law of the State of Delaware, as so amended."
The Company'sOur Bylaws obligate it to indemnify the Corporation to indemnify
its directors, officers, employees and other agentsprovide that, to the fullest extent permitted by Delaware law, we will indemnify, and advance expenses to, a director or officer in respect of expenses, judgments, penalties, fines,
and settlement of claims paid or incurred, including those resulting from
liability under the Act, if the indemnitee acted in good faith and in what he or
she reasonably believed to be in, or not opposed to, the best interest of the
corporation, and, in the case of criminalan action if the indemnitee had no
reasonable cause to believe his or her conduct was unlawful. The Bylaws provide:
"ARTICLE VI
INDEMNIFICATION
SECTION 1. Directors and Officers. The Corporation shall 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,brought by reason of the fact that hethe director or officer is or was our director or officer, or is or was serving at our request as a director or an officer of the Corporation,any other entity, against all expenses, (including, but not limited to, attorneys' fees), judgments, finesliability and amounts paid in settlement actually andloss reasonably incurred or suffered by himsuch person in connection withtherewith. We may maintain insurance to protect a director or officer against any expense, liability or loss, whether or not we would have the power to indemnify such person against such expense, liability or loss under Delaware law.
The limitation of liability and indemnification provisions in our Certificate of Incorporation and Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against our directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. However, these provisions do not limit or eliminate our rights, or those of any stockholder, to seek non-monetary relief such as injunction or rescission in the event of a breach of a director’s duty of care. The provisions will not alter the liability of directors under the federal securities laws. In addition, your investment may be adversely affected to the extent that, in a class action or direct suit, we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. There is currently no pending litigation or proceeding against any of our directors, officers or employees for which indemnification is sought.
| Item 16. | Exhibits. |
| a) | Exhibits. |
| Exhibit Number | Description of Document | |
1.1* | Form of Underwriting Agreement | |
Amended and Restated Certificate of Incorporation of Ameri Holdings, Inc. (filed as Exhibit 3.1 to Ameri Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on June 23, 2016 and incorporated herein by reference). | ||
Amended and Restated Certificate of Designation of Rights and Preferences of 9.00% Series A Cumulative Preferred Stock (filed as Exhibit 3.1 to Ameri Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on August 17, 2018 and incorporated herein by reference). | ||
Amended and Restated Bylaws of Ameri Holdings, Inc. (filed as Exhibit 3.2 to Ameri Holdings, Inc.’s Current Report on Form 8-K filed with the SEC on June 23, 2016 and incorporated herein by reference). | ||
Form of Certificate Representing Shares of Common Stock of Registrant (filed as Exhibit 4.1 to Ameri Holdings, Inc.’s Registration Statement on Form S-8 filed with the SEC on December 17, 2015 and incorporated herein by reference). | ||
4.2* | Form of Certificate of Designation with respect to Preferred Stock | |
| Form of Senior Indenture | ||
| Form of Subordinated Indenture | ||
4.5* | Form of Senior Note | |
4.6* | Form of Subordinated Note | |
4.7* | Form of Warrant | |
4.8* | Form of Warrant Agreement | |
4.9* | Form of Unit Agreement | |
| Opinion of Sheppard, Mullin, Richter & Hampton LLP as to the legality of the securities being registered | ||
| Consent of Ram Associates, CPA, Independent Registered Public Accounting Firm | ||
| Consent of Sheppard, Mullin, Richter & Hampton LLP (included in Exhibit 5.1) | ||
| Power of Attorney (included on signature pages to the registration statement) | ||
25.1* | Statement of Eligibility of Trustee on Form T-1 under the Trust Indenture Act of 1939, as amended |
| * | To the extent applicable, to be filed by an amendment or as an exhibit to a document filed under the Securities Exchange Act of 1934, as amended, and incorporated by reference herein. |
| Item 17. | Undertakings. |
| (a) | 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 fullest extent andSecurities Act of 1933;
(ii) To reflect in the mannerprospectus any facts 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 volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and permittedany deviation from the low or high end 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 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(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 (a)(1)(i), (a)(1)(ii), and (a)(1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the General Corporation Lawregistrant pursuant to Section 13 or Section 15(d) of the StateSecurities Exchange Act of Delaware and1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is a part of the registration statement.
(2) That, for the purpose of determining any other applicable law as from time to time may
be in effect. Such rightliability under the Securities Act of indemnification shall not be deemed to be
exclusive of any right to which1933, each such director or officer may be entitled
apart from the foregoing provisions. The foregoing provisions of this
Section 1post-effective amendment shall be deemed to be a contract betweennew registration statement relating to the Corporation and each
director and officer who serves in such capacity at any time while this
Section 1securities offered therein, and the relevant provisionsoffering of the General Corporation Law of the
State of Delaware and other applicable law, if any, are in effect, and any
repeal or modification thereofsuch securities at that time shall not affect any right or obligation
then existing, with respect to any state of facts then or theretofore
existing, or any action, suit or proceeding theretofore or thereafter
brought or threatened based in whole or in part upon any such state of
facts.
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SECTION 2. Agents and Employees. The 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 by reason of the fact that he is
or was an 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, but not limited to, attorneys' fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding to the
extent and in the manner set forth in and permitted by the General
Corporation Law of the State of Delaware and any other applicable law as
from time to time may be in effect. Such right of indemnification shall not be deemed to be exclusivethe 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.
(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided , however , that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other rightfree writing prospectus relating to whichthe offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act.
(c) The undersigned registrant hereby undertakes that, 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 person maysecurities at that time shall be entitled apart fromdeemed to be the foregoing provisions."
* * *initial bona fide offering thereof.
(d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 Act may be permitted to directors, officers orand controlling persons controllingof the Companyregistrant pursuant to the foregoing provisions, or otherwise, the Companyregistrant has been informedadvised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933Securities Act and is, therefore, unenforceable. The preceding discussionIn the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the Company's Certificateregistrant in the successful defense of Incorporation,
Bylaws and Section 145 of the DGCLany action, suit or proceeding) is qualifiedasserted by such director, officer or controlling person in its entirety by reference to
the complete text of the Company's Certificate of Incorporation and Bylaws which
are incorporated by reference as Exhibits to this Registration Statement.
ITEM 14. EXHIBITS
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29
- ---------------
* Previously filed.
** To be filed by amendment.
*** Portions subject to request for confidential treatment. The confidential
portions omitted have been filed separatelyconnection with the Commission.
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30
securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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 on Form S-3registration statement to be signed on its behalf by the undersigned, theretothereunto duly authorized, in the City of Los Angeles,Suwanee, State of CaliforniaGeorgia, on June 30, 1998.
SPATIALIZER AUDIO LABORATORIES, INC.
By: /s/ STEVEN D. GERSHICK
------------------------------------
Name: Steven D. Gershick
Title: PresidentAugust 14, 2019.
| AMERI HOLDINGS, INC. | ||
By: | /s/ Brent Kelton | |
Brent Kelton | ||
Chief Executive Officer | ||
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and Chief Executive
Officer
appoints Barry Kostiner, as his true and lawful attorney-in-fact and agent with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities to sign any or all amendments (including, without limitation, post-effective amendments) to this Registration Statement, any related Registration Statement filed pursuant to Rule 462(b) under the Securities Act of 1933 and any or all pre- or post-effective amendments thereto, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming that said attorneys-in-fact and agent, or any substitute or substitutes for him, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
indicated have signed this Registration Statement below.
| Signature | Title | Date | ||
/s/ Brent Kelton | Chief Executive | August 14, 2019 | ||
Brent Kelton | (Principal Executive Officer) | |||
/s/ Barry Kostiner | Chief Financial | August 14, 2019 | ||
Barry Kostiner | (Principal Financial and Accounting Officer) | |||
/s/ Srinidhi Devanur | Director | August 14, 2019 | ||
Srinidhi Devanur | ||||
/s/ Thoranath Sukumaran | Director | August 14, 2019 | ||
| Thoranath Sukumaran | ||||
/s/ Carmo Martella | Director | August 14, 2019 | ||
| Carmo Martella | ||||
/s/ Dimitrios Angelis | Director | August 14, 2019 | ||
Dimitrios Angelis |
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