Registration Statement for Securities Offered Pursuant to a Transaction — Form S-3
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-3 Registration Statement for Securities Offered 35 172K
Pursuant to a Transaction
2: EX-3.7 Certificate of Designation 14 57K
3: EX-5.1 Opinion of Counsel 3 16K
4: EX-10.32 Letter Agreement 3 17K
5: EX-10.33 Letter Agreement 2 11K
6: EX-10.34 Letter Agreement Dated July 14, 2000 2 15K
7: EX-10.35 Letter Agreement Dated July 7, 2000 2 13K
8: EX-10.36 Convertible Preferred Stock and Warrants 24 113K
9: EX-10.37 Registration Rights Agreement 12 57K
10: EX-10.38 Stock Purchase Warrant 16 65K
11: EX-10.39 Letter Agreement 2 15K
12: EX-23.1 Consent of Independent Auditors 1 7K
S-3 — Registration Statement for Securities Offered Pursuant to a Transaction
Document Table of Contents
As filed with the Securities and Exchange Commission on July __, 2000
Registration Number 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Compositech Ltd.
(Exact name of registrant as specified in its charter)
Delaware 11-2710467
(State of incorporation) (I.R.S. Employer Identification No.)
710 Koehler Avenue, Ronkonkoma NY 11779 - (631) 585-7710
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Samuel S. Gross
Executive Vice President, Secretary and Treasurer
710 Koehler Avenue, Ronkonkoma NY 11779 - (631) 585-7710
(Address, including zip code, and telephone number, including area code,
of agent for service)
With a copy to:
Edward F. Cox, Esq.
Patterson, Belknap, Webb & Tyler LLP 1133
Avenue of the Americas, New York, NY 10036-6710 (212) 336-2000
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
[Enlarge/Download Table]
CALCULATION OF REGISTRATION FEE
---------------------------------------------------------------------------------------
Proposed
Title of Each Class Amount of Maximum Proposed Maximum Amount of
of Securities to be shares to be Offering Price Aggregate Offering Registration Fee
Registered Registered(1) per Share (2) Price (2) (2)
---------------------------------------------------------------------------------------
Common stock
($0.01 par value)(3) 9,050,085 $0.454 $4,108,739
Common stock
($0.01 par value)(4) 542,380 $0.688 373,157
Common stock
($0.01 par value)(4) 709,849 $0.7326 520,035
Common stock
($0.01 par value)(4) 12,500 $1.094 13,675
Common stock
($0.01 par value)(4) 25,000 $1.125 28,125
Common stock
($0.01 par value)(4) 25,000 $1.156 28,900
Common stock
($0.01 par value)(4) 5,750 $1.188 6,831
Common stock
($0.01 par value)(4) 316,871 $1.200 380,245
Common stock
($0.01 par value)(4) 25,000 $1.219 30,475
Common stock
($0.01 par value)(4) 25,000 $1.245 31,125
Common stock
($0.01 par value)(4) 135,000 $1.250 168,750
Common stock
($0.01 par value)(4) 129,000 $1.272 164,088
Common stock
($0.01 par value)(4) 6,250 $1.281 8,006
Common stock
($0.01 par value)(4) 54,880 $1.375 75,460
Common stock
($0.01 par value)(4) 23,750 $1.500 35,625
Common stock
($0.01 par value)(4) 12,500 $1.563 19,538
Common stock
($0.01 par value)(4) 87,500 $2.125 185,938
Common stock
($0.01 par value)(4) 112,500 $2.131 239,738
Common stock
($0.01 par value)(4) 40,000 $2.250 90,000
Common stock
($0.01 par value)(4) 125,000 $2.372 296,500
Common stock
($0.01 par value)(4) 107,500 $2.647 284,553
------------- ----------------------------------------
Totals 11,571,315 $7,089,503 $1,872
------------- ----------------------------------------
(1) Pursuant to Rule 416 of the Securities Act, there are also being registered
hereunder such indeterminate number of additional shares as may be issued
to the selling stockholders because of future dividends, stock
distributions, stock splits or similar capital adjustments and exercise
price adjustments due to such events pursuant to the terms of certain of
the securities being registered.
(2) The maximum offering price of $0.454 per share for the 9,050,085 shares of
common stock of Compositech Ltd. was based upon the average of the high and
low prices of the common stock of Compositech reported by The Nasdaq
SmallCapSM Market for its common stock on July 17, 2000, (in accordance
with Sections (c) and (g) of Rule 457 of Regulation C). The maximum
offering price per share for the remainder of the shares of common stock
being registered on this Registration Statement is the exercise price for
the warrants which such shares underlie, since in each case the exercise
price is higher than the average of the high and low prices of the common
stock of Compositech, reported by The Nasdaq SmallCapSM Market for its
common stock on July 17, 2000(in accordance with Section (g) of Rule 457 of
Regulation C).
(3) Represents 1,214,839 shares of common stock issued in a private placement
of Compositech's common stock, 1,480,081 shares of common stock being
registered in accordance with a contractual obligation, issuable in the
event certain term notes are converted into common stock, 1,350,165 shares
of common stock issued in connection with the election by certain
promissory noteholders who have elected repayment of their notes in shares
of common stock, 1,745,000 shares of common stock being registered in
accordance with a contractual obligation, issuable in the event 54,000
shares of Compositech's Series C 8% Convertible Preferred Stock are
converted into common stock and 3,260,000 shares of common stock being
registered in accordance with a contractual obligation, which represents
200% of the shares currently issuable in the event 500 shares of
Compositech's Series D 8% Convertible Preferred Stock are converted into
common stock.
(4) Represents shares of common stock underlying common stock purchase
warrants, with expiration dates ranging from July 31, 2001 to November 5,
2004 and exercise prices set forth in the above table, since in each case,
their respective exercise price is greater than the average of the high and
low prices of the common stock of Compositech, reported by The Nasdaq
SmallCapSM Market for its common stock on July 17, 2000 (in accordance with
Section (g) of Rule 457 of Regulation C) and expiration dates ranging from
July 31, 2001 to November 5, 2004.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a), may
determine.
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The information contained in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any State where the offer or sale is not permitted.
Subject to Completion, dated July___, 2000
PROSPECTUS
COMPOSITECH LTD.
11,571,315 Shares of Common Stock
---------------------------------------
The selling stockholders named in this prospectus are offering and selling
up to 11,571,315 shares of the common stock of Compositech Ltd. This amount
includes 2,521,230 shares which may be acquired upon exercise of warrants held
by some of the selling stockholders. Up to 1,820,000 shares being offered may be
issuable if certain shares of Series C 8% Convertible Preferred Stock and
warrants issued in connection with the placement of those shares are converted
into or exercised for shares of common stock. Up to 3,969,849 shares being
offered may be issuable if certain shares of Series D 8% Convertible Preferred
Stock and warrants issued in connection with the placement of those shares are
converted into or exercised for shares of common stock. 2,141,952 shares being
offered may be issuable if certain of our term notes and warrants issued in
connection with the placement of those notes are converted into or exercised for
shares of common stock.
The prices at which the selling stockholders may sell the shares of common
stock will be determined by prevailing market prices for the shares or by
negotiated transactions. We will not receive any of the proceeds from the sale
of shares, but will receive the exercise price of the warrants.
Our common stock is quoted on the Nasdaq SmallCap Market under the symbol
"CTEK". On July 17, 2000, the closing sales price of our common stock on The
Nasdaq SmallCap Market was $0.438
---------------------------------------
You Should Read The Description Of Certain Risks Under The Caption "Risk
Factors" Beginning On Page 6 Before Purchasing Our Common Stock.
---------------------------------------
Neither The Securities And Exchange Commission Nor Any State Securities
Commission Has Approved Or Disapproved These Securities Or Passed Upon The
Accuracy Or Adequacy Of This Prospectus. Any Representation To The Contrary Is A
Criminal Offense.
The date of this prospectus is July ___, 2000.
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PROSPECTUS SUMMARY
Compositech has developed a proprietary technology for the manufacture of
innovative and superior copper-clad fiberglass epoxy laminates used to make
printed circuit boards. Printed circuit boards are important parts of:
o personal computers;
o workstations;
o data communication equipment;
o internet servers; and
o telecommunications equipment.
Prior to December 3, 1999, we had focused our resources on utilizing our
technology to manufacture laminates for the multilayer/high performance laminate
segment of the market. In 1998, this market was $2.4 billion worldwide according
to IPC, a trade organization and the United States' share of this market was
$852 million.
In the last half of 1999, we experienced a demand for product that was
greater than our production capability. In addition, we were unable to obtain
adequate financing to maintain or expand our manufacturing capabilities. On
December 3, 1999, we suspended our manufacturing operations and refocused our
resources on locating suitable licensees, joint venture partners or purchasers
for our technology. As a result, we reduced our staff from 124 employees to six.
We are also exploring potential mergers and acquisitions or other strategic
transactions.
In March 2000, we formally launched our licensing program by sending
proposals to a limited number of select candidates supported by our
recommendation letters from several original equipment manufacturers ("OEM's")
and printed circuit board customers. At the current date, we are having
licensing discussions with five potential licensees. These include two laminate
manufacturers and two suppliers to the industry.
We have 30 patents in the United States and other major industrial
countries. Our patents cover:
o our laminates;
o the process we use to make our laminates; and
o the equipment we use to make our laminates.
On June 2, 2000, we entered into a letter of intent to acquire The Aeon
Group, Inc., a Business-to-Business (B2B) e-commerce software company pursuant
to a merger in which Compositech would be the surviving corporation.
-----------------------------------
Our offices are located at: 710 Koehler Avenue
Ronkonkoma, NY 11779
(631) 585-7710
5
RISK FACTORS
Before you invest in our common stock, you should be aware that there are
various risks, including those described below. You should consider carefully
these risk factors, together with all of the other information included in this
prospectus, including the documents that we incorporate by reference, before you
decide to purchase shares of our common stock.
We Have Had Limited Revenues; Our New Licensing Program May Not Be Successful;
We May Not Be Able to Continue as a Going Concern; We May Not Be Able to Achieve
Commercial Acceptance of Our Product or Generate Sufficient Revenues to Make a
Profit
Compositech Ltd. was a development stage company through December 31, 1996,
has had limited revenues from the sale of laminates, has incurred significant
losses and has had substantial negative cash flow since inception.
As of December 31, 1999, we had an accumulated deficit of $50,349,052 and a
capital deficiency of $6,556,238 and at March 31, 2000 an accumulated deficit of
$51,249,982 and a capital deficiency of $5,104,746. Our independent auditors
have included an explanatory paragraph in their report covering the December 31,
1999 financial statements, which expresses substantial doubt about our ability
to continue as a going concern. As of December 3, 1999, we suspended
manufacturing laminates due to a lack of skilled employees and adequate
financing, and we have refocused our resources on finding suitable licensees,
joint venture partners or purchasers for our technology.
We require additional funding to settle past due accounts payable and
operating expenses until revenues from royalties from licensing or joint venture
arrangements are sufficient for these purposes. We expect that significant
operating losses will continue in 2000. We cannot assure you that we will be
able to successfully license or realize on our technology or that we or any
licensee will successfully achieve broad commercial acceptance of our products
or that we will be able to generate sufficient revenues to achieve profitable
operations.
We Need Additional Financing Which May Dilute Stockholders' Ownership
Percentages; We Have to Settle Various Debts; We May Not Be Able to Continue as
a Going Concern
Our available funds, without giving effect to alternative sources of
funding, are not sufficient to continue as a going concern. We will need
additional funding to settle past due accounts payable, which represent
substantially all our accounts payable, and for operations in 2000 which may be
raised through sources including:
o license fees;
o sales of equipment in connection with licensing operations;
o joint ventures or other collaborative relationships;
o mergers; or
o equity or debt financing.
We cannot assure you that additional funding will be sufficient and
available or, if it is available, that it will be available on acceptable terms.
Our funding sources may require that our trade creditors, stockholder note
holders and deferred salary payees receive less than the full amounts due them
in cash and receive some amount in common stock. Although discussions have been
started with certain creditors in this regard, there is no assurance that the
creditors will accept the proposals. If additional funds are raised or debts are
settled through the issuance of equity securities or securities convertible into
equity securities, the percentage ownership of then current stockholders of
6
Compositech will be reduced. Such securities may have rights, preferences or
privileges senior to those of the holders of common stock.
If additional funds are not available to satisfy our past due accounts
payable and our short-term or long-term capital requirements, we may not be able
to continue as a going concern.
We Could Lose Our Patents and Certain Production Equipment If We Default on
Notes and Can't Extend Them
Our patents and certain other assets are subject to liens securing
outstanding debt as follows:
o notes payable to stockholders in the amount of $100,000 and notes
payable to stockholders/directors/officers in the amount of $733,333 are
collateralized by a second lien on U.S. Patents and Patent Applications;
o notes payable to stockholders/directors/officers in the amount of
$745,000 are collateralized by a first lien on our patents, patent
applications and certain production equipment; and
o term notes of $1,557,655 are collateralized by certain pieces of
production equipment.
If we default on the notes, we could lose all or most of its patents and
certain production equipment. The potential loss of these assets could force us
to negotiate new and disadvantageous terms to extend the due dates of such
notes.
We May Not Be Able to Find Suitable Licensees, Joint Venture Partners or a
Purchaser for Our Technology
We are currently seeking licensees, joint venture partners or purchasers
for our technology. There can be no assurances that we will be able to find
suitable licensees, joint venture partners or purchasers for our technology or
that we will be able to negotiate acceptable terms with such entities if found.
If we are unable to find a suitable licensee, joint venture partner or purchaser
for our technology, we may not be able to continue as a going concern.
Our Licensees May Not Be Able to Compete Successfully Against Some Large
Competitors
The laminate manufacturing business is highly competitive. Our competitors
include major corporations, such as General Electric Company, which have
substantial financial, marketing and technical resources. In 1994, we granted
patent immunity on its product patents to AMP and Akzo Electronics Products NV,
which, at the time, were operating a joint venture which was developing a new
process to make linear laminates.
The future success of Compositech will depend on our ability or our
licensees' or joint venture partners' ability to effectively market products
made using our technology against competitors with potentially greater
resources. We cannot assure you that our licensees or joint venture partners
will be able to compete successfully in the future.
We May Not Be Able to Attract and Retain The Key Personnel We Need to Succeed
We believe that our success will depend to a significant extent upon the
efforts of our executive officers and senior management as well as our ability
to attract and retain highly qualified managerial, technical and sales
personnel. On December 3, 1999, we suspended manufacturing operations and
reduced our staff to nine and subsequently to six employees. All manufacturing
personnel and most of our engineers were terminated. As of December 31, 1999,
Christopher F.
7
Johnson resigned from his position as President and Chief Executive Officer and
from the Board of Directors to accept a position with Park Electrochemical
Corp., a manufacturer of laminates.
The loss or unavailability of our executive officers or other senior
management or the inability to attract, assimilate or retain such personnel in
the future could have a material adverse effect on our business, financial
condition and results of operations.
Dependence on Licensees or Joint Venture Partners
If we are able to find suitable licensees or joint venture partners for our
technology and negotiate a license or transaction with them, we may be dependent
on the manufacturing and machinery capability of companies who have limited
experience with products like ours. There can be no assurance that such
licensees or joint venture partners will successfully utilize our technology and
achieve a level of sales which will generate royalty income for us which will be
sufficient to achieve profitable operations.
Technological Changes in the Printed Circuit Board Industry Could Reduce Demand
for Our Product
Our laminates are used in the electronic printed circuit board industry
which could encounter competition from new technologies in the future and reduce
the number of circuit boards required in electronic equipment or render existing
interconnect technology less competitive or obsolete.
Our Patents and Intellectual Property May Be Challenged, Invalidated or
Circumvented Which Would Negatively Impact Our Competitive Position
We believe that our patent estate and our know-how are important for the
protection of our technology. We cannot assure you that any patents issued to us
will not be challenged, invalidated or circumvented or that such patents will
provide substantial protection with respect to our product, process or
competitive position. In addition, certain proprietary information which is
considered to be of substantial value is not covered by patents and, along with
our other intellectual property, is subject to misappropriation or obsolescence.
In addition, we granted certain immunities on our product patents to AMP
and Akzo Electronics Products NV which were potential competitors of ours. We
granted HT Troplast AG ("HT"), a significant stockholder of ours, the exclusive
right under a license, to produce and market Compositech's laminates in Europe,
the countries of the former Soviet Union and Turkey. Although HT exited the
laminate business, the license remains in effect. Pursuant to the agreement, we
are obligated to sell only through HT in such territories.
Certain Significant Stockholders Could Control the Management and Policies of
Compositech Which Could Prevent a Change of Control and May Adversely Affect the
Rights of Other Stockholders
As of July 18, 2000, officers, directors and certain other significant
stockholders of Compositech beneficially owned approximately 14.9% of our common
stock and voting preferred stock, including stock options and warrants
exercisable within 60 days. It is expected that these stockholders will continue
to control the management and policies of Compositech. In addition, several
holders of Compositech's convertible preferred stock or convertible term notes
could become significant stockholders if they elect to convert their holdings to
shares of common stock. Included in the beneficial ownership of officers and
directors are 1,702,467 shares of common stock that were lent to us by two
directors to use as collateral for a loan from CreditBancorp. The SEC has
8
commenced an action against Credit Bancorp, its principals and trustee, claiming
violations of the securities laws by misappropriating securities placed as
collateral and has had a receiver appointed. To date, the receiver has only
located 1,122,967 of these shares and some or all of them are or may be in
margin accounts. It is not known when and how many shares may be returned to the
stockholders. In accordance with agreements with the two directors who lent the
shares of common stock in question to us, we may have to replace part or all of
the aforementioned shares which would dilute stockholders' current ownership
percentages.
In addition, some of these officers, directors and other stockholders, in
connection with certain outstanding loans, have a security interest in some of
our manufacturing equipment and either all of our patents and patent
applications or in our U.S. patents and patent applications.
We Cannot Guarantee That Our Securities Will Continue to be Listed on The Nasdaq
SmallCap MarketSM; If Not Listed You May Find it More Difficult to Sell Your
Shares
Our common stock is quoted on The Nasdaq SmallCap MarketSM. We have
received a letter from The Nasdaq SmallCap MarketSM informing us that we
currently do not meet certain of the maintenance criteria for continued listing
of the common stock on The Nasdaq SmallCap MarketSM, specifically the first two
items listed below. The minimum listing requirements for continued listing The
Nasdaq SmallCap MarketSM include, among other criteria:
o net tangible assets of at least $2.0 million, or market capitalization
of $35 million, or net income of $500,000 (in the latest fiscal year
or two of the last three fiscal years);
o a minimum bid price per share of $1.00;
o a market value of the public float of $1.0 million;
o 300 round lot shareholders; and
o two market makers.
This failure to meet the maintenance criteria may result in the
discontinuance of the inclusion of the common stock on The Nasdaq SmallCap
MarketSM. We have responded to Nasdaq with our plans to take all steps possible
to maintain our listing, including asking stockholders to approve a reverse
split of common stock so as to initially have a minimum bid price per share of
over $1.00, but there can be no assurance that we will be able to maintain our
listing on The Nasdaq SmallCap MarketSM. In the event we are delisted, trading,
if any, in the common stock may continue to be conducted in non-Nasdaq
over-the-counter markets and investors may find it more difficult to dispose of,
or to obtain accurate quotations as to the price of, the common stock. The
common stock would then be subject to the risk that it could become
characterized as low-priced or "penny stock," which characterization could
severely affect the ability of stockholders to sell their common stock.
The SEC has adopted regulations which generally define "penny stock" to be
any equity security that has a market price less than $5.00 per share (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
risks in the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and
monthly account statements showing the market value of each penny stock held in
the customer's account.
In addition, the penny stock rules generally require that prior to a
transaction in a penny stock the broker-dealer make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary
9
market for a stock that becomes subject to the penny stock rules. If the common
stock becomes subject to the penny stock rules, investors may find it more
difficult to sell their common stock.
Certain Restrictive Charter and Bylaw Provisions May Have the Effect of
Deterring Takeovers and Affect The Price of Your Shares
Our Restated Certificate of Incorporation and Bylaws allow the Board of
Directors, without approval of the stockholders, to issue shares of preferred
stock and to fix the rights and preferences of the preferred stock. The Board of
Directors can also prohibit stockholders of Compositech from calling a special
meeting unless requested by at least a majority of the outstanding voting
shares. The Restated Certificate of Incorporation does not provide for
cumulative voting for election of directors.
These provisions could have the effect of deterring unsolicited takeovers
or other business combinations or delaying or preventing changes in control or
management of Compositech. This may prevent transactions in which stockholders
might otherwise receive a premium for the securities over then-current market
prices. In addition, these provisions may limit the ability of stockholders to
approve transactions that they may deem to be in their best interests.
Additional Shares will be Eligible for Public Sale in the Future; The Sale of a
Large Number of Shares Could Cause Our Stock Price to Go Down
Immediately following this offering, there would be an aggregate of
29,040,901 shares of common stock outstanding, if all of the shares being
registered pursuant to this prospectus were issued. In addition, an aggregate of
6,900,344 shares of common stock are issuable pursuant to outstanding options
and stock purchase warrants, 163,331 shares are issuable upon the conversion of
Series A Convertible Preferred Stock and up to 4,534,696 are issuable upon the
exercise of repricing warrants assuming the holders of certain term notes
convert the balance of the notes into common stock. The number of shares has
been estimated based on a market price of $0.46 per share as defined in and
using the formula contained in the repricing warrants.
The Series C 8% Convertible Preferred Stock, the Series D 8% Convertible
Preferred Stock and the term notes and related repricing warrants are
convertible into or exercisable for common stock at a discount to the
then-prevailing market price of our common stock. The lower the stock price at
the time of conversion, the more shares the holders of the securities will
receive. Sales resulting from the conversions or exercise of these securities
could have an immediate adverse effect on the market price of the common stock.
Subject to restrictions on transfer referred to below, shares of common
stock issued by Compositech in private transactions, are treated as "restricted
securities" as defined under the Securities Act and in the future may be sold in
compliance with Rule 144 under the Securities Act or pursuant to a registration
statement filed under the Securities Act. As of July 17, 2000 there would be
10,307,453 shares eligible for sale under Rule 144, including 163,331 shares
which may be acquired upon conversion of Series A Convertible Preferred Stock
and 4,534,696 shares which may be acquired upon the exercise of repricing
warrants, calculated as set forth in the preceding paragraph.
Rule 144 generally provides that a person holding restricted securities for
a period of one year may sell every three months in brokerage transactions or
market-maker transactions an amount equal to the greater of:
o one percent (1%) of Compositech's issued and outstanding common stock;
or
10
o the average weekly trading volume of the common stock during the four
calendar weeks prior to such sale.
Rule 144 also permits, under certain circumstances, the sale of shares
without any quantity limitation by a person who is not an affiliate of
Compositech and who has satisfied a two-year holding period. In addition,
stockholders holding 1,380,308 shares (including shares which may be acquired
upon exercise of outstanding warrants), are entitled in certain cases, subject
to certain restrictions, to include their shares in any registration of
securities by Compositech. The sale of substantial numbers of such shares,
whether pursuant to Rule 144 or pursuant to a registration statement, may have a
depressive effect on the market price of the common stock.
We May Not Be Able to Consummate the Merger with The Aeon Group, Inc.
We have entered into a letter of intent to acquire The Aeon Group, Inc.
pursuant to a merger transaction. The merger is subject to execution of
definitive agreements and various actions, including approvals by the boards of
directors and shareholders of each company. We can give no assurance that the
merger will be consummated.
Forward-Looking Information Could be Wrong
This prospectus contains forward-looking statements that involve risks and
uncertainties. These statements deal with our future plans and growth
strategies, as well as trends we anticipate in our industry. We base these
forward-looking statements largely on our expectations, which are subject to
risks and uncertainties often beyond our control. Our actual results could
differ materially from those anticipated in these forward-looking statements as
a result of many factors, including those described in this section and
elsewhere in this prospectus. In light of these risks and uncertainties, there
can be no assurance that the forward-looking information contained in this
prospectus will in fact occur or prove to be accurate.
11
INFORMATION ABOUT COMPOSITECH LTD.
We have developed a proprietary technology for the manufacture of
innovative and superior copper-clad fiberglass epoxy laminates used to make
printed circuit boards. Printed circuit boards are important parts of:
o personal computers;
o workstations;
o data communication equipment;
o internet servers; and
o telecommunications equipment.
A continuing trend in electronics is to put more features in products while
reducing their size. This has caused the printed circuit board industry to put
more demands on the laminates they use. Laminates have to be stronger, more
uniform electrically and stand higher temperatures.
We invented a filament wound process for making laminates that uses the
same raw materials as other conventional laminates. Other laminates use
fiberglass cloth as a reinforcement. However, the weave pattern from the
fiberglass cloth used as the reinforcement in other laminates makes a rough
surface. Our CL200+ laminates made with our filament winding process are
smoother and more stable and do not change size as much as other laminates in
processing. Our laminates have a higher thermal rating than similar laminates,
meaning they can stand higher temperatures during processing.
Management believes that based on our tests and tests by customers and
other users, the benefits of our laminates should enable printed circuit board
manufacturers to:
o decrease costs by reducing waste in the making of existing board
designs because Compositech laminates are more stable, consistent and
smoother and can stand higher temperatures; and
o produce large printed circuit boards with a high number of layers
because Compositech laminates are more stable and consistent during
processing.
Our laminates also enable the OEM end users of printed circuit boards to
speed up the development of new products requiring denser circuitry by
permitting features to be put closer together.
Prior to December 3, 1999, we had focused our resources on utilizing our
technology to manufacture laminates for the multilayer/high performance laminate
segment of the market. In 1998, this market was $2.4 billion worldwide according
to IPC, a trade organization and the United States' share of this market was
$852 million.
We have 30 patents in the United States and other major industrial
countries. Our patents cover:
o our laminates;
o the process we use to make our laminates; and
o the equipment we use to make our laminates.
Prior to December 3, 1999, Compositech's marketing efforts had been
directed to expanding good working relations with leading-edge producers of
printed circuit boards in North America. Compositech has sold its CL200+
laminates to a select group of these companies. We encouraged
12
benchmark comparisons of our laminates with competitive laminates. In virtually
all of these comparisons, CL 200+ was superior to other laminates used by these
companies.
During 1998, we received orders from Teradyne, Inc. to enable them to do
extensive testing and qualification of our laminate for production of their
backplanes. Backplanes are used in internet servers and telecommunications
equipment and are planned to have as many as 64 layers. In April 1999, Sun
Microsystems, an end user of printed circuit boards, approved the use of
Compositech's CL200+ laminates in the manufacture of printed circuit boards for
its use.
In June 1999, as a result of the extensive testing and customer
qualification, we entered into a supply and joint product development agreement
with Teradyne, Inc. The agreement which was renewable provided for minimum
annual purchase commitments for the first year. The Teradyne joint development
agreement was terminated when the Company suspended manufacturing operations in
December of 1999. Since the Company did not meet the minimum commitment under
the agreement, Teradyne has the option of obtaining a non-exclusive royalty
bearing license for the manufacture of CL200+ for their own internal use and to
purchase certain production equipment. To date, Teradyne has not exercised the
option to obtain this license.
In the last half of 1999, we experienced a demand for product that was
greater than our production capability. In addition, we were unable to obtain
adequate financing to maintain or expand our manufacturing capabilities. On
December 3, 1999, we suspended manufacturing operations and refocused our
resources on locating suitable licensees, joint venture partners or purchasers
for our technology. As a result, the staff was reduced from 124 employees to
six. We expect to achieve our goals through the effective exploitation of our
patented and proprietary products worldwide through licensing, strategic
partnerships or selling our technology.
Until December 3, 1999, we had focused our resources on utilizing our
technology to manufacture and sell laminates for the multilayer/high performance
laminate segment of the market to circuit board manufacturers in the United
States and Canada with our own sales force and six independent sales
representatives. Due to recent events, we have eliminated our sales staff and
our Vice President of Sales has been assigned to working on our licensing
program.
On December 27, 1999, we signed a letter of intent with Netdirect
International Corporation regarding a potential merger with them. On March 6,
2000, the parties terminated their merger discussions.
As of December 31, 1999, Christopher F. Johnson resigned from his position
as President and Chief Executive Officer and from the board of directors to
accept a position with Park Electrochemical Corp., a manufacturer of laminates.
At such time, Mr. Jonas Medney resumed his role as Chief Executive Officer.
We have begun licensing discussions with several potential licensees and
hired International Licensing Network as a consultant to assist in our licensing
efforts. In March 2000, we formally launched our licensing program by sending
proposals to a limited number of select candidates supported by recommendation
letters from several OEM's and printed circuit board customers of ours. At the
current date, we are having licensing discussions with five potential licensees.
These include four laminate manufacturers and two suppliers to the industry.
On October 16, 1997, we closed a transaction with four Quebec institutional
investors (collectively, the "Quebec Investors") to form a 50/50 joint venture
for the establishment of a plant in the greater Montreal area to manufacture
Compositech's laminates. Our approximately $5.4 million
13
capital investment in the joint venture was funded by the Quebec Investors
purchasing 1,066,192 shares of our common stock.
On November 26, 1999, Pierre LaFlamme, a member of our board of directors
who was appointed by the Quebec Investors resigned from our board of directors.
In December of 1999, we received notice from the Quebec Investors that they
intended to begin the process of liquidation and dissolution of the Canadian
joint venture due principally to our inability to finance ourselves adequately
which resulted in an inability to obtain necessary financing for the joint
venture in the required time periods. Under the liquidation terms of the joint
venture agreement, the Quebec Investors received the proceeds of the liquidation
of the assets of the joint venture, and they are in the process of transferring
to us 949,585 shares of the 1,066,192 shares of the common stock originally
purchased by them.
On February 9, 1998, we entered into a joint venture agreement and patent,
information and trademark agreement with a Taiwanese investor group to establish
a joint venture to manufacture our laminates in Taiwan. We received $1 million
as a license down payment and were to receive additional up-front license
payments of $1 million upon the achievement of certain milestones. As part of
the transaction, the joint venture acquired 587,372 shares of our common stock
for $1 million and agreed to buy a like amount of shares for another $1 million
within 30 days following approval of the joint venture license by the science
park where the joint venture was proposed to be located. During 1998, we
received an advance of $500,000 against the latter purchase of shares,
substantially all of which we invested in the joint venture in accordance with
the joint venture agreement.
In October 1999, the joint venture partner informed us that the earthquake
in Taiwan had affected their ability to raise capital and proposed a settlement
of the joint venture agreement and license. As of February 7, 2000, we reached a
settlement agreement with our joint venture partner/licensee which terminates
the joint venture agreement and the license to use our proprietary technology in
Taiwan. Under the terms of the settlement, in exchange for the issuance of
587,372 shares of our common stock, we retained the $1 million license down
payment we received in 1998. Additionally, in exchange for the return of our
equity interest in the joint venture, we retained the $500,000 advance we
received to make the investment.
14
RECENT DEVELOPMENTS
On June 2, 2000, we entered into a letter of intent to acquire The Aeon
Group, Inc., a Business-to-Business (B2B) e-commerce software company pursuant
to a merger transaction in which Compositech is the surviving corporation. The
Aeon Group designs infrastructure connectivity solutions enabling rapid network
communication across business processes. Under the terms of the transaction, all
of the shares of The Aeon Group will be converted into shares of common stock of
Compositech equal in number to 24.9% of the issued and outstanding shares of
Compositech immediately after the acquisition and merger. The former
shareholders of The Aeon Group will also receive additional shares of
Compositech equivalent to 5% of the issued and outstanding shares of Compositech
immediately after the merger for each $.50 increase in the market price of
common stock, from and after the merger, up to $4.00 per share and 15% for each
$0.50 increase thereafter, up to an overall cap of 90% of such shares, which
would be achieved at a price of approximately $5.00 per share. They will also
receive two-year warrants to purchase shares of common stock equal to 27% of the
shares issued and outstanding immediately after the merger (and the exercise of
warrants) at a price related to the current market price. A financing package,
including bridge financing, will be part of the merger transaction. The current
laminate business of Compositech will be put into a new wholly owned subsidiary.
The merger is subject to execution of definitive agreements and various actions,
including approvals by the boards of directors and shareholders of each company.
The Aeon Group is a privately-held software company which operates through
its wholly-owned subsidiary, Area 7 Technologies, Inc. The Aeon Group plans to
be actively engaged in B2B e-commerce through a collaborative network of
companies that leverages the collective knowledge and resources of the group. As
part of this program, immediately prior to the merger, Area 7 Technologies will
acquire a technology license from Eltegra, Inc., to use and market software
related to legacy integration and connectivity management.
Upon completion of the merger, the continuing company will be named The
Aeon Group, Inc., and an application will be submitted for a change of Nasdaq
symbol. Jonas Medney will continue as Chairman and Samuel S. Gross will continue
as Chief Financial Officer. The Aeon Group, Inc. will name a new President and
Chief Executive Officer, Chief Operating Officer and Chief Technology Officer.
Ralph Segalowitz, Vice President of Technology, will continue to head up the
CL200+ laminate technology-licensing program with technical assistance from Mr.
Medney.
On July 12, 2000, as part of the bridge financing mentioned above, we
closed on a private placement of 500 shares of Series D 8% Convertible Preferred
Stock ("Series D") for a total of $500,000, of which $100,000 was lent to The
Aeon Group as required by the investor. The Series D stock is intended to be a
bridge financing to be redeemed from future financings to be received in
connection with the Merger. We also issued warrants to the purchaser to purchase
709,849 shares of common stock, of which number one-half is exercisable
immediately, three-quarters is exercisable if the Series D stock is not redeemed
within 120 days of closing and the balance is exercisable if the Series D stock
is not redeemed within 180 days of closing.
15
THE OFFERING
Securities Offered......................11,571,315 shares of common stock, par
value $0.01 per share, offered by the
selling stockholders. (1)
Common stock Outstanding
prior to the offering..............20,034,590 shares as of July 17, 2000.
(2)
Plan of Distribution....................The common stock offered by this
prospectus may be sold from time to time
in one or more transactions at market
prices prevailing at the time of the
sale, at prices related to such
prevailing market prices or at
negotiated prices.
Use of Proceeds.........................Compositech will not receive any of the
proceeds from the sale of the shares of
common stock offered by this prospectus.
The proceeds, if any, from the exercise
of warrants will be used for working
capital and general corporate purposes.
Symbol for common stock.................CTEK
------------------------------
(1) Includes 2,521,230 shares of common stock underlying common stock purchase
warrants, 1,745,000 shares of common stock which is being registered in
accordance with a contractual obligation as conversion shares for 54,000
shares of Compositech's Series C 8% Convertible Preferred Stock, 3,260,000
shares of common stock which is being registered in accordance with a
contractual obligation as conversion shares for 500 shares of Compositech's
Series D 8% Convertible Preferred Stock and 1,480,081 shares which may be
issuable in the event certain term notes are converted into common stock.
(2) Does not include 6,883,677 shares issuable upon exercise of outstanding
options and stock purchase warrants at a weighted exercise price of $3.90
per share, the outstanding shares of Series A convertible preferred stock,
which are convertible into 163,331 shares of common stock at the option of
the stockholder and 4,534,696 shares underlying repricing warrants assuming
the holders of certain term notes convert the balance of the notes into
common stock. The shares underlying the repricing warrants have been
estimated based on a market price of $0.46 per share as defined in and
using a formula contained in the repricing warrants. Compositech is
negotiating with the holders of the repricing warrants to substantially
reduce the number of shares issuable.
USE OF PROCEEDS
Compositech will not receive any proceeds resulting from the sale of the
shares of common stock by the selling stockholders. See "Selling Stockholders."
The warrants have exercise prices ranging from $0.688 per share to $2.647
per share. The warrants have to be exercised to purchase shares of common stock
prior to the resale of the common stock offered by the selling stockholder
pursuant to this offering. The exercise of all the warrants would result in
total gross proceeds to Compositech of $2,980,764. In the event that any of the
warrants are exercised in the future, net cash proceeds to Compositech would be
used for working capital or general corporate purposes. We cannot predict
whether, how and to what extent any warrants will be exercised.
16
SELLING STOCKHOLDERS
The following table sets forth certain information concerning the selling
stockholders for whom we are registering the resale of shares of our common
stock. The number of shares of common stock shown as securities owned prior to
the offering and as shares to be offered includes the number of shares to be
registered according to the agreements with the holders of the common stock and
warrants. The footnotes to the selling stockholder table below indicate those
selling stockholders which disclosed to us their holdings of our common stock
and their ultimate control persons pursuant to filings under the Exchange Act.
The beneficial ownership of the shares of common stock was determined in
accordance with Rule 13d-3 under the Exchange Act to reflect the ownership of
shares issuable upon exercise of outstanding options, warrants or other common
stock equivalents which are exercisable within 60 days of the date of this
prospectus. As provided in the rule, shares issuable to any holder are deemed
outstanding for the purpose of calculating the holder's beneficial ownership but
not any other holder's beneficial ownership.
The shares of common stock listed under the heading Shares to be Offered
may include shares of common stock and common stock equivalents exercisable
within 60 days of the date of this prospectus owned by selling stockholders that
are being offered for sale by this prospectus.
[Enlarge/Download Table]
Shares to be Shares Owned
Securities Owned Prior to the Offering Offered after the Offering (1)
--------------------------------------------------------- ------------------------
Common Preferred
Name of selling stockholder Stock Warrants Stock (2) Term Notes Shares %
--------------------------- ------------------------------------------------ -------- -------------- ---
Alan Bartelheimer 125,871 17,500 143,371
Louis Berrick 60,328 60,328
Philip Clark 53,500 50,000 3,500 *
William C. Clement Trust 30,000 15,500 37,500 8,000 *
Craig Cleveland 5,000 1,250 6,250
Alan R. Cohen 18,000 2,500 12,500 8,000 *
Alan R. Cohen c/f Jessica W
Cohen - UGMA-NJ 15,000 24,250 12,500 26,750 *
Thomas Counts 58,353 8,750 61,203 5,900 *
Jeffrey Davis 175,681 43,000 184,081 34,600 *
Mark Ferguson 25,000 3,750 18,750 10,000 *
Oscar Garza 116,150 8,056 63,678 60,528 *
Investor Resource Services,
Inc. 555,000 106,250 356,250 305,000 1.1
Dr. Robert Klein 67,500 12,000 60,000 19,500 *
James Lehman 70,000 6,000 70,000 6,000 *
Jay J. Lobell 109,520 2,380 111,900
17
[Enlarge/Download Table]
Shares to be Shares Owned
Securities Owned Prior to the Offering Offered after the Offering (1)
--------------------------------------------------------- ------------------------
Common Preferred
Name of selling stockholder Stock Warrants Stock (2) Term Notes Shares %
--------------------------- ------------------------------------------------ -------- -------------- ---
Elmer Macke 83,250 7,500 55,000 35,750 *
Daniel Mintz 20,000 5,000 25,000
Edward Mirabile 38,572 28,572 10,000 *
Harry & Doris Mussie 130,571 23,100 100,071 53,600 *
Michael Pokel 42,347 5,750 48,097
RBB Bank 163,934 163,934
RLH Options, Inc. 40,900 16,500 37,500 19,900 *
Byron Rosenstein 28,000 28,000
Steven Rosner 136,303 85,000 134,303 87,000 *
Michael Rucker 44,954 6,250 51,204
Raymond Smith 110,964 38,000 140,964 8,000 *
Elliot Sobol 10,000 2,500 12,500
Ji-Ang Song 122,542 51,800 146,017 28,325 *
Roy Stephens 43,569 43,569
Howard J. Stryker 57,675 35,750 77,000 16,425 *
Debbie Sutz IRA 328,604 90,000 418,604
Lawrence Unger 34,000 21,250 34,000 21,250 *
Var Growth Corp. 400,000 400,000
Yu Family Trust 49,180 49,180
Arab Commerce Bank Ltd.(3) 362,354 162,341 200,341 324,354 1.1
Bronia GmbH (3) 815,424 373,465 442,715 746,174 2.6
Correllus International Ltd.(3) 724,705 324,681 400,681 648,705 2.2
SovCap Equity Partners, Ltd.
(3) 769,563 2,910,925 509,814 824,614 3,365,688 11.5
Sovereign Capital Advisors,
LLC (3) 383,159 109,780 273,601 219,338 *
The Shaar Fund Ltd. 75,000 1,745,000 1,820,000
The Gross Foundation, Inc. 709,849 3,260,000 3,969,849
Trautman Wasserman &
Company, Inc.(4) 100,000 484,970 8,116 576,854 2.0
Trautman Wasserman Holding
Company, Inc.(5) 89,682 89,682
Gregory O. Trautman(6) 185,752 126,377 174,401 137,728 *
18
[Enlarge/Download Table]
Shares to be Shares Owned
Securities Owned Prior to the Offering Offered after the Offering (1)
--------------------------------------------------------- ------------------------
Common Preferred
Name of selling stockholder Stock Warrants Stock (2) Term Notes Shares %
--------------------------- --------------------------------------------- ----------- -------------- ----
Mark Barbera (6) 5,000 91,954 26,613 70,341 *
Mark Gillis (6) 2,400 96,491 44,551 54,340 *
Jerome Snyder (6) 1,100 1,100
Samuel Wasserman (6) 53,225 53,225
--------------------------------------------- ---------- -------------- ----
Totals 4,122,665 7,875,119 5,005,000 1,480,081 11,571,315 6,911,550 25.9
--------------------------------------------- ---------- -------------- ----
(*) Assuming the sale of all shares of common stock being offered for sale
by this prospectus, represents less than 1% of the outstanding common
stock.
(1) Represents shares of common stock and common stock equivalents owned
after the offering assuming no further sales other than those made
pursuant to this prospectus.
(2) The total includes shares of common stock underlying conversion shares
which may be issued only in the event certain shares of Compositech's
Series C 8% Convertible Preferred Stock and certain shares of
Compositech's Series D 8% Convertible Preferred Stock are converted
into shares of common stock. In accordance with contractual
obligations, Compositech is registering 1,745,000 shares underlying
54,000 shares of 8% Series C Convertible Preferred Stock and 3,260,000
shares, which represents 200% of the shares currently underlying 500
shares of Series D 8% Convertible Preferred Stock.
(3) The total listed under warrants includes 4,534,696 shares of common
stock underlying repricing warrants which may be issued only in the
event certain term notes are converted into shares of common stock.
The shares have been estimated based on a market price of $0.46 per
share as defined in and using the formula contained in the repricing
warrants. The 4,534,696 is allocated as follows : Arab Commerce Bank
Ltd. - 324,354 shares, Bronia GmbH, - 746,174 shares, Correllus
International Ltd., - 648,705 shares, SovCap Equity Partners, Ltd. -
2,596,125 shares and Sovereign Capital Advisors, LLC - 219,338 shares.
The Company is negotiating with the holders of the repricing warrants
to substantially reduce the number of shares issuable.
(4) Trautman Wasserman & Company, Inc. is a market maker of Compositech's
common stock and Redeemable Common Stock Warrants. In addition to
their role as market maker, Trautman Wasserman & Company Inc. has
received commissions from Compositech in the private placement sales
of the Company's common stock. The securities listed under warrants
include 210,000 shares underlying 105,000 of Compositech's Unit
Purchase Options, enabling the holder to purchase units, at $7.50 per
unit, consisting of a share of Compositech's common stock and a
redeemable warrant to purchase a share of Compositech's common stock
for $7.8125 per share.
(5) Trautman Wasserman Holding Company Incorporated is a sister company of
Trautman Wasserman & Company, Inc.
(6) Mr. Trautman, Mr. Barbera, Mr. Gillis, Mr. Snyder and Mr. Wasserman
are principals of the firm of Trautman Wasserman & Company, Inc. They
individually disclaims beneficial ownership of shares attributable to
Trautman Wasserman Holding Company Incorporated.
----------
The shares of common stock are being registered under the Securities
Act pursuant to the terms of certain registration rights agreements between
the selling stockholders and Compositech entered into at the time the
selling stockholders acquired the common stock and the warrants. Each
selling stockholder will be entitled to receive all of the proceeds from
the future sale of his or its shares of common stock. Except for the costs
of including such shares of common stock within the registration statement
of which this prospectus forms a part, which costs are borne by
Compositech, the selling stockholders will bear all expenses of any
offering by them of their shares of common stock, including the costs of
their counsel and any sales commissions incurred.
PLAN OF DISTRIBUTION
The selling stockholders or their transferees may, from time to time, sell
all or a portion of the shares of common stock being registered pursuant to this
prospectus in privately negotiated transactions or otherwise, at fixed prices
that may be changed, at market prices prevailing at the time of sale, at prices
related to such market prices or at negotiated prices. The shares may be sold by
the selling stockholders by one or more of the following methods, without
limitation:
o block trades in which the broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o privately negotiated transactions;
o short sales;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
From time to time, the selling stockholders may engage in short sales,
short sales against the box, puts and calls and other transactions in our
securities or derivatives of such securities, and may sell and deliver the
shares in connection therewith or in settlement of securities loans. From time
to time, the selling stockholders may pledge their shares pursuant to the margin
provisions of its customer agreements with its brokers. Upon a default by the
selling stockholders, the broker may offer and sell the pledged shares from time
to time.
In effecting sales, brokers and dealers engaged by the selling stockholders
may arrange for other brokers or dealers to participate in such sales. Brokers
or dealers may receive commissions or discounts from the selling stockholders
(or, if any such broker-dealer acts as agent for the purchaser of such shares,
from such purchaser) in amounts to be negotiated which are not expected to
exceed those customary in the types of transactions involved. Broker-dealers may
agree with the selling stockholders to sell a specified number of such shares at
a stipulated price per share, and, to the extent such broker-dealer is unable to
do so acting as agent for a selling stockholder, to purchase as principal any
unsold shares at the price required to fulfill the broker-dealer commitment to
the selling stockholders.
Broker-dealers who acquire shares as principal may thereafter resell such
shares from time to time in transactions (which may involve block transactions
and sales to and through other broker-dealers, including transactions of the
nature described above) in the over-the-counter market or otherwise at prices
and on terms then prevailing at the time of sale, at prices then related to the
then-current market price or in negotiated transactions and, in connection with
such resales, may pay to or receive from the purchasers of such shares
commissions as described above. The selling stockholders may also sell the
shares in accordance with Rule 144 under the Securities Act, rather than
pursuant to this prospectus.
The selling stockholders and any broker-dealers or agents that participate
with the selling stockholders in sales of the shares may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales. In such event, any commissions received by such
20
broker-dealers or agents and any profit on the resale of the shares purchased by
them may be deemed to be underwriting commissions or discounts under the
Securities Act.
We have agreed to indemnify the selling stockholders against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act.
We have informed the selling stockholders that the anti-manipulation
provisions of Regulation M under the Exchange Act may apply to the sales of
their shares offered hereby. We have also advised the selling stockholders of
the requirement for delivery of this prospectus in connection with any sale of
the shares offered hereby.
Certain selling stockholders may from time to time purchase shares of
common stock in the open market. These selling stockholders have been notified
that they should not commence any distribution of shares unless they have
terminated their purchasing and bidding for common stock in the open market as
provided in applicable securities regulations.
There is no assurance that the selling stockholders or their transferees
will sell any or all of the shares offered by them in this prospectus.
FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus may contain forward-looking
statements. Such statements can be identified by the use of forward-looking
terminology such as "may", "will", "expect", "believe", "intend", "anticipate",
"estimate", "continue" or similar words. These statements discuss future
condition or state other "forward-looking" information. When considering such
forward-looking statements, you should keep in mind the risk factors and other
cautionary statements in this prospectus and the documents that we incorporate
by reference.
WHERE YOU CAN FIND MORE INFORMATION ABOUT COMPOSITECH
We file reports, proxy statements and other information with the Securities
and Exchange Commission. You can read and copy any document we file at the
Public Reference Room maintained by the SEC at Room 1024, 450 Fifth Street,
N.W., Washington, D.C., 20549; and at the SEC's Regional Offices at the 13th
Floor, World Trade Center, New York, New York, 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois, 60661. Please call 1-800-SEC-0330 for
further information concerning the Public Reference Room. Our filings also are
available to the public from the SEC's website at www.sec.gov.
We distribute to our stockholders annual reports containing audited
financial statements. Documents filed by us can also be inspected at the offices
of The Nasdaq SmallCap MarketSM, 1735 K Street, NW, Washington, DC 20006-1500.
21
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with it. This means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is
considered to be part of this prospectus. Information we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we make with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until the offering is completed:
(1) Compositech's Quarterly Report on Form 10-QSB for the three months
ended March 31, 2000
(2) Compositech's Current Report on Form 8-K dated March 7, 2000
(3) Compositech's Annual Report on Form 10-KSB for the year ended December
31, 1999
(4) Compositech's Current Report on Form 8-K dated January 4, 2000
(5) The description of our common stock contained in our Registration
Statement on Form 8-A (File No. 0-20701), declared effective on July
2, 1996, by which our shares of common stock were registered under
Section 12 of the Exchange Act and any other amendments or reports
filed for the purpose of updating such description.
You may request a copy of these filings, at no cost, by writing or calling
us at:
Compositech Ltd.
710 Koehler Avenue
Ronkonkoma, NY 11779
Attention: Investor Relations
Telephone: (631) 585-7710, Extension 114
This prospectus is part of a registration statement we filed with the SEC.
You should rely only on the information or representations provided in this
prospectus. We have not authorized anyone to provide you with different
information. The common stock will not be offered in any state where an offer is
not permitted. Do not assume that the information in this prospectus is accurate
as of any date other than the date on the cover of this prospectus.
LEGAL OPINIONS
The validity of the shares of common stock offered hereby will be passed
upon for Compositech and selling stockholders by Patterson, Belknap, Webb &
Tyler LLP, 1133 Avenue of the Americas, New York, New York, 10036-6710.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial
statements included in our Annual Report (Form 10-KSB) for the year ended
December 31, 1999, as set forth in their report (which contains an explanatory
paragraph describing conditions that raise substantial doubt about Compositech's
ability to continue as a going concern as described in Note 1 to the financial
statements), which is incorporated by reference in this prospectus and elsewhere
in the registration statement. Our financial statements are incorporated by
reference in reliance on Ernst & Young LLP's report, given on their authority as
experts in accounting and auditing.
22
No dealer, salesman or other person has been authorized to give any information
or to make any representation not contained in this prospectus, and, if given or
made, such information or representation must not be relied upon as having been
authorized by Compositech or the selling stockholders. This prospectus does not
constitute an offer to buy any of these securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer in such
jurisdiction.
CONTENTS
Page
----
Prospectus Summary ........................................................ 5
Risk Factors .............................................................. 6
Information about Compositech ............................................. 12
Recent Developments ....................................................... 15
The Offering .............................................................. 16
Use of Proceeds ........................................................... 16
Selling Stockholders ...................................................... 17
Plan of Distribution ...................................................... 20
Forward-Looking Statements ................................................ 21
Where You Can Find More
Information about Compositech ............................................. 21
Information Incorporated by Reference ..................................... 22
Legal Opinions ............................................................ 22
Experts ................................................................... 22
11,571,315 Shares of
Common Stock
COMPOSITECH LTD.
----------------------------
PROSPECTUS
____________________________
July ____, 2000
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various estimated amount of fees and
expenses payable in connection with this offering other than sales commissions.
All such expenses will be borne by the Registrant.
Item Amount of Expenses
---- ------------------
Commission Registration Fees ............................... $ 1,872
Printing Expenses .......................................... 2,000
Accounting Fees and Expenses ............................... 4,000
Legal Fees and Expenses .................................... 10,000
Miscellaneous .............................................. 1,000
-------
Total ............................................. $18,872
=======
----------
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware and
Article Eighth of Compositech's Restated Certificate of Incorporation contain
provisions for indemnification of officers, directors, employees and agents of
Compositech. The Amended and Restated Certificate of Incorporation requires
Compositech to indemnify such persons to the full extent permitted by Delaware
law. Each person will be indemnified in any proceeding if he acted in good faith
and in a manner which he reasonably believed to be in , or not opposed to, the
best interest of Compositech. Indemnification would cover expenses, including
attorney's fees, judgments, fines and amounts paid in settlement.
Compositech has directors' and officers' liability insurance. Such
insurance may cover liabilities asserted against any present or past director or
officer incurred in the capacity of director or officer arising out of such
status, whether or not Compositech would have the power to indemnify such
person.
Item 16. Exhibits.
Exhibit
Number Exhibit
--------------------------------------------------------------------------------
3.1 Restated Certificate of Incorporation of the Company. (Incorporated by
reference to Exhibit 3.1 previously filed with Compositech's Form
10-KSB for the year ended December 31, 1996.)
3.2 Amendment to the Restated Certificate of Incorporation of the Company
(Incorporated by reference to Exhibit 3.2 previously filed with
Compositech's Form 10-KSB for the year ended December 31, 1999.)
3.3 By-Laws, As Amended, of the Company. (Incorporated by reference to
Exhibit xx previously filed with Compositech's Registration Statement
on Form SB-2, Reg. No. 333-3564-NY)
3.4 Certificate of Designations for 7% Series B Convertible Preferred Stock
dated as of May 29, 1998 (Incorporated by reference to Exhibit 3.4
previously filed with Compositech's Form 8K dated May 29, 1998.)
3.5 Certificate of Designation for the Company's Series C 8% Convertible
Preferred Stock, filed on November 1, 1999. (Incorporated by reference
to Exhibit 3.5 previously filed with Compositech's Form 10-QSB for the
quarterly period ended September 30, 1999.)
3.6 Certificate of Correction of Certificate of Designation for the
Company's Series C 8% Convertible Preferred Stock, filed on November 8,
1999. (Incorporated by reference to Exhibit 3.6 previously filed with
Compositech's Form 10-QSB for the quarterly period ended September 30,
1999.)
3.7* Certificate of Designation for the Company's Series D 8% Convertible
Preferred Stock, filed on July 10, 2000.
5.1* Opinion of Patterson, Belknap, Webb & Tyler LLP, special counsel for
the Registrant, as to the legality of the securities being offered.
10.1 Bridge Note Purchase Agreement dated March 16, 1999 between Compositech
and SovCap Equity Partners, Ltd. (Incorporated by reference to Exhibit
10.37 previously filed with Compositech's Form 10-KSB for the year
ended December 31, 1998.)
10.2 Form of Bridge Note dated March 16, 1999 between Compositech and SovCap
Equity Partners, Ltd. (Incorporated by reference to Exhibit 10.38
previously filed with Compositech's Form 10-KSB for the year ended
December 31, 1998. )
10.3 Form of Attached Repricing Warrant dated March 16, 1999 between
Compositech and SovCap Equity Partners, Ltd. (Incorporated by reference
to Exhibit 10.39 previously filed with Compositech's Form 10-KSB for
the year ended December 31, 1998.)
10.4 Form of Common Stock Purchase Warrant dated March 16, 1999 between
Compositech and SovCap Equity Partners, Ltd. (Incorporated by reference
to Exhibit 10.40 previously filed with Compositech's Form 10-KSB for
the year ended December 31, 1998.)
10.5 Registration Rights Agreement dated March 16, 1999 between Compositech
and SovCap Equity Partners, Ltd. (Incorporated by reference to Exhibit
10.41 previously filed with Compositech's Form 10-KSB for the year
ended December 31, 1998.)
II-2
10.6 Placement Agency Agreement dated March 16, 1999 between Compositech and
Sovereign Capital Advisors LLC. (Incorporated by reference to Exhibit
10.42 previously filed with Compositech's Form 10-KSB for the year
ended December 31, 1998 .)
10.7 Sovereign Warrant Agreement dated March 16, 1999 between Compositech
and Sovereign Capital Advisors LLC. (Incorporated by reference to
Exhibit 10.43 previously filed with Compositech's Form 10-KSB for the
year ended December 31, 1998.)
10.8 Sovereign Warrant Certificate dated March 16, 1999 between Compositech
and Sovereign Capital Advisors LLC. (Incorporated by reference to
Exhibit 10.44 previously filed with Compositech's Form 10-KSB for the
year ended December 31, 1998.)
10.9 First Amendment to Bridge Note Purchase Agreement, dated April 21,
1999, between Compositech and Purchasers of the Second Closing Bridge
Notes. (Incorporated by reference to Exhibit 10.45 previously filed
with Compositech's Form 10-QSB for the period ended June 30, 1999.)
10.10 Second Amendment to Bridge Note Purchase Agreement, dated July 28,
1999, between Compositech and Purchasers of the Third Closing Bridge
Notes. (Incorporated by reference to Exhibit 10.46 previously filed
with Compositech's Form 10-QSB for the period ended June 30, 1999.)
10.11 Second Amendment to the Registration Rights Agreement, dated July 28,
1999, between Compositech and the Purchasers of the First, Second and
Third Closing Bridge Notes. (Incorporated by reference to Exhibit 10.47
previously filed with Compositech's Form 10-QSB for the period ended
June 30, 1999.)
10.12 Letter agreement, dated November 22, 1999, concerning the Series 1
Bridge Note Purchase and Security Agreement, as amended, between
Compositech and certain Purchasers (Incorporated by reference to
Exhibit 10.57 previously filed with Compositech's Form 10-KSB for the
year ended December 31, 1999.)
10.13 Convertible Preferred Stock Purchase Agreement, dated as of November 5,
1999 between the Company and The Shaar Fund Ltd. (Incorporated by
reference to Exhibit 10.51 previously filed with Compositech's Form
10-QSB for the period ended September 30, 1999.)
10.14 Registration Rights Agreement dated as of November 5, 1999, between the
Company and The Shaar Fund Ltd. (Incorporated by reference to Exhibit
10.52 previously filed Exhibit to Compositech's Form 10-QSB for the
period ended September 30, 1999.)
10.15 Common Stock Purchase Warrant dated November 5, 1999 between the
Company and The Shaar Fund Ltd. (Incorporated by reference to Exhibit
10.53 previously filed with Compositech's Form 10-QSB for the period
ended September 30, 1999 as Exhibit 10.53.)
10.16 Form of Investor Subscription Agreement between Compositech and certain
investors in connection with a private placement of Compositech's
common stock which had its final closing on July 27, 1999.
(Incorporated by reference to Exhibit 10.55 previously filed with
Compositech's Form 10-QSB for the period ended September 30, 1999.)
II-3
10.17 Form of Common Stock Purchase Warrant issued in connection with
Compositech's private placement, which had its final closing on July
27, 1999. (Incorporated by reference to Exhibit 10.56 previously filed
with Compositech's Form 10-QSB for the period ended September 30,
1999.)
10.18 Form of Series 1 Bridge Financing Note dated October 4, 1999 between
Compositech and SovCap Equity Partners, Ltd. (Incorporated by reference
to Exhibit 10.58 previously filed with Compositech's Form 10-KSB for
the year ended December 31, 1999.)
10.19 Form of Common Stock Purchase Warrant dated October 4, 1999 between
Compositech and SovCap Equity Partners, Ltd. (Incorporated by reference
to Exhibit 10.59 previously filed with Compositech's Form 10-KSB for
the year ended December 31, 1999.)
10.20 Form of Attached Repricing Warrant dated October 4, 1999 between
Compositech and SovCap Equity Partners, Ltd. (Incorporated by reference
to Exhibit 10.60 previously filed with Compositech's Form 10-KSB for
the year ended December 31, 1999.)
10.21 Secured Convertible Bridge Financing Note dated October 4, 1999 between
Compositech and Sovereign Capital Advisors, LLC (Incorporated by
reference to Exhibit 10.61 previously filed with Compositech's Form
10-KSB for the year ended December 31, 1999.)
10.22 Sovereign Warrant Agreement dated October 4, 1999 between Compositech
and Sovereign Capital Advisors LLC. (Incorporated by reference to
Exhibit 10.62 previously filed with Compositech's Form 10-KSB for the
year ended December 31, 1999.)
10.23 Form of Promissory Note between Compositech and certain qualified
investors with a term of 14 days (Incorporated by reference to Exhibit
10.63 previously filed with Compositech's Form 10-KSB for the year
ended December 31, 1999.)
10.24 Form of Promissory Note between Compositech and certain qualified
investors with a term of 30 days (Incorporated by reference to Exhibit
10.64 previously filed with Compositech's Form 10-KSB for the year
ended December 31, 1999.)
10.25 Form of Promissory Note between Compositech and certain qualified
investors with a term of 30 days and time-dependent warrant coverage
(Incorporated by reference to Exhibit 10.65 previously filed with
Compositech's Form 10-KSB for the year ended December 31, 1999.)
10.26 Form of Common Stock Purchase Warrant issued in connection with
Compositech's private placements. (Incorporated by reference to Exhibit
10.66 previously filed with Compositech's Form 10-KSB for the year
ended December 31, 1999.)
10.27 Form of Convertible Promissory Note between the Company and certain
investors in connection with a private placement of short term bridge
notes which had its most recent closing on January 16, 2000
(Incorporated by reference to Exhibit 10.67 previously filed with
Compositech's Form 10-KSB for the year ended December 31, 1999.)
10.28 Form of Investor Subscription Agreement between Compositech and certain
investors in connection with a private placement of Compositech's
common stock which had its most recent closing on June 26, 2000.
(Incorporated by reference to Exhibit 10.70 previously filed with
Compositech's Form 10-QSB for the three months ended March 31, 2000.)
II-4
10.29 Form of Amendment to Bridge Financing Notes between Compositech and
certain investors dated March 31, 2000. (Incorporated by reference to
Exhibit 10.71 previously filed with Compositech's Form 10-QSB for the
three months ended March 31, 2000.)
10.30 Agreement dated March 31, 2000 between Compositech and Sovereign
Capital Advisors, LLC to extend the due date of a Secured Convertible
Bridge Financing Note. (Incorporated by reference to Exhibit 10.72
previously filed with Compositech's Form 10-QSB for the three months
ended March 31, 2000.)
10.31 Agreement between Compositech and SovCap Equity Partners, Ltd.,
Sovereign Capital Advisors LLC, Arab Commerce Bank, Ltd., Correllus
International Ltd. and Bronia GmbH dated April 21, 2000, to extend the
due dates on certain Secured Convertible Bridge Financing Notes to July
15, 2000. (Incorporated by reference to Exhibit 10.73 previously filed
with Compositech's Form 10-QSB for the three months ended March 31,
2000.)
10.32* Letter Agreement, dated June 2, 2000, between Compositech and Sovereign
Capital Advisors, LLC, to extend the due date on a certain Secured
Convertible Bridge Financing Note.
10.33* Letter Agreement, dated June 26, 2000 between Compositech and SovCap
Equity Partners, Ltd., Sovereign Capital Advisors LLC, Arab Commerce
Bank, Ltd., Correllus International Ltd. and Bronia GmbH, extending the
term of the Repricing Warrants from 90 days to 180 days.
10.34* Letter Agreement between Compositech and SovCap Equity Partners, Ltd.,
Sovereign Capital Advisors LLC, Arab Commerce Bank, Ltd., Correllus
International Ltd. and Bronia GmbH dated July 14, 2000, to extend the
due dates on certain Bridge Financing Notes.
10.35* Letter Agreement, dated July 7, 2000, between Compositech and SovCap
Equity Partners, Ltd., as Representative for the Purchasers amending
certain Bridge Note Purchase and Security Agreements as to certain
collateral.
10.36* Convertible Preferred Stock and Warrants Purchase Agreement dated July
7, 2000 between Compositech and The Gross Foundation, Inc.
10.37* Registration Rights Agreement dated as of July 7, 2000, between
Compositech and The Gross Foundation, Inc.
10.38* Common Stock Purchase Warrant dated July 12, 2000 between Compositech
and The Gross Foundation, Inc.
10.39* Letter Agreement, dated July 19, 2000, between Compositech and SovCap
Equity Partners, Ltd., as Representative for the Purchasers amending
certain Registration Rights Agreements.
23.1* Consent of Ernst & Young LLP
23.2* Consent of Patterson, Belknap, Webb & Tyler LLP (contained in Exhibit
5.1)
24* Power of Attorney (see signature pages of Registration Statement)
-------------
* Filed herewith
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
II-5
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10 (a) (3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus 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,
represents a fundamental change in the information set forth in the
registration statement;
(iii) to include any material information with respect to the Plan of
Distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that paragraphs (i) and (ii) do not apply to this
registration statement if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15 (d) of the
Securities Exchange Act and incorporated by reference in this registration
statement;
(2) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13 (a) or Section 15 (d) of the
Exchange Act that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in the first paragraph of Item
15 above, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange commission such indemnification is against public
policy as expressed in said Securities Act and is, therefore, unenforceable. In
the event that as claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit, or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Hamlet of Ronkonkoma, State of New York, on July 21, 2000.
COMPOSITECH LTD.
Date: July 21, 2000 By: /S/ Jonas Medney
---------------------------------
Jonas Medney
Chairman and Chief Executive Officer
(Principal Executive Officer)
In accordance with the Securities Act of 1933, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated. Each person whose signature appears below
constitutes and appoints each of Jonas Medney and Samuel S. Gross his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to this registration statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, and to take such actions in, and file with the appropriate
authorities in, whatever states said attorney-in-fact and agent shall determine,
such applications, statements, consents and other documents as may be necessary
or expedient to register securities of Compositech for sale, granting unto said
attorney-in-fact and agent full power and authority to do so and perform each
and every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof and the registrant hereby confers like authority on its behalf.
/S/ Jonas Medney July 21, 2000
--------------------------------------------
Jonas Medney
Chairman of the Board, Chief Executive Officer
and Director
/S/ Samuel S. Gross July 21, 2000
--------------------------------------------
Samuel S. Gross
Executive Vice President, Secretary, Treasurer
and Director
(Principal Financial and Accounting Officer)
/S/ Fred E. Klimpl July 21, 2000
--------------------------------------------
Fred E. Klimpl, Director
/S/ Willard T. Jackson July 21, 2000
--------------------------------------------
Willard T. Jackson, Director
II-7
/S/ Robert W. Middleton July 21, 2000
--------------------------------------------
Robert W. Middleton, Director
/S/ Heinz-Gerd Reinkemeyer July 21, 2000
--------------------------------------------
Heinz-Gerd Reinkemeyer, Director
/S/ James W. Taylor July 21, 2000
--------------------------------------------
James W. Taylor, Director
II-8
INDEX TO EXHIBITS
Exhibit
Number Exhibit
--------------------------------------------------------------------------------
3.1 Restated Certificate of Incorporation of the Company. (Incorporated by
reference to Exhibit 3.1 previously filed with Compositech's Form
10-KSB for the year ended December 31, 1996.)
3.2 Amendment to the Restated Certificate of Incorporation of the Company
(Incorporated by reference to Exhibit 3.2 previously filed with
Compositech's Form 10-KSB for the year ended December 31, 1999.)
3.3 By-Laws, As Amended, of the Company. (Incorporated by reference to
Exhibit xx previously filed with Compositech's Registration Statement
on Form SB-2, Reg. No. 333-3564-NY)
3.4 Certificate of Designations for 7% Series B Convertible Preferred Stock
dated as of May 29, 1998 (Incorporated by reference to Exhibit 3.4
previously filed with Compositech's Form 8K dated May 29, 1998.)
3.5 Certificate of Designation for the Company's Series C 8% Convertible
Preferred Stock, filed on November 1, 1999. (Incorporated by reference
to Exhibit 3.5 previously filed with Compositech's Form 10-QSB for the
quarterly period ended September 30, 1999.)
3.6 Certificate of Correction of Certificate of Designation for the
Company's Series C 8% Convertible Preferred Stock, filed on November 8,
1999. (Incorporated by reference to Exhibit 3.6 previously filed with
Compositech's Form 10-QSB for the quarterly period ended September 30,
1999.)
3.7* Certificate of Designation for the Company's Series D 8% Convertible
Preferred Stock, filed on July 10, 2000.
5.1* Opinion of Patterson, Belknap, Webb & Tyler LLP, special counsel for
the Registrant, as to the legality of the securities being offered.
10.1 Bridge Note Purchase Agreement dated March 16, 1999 between Compositech
and SovCap Equity Partners, Ltd. (Incorporated by reference to Exhibit
10.37 previously filed with Compositech's Form 10-KSB for the year
ended December 31, 1998.)
10.2 Form of Bridge Note dated March 16, 1999 between Compositech and SovCap
Equity Partners, Ltd. (Incorporated by reference to Exhibit 10.38
previously filed with Compositech's Form 10-KSB for the year ended
December 31, 1998. )
10.3 Form of Attached Repricing Warrant dated March 16, 1999 between
Compositech and SovCap Equity Partners, Ltd. (Incorporated by reference
to Exhibit 10.39 previously filed with Compositech's Form 10-KSB for
the year ended December 31, 1998.)
10.4 Form of Common Stock Purchase Warrant dated March 16, 1999 between
Compositech and SovCap Equity Partners, Ltd. (Incorporated by reference
to Exhibit 10.40 previously filed with Compositech's Form 10-KSB for
the year ended December 31, 1998.)
10.5 Registration Rights Agreement dated March 16, 1999 between Compositech
and SovCap Equity Partners, Ltd. (Incorporated by reference to Exhibit
10.41 previously filed with Compositech's Form 10-KSB for the year
ended December 31, 1998.)
II-9
10.6 Placement Agency Agreement dated March 16, 1999 between Compositech and
Sovereign Capital Advisors LLC. (Incorporated by reference to Exhibit
10.42 previously filed with Compositech's Form 10-KSB for the year
ended December 31, 1998 .)
10.7 Sovereign Warrant Agreement dated March 16, 1999 between Compositech
and Sovereign Capital Advisors LLC. (Incorporated by reference to
Exhibit 10.43 previously filed with Compositech's Form 10-KSB for the
year ended December 31, 1998.)
10.8 Sovereign Warrant Certificate dated March 16, 1999 between Compositech
and Sovereign Capital Advisors LLC. (Incorporated by reference to
Exhibit 10.44 previously filed with Compositech's Form 10-KSB for the
year ended December 31, 1998.)
10.9 First Amendment to Bridge Note Purchase Agreement, dated April 21,
1999, between Compositech and Purchasers of the Second Closing Bridge
Notes. (Incorporated by reference to Exhibit 10.45 previously filed
with Compositech's Form 10-QSB for the period ended June 30, 1999.)
10.10 Second Amendment to Bridge Note Purchase Agreement, dated July 28,
1999, between Compositech and Purchasers of the Third Closing Bridge
Notes. (Incorporated by reference to Exhibit 10.46 previously filed
with Compositech's Form 10-QSB for the period ended June 30, 1999.)
10.11 Second Amendment to the Registration Rights Agreement, dated July 28,
1999, between Compositech and the Purchasers of the First, Second and
Third Closing Bridge Notes. (Incorporated by reference to Exhibit 10.47
previously filed with Compositech's Form 10-QSB for the period ended
June 30, 1999.)
10.12 Letter agreement, dated November 22, 1999, concerning the Series 1
Bridge Note Purchase and Security Agreement, as amended, between
Compositech and certain Purchasers (Incorporated by reference to
Exhibit 10.57 previously filed with Compositech's Form 10-KSB for the
year ended December 31, 1999.)
10.13 Convertible Preferred Stock Purchase Agreement, dated as of November 5,
1999 between the Company and The Shaar Fund Ltd. (Incorporated by
reference to Exhibit 10.51 previously filed with Compositech's Form
10-QSB for the period ended September 30, 1999.)
10.14 Registration Rights Agreement dated as of November 5, 1999, between the
Company and The Shaar Fund Ltd. (Incorporated by reference to Exhibit
10.52 previously filed Exhibit to Compositech's Form 10-QSB for the
period ended September 30, 1999.)
10.15 Common Stock Purchase Warrant dated November 5, 1999 between the
Company and The Shaar Fund Ltd. (Incorporated by reference to Exhibit
10.53 previously filed with Compositech's Form 10-QSB for the period
ended September 30, 1999 as Exhibit 10.53.)
10.16 Form of Investor Subscription Agreement between Compositech and certain
investors in connection with a private placement of Compositech's
common stock which had its final closing on July 27, 1999.
(Incorporated by reference to Exhibit 10.55 previously filed with
Compositech's Form 10-QSB for the period ended September 30, 1999.)
II-10
10.17 Form of Common Stock Purchase Warrant issued in connection with
Compositech's private placement, which had its final closing on July
27, 1999. (Incorporated by reference to Exhibit 10.56 previously filed
with Compositech's Form 10-QSB for the period ended September 30,
1999.)
10.18 Form of Series 1 Bridge Financing Note dated October 4,
1999 between Compositech and SovCap Equity Partners, Ltd. (Incorporated
by reference to Exhibit 10.58 previously filed with Compositech's Form
10-KSB for the year ended December 31, 1999.)
10.19 Form of Common Stock Purchase Warrant dated October 4, 1999 between
Compositech and SovCap Equity Partners, Ltd. (Incorporated by reference
to Exhibit 10.59 previously filed with Compositech's Form 10-KSB for
the year ended December 31, 1999.)
10.20 Form of Attached Repricing Warrant dated October 4, 1999 between
Compositech and SovCap Equity Partners, Ltd. (Incorporated by reference
to Exhibit 10.60 previously filed with Compositech's Form 10-KSB for
the year ended December 31, 1999.)
10.21 Secured Convertible Bridge Financing Note dated October 4, 1999 between
Compositech and Sovereign Capital Advisors, LLC (Incorporated by
reference to Exhibit 10.61 previously filed with Compositech's Form
10-KSB for the year ended December 31, 1999.)
10.22 Sovereign Warrant Agreement dated October 4, 1999 between Compositech
and Sovereign Capital Advisors LLC. (Incorporated by reference to
Exhibit 10.62 previously filed with Compositech's Form 10-KSB for the
year ended December 31, 1999.)
10.23 Form of Promissory Note between Compositech and certain qualified
investors with a term of 14 days (Incorporated by reference to Exhibit
10.63 previously filed with Compositech's Form 10-KSB for the year
ended December 31, 1999.)
10.24 Form of Promissory Note between Compositech and certain qualified
investors with a term of 30 days (Incorporated by reference to Exhibit
10.64 previously filed with Compositech's Form 10-KSB for the year
ended December 31, 1999.)
10.25 Form of Promissory Note between Compositech and certain qualified
investors with a term of 30 days and time-dependent warrant coverage
(Incorporated by reference to Exhibit 10.65 previously filed with
Compositech's Form 10-KSB for the year ended December 31, 1999.)
10.26 Form of Common Stock Purchase Warrant issued in connection with
Compositech's private placements. (Incorporated by reference to Exhibit
10.66 previously filed with Compositech's Form 10-KSB for the year
ended December 31, 1999.)
10.27 Form of Convertible Promissory Note between the Company and certain
investors in connection with a private placement of short term bridge
notes which had its most recent closing on January 16, 2000
(Incorporated by reference to Exhibit 10.67 previously filed with
Compositech's Form 10-KSB for the year ended December 31, 1999.)
10.28 Form of Investor Subscription Agreement between Compositech and certain
investors in connection with a private placement of Compositech's
common stock which had its most recent closing on June 26, 2000.
(Incorporated by reference to Exhibit 10.70 previously filed with
Compositech's Form 10-QSB for the three months ended March 31, 2000.)
II-11
10.29 Form of Amendment to Bridge Financing Notes between Compositech and
certain investors dated March 31, 2000. (Incorporated by reference to
Exhibit 10.71 previously filed with Compositech's Form 10-QSB for the
three months ended March 31, 2000.)
10.30 Agreement, dated March 31, 2000, between Compositech and Sovereign
Capital Advisors, LLC to extend the due date of a Secured Convertible
Bridge Financing Note. (Incorporated by reference to Exhibit 10.72
previously filed with Compositech's Form 10-QSB for the three months
ended March 31, 2000.)
10.31 Agreement between Compositech and SovCap Equity Partners, Ltd.,
Sovereign Capital Advisors LLC, Arab Commerce Bank, Ltd., Correllus
International Ltd. and Bronia GmbH dated April 21, 2000, extending the
due dates on certain Bridge Financing Notes till July 15, 2000.
(Incorporated by reference to Exhibit 10.73 previously filed with
Compositech's Form 10-QSB for the three months ended March 31, 2000.)
10.32* Letter Agreement, dated June 2, 2000, between Compositech and Sovereign
Capital Advisors, LLC, extending the due date on a certain Bridge
Financing Note till July 21, 2000.
10.33* Letter Agreement, dated June 26, 2000 between Compositech and SovCap
Equity Partners, Ltd., Sovereign Capital Advisors LLC, Arab Commerce
Bank, Ltd., Correllus International Ltd. and Bronia GmbH, extending the
term of the Repricing Warrants from 90 days to 180 days.
10.34* Letter Agreement between Compositech and SovCap Equity Partners, Ltd.,
Sovereign Capital Advisors LLC, Arab Commerce Bank, Ltd., Correllus
International Ltd. and Bronia GmbH dated July 14, 2000, to extend the
due dates on certain Bridge Financing Notes.
10.35* Letter Agreement, dated July 7, 2000, between Compositech and SovCap
Equity Partners, Ltd., as Representative for the Purchasers amending
certain Bridge Note Purchase and Security Agreements as to certain
collateral.
10.36* Convertible Preferred Stock and Warrants Purchase Agreement dated July
7, 2000 between Compositech and The Gross Foundation, Inc.
10.37* Registration Rights Agreement dated as of July 7, 2000, between
Compositech and The Gross Foundation, Inc.
10.38* Common Stock Purchase Warrant dated July 12, 2000 between Compositech
and The Gross Foundation, Inc.
10.39* Letter Agreement, dated July 19, 2000, between Compositech and SovCap
Equity Partners, Ltd., as Representative for the Purchasers amending
certain Registration Rights Agreements.
23.1* Consent of Ernst & Young LLP
23.2* Consent of Patterson, Belknap, Webb & Tyler LLP (contained in Exhibit
5.1)
24* Power of Attorney (see signature pages of Registration Statement)
-------------
* Filed herewith
II-12
Dates Referenced Herein and Documents Incorporated by Reference
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