Schedule 14C
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
|X| Preliminary Information Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
|_| Definitive Information Statement
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ACCESS INTEGRATED TECHNOLOGIES, INC.
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(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1)
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
1
(3) Per unit price or other underlying value of transaction computed pursuanr
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PRELIMINARY INFORMATION STATEMENT
AS FILED WITH THE SEC ON SEPTEMBER 21, 2005
ACCESS INTEGRATED TECHNOLOGIES, INC.
55 Madison Avenue, Suite 300
Morristown, New Jersey 07960
October __, 2005
To our Stockholders:
Access Integrated Technologies, Inc. ("Access IT" or the "Company") hereby
gives notice to the holders of its Class A common stock ("Class A Common Stock")
and Class B common stock ("Class B Common Stock", and collectively with the
Class A Common Stock, the "Common Stock") that the holders of a majority of the
voting power of its outstanding Common Stock intend to take certain action by
written consent to approve the issuance of shares of Class A Common Stock and
warrants exercisable into Class A Common Stock in an amount greater than 20% of
our outstanding shares of Common Stock. A description of the securities to be
issued is contained in this information statement. The stockholders will take
this action solely for the purposes of satisfying requirements of the American
Stock Exchange that require an issuer of listed securities to obtain prior
stockholder approval if it sells or issues common stock (or securities
convertible or exercisable into common stock) equal to 20% or more of its common
stock outstanding before the issuance for less than the greater of book or
market value of the common stock.
The stockholder action by consent will be taken pursuant to Section 228 of
the Delaware General Corporation Law, which permits any action that may be taken
at a meeting of the stockholders to be taken by written consent to the action by
the holders of the number of shares of voting stock required to approve the
action at a meeting. All necessary corporate approvals in connection with the
matters referred to in this information statement have been obtained. This
information statement is being furnished to all stockholders of AccessIT
pursuant to Section 14(c) of the Securities Exchange Act of 1934 and the rules
thereunder solely for the purpose of informing stockholders of these corporate
actions before they take effect. In accordance with Rule 14c-2 under the
Exchange Act, the stockholder consent is expected to become effective twenty
(20) calendar days following the mailing of this information statement.
This action has been approved by the board of directors of AccessIT and
will be approved by the holders of more than a majority of shares of the
outstanding Common Stock of AccessIT. YOUR CONSENT IS NOT REQUIRED AND IS NOT
BEING SOLICITED IN CONNECTION WITH THIS ACTION.
By order of the Board of Directors
A. Dale Mayo
President, Chief Executive Officer and
Chairman of the Board of Directors
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ACCESS INTEGRATED TECHNOLOGIES, INC.
55 Madison Avenue, Suite 300
Morristown, New Jersey 07960
INFORMATION STATEMENT
We are required to deliver this information statement to holders of our
Class A Common Stock and Class B Common Stock in order to inform them that the
holders of a majority of the voting power of our outstanding stock, without
holding a meeting of stockholders at which stockholders would be entitled to
vote, intend to take certain actions that would normally require such a meeting.
October 5, 2005 has been fixed as the record date for the determination of
stockholders who are entitled to receive this information statement.
THIS INFORMATION STATEMENT IS FIRST BEING SENT OR GIVEN TO THE HOLDERS OF
OUR CLASS A COMMON STOCK AND CLASS B COMMON STOCK ON OR ABOUT OCTOBER 11, 2005.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
ISSUANCE OF SECURITIES
As of August 29, 2005, the Company entered into a letter agreement with
certain accredited investors (the "Letter Agreement") pursuant to which the
Investors converted all of their 7% Convertible Debentures due 2009 of the
Company (the "Debentures"), and exercised all of their warrants (the "Old
Warrants") issued in connection with the Debentures, previously purchased by
them in February 2005. The resale by the Investors of the shares of the
Company's Class A Common Stock underlying the Debentures and the Old Warrants
has been previously registered by the Company on its Registration Statement on
Form S-3, Registration No. 333-123279, which was declared effective by the
Securities and Exchange Commission ("SEC") on March 21, 2005. The Debentures and
Old Warrants converted and exercised pursuant to the Letter Agreement
constituted all of the outstanding Debentures and Old Warrants. The Debentures,
which had an aggregate principal amount of approximately $7.6 million, were
converted into an aggregate of 1,867,322 shares of the Company's Class A Common
Stock and the Old Warrants were exercised for an aggregate of 560,196 shares of
Class A Common Stock. The Company realized net proceeds of approximately $2.48
million as a result of the exercise of the Old Warrants. Pursuant to the Letter
Agreement, the Company agreed to issue to the Investors, upon such conversion
and exercise, an aggregate of 71,359 shares (the "Shares") of Class A Common
Stock and warrants (the "New Warrants") to purchase an aggregate of 760,196
shares of Class A Common Stock (the "Warrant Shares"). The New Warrants will be
exercisable immediately and will remain exercisable for a period of five (5)
years after the date they are issued. The initial exercise price per share of
Class A Common Stock under the warrants will be $11.39. The exercise price of
the warrants and the number of shares of Class A Common Stock for which the
warrants are exercisable will be subject to proportionate adjustment in the
event we make common stock dividends or distributions, consummate a stock split
or reverse stock split or issue shares in a reclassification of our common
stock.
We expect to use the proceeds from exercise of the Old Warrants for capital
expenditures and for working capital and general corporate purposes. The
securities to be issued in the financing will be issued to the Investors in a
private placement exempt from the registration requirements of the Securities
Act of 1933 and may not be resold absent registration under the Securities Act
or an exemption therefrom.
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Our Common Stock is listed on the American Stock Exchange (the "AMEX") and
we are subject to the rules and requirements set forth in the AMEX Company
Guide. Under Section 713 of the AMEX Company Guide, we are required to obtain
stockholder approval before issuing shares of our Common Stock (or securities
convertible or exercisable into Common Stock) in an amount greater than 20% or
more of our Common Stock outstanding before the issuance if the purchase price
per share in such issuance is less than the greater of book or market value of
our Common Stock. We sometimes refer to this rule as the "20% Rule". The
securities to be issued in the financing may be issued at a discount to the
market price of our Class A Common Stock. In addition, although the Shares and
the Warrant Shares would not constitute more than 20% of the number of shares of
our Common Stock outstanding, we believe that, in the view of the AMEX, the
issuance of the Shares and the Warrant Shares might be "integrated", or
considered to be a single offering, with certain prior issuances of Common Stock
that we have made for purposes of the 20% Rule. As a result, in order to assure
compliance with the 20% Rule, we have determined to obtain stockholder approval
for the issuances of the Shares, the New Warrants and the Warrant Shares and the
listing of the Shares and the Warrant Shares on AMEX. We intend to obtain
stockholder approval by written consent on the twenty-first (21st)day following
the date on which this information statement is first sent or given to our
stockholders, or as soon thereafter as is reasonably practicable. Assuming this
information statement is first mailed or given to stockholders on October 11,
2005, we expect that the stockholder approval by written consent would be
obtained on October 31, 2005, or promptly thereafter. A copy of the form of
written consent expected to be executed in connection with the stockholder
approval is attached hereto as Exhibit A.
The Investors have acknowledged and agreed that neither the Shares nor the
New Warrants will be issued until such issuances have been approved by the
Company's stockholders and the listing of the Shares and the Warrant Shares on
the AMEX has been authorized the AMEX. As a result, the Shares and the New
Warrants are expected to be issued at a closing which is expected to occur on or
about November 1, 2005.
Issuance of the securities will result in dilution to our existing
stockholders, but will not otherwise materially affect our existing common
stockholders' rights as stockholders.
We expect that, in connection with issuance of the securities, we will
enter into a registration rights agreement with the purchasers. Under the terms
of the registration rights agreement, we will agree to file a registration
statement with the Securities and Exchange Commission on or before [_______,
2005] to cover resales of the Shares and the Warrant Shares. We will agree to
cause that registration statement to be declared effective as soon as reasonably
possible and to use our best reasonable efforts to keep the registration
statement effective until the date which is two (2) years after the date of
effectiveness of the registration statement or such earlier date on which the
stockholders are able to resell all of their respective shares without volume
restrictions pursuant to Rule 144(k) promulgated under the Securities Act of
1933.
We expect that we will also agree to indemnify each purchaser from
liabilities it may incur as a result of any untrue statement or alleged untrue
statement of a material fact contained in the registration statement, except to
the extent that such untrue statement or alleged untrue statement was reviewed
and approved in writing by such purchaser.
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NO DISSENTERS' RIGHTS
Delaware law does not provide for dissenter's rights in connection with the
approval of the actions described in this information statement.
NO ACTION IS REQUIRED
No other votes are necessary or required. AccessIT anticipates that the
stockholder consent described in this information statement will become
effective on or promptly after October 31, 2005.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of September 9, 2005, the Company's directors, executive officers and
principal stockholders beneficially own, directly or indirectly, in the
aggregate, approximately 35.7% of its outstanding Class A Common Stock and 100%
of its Class B Common Stock. Class B Common Stock entitles the holder to ten
(10) votes per share of Class B Common Stock and Class A Common Stock entitles
the holder to one (1) vote per share of Class A Common Stock. In particular, A.
Dale Mayo, the Company's President and Chief Executive Officer, beneficially
owns 925,811 shares of Class B Common Stock and 55,411 shares of Class A Common
Stock, which represent approximately 40.0% of the total voting power of the
Company's outstanding Common Stock. These stockholders, and Mr. Mayo himself,
will have significant influence over the Company's business affairs, with the
ability to control matters requiring approval by the Company's stockholders,
including the written consent set forth in this information statement.
The following table sets forth as of September 9, 2005, certain information
with respect to the beneficial ownership of the Common Stock as to (i) each
person known by the Company to beneficially own more than five percent (5%) of
the outstanding shares of the Company's Common Stock, (ii) each of the Company's
directors, (iii) each of the Company's Named Executives and (iv) all of the
Company's directors and executive officers as a group.
CLASS A COMMON STOCK
SHARES BENEFICIALLY OWNED (A)
-------------------------------
NAME (b) NUMBER PERCENT
----- ------ -------
A. Dale Mayo 981,222 (c) 6.6%
President, Chief Executive Officer
and Chairman of the Board of Directors
(Principal Executive Officer)
Brett E. Marks 556,134 (d) 4.0%
Senior Vice President
Business Development and Director
Kevin J. Farrell 305,000 2.2%
Senior Vice President,
Data Center Operations and Director
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Gary S. Loffredo 156,683 (e) 1.1%
Senior Vice President,
Business Affairs, General Counsel,
Secretary and Director
Jeff Butkovsky 86,677 (f) *
Senior Vice President
Chief Technology Officer
Brian Pflug 105,203 (g) *
Senior Vice President
Accounting and Finance
(Principal Financial and Accounting Officer)
David Gajda 179,778 1.3%
Robert Davidoff 394,522 (h) 2.8%
Gerald Crotty 3,000 (h) *
James Weichert 531,588 3.8%
MidMark Equity Partners II, L.P. 2,214,879 (i) 15.8%
177 Madison Avenue
Morristown, NJ 07960
Wayne L. Clevenger 2,221,546 (j) 15.9%
c/o MidMark Equity Partners II, L.P.
177 Madison Avenue
Morristown, NJ 07960
Matthew Finlay 2,221,546 (k) 15.9%
c/o MidMark Equity Partners II, L.P.
177 Madison Avenue, Morristown, NJ 07960
All directors and executive officers as a group 5,528,018 35.7%
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* Less than 1%
(a) Applicable percentage of ownership is based on 13,997,454 shares of Class A
Common Stock outstanding as of September 9, 2005 together with all
applicable options, warrants and other securities convertible into shares
of our Class A Common Stock for such stockholder. Beneficial ownership is
determined in accordance with the rules of the SEC, and includes voting and
investment power with respect to shares. Shares of Class A Common Stock
subject to options, warrants or other convertible securities exercisable
within sixty (60) days after September 9, 2005 are deemed outstanding for
computing the percentage ownership of the person holding such options,
warrants or other convertible securities, but are not deemed outstanding
for computing the percentage of any other person. Except as otherwise
noted, the named beneficial owner has the sole voting and investment power
with respect to the shares shown.
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(b) Unless otherwise indicated, the business address of each person named in
the table is c/o Access Integrated Technologies, Inc., 55 Madison Avenue,
Suite 300, Morristown, New Jersey 07960.
(c) Includes 825,811 shares of Class B Common Stock held by Mr. Mayo and
100,000 shares of Class B Common Stock held by Mr. Mayo's spouse. Mr. Mayo
disclaims beneficial ownership of all 100,000 shares of Class B Common
Stock held by Mr. Mayo's spouse. In addition, Mr. Mayo holds 9,601 Class A
Common Stock, and another 45,810 Class A Common Stock issuable upon the
conversion of convertible notes payable. The holder of each share of class
B common stock is entitled to ten votes per share. Including the voting
rights of his shares of Class B Common Stock, Mr. Mayo may exercise up to
40.0% of the total voting power of our common stock. Each share of Class B
Common Stock is convertible at any time at the holder's option into one
share of Class A Common Stock.
(d) Includes 533,563 shares of Class A Common Stock held by Mr. Marks' spouse,
and 22,571 shares of Class A Common Stock issuable upon the conversion of
convertible notes payable.
(e) Includes 136,683 shares of Class A Common Stock underlying options that may
be acquired upon exercise of such options.
(f) Includes 71,667 shares of Class A Common Stock underlying options that may
be acquired upon exercise of such options.
(g) Includes 85,203 shares of Class A Common Stock underlying options that may
be acquired upon exercise of such options.
(h) Represents 5,000 shares of Class A Common Stock underlying options that may
be acquired upon exercise of such options; 157,927 shares owned by CMNY
Capital II, L.P., for which Mr. Davidoff serves as a director; 51,025
shares owned by Sterling Equities/Carl Marks Capital, Inc., for which Mr.
Davidoff serves as a director; and 180,570 shares into which a subordinated
promissory note held by CMNY Capital II, L.P. is convertible. Other then
the 5,000 shares first described, Mr. Davidoff disclaims beneficial
ownership of such shares.
(i) Includes beneficial ownership by MidMark Advisors II, LLC, the general
partner of MidMark Equity Partners II, L.P.
(j) Mr. Clevenger is a managing director of MidMark Equity Partners II, L.P.
and a managing member of MidMark Advisors II, LLC. Represents 6,667 shares
of Class A Common Stock underlying options that may be acquired upon
exercise of such options and 2,214,879 shares owned by MidMark Equity
Partners II, L.P. Other than the 6,667 shares first described, Mr.
Clevenger disclaims beneficial ownership of such shares.
(k) Mr. Finlay is a director of MidMark Equity Partners II, L.P. Represents
6,667 shares of Class A Common Stock underlying options that may be
acquired upon exercise of such options and 2,214,879 shares owned by
MidMark Equity Partners II, L.P. Other than the 6,667 shares first
described, Mr. Finlay disclaims beneficial ownership of such shares.
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CLASS B COMMON STOCK
SHARES BENEFICIALLY OWNED(A)
----------------------------
NAME AND ADDRESS NUMBER PERCENT OF CLASS
---------------- ------ ----------------
A. Dale Mayo
c/o Access Integrated Technologies, Inc.
55 Madison Avenue, Suite 300
Morristown, New Jersey 07960......................................... 925,811 (b) 100%
All directors and executive officers as a group (one person)......... 925,811 100%
--------------------
(a) Applicable percentage of ownership is based on 925,811 shares of Class B
Common Stock outstanding as of September 9, 2005 together with all
applicable options, warrants and other securities convertible into shares
of the Company's Class A Common Stock for such stockholder. Beneficial
ownership is determined in accordance with the rules of the SEC, and
includes voting and investment power with respect to shares. Shares of
Class B Common Stock subject to options, warrants or other convertible
securities exercisable within sixty (60) days after September 9, 2005 are
deemed outstanding for computing the percentage ownership of the person
holding such options, warrants or other convertible securities, but are not
deemed outstanding for computing the percentage of any other person.
(b) Includes 100,000 shares of Class B Common Stock held by Mr. Mayo's spouse.
Mr. Mayo disclaims beneficial ownership of all 100,000 shares of Class B
Common Stock held by Mr. Mayo's spouse. Each share of Class B Common Stock
is convertible at any time at the holder's option into one share of Class A
Common Stock.
BROKERS, CUSTODIANS, ETC.
We have asked brokers and other custodians, nominees and fiduciaries to
forward this information statement to the beneficial owners of our Class A
Common Stock and Class B Common Stock held of record by such persons and will
reimburse such persons for out-of-pocket expenses incurred in forwarding such
material.
All information concerning the Company contained in this information
statement has been furnished by the Company. No person is authorized to make any
representation with respect to the matters described in this information
statement other than those contained in this information statement and if given
or made must not be relied upon as having been authorized by the Company or any
other person. Therefore, if anyone gives you such information, you should not
rely on it. This information statement is dated October __,2005. You should not
assume that the information contained in this document is accurate as of any
other date unless the information specifically indicates that another date
applies.
By order of the Board of Directors
A. Dale Mayo
President, Chief Executive Officer and
Chairman of the Board of Directors
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APPENDIX A
FORM OF WRITTEN CONSENT OF THE HOLDERS
OF A MAJORITY OF THE VOTING POWER
OF THE COMMON STOCK
OF ACCESS INTEGRATED TECHNOLOGIES, INC.
Pursuant to Section 228 of the General Corporation Law of the State of
Delaware and the Bylaws of Access Integrated Technologies, Inc., a Delaware
corporation (the "Corporation"), the undersigned, being the holders of a
majority of the voting power of the outstanding voting securities of the
Corporation (the "VOTING STOCKHOLDERS"), do hereby consent to and adopt the
following resolutions and actions, and the same shall be effective as if such
resolutions had been duly adopted at a duly convened meeting of the stockholders
of the Corporation:
WHEREAS, the Board of Directors of the Corporation (the "BOARD") has
previously determined it to be in the best interest of the Corporation
to enter into a letter agreement (the "LETTER AGREEMENT"), dated as of
August 29, 2005, with certain accredited investors (the "INVESTORS"),
pursuant to which the Investors agreed to convert all of their 7%
Convertible Debentures due 2009 of the Corporation (the "DEBENTURES")
and to exercise all of their warrants (the "OLD WARRANTS") issued in
connection with the Debentures, into shares of the Corporation's Class
A common stock (the "COMMON STOCK"); and
WHEREAS, copies of the Letter Agreement have been provided to each of
the Voting Stockholders; and
WHEREAS, pursuant to the Letter Agreement, the Corporation agreed to
issue to the Investors, upon such conversion and exercise, an
aggregate of 71,359 shares of Common Stock (the "NEW SHARES") and
warrants (the "NEW WARRANTS") to purchase an aggregate of 760,196
shares of Common Stock (the "WARRANT SHARES") exercisable immediately,
and for a period of five (5) years after the date they are issued, at
an exercise price of $11.39 per share; and
WHEREAS, the Voting Stockholders have determined that it is in the
best interests of the Corporation to ratify and confirm the
Corporation's entry into the Letter Agreement, and to consummate the
transactions contemplated thereby, including the issuance of the New
Shares, New Warrants, and Warrant Shares and the listing of the New
Shares and the Warrant Shares on the AMEX; now, therefore, be it
RESOLVED, that the approval of the Letter Agreement by the Board, and
the execution and delivery of the Letter Agreement by the officers of
the Corporation, be, and the same hereby are, ratified and confirmed
in all respects; and, be it further
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RESOLVED, that the issuance and delivery by the Corporation to the
Investors of an aggregate of (i) 71,359 shares of Common Stock and
(ii) New Warrants to purchase 760,196 shares of Common Stock at an
exercise price of $11.39 per share, upon substantially the terms and
conditions described in the Letter Agreement be, and they hereby are,
approved and authorized in all respects; and be it further
RESOLVED, that these resolutions may be executed in one or more
counterparts, each of which shall be inserted in the minute book of
the Corporation and shall be deemed an original and all of which
together shall be deemed to be one and the same instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the undersigned hereby consents to the adoption
of the foregoing resolutions as or the date set forth below his signature below.
______________________________ Date:__________
Name: A. Dale Mayo
_______ Class A Shares
_______ Class B Shares
______________________________ Date:__________
Name: Kevin J. Farrell
_______ Class A Shares
______________________________ Date:__________
Name: Ilyssa Marks
_______ Class A Shares
MIDMARK EQUITY PARTNERS II, L.P.
by: MidMark Advisors II, LLC
______________________________ Date:__________
Name:
_______ Class A Shares
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