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:
|_| Preliminary Information Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2)) |X| Definitive Information Statement
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ACCESS INTEGRATED TECHNOLOGIES, INC.
(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) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
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.: NY
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(3) Filing Party:
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(4) Date Filed:
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DEFINITIVE INFORMATION STATEMENT
AS FILED WITH THE SEC ON OCTOBER 6, 2005
ACCESS INTEGRATED TECHNOLOGIES, INC.
55 Madison Avenue, Suite 300
Morristown, New Jersey 07960
October 6, 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 New Warrants will be $11.39. The exercise price of the New
Warrants and the Warrant Shares 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
November 15, 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
President, Chief Executive Officer
and Chairman of the Board of Directors.............. 981,222 (c) 6.6%
(Principal Executive Officer)
Brett E. Marks
Senior Vice President
Business Development and Director................... 556,134 (d) 4.0%
Kevin J. Farrell
Senior Vice President,
Data Center Operations and Director................. 305,000 2.2%
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Gary S. Loffredo
Senior Vice President,
Business Affairs, General Counsel,
Secretary and Director.............................. 156,683 (e) 1.1%
Jeff Butkovsky
Senior Vice President
Chief Technology Officer............................ 86,677 (f) *
Brian Pflug..
Senior Vice President
Accounting and Finance.............................. 105,203 (g) *
(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.
177 Madison Avenue
Morristown, NJ 07960................................ 2,214,879 (i) 15.8%
Wayne L. Clevenger
c/o MidMark Equity Partners II, L.P.
177 Madison Avenue
Morristown, NJ 07960................................ 2,221,546 (j) 15.9%
Matthew Finlay
c/o MidMark Equity Partners II, L.P.
177 Madison Avenue,
Morristown, NJ 07960................................ 2,221,546 (k) 15.9%
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.
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%
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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 6, 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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EXHIBIT A
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
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
Name:
_______ Class A Shares
______________________________ Date:_______________________
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