As filed with the Securities and Exchange Commission on November 16, 2005
Registration No. 333-_______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ACCESS INTEGRATED TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 7389 22-3720962
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
55 Madison Avenue, Suite 300
Morristown, NJ 07960
(973) 290-0080
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
A. DALE MAYO
Chief Executive Officer and President
Access Integrated Technologies, Inc.
55 Madison Avenue, Suite 300
Morristown, NJ 07960
(973) 290-0080
(Name, address, including zip code and telephone number,
including area code, of agent for service)
With a copy to:
JONATHAN K. COOPERMAN, ESQ.
Kelley Drye & Warren LLP
101 Park Avenue
New York, New York 10178
(212) 808-7800
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement.
If the only 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 to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
Proposed
Maximum
Offering Proposed Maximum Amount of
Title of Each Class of Amount to be Price Per Aggregate Registration
Securities to be Registered Registered (1) Share(2) Offering Price Fee
Class A Class A common stock,
par value $0.001 per share 1,010,604 $7.62 $7,700,802.48 $906.38
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, the
registrant is also registering such additional indeterminate number of
shares of Class A common stock as may become issuable as a result of
stock splits or stock dividends.
(2) The price is estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(c) and represents the average
high and low trading prices of the Class A common stock as reported on
the American Stock Exchange on November 15, 2005. [GRAPHIC OMITTED]
-----------------------------------------
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.
Dated _______ __, 2005
PROSPECTUS
1,010,604 Shares
Class A common stock
This prospectus relates to the resale by certain selling security holders of
Access Integrated Technologies, Inc. of 1,010,604 shares of our Class A common
stock, par value $0.001 per share, including 71,359 shares of our Class A common
stock issued to security holders in our August 29, 2005 private offering,
760,196 shares of our Class A common stock issuable upon the exercise of
warrants issued to those security holders in our August 29, 2005 private
offering, and 8,780 shares of our Class A common stock issued to Roth Capital
Partners in consideration of its services as financial advisor to us in
connection with the private offering. This prospectus may also be used by
selling stockholders who exercised registration rights in relation to 170,269
shares of our Class A common stock that they acquired in prior private
transactions with us.
The selling security holders may offer to sell the shares of our Class A common
stock being offered by this prospectus at fixed prices, at prevailing market
prices at the time of sale, at varying prices, or at negotiated prices.
The shares of our Class A common stock are listed for trading on the American
Stock Exchange under the symbol "AIX". On November 15, 2005, the last reported
sale price of our Class A common stock on the American Stock Exchange was $7.47
per share.
We will not receive any proceeds from the resale of shares of our Class A common
stock by the selling security holders, other than payment of the exercise price
of the warrants if, and when, they are exercised. We will pay the expenses of
this offering.
See "Risk Factors" beginning on page 9 for a discussion of factors that you
should consider before buying shares of our Class A common stock.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_______ __, 2005
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with
the Securities and Exchange Commission (the "SEC" or the "Commission") utilizing
a shelf registration process. Under this shelf registration process, selling
stockholders may, from time to time, offer and sell shares of our Class A common
stock pursuant to this prospectus. It is important for you to read and consider
all of the information contained in this prospectus and any applicable
prospectus supplement before making a decision whether to invest in our Class A
common stock. You should also read and consider the information contained in the
documents that we have incorporated by reference as described in "Where You Can
Find More Information" and "Incorporation of Certain Documents By Reference" in
this prospectus.
You should rely only on the information provided in this prospectus and any
applicable prospectus supplement, including the information incorporated by
reference. We have not authorized anyone to provide you with additional or
different information. If anyone provides you with additional, different or
inconsistent information, you should not rely on it. We are not offering to sell
or soliciting offers to buy, and will not sell, any securities in any
jurisdiction where it is unlawful. You should assume that the information
contained in this prospectus or in any prospectus supplement, as well as
information contained in a document that we have previously filed or in the
future will file with the SEC and incorporate by reference in this prospectus or
any prospectus supplement, is accurate only as of the date of this prospectus,
the applicable prospectus supplement or the document containing that
information, as the case may be. Our financial condition, results of operations,
cash flows or business may have changed since that date.
WHERE YOU CAN FIND MORE INFORMATION
We are required to file periodic reports, proxy statements and other
information relating to our business, financial and other matters with the SEC
under the Securities Exchange Act of 1934 (the "Exchange Act"). Our filings are
available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file with the SEC
at, and obtain a copy of any such document by mail from, the SEC's public
reference room located at 100 F Street, N.E., Washington, D.C. 20549, at
prescribed charges. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room and its charges.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933 (the "Securities Act") with respect to our securities
described in this prospectus. References to the "registration statement" or the
"registration statement of which this prospectus is a part" mean the original
registration statement and all amendments, including all schedules and exhibits.
This prospectus does not, and any prospectus supplement will not, contain all of
the information in the registration statement because we have omitted parts of
the registration statement in accordance with the rules of the SEC. Please refer
to the registration statement for any information in the registration statement
that is not contained in this prospectus or a prospectus supplement. The
registration statement is available to the public over the Internet at the SEC's
web site described above and can be read and copied at the location described
above.
Each statement made in this prospectus or any prospectus supplement
concerning a document filed as an exhibit to the registration statement is
qualified in its entirety by reference to that exhibit for a complete
description of its provisions.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" in this prospectus the
information contained in other documents filed separately with the SEC. This
means that we can disclose important information to you by referring you to
other documents filed with the SEC that contain such information. The
information incorporated by reference is an important part of this prospectus
and prospectus supplement. Information disclosed in documents that we file later
with the SEC will automatically add to, update and change information previously
disclosed. If there is additional information in a later filed document or a
conflict or inconsistency between information in this prospectus or a prospectus
supplement and information incorporated by reference from a later filed
document, you should rely on the information in the later dated document.
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We incorporate by reference the documents listed below (and the documents
incorporated by reference therein) that we have previously filed, and any
documents that we may file in the future, with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, until the offerings contemplated by this
prospectus are completed:
o our annual report on Form 10-KSB for the fiscal year ended March 31,
2005, filed with the SEC on June 29, 2005;
o our quarterly report on Form 10-QSB for the period ended June 30,
2005, filed with the SEC on August 15, 2005;
o our quarterly report on Form 10-QSB/A for the period ended June 30,
2005, filed with the SEC on August 19, 2005;
o our quarterly report on Form 10-QSB for the period ended September 30,
2005, filed with the SEC on November 14, 2005;
o our current report on Form 8-K, dated April 29, 2005, filed with the
SEC on April 29, 2005;
o our current report on Form 8-K, dated June 14, 2005, filed with the
SEC on June 14, 2005;
o our current report on Form 8-K, dated June 24, 2005, filed with the
SEC on June 24, 2005;
o our current report on Form 8-K, dated June 27, 2005, filed with the
SEC on June 27, 2005;
o our current report on Form 8-K, dated July 22, 2005, filed with the
SEC on July 22, 2005;
o our current report on Form 8-K/A, dated July 22, 2005, filed with the
SEC on July 22, 2005;
o our current report on Form 8-K, dated August 11, 2005, filed with the
SEC on August 11, 2005;
o our current report on Form 8-K, dated August 31, 2005, filed with the
SEC on August 31, 2005;
o our current report on Form 8-K, dated September 1, 2005, filed with
the SEC on September 1, 2005;
o our current report on Form 8-K, dated September 16, 2005, filed with
the SEC on September 16, 2005;
o our current report on Form 8-K, dated October 6, 2005, filed with the
SEC on October 6, 2005;
o our current report on Form 8-K, dated October 18, 2005, filed with the
SEC on October 18, 2005;
o our current report on Form 8-K, dated October 28, 2005, filed with the
SEC on October 28, 2005;
o the description of our Class A common stock contained in our
registration statement on Form 8-A (File No. 001-31810), filed with
the SEC under Section 12 of the Exchange Act on September 24, 2003.
Any statement made in this prospectus, a prospectus supplement or a
document incorporated by reference in this prospectus or a prospectus supplement
will be deemed to be modified or superseded for purposes of this prospectus and
any applicable prospectus supplement to the extent that a statement contained in
an amendment to the registration statement, any subsequent prospectus supplement
or in any other subsequently filed document incorporated by reference herein or
therein adds, updates or changes that statement. Any statement so affected will
not be deemed, except as so affected, to constitute a part of this prospectus or
any applicable prospectus supplement. You may obtain a copy of these filings,
excluding exhibits (but including exhibits that are specifically incorporated by
reference in any such filing), free of charge, by oral or written request
directed to: Access Integrated Technologies, Inc., 55 Madison Avenue, Suite 300,
Morristown, NJ 07960, Attention: General Counsel, Telephone (973) 290-0080.
FORWARD-LOOKING STATEMENTS
Various statements contained in this prospectus or incorporated by
reference into this prospectus constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on current expectations and are indicated
by words or phrases such as "believe," "expect," "may," "will," "should,"
"seek," "plan," "intend" or "anticipate" or the negative thereof or comparable
terminology, or by discussion of strategy. Forward-looking statements represent
as of the date of this prospectus our judgment relating to, among other things,
future results of operations, growth plans, sales, capital requirements and
general industry and business conditions applicable to us. Such forward-looking
statements are based largely on our current expectations and are inherently
subject to risks and uncertainties. Our actual results could differ materially
from those that are anticipated or projected as a result of certain risks and
uncertainties, including, but not limited to, a number of factors, such as:
o successful integration of acquired businesses;
o the effect of our indebtedness on our financial condition and
financial flexibility, including, but not limited to, the ability to
obtain necessary financing for our business;
o economic and market conditions;
o the performance of our targeted markets;
o changes in business relationships with our major customers;
o competitive product and pricing pressures; and
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o the other risks and uncertainties that are described under "Risk
Factors" and elsewhere in this prospectus and from time to time in our
filings with the SEC.
Except as otherwise required to be disclosed in periodic reports required to be
filed by public companies with the SEC pursuant to the SEC's rules, we have no
duty to update these statements, and we undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these risks and
uncertainties, we cannot assure you that the forward-looking information
contained in this will in fact transpire.
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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus, any
prospectus supplement and the documents incorporated by reference. It does not
contain all of the information that you should consider before making a decision
to invest in our Class A common stock. You should read carefully the entire
prospectus, any applicable prospectus supplement and the documents incorporated
by reference, including "Risk Factors" and the Consolidated Financial Statements
and Notes thereto included elsewhere or incorporated by reference in this
prospectus or any prospectus supplement.
In this prospectus, "AccessIT", "we," "us," "our" and the "Company" refer to
Access Integrated Technologies, Inc. and its subsidiaries unless the context
otherwise requires.
OUR BUSINESS
AccessIT was organized on March 31, 2000. We are in the business of providing
software services and technology solutions to the motion picture industry and
operating Internet data centers. We are actively expanding into new and
interrelated business areas relating to the delivery and management of digital
cinema content to entertainment venues worldwide. These businesses, supported by
our Internet data center business, have become our primary strategic focus.
Our business focus is to create a secure, managed and complete system that
consists of software to book, track and perform accounting functions for digital
content in theatres, deliver digital content to multiple locations and provide
the content management software for in-theatre playback system for the digital
cinema marketplace. The system is intended to use all of our businesses:
Media Services
o Digital Media Delivery - digital media managed electronic delivery
services and in-theatre management software for use in theatres from
Access Digital Media, Inc. ("AccessDM"), our wholly- owned subsidiary,
and satellite delivery services from FiberSat Global Services, Inc.,
our wholly-owned subsidiary. The Pavilion Theatre (as defined below)
is utilizing the digital media managed electronic delivery services
and in-theatre management software products. Christie/AIX, Inc.
("Christie/AIX"), a wholly-owned subsidiary of Access DM, was formed
for the purpose of acquiring digital cinema projectors and related
equipment for placement into movie theaters in exchange for virtual
print fees and other fees from movie distributors and exhibitors;
o Movie Distribution and Exhibitor Software - Hollywood Software, Inc.
("Hollywood SW"), our wholly-owned subsidiary, develops and licenses
distribution and exhibitor software products and services;
Data Center Services
o Data Centers - AccessIT's Internet data centers ("IDCs" or "data
centers"), including redundant sites in Los Angeles and New York City;
and
o Managed Service Offerings- managed storage and network and systems
management services by Core Technology Services, Inc. ("Managed
Services"), our wholly-owned subsidiary, and AccessIT.
Our system provides a digital content owner with the secure delivery of multiple
files to multiple locations with proactive notification and security management.
Our system also provides the digital content exhibitor with access to digital
content, freedom to choose what to play and when to play it with proactive
notifications and management software. We have created a system whereby digital
content is delivered where it is supposed to go and played when it is supposed
to be played, along with the ability to act upon and report back management and
financial information.
We have two reportable segments: Media Services, which represents the operations
of AccessDM (including Boeing Digital (as defined below)), Pavilion Theatre,
FiberSat (as defined below), Christie/AIX and Hollywood SW; and Data Center
Services, which are comprised of our IDC operations and Managed Service
Offerings.
In February 2003, we organized AccessDM, which in May 2004 became our
wholly-owned subsidiary. AccessDM has developed proprietary software, Digital
Express e-Courier, capable of worldwide delivery of digital data -- including
movies, advertisements and alternative content such as concerts, seminars and
sporting events -- to movie theaters and other venues having digital projection
equipment. Also, in April 2005 we completed the development of in-theatre
management software for use by digitally - equipped movie theaters, called the
Theatre Command Center.
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In November 2003, we acquired all of the capital stock of Hollywood SW, a
leading provider of proprietary transactional support software and consulting
services for distributors and exhibitors of filmed entertainment in the United
States and Canada (the "Hollywood SW Acquisition"). Its licensed software
records and manages information relating to the planning, scheduling, revenue
sharing, cash flow and reporting associated with the distribution and exhibition
of theatrical films. In addition, Hollywood SW's software complements, and is
integrated with, AccessDM's digital content delivery software by enabling
Hollywood SW's customers to seamlessly plan and schedule delivery of digital
content to entertainment venue operators as well as to manage the related
financial transactions.
In an effort to increase the competitive advantage of our IDCs, on January 9,
2004, we acquired Managed Services, a managed service provider of information
technologies. As an information technology outsourcing organization, Managed
Services manages clients' networks and systems in over 35 countries in Europe,
Asia, North and South America and more than 20 states in the United States.
Managed Services operates a 24x7 Global Network Command Center ("GNCC"), capable
of running the networks and systems of large corporate clients. The four largest
customers of Managed Services accounted for approximately 54% of its revenues.
The managed services capabilities of Managed Services have been integrated with
our IDCs and now operate under the name of AccessIT Managed Services.
In March 2004, we acquired certain assets of Boeing Digital Cinema ("Boeing
Digital"), a division of The Boeing Company ("Boeing"). These assets were
purchased to further our strategy of becoming a leader in the delivery of movies
and other digital content to movie theaters. The acquired assets consist of
digital projectors, satellite dishes and other equipment installed at 28 screens
within 21 theaters in the United States and equipment stored at other locations,
and satellite transmission equipment located in Los Angeles, California. Since
the acquisition, we have used the stored equipment (and added new equipment) in
an additional 3 screens within 2 theaters in the United States.
Also in March 2004, we refinanced approximately $4.2 million aggregate principal
amount (plus accrued and unpaid interest) of our promissory notes pursuant to an
exchange offer. In exchange for these promissory notes, we issued 707,477
unregistered shares of our Class A common stock and $1.7 million aggregate
principal amount of new convertible notes which, as of March 31, 2005, were
convertible into a maximum of 312,425 shares of our Class A common stock. In
September 2005, in accordance with certain automatic conversion provisions of
these convertible notes, all of the notes were converted into 307,871 shares of
our Class A Common Stock, of which 67,713 shares remain unregistered.
In May 2004, we entered into an agreement with a holder of 750,000 shares of
AccessDM's common stock, to exchange all of the holder's shares for 31,300
unregistered shares of AccessIT's Class A common stock. As a result of the
transaction, which was consummated on May 26, 2004, AccessIT now holds 100% of
AccessDM's common stock.
In June 2004, we consummated a $4.87 million private placement of 1,217,500
unregistered shares of our Class A common stock with institutional and other
accredited investors. Pursuant to the private placement, we also issued to the
investors and the placement agent warrants to purchase up to 243,500 and 60,875
shares of our Class A common stock, respectively, at an exercise price of $4.80
per share, exercisable upon receipt. We registered the resale of all of the
1,217,500 shares and the 304,375 shares underlying the warrants on a
registration statement on Form SB-2 with the SEC on July 2, 2004, which was
declared effective by the SEC on July 20, 2004.
In November 2004, we consummated a $1.1 million private placement of 282,776
unregistered shares of our Class A common stock at $3.89 per share with certain
accredited investors (the "November 2004 PIPE"). The net proceeds of
approximately $1.023 million from this private placement were used for the
FiberSat Acquisition and for working capital. These shares carry piggyback and
demand registration rights, at the sole expense of the investors. The investors
exercised their piggyback registration rights and we registered the resale of
all of the 282,776 shares on a registration statement on Form S-3, which was
declared effective by the SEC on March 21, 2005.
Also in November 2004, we acquired substantially all of the assets of FiberSat
Global Services, LLC ("FiberSat") through FiberSat Global Services, Inc., our
wholly-owned subsidiary (the "FiberSat Acquisition"). FiberSat, headquartered in
Chatsworth, California, provides services utilizing satellite ground facilities
and fiber-optic connectivity to receive, process, store, encrypt and transmit
television and data signals globally. FiberSat's Chatsworth facility currently
houses the infrastructure operations of our digital cinema satellite delivery
services. By completing the FiberSat Acquisition, we gained extensive satellite
distribution and networking capabilities provided by FiberSat's fully
operational data storage and uplink facility located in Los Angeles, California.
FiberSat has the ability to provide broadband video, data and Internet
transmission and encryption services for the broadcast and cable television and
communications industries.
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In February 2005, we consummated a private placement of $7.6 million, 4-year
convertible debentures (the "Convertible Debentures"). The Convertible
Debentures bore interest at the rate of 7% per year and were convertible into
shares of our Class A common stock at the price of $4.07 per share, subject to
possible adjustment from time to time. In connection with the Convertible
Debenture offering, we issued the participating institutional investors warrants
(the "Convertible Debentures Warrants") exercisable for up to 560,196 shares of
Class A common stock at an initial exercise price of $4.44 per share, subject to
adjustment from time to time. We registered the resale of all of the shares
underlying the Convertible Debentures and the Convertible Debentures Warrants on
a registration statement on Form S-3, which was declared effective by the SEC on
March 21, 2005. As described below, all of the Convertible Debentures were
converted, and all of the Convertible Debentures Warrants were exercised, by the
holders on September 6, 2005.
Also in February 2005, through ADM Cinema Corporation, our wholly-owned
subsidiary ("ADM Cinema"), we consummated the acquisition of substantially all
of the assets of the Pavilion Movie Theatre located in the Park Slope section of
Brooklyn, New York ("Pavilion Theatre") from Pritchard Square Cinema, LLC. The
Pavilion Theatre is an eight-screen movie theatre and cafe and is a component of
the Media Services segment. Continuing to operate as a fully functional
multiplex, the Pavilion Theatre will become our showplace to demonstrate our
integrated digital cinema solutions to the movie entertainment industry.
In June 2005 we formed Christie/AIX. On June 15, 2005 the Company entered into a
digital cinema framework agreement, as amended on August 31, 2005 and September
30, 2005 (the "Framework Agreement") with Christie/AIX, Christie Digital Systems
USA, Inc. ("Christie") and AccessDM. The Framework Agreement provides that
Christie/AIX will, among other things, (1) seek to raise financing to purchase
200 of Christie's digital cinema projection systems (the "Systems") at
agreed-upon prices; (2) seek additional debt and/or equity financing to purchase
an additional 2,300 Systems at agreed-upon prices; and (3) agree that the total
NUMBER OF SYSTEMS WHICH MAY BE ORDERED is 4,000 Systems. As of November 2005,
Christie/AIX has ordered 200 of the Systems from Christie.
In connection with facilitating deployment of the Systems the Company has
entered into digital cinema deployment agreements, for distribution of movie
releases to theaters equipped with the Systems.
In connection with the execution of the Framework Agreement the Company engaged
a third party to assist in raising funds to purchase the equipment associated
with the Framework Agreement, and for general corporate purposes. On July 19,
2005 the Company sold to certain institutional and other accredited investors in
a private placement (the "July 2005 Private Placement") a total of 1,909,115
shares of Class A common stock at $9.50 per share and warrants (the "July 2005
Private Placement Warrants") to purchase up to 477,275 shares of the Company's
Class A common stock at an exercise price of $11.00 per share. The gross
proceeds from the July 2005 Private Placement were $18.1 million, prior to the
placement agent's fee and various other expenses. The Company intends to use the
net proceeds of the July 2005 Private Placement primarily for funding of the
capital investments in the first digital cinema systems contemplated in the
Company's 2,500-screen Christie/AIX digital cinema deployment plan announced on
June 21, 2005 and for working capital and general corporate purposes. In August
2005, the Company ordered the first 100 digital cinema systems from Christie.
The July 2005 Private Placement Warrants become exercisable on February 18, 2006
and expire on February 18, 2011. The July 2005 Private Placement Warrants are
callable by the Company, subject to certain conditions, after the later of (i)
the date which is seven months after the date of issuance of the Warrants and
(ii) the date on which the registration statement below was declared effective;
provided that the trading price of the Company's Class A common stock is 200% of
the applicable exercise price for 20 consecutive trading days. We registered the
resale of all of the shares and all of the shares underlying the warrants issued
in the July 2005 Private Placement on a registration statement on Form S-3 which
was declared effective by the SEC on August 31, 2005.
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On August 29, 2005, we entered into a letter agreement (the "Letter Agreement")
with the holders of our Convertible Debentures and Convertible Debentures
Warrants pursuant to which the holders agreed to convert all of their
Convertible Debentures and exercise all of their Convertible Debentures
Warrants. The Convertible Debentures were converted, and the Convertible
Debentures Warrants were exercised, in full on September 6, 2005 and the Company
realized net proceeds of approximately $2.48 million as a result of the exercise
of the Convertible Debentures Warrants. In consideration for the holders,
agreeing to convert the Convertible Debentures and exercise the Convertible
Debentures Warrants, we issued to the holders an aggregate of 71,359 shares of
Class A common stock and warrants to purchase an aggregate of 760,196 shares of
Class A common stock (the "New Warrants") at an exercise price of $11.39 per
share, subject to adjustment. The New Warrants are exercisable at any time, and
from time to time, on or prior to August 29, 2010. We also entered into a
registration rights agreement with the holders relating to the 71,359 shares and
the 760,196 shares underlying the New Warrants. The registration statement of
which this prospectus is a part was filed pursuant to that registration rights
agreement. We offer interrelated services that use each of our business units
for the planning, purchasing, delivery and management of digital content -- such
as movies, advertising, trailers and alternative content, including concerts,
seminars and sporting events -- to movie theater and other venue operators. We
believe that our ability to offer a wide range of fully managed services will
differentiate us from other service providers, including distributors of other
types of digital media.
During the fiscal year ended March 31, 2005, we received 62% of our revenue from
the Data Center Services segment and 38% of our revenue from the Media Services
segment. During the fiscal year ended March 31, 2004, we received 81% of our
revenue from the Data Center Services segment and 19% of our revenue from the
Media Services segment. For the fiscal year ended March 31, 2005, KMC Telecom,
an IDC customer, accounted for approximately 18% of our revenues. Our contract
with KMC Telecom expires on December 31, 2005. We have received an indication
from KMC Telecom that they will not renew the contract for at least some of the
sites that they are currently licensing under the contract. Total monthly
revenue from KMC is approximately $150,000. No other single customer accounted
for greater than 10% of revenues during the fiscal year ended March 31, 2005.
Additionally we have two other large data center customer contracts which are
expiring before July 1, 2006, which currently provide approximately $108,000 of
total monthly revenue. We have not yet received an indication as to whether
these contracts will be renewed.
7
Our principal executive offices are located at 55 Madison Avenue, Suite 300,
Morristown, NJ 07960, and our telephone number at such offices is (973)
290-0080. Our e-mail address is investor@accessitx.com and our web site address
is www.accessitx.com. Information accessed on or through our web site does not
constitute a part of this prospectus.
THE OFFERING
Class A common stock offered
by selling security holders..........................1,010,604 shares(1)
Common stock equivalents
presently outstanding................................15,288,496 shares(2)
Common stock equivalents to be
outstanding immediately
after this offering..................................15,288,496 shares(2)
Use of proceeds......................................We will not receive any
proceeds from the resale of
shares of our Class A
common stock by the selling
security holders, other
than payment of the
exercise price of the
warrants.
American Stock Exchange symbol.......................AIX
(1) This prospectus covers the resale by the selling security holders
named in this prospectus of up to 1,010,604 shares of our Class A
common stock acquired in private transactions, including 71,359 shares
pursuant to the Letter Agreement, 760,196 shares of our Class A common
stock issuable upon the exercise of warrants issued to some of those
selling security holders, and 8,780 shares of our Class A common stock
issued to Roth Capital Partners, LLC in consideration of its services
as financial advisor to us in connection with the transactions
contemplated by the Letter Agreement. This prospectus may also be used
by selling stockholders exercising their registration rights with
respect to 170,269 shares of our Clas A common stock that they
acquired in various transactions with us. The selling security holders
may offer to sell the shares of Class A common stock being offered in
this prospectus at fixed prices, at prevailing market prices at the
time of sale, at varying prices or at negotiated prices. Please see
"Plan of Distribution" in this prospectus for a detailed explanation
of how the shares of Class A common stock may be sold.
(2) Reflects 14,362,685 outstanding shares of our Class A common stock as
of October 28, 2005, and 925,811 outstanding shares of our Class B
common stock as of October 28, 2005, which are convertible into
925,811 shares of Class A common stock. Please see "Description of
Securities" in this prospectus for a discussion of our capital stock.
This prospectus contains our trademarks, tradenames and servicemarks and also
contains certain trademarks, tradenames and servicemarks of other parties.
-----------------
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RISK FACTORS
An investment in our Class A common stock involves a high degree of risk and
uncertainty. You should carefully consider the risks described below before
deciding to invest in our Class A common stock. The risks described below are
not the only ones facing our company. Additional risks not presently known to us
or that we presently consider immaterial may also adversely affect our company.
If any of the following risks occur, our business, financial condition, results
of operations and prospects could be materially adversely affected. In that
case, the trading price of our Class A common stock could decline, and you could
lose all or part or your investment. In assessing these risks, you should also
refer to the other information included or incorporated by reference in this
prospectus, including the consolidated financial statements and notes thereto of
our company included elsewhere in this prospectus.
WE HAVE INCURRED LOSSES SINCE OUR INCEPTION.
We have incurred losses since our inception in March 2000 and have financed our
operations principally through equity investments and borrowings. We incurred
net losses of $4.8 million and $6.8 million in the fiscal years ended March 31,
2004 and 2005, respectively. We have also incurred a net loss of $11.8 million
for the six months ended September 30, 2005. As of September 30, 2005, we had
working capital of $10.7 million and cash and cash equivalents of $14.1 million;
we had an accumulated deficit of $33.2 million; and, from inception through such
date, we had used $10.3 million in cash for operating activities. Our net losses
are likely to continue for the foreseeable future.
Our ability to become profitable is dependent upon us achieving a sufficient
volume of business from our customers. If we cannot achieve a high enough
volume, we likely will incur additional net and operating losses. We may be
unable to continue our business as presently conducted unless we obtain funds
from additional financings.
Our net losses and negative cash flows may increase as and to the extent that we
increase the size of our business operations, increase our sales and marketing
activities, enlarge our customer support and professional services and acquire
additional businesses. These efforts may prove to be more expensive than we
currently anticipate which could further increase our losses. We must
significantly increase our revenues in order to become profitable. We cannot
reliably predict when, or if, we will become profitable. Even if we achieve
profitability, we may not be able to sustain it. If we cannot generate operating
income or positive cash flows in the future, we will be unable to meet our
working capital requirements.
WE HAVE LIMITED EXPERIENCE IN OUR BUSINESS OPERATIONS, WHICH MAY NEGATIVELY
AFFECT OUR ABILITY TO GENERATE SUFFICIENT REVENUES TO ACHIEVE PROFITABILITY.
We were incorporated on March 31, 2000. Our first IDC became operational in
December 2000. In addition to our data center operations, we have expanded into
the following new business areas: (a) providing back office transactional
software for distributors and exhibitors of filmed and digital entertainment
through our wholly-owned subsidiary, Hollywood SW; (b) providing software and
systems for the delivery of digital entertainment, such as movies, to movie
theater and other venues through our wholly-owned subsidiary, AccessDM; (c)
providing information technologies, secure system monitoring of
telecommunications and data network outsourcing through our wholly-owned
subsidiary, Managed Services; (d) providing satellite delivery services through
our wholly-owned subsidiary FiberSat; (e) operating of a movie theater, through
our wholly-owned subsidiary ADM Cinema; (f) through the planned operation of
Christie/AIX, placing digital cinema projection systems into movie theaters; and
(g) collecting virtual print fees in connection therewith. Although we have
retained the senior management of Hollywood SW, Managed Services, and FiberSat,
we have little experience in these new areas of business and cannot assure you
that we will be able to develop and market the services provided thereby. None
of these new businesses is directly related to our data center operations and we
cannot assure you that any of them will complement our data center operations,
or vice versa. We also cannot assure you that we will be able to successfully
operate these businesses. Our efforts to expand into these five new business
areas may prove costly and time-consuming and may divert a considerable amount
of resources from our data center operations.
Our lack of operating experience in the digital cinema industry and providing
transactional software for movie distributors could result in:
o increased operating and capital costs;
o an inability to effect a viable growth strategy;
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o service interruptions for our customers; and
o an inability to attract and retain customers.
We may not be able to generate sufficient revenues to achieve profitability
through the operation of our data centers, our digital cinema business or our
movie distribution software business. We cannot assure you that we will be
successful in marketing and operating these new businesses or, even if we are
successful in doing so, that we will not experience additional losses.
OUR RECENT ACQUISITIONS INVOLVE RISKS, INCLUDING OUR INABILITY TO INTEGRATE
SUCCESSFULLY THE NEW BUSINESSES AND OUR ASSUMPTION OF CERTAIN LIABILITIES.
We have made several meaningful acquisitions to expand into new business areas.
However, we may experience costs and hardships in integrating the new
acquisitions into our current business structure. On November 3, 2003, we
acquired Hollywood SW and on January 9, 2004, we acquired Managed Services. On
March 29, 2004, we acquired assets used in the operations of Boeing Digital, a
business unit of Boeing, which we integrated into the business of AccessDM. On
November 17, 2004, we acquired assets of FiberSat. On February 11, 2005, we
acquired the Pavilion Theatre through ADM Cinema, our wholly-owned subsidiary.
Most recently, in June 2005, we created Christie/AIX, a wholly-owned subsidiary
of AccessDM. We may not be able to integrate successfully the acquired
businesses and assets into our existing business. We cannot assure you that we
will be able to effectively market the services provided by Hollywood SW,
AccessDM, Managed Services, FiberSat, the Pavilion Theatre and Christie/AIX
along with our data centers. Further, these new businesses and assets may
involve a significant diversion of our management time and resources and be
costly. Our acquisition of these businesses and assets also involves the risks
that the businesses and assets acquired may prove to be less valuable than we
expected and/or that we may assume unknown or unexpected liabilities, costs and
problems. In addition, we assumed certain liabilities in connection with these
acquisitions and we cannot assure you that we will be able to satisfy adequately
such assumed liabilities. Other companies that offer similar products and
services may be able to market and sell their products and services more
cost-effectively than we can.
BECAUSE THE USE OF ACCESSDM'S SERVICES LARGELY DEPENDS ON THE EXPANDED USE OF
DIGITAL PRESENTATIONS REQUIRING ELECTRONIC DELIVERY, IF SUCH EXPANDED USE DOES
NOT OCCUR, NO VIABLE MARKET FOR ACCESSDM'S SERVICES MAY DEVELOP.
Even if we are among the first to develop software and systems for the delivery
of digital content to movie theaters and other venues, the demand for them will
largely depend on a concurrent expansion of digital presentations at theaters,
which may not occur for several years. There can be no assurance, however, that
major movie studios that currently rely on traditional distribution networks to
provide physical delivery of digital files will adopt a different method,
particularly electronic delivery, of distributing digital content to movie
theaters. If the development of digital presentations and changes in the way
digital files are delivered does not occur, there may be no viable market for
AccessDM's delivery systems and software.
IF WE DO NOT MANAGE OUR GROWTH, OUR BUSINESS WILL BE HARMED.
We may not be successful in managing our rapid growth. Since February 2003, we
have acquired five businesses and in connection with those acquisitions, we have
formed three more subsidiaries. These subsidiaries operate in business areas
different from our data center operations business. The number of our employees
has grown from 11 in March 2003 to 34 in March 2004 and to 93 in March 2005.
Past growth has placed, and future growth will continue to place, significant
challenges on our management and resources, related to the successful
integration of the newly acquired businesses. To manage the expected growth of
our operations, we will need to improve our existing, and implement new,
operational and financial systems, procedures and controls. We may also need to
expand our finance, administrative, client services and operations staffs and
train and manage our growing employee base effectively. Our current and planned
personnel, systems, procedures and controls may not be adequate to support our
future operations. Our business, results of operations and financial position
will suffer if we do not effectively manage our growth.
WE MAY NOT BE ABLE TO GENERATE THE AMOUNT OF CASH NEEDED TO FUND OUR FUTURE
OPERATIONS.
Our ability either to make payments on or to refinance our indebtedness, or to
fund planned capital expenditures and research and development efforts, will
depend on our ability to generate cash in the future. Our ability to generate
cash is in part subject to general economic, financial, competitive, regulatory
and other factors that are beyond our control.
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Based on our current level of operations, we believe our cash flow from
operations and available cash financed through the issuance of common stock and
promissory notes will be adequate to meet our future liquidity needs for at
least one year from the date of this prospectus. Significant assumptions
underlie this belief, including, among other things, that there will be no
material adverse developments in our business, liquidity or capital
requirements. If we are unable to service our indebtedness, we will be forced to
adopt an alternative strategy that may include actions such as:
o reducing capital expenditures;
o reducing research and development efforts;
o selling assets;
o restructuring or refinancing our remaining indebtedness; and
o seeking additional funding.
We cannot assure you, however, that our business will generate sufficient cash
flow from operations, or that we will be able to make future borrowings in
amounts sufficient to enable us to pay the principal and interest on our current
indebtedness or to fund our other liquidity needs. We may need to refinance all
or a portion of our indebtedness on or before maturity. We cannot assure you
that we will be able to refinance any of our indebtedness on commercially
reasonable terms or at all.
WE MAY CONTINUE TO HAVE CUSTOMER CONCENTRATION IN OUR BUSINESS, AND THE LOSS OF
ONE OR MORE OF OUR LARGEST CUSTOMERS COULD HAVE A MATERIAL ADVERSE EFFECT ON US.
We expect that we will rely, at least in the near future, upon a limited number
of customers for a substantial percentage of our revenues and may continue to
have customer concentration company-wide. For our fiscal years ended March 31,
2004 and 2005, our four largest customers accounted for approximately 54% and
40% of our revenues, respectively (our largest customer, KMC Telecom, accounted
for approximately 27% and 18%, respectively of our revenues for such fiscal
years). Our contract with KMC Telecom expires on December 31, 2005. We have
received an indication from KMC Telecom that they will not renew the contract
for at least some of the sites that they are currently licensing under the
contract. We currently receive monthly revenues of approximately $150,000 from
KMC. In addition there are two other large datacenter contracts expiring before
July 2006, from which we receive approximately $108,000 per month. We have not
received an indication of whether these customers intend to renew. The revenues
generated from our IDC business constituted approximately 62% of our total
revenue for the fiscal year ended March 31, 2005.
AccessDM generated revenues of $260,000 for the fiscal year ended March 31,
2005, and we anticipate that AccessDM's revenues will grow significantly,
although there can be no assurances of this. For the fiscal year ended March 31,
2005, the five largest customers of Hollywood SW accounted for approximately 78%
of its revenues (its largest customer, 20th Century Fox, accounted for
approximately 35% of its revenues for such period). For the fiscal year ended
March 31, 2005, the four largest customers of Managed Services and FiberSat
accounted for approximately 54% and 73% of their respective revenues. A loss of
or decrease in business from one or more of our largest customers for any reason
could have a material adverse effect on our business, financial position and
results of operations.
OUR SUBSTANTIAL DEBT AND LEASE OBLIGATIONS COULD IMPAIR OUR FINANCIAL
FLEXIBILITY AND OUR COMPETITIVE POSITION.
We now have, and will continue to have, significant debt obligations. We have
notes payable to third parties with principal amounts aggregating $3.4 million
as of September 30, 2005. We also have capital lease obligations with principal
amounts aggregating $6.2 million as of September 30, 2005.
These obligations could have important consequences for us, including:
o limiting our ability to obtain necessary financing in the future and
make it more difficult for us to satisfy our lease and debt
obligations;
o requiring us to dedicate a substantial portion of our cash flow to
payments on our lease and debt obligations, thereby reducing the
availability of our cash flow to fund working capital, capital
expenditures and other corporate requirements;
o making us more vulnerable to a downturn in our business and limiting
our flexibility to plan for, or react to, changes in our business; and
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o placing us at a competitive disadvantage compared to competitors that
might have stronger balance sheets or better access to capital by, for
example, limiting our ability to enter into new markets.
If we are unable to meet our lease and debt obligations, we could be forced to
restructure or refinance our obligations, to seek additional equity financing or
to sell assets, which we may not be able to do on satisfactory terms or at all.
As a result, we could default on those obligations.
AN INABILITY TO OBTAIN NECESSARY FINANCING MAY HAVE A MATERIAL ADVERSE EFFECT ON
OUR FINANCIAL POSITION, OPERATIONS AND PROSPECTS IF UNANTICIPATED CAPITAL NEEDS
ARISE.
Our capital requirements may vary significantly from what we currently project
and be affected by unforeseen delays and expenses. We may experience problems,
delays, expenses and difficulties frequently encountered by similarly-situated
companies, as well as difficulties as a result of changes in economic,
regulatory or competitive conditions. If we encounter any of these problems or
difficulties or have underestimated our operating losses or capital
requirements, we may require significantly more financing than we currently
anticipate. We cannot assure you that we will be able to obtain any required
additional financing on terms acceptable to us, if at all. We will be restricted
in the type and amount of additional indebtedness that we may incur as a result
of our acquisition of Hollywood SW. In connection with the acquisition of
Hollywood SW, we issued secured promissory notes to the sellers that will be
senior to all indebtedness during the term of those notes other than any debt
provided by a bank or institutional lender, which is less than $1.0 million in
aggregate principal amount, unsecured or secured by the assets of Hollywood SW
and its subsidiaries. An inability to obtain necessary financing could have a
material adverse effect on our financial position, operations and prospects. In
connection with the Framework Agreement, we have agreed, through Christie/AIX,
to seek to raise financing for purchases of digital cinema projection systems.
If we are unable to raise such funds, we may not be able to fulfill our
obligations under the Framework Agreement.
OUR PLAN TO ACQUIRE ADDITIONAL BUSINESSES INVOLVES RISKS, INCLUDING OUR
INABILITY SUCCESSFULLY TO COMPLETE AN ACQUISITION, OUR ASSUMPTION OF
LIABILITIES, DILUTION OF YOUR INVESTMENT AND SIGNIFICANT COSTS.
We intend to make further acquisitions of similar or complementary businesses or
assets, although there are no acquisitions identified by us as probable at this
time. Even if we identify appropriate acquisition candidates, we may be unable
to negotiate successfully the terms of the acquisitions, finance them, integrate
the acquired business into our then existing business and/or attract and retain
customers. Completing an acquisition and integrating an acquired business,
including our recently acquired businesses, may require a significant diversion
of management time and resources and involves assuming new liabilities. Any
acquisition also involves the risks that the assets acquired may prove less
valuable than expected and/or that we may assume unknown or unexpected
liabilities, costs and problems. If we make one or more significant acquisitions
in which the consideration consists of our capital stock, your equity interest
in our company could be diluted, perhaps significantly. If we were to proceed
with one or more significant acquisitions in which the consideration included
cash, we could be required to use a substantial portion of our available cash,
or obtain additional financing to consummate them.
WE EXPECT COMPETITION TO BE INTENSE: IF WE ARE UNABLE TO COMPETE SUCCESSFULLY,
OUR BUSINESS AND RESULTS OF OPERATIONS WILL BE SERIOUSLY HARMED.
The markets for the IDC facilities and managed services business, the digital
cinema business and the movie distribution software business, although
relatively new, are competitive, evolving and subject to rapid technological and
other changes. We expect the intensity of competition in each of these areas to
increase in the future. Companies willing to expend the necessary capital to
create facilities and/or software similar to ours may compete with our business.
Increased competition may result in reduced revenues and/or margins and loss of
market share, any of which could seriously harm our business. In order to
compete effectively in each of these fields, we must differentiate ourselves
from competitors.
Many of our current and potential competitors have longer operating histories
and greater financial, technical, marketing and other resources than us, which
may permit them to adopt aggressive pricing policies. As a result, we may suffer
from pricing pressures that could adversely affect our ability to generate
revenues and our results of operations. Many of our competitors also have
significantly greater name and brand recognition and a larger customer base than
us. We may not be able to compete successfully with our competitors. If we are
unable to compete successfully, our business and results of operations will be
seriously harmed.
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WE FACE THE RISKS OF AN EARLY-STAGE COMPANY IN A NEW AND RAPIDLY EVOLVING MARKET
AND MAY NOT BE ABLE SUCCESSFULLY TO ADDRESS SUCH RISKS AND EVER BE SUCCESSFUL OR
PROFITABLE.
We have encountered and will continue to encounter the challenges, uncertainties
and difficulties frequently experienced by early-stage companies in new and
rapidly evolving markets, including:
o lack of operating experience;
o net losses;
o lack of sufficient customers;
o insufficient revenues and cash flow to be self-sustaining;
o necessary capital expenditures;
o an unproven business model;
o a changing business focus; and
o difficulties in managing potentially rapid growth.
This is particularly the case with respect to our newly acquired businesses. We
cannot assure you that we will ever be successful or profitable.
MANY OF OUR CORPORATE ACTIONS MAY BE CONTROLLED BY OUR OFFICERS, DIRECTORS AND
PRINCIPAL STOCKHOLDERS; THESE ACTIONS MAY BENEFIT THESE PRINCIPAL STOCKHOLDERS
MORE THAN OUR OTHER STOCKHOLDERS.
As of November 1, 2005, our directors, executive officers and principal
stockholders beneficially own, directly or indirectly, in the aggregate,
approximately 36% of our outstanding common stock. In particular, A. Dale Mayo,
our President and Chief Executive Officer, beneficially holds 925,811 shares of
Class B common stock, and 55,411 shares of Class A common stock which
collectively represent approximately 6% of our outstanding common stock, but due
to the supervoting Class B common stock, represent approximately 40% of the
voting power. These stockholders, and Mr. Mayo himself, will have significant
influence over our business affairs, with the ability to control matters
requiring approval by our security holders, including elections of directors and
approvals of mergers or other business combinations. Our Class B common stock
entitles the holder to ten votes per share. The shares of Class A common stock
have one vote per share. Also, certain corporate actions directed by our
officers may not necessarily inure to the proportional benefit of other
stockholders of our company; under his employment agreement, for example, Mr.
Mayo is entitled to receive cash bonuses based on our revenues, regardless of
our earnings, if any.
OUR SUCCESS WILL SIGNIFICANTLY DEPEND ON OUR ABILITY TO HIRE AND RETAIN KEY
PERSONNEL.
Our success will depend in significant part upon the continued services of our
key technical, sales and senior management personnel. If we lose one or more of
our key employees, we may not be able to find a suitable replacement(s) and our
business and results of operations could be adversely affected. In particular,
our performance depends significantly upon the continued service of A. Dale
Mayo, our President and Chief Executive Officer, whose experience and
relationships in the movie theater industry are integral to our business,
particularly in the business areas of Hollywood SW, AccessDM and Christie/AIX.
Although we have obtained two $5.0 million key-man life insurance policies in
respect of Mr. Mayo, the loss of his services would have a material and adverse
effect on our business, operations and prospects. Each policy carries a death
benefit of $5.0 million, and while we are the beneficiary of each policy, under
one of the policies the proceeds will be used to repurchase, after reimbursement
of all premiums paid by us some, or all, of the shares of our capital stock held
by Mr. Mayo's estate at the then-determined fair market value. We also rely on
the experience and expertise of Russell J. Wintner, AccessDM's President and
Chief Operating Officer, the two co-founders of Hollywood SW, David Gajda and
Robert Jackovich, Charles Goldwater, Christie/AIX's President and Chief
Operating Officer, and Ravi Patel, FiberSat's President and Chief Operating
Officer. In addition, our future success will depend upon our ability to hire,
train, integrate and retain qualified new employees.
IF WE ARE NOT SUCCESSFUL IN PROTECTING OUR INTELLECTUAL PROPERTY, OUR BUSINESS
WILL SUFFER.
We depend heavily on technology to operate our business. Our success depends on
protecting our intellectual property, which is one of our most important assets.
Although we do not currently hold any copyrights, patents or registered
trademarks, we do have intellectual property consisting of:
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o licensable software products;
o rights to certain domain names;
o registered service marks on certain names and phrases;
o various unregistered trademarks and service marks;
o know-how; and
o rights to certain logos.
If we do not adequately protect our intellectual property, our business,
financial position and results of operations would be harmed. Our means of
protecting our intellectual property may not be adequate. Unauthorized parties
may attempt to copy aspects of our intellectual property or to obtain and use
information that we regard as proprietary. In addition, competitors may be able
to devise methods of competing with our business that are not covered by our
intellectual property. Our competitors may independently develop similar
technology, duplicate our technology or design around any intellectual property
that we may obtain.
The success of some of our business operations depends on the proprietary nature
of certain software. We do not, however, have any patents with respect to such
software. Because there is no patent protection in respect of our software,
other companies are not prevented from developing and marketing similar
software. We cannot assure you, therefore, that we will not face more
competitors or that we can compete effectively against any companies that
develop similar software. We also cannot assure you that we can compete
effectively or not suffer from pricing pressure with respect to our existing and
developing products that could adversely affect our ability to generate
revenues.
Although we hold rights to various web domain names, regulatory bodies in the
United States and abroad could establish additional top-level domains, appoint
additional domain name registrars or modify the requirements for holding domain
names. The relationship between regulations governing domain names and laws
protecting trademarks and similar proprietary rights is unclear. We may be
unable to prevent third parties from acquiring domain names that are similar to
or diminish the value of our proprietary rights.
SERVICE AND OTHER INTERRUPTIONS COULD POTENTIALLY REDUCE OUR REVENUES AND HARM
OUR REPUTATION AND FINANCIAL RESULTS.
Our facilities and our customers' equipment are vulnerable to damage from human
error, physical or electronic security breaches, power loss, other facility
failures, fire, earthquake, water damage, sabotage, vandalism and similar
events. In addition, our customers would be adversely affected by the failure of
carriers to provide network access to our facilities as a result of any of these
events. Any of these events or other unanticipated problems could interrupt our
customers' ability to provide services from our facilities. This could damage
our reputation, make it difficult to attract new, and retain existing, customers
and cause our customers to terminate their contracts with us and to seek
damages. Any of these events could have a material adverse effect on our
business, financial position and prospects.
WE DEPEND ON RELATIONSHIPS WITH THIRD PARTIES, WHICH, IF NOT MAINTAINED, MAY
ADVERSELY AFFECT OUR ABILITY TO PROVIDE SERVICES TO OUR CUSTOMERS.
We are not a communications carrier and, therefore, we rely substantially on
third parties to provide our customers with access to voice, data and Internet
networks. We must maintain relationships with third-party network providers in
order to offer our data center customers access to a choice of networks. Many
carriers have their own data center facilities and may be reluctant to provide
network services at our data centers. As a result, some carriers may choose not
to connect their services to our data centers. We do not own any real property
and depend on our ability to negotiate favorable lease terms with the owners of
our data center facilities. The use of our IDCs is limited to the extent that we
do not extend or renew our leases, in which case we might not be able to
accommodate our customers, particularly if we were unable to relocate timely to
a comparable facility.
The availability of an adequate supply of electrical power and the
infrastructure to deliver that power is critical to our ability to attract and
retain customers and achieve profitability. We rely on third parties to provide
electrical power to our data centers and cannot be certain that these parties
will provide adequate electrical power or that we will have the necessary
infrastructure to deliver such power to our customers. If the electrical power
delivered to our facilities is inadequate to support our customers' requirements
or if delivery is not timely, our results of operations and financial position
may be materially and adversely affected.
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WE MAY HAVE DIFFICULTY COLLECTING PAYMENTS FROM SOME OF OUR CUSTOMERS AND INCUR
COSTS AS A RESULT.
A number of our customers are early stage companies. In addition, many of our
customers are telecommunications companies, and many telecommunications
companies have been experiencing significant financial difficulties. There is a
risk that these companies will experience difficulty paying amounts owed to us,
and we might not be able to collect on a timely basis all monies owed to us by
some of them. Although we intend to remove customers that do not pay us in a
timely manner, we may experience difficulties and costs in collecting from or
removing these customers.
IF WE DO NOT RESPOND TO FUTURE ADVANCES IN TECHNOLOGY AND CHANGES IN CUSTOMER
DEMANDS, OUR FINANCIAL POSITION, PROSPECTS AND RESULTS OF OPERATIONS MAY BE
ADVERSELY AFFECTED.
The demand for our digital cinema business, movie distribution software and data
centers will be affected, in large part, by future advances in technology and
changes in customer demands. Our success will also depend on our ability to
address the increasingly sophisticated and varied needs of our existing and
prospective customers.
We cannot assure you that there will be a demand for the digital cinema software
and delivery services provided by AccessDM. AccessDM's profitability depends
largely upon the general expansion of digital presentations at theaters, which
may not occur for several years. There can be no assurance that major movie
studios relying on traditional distribution networks to provide physical
delivery of digital files will adopt a different method, particularly electronic
delivery, of distributing digital content to movie theaters. If the development
of digital presentations and changes in the way digital files are delivered does
not occur, there may be no viable market for AccessDM's software and systems.
WE MAY BE SUBJECT TO ENVIRONMENTAL RISKS RELATING TO THE ON-SITE STORAGE OF
DIESEL FUEL AND BATTERIES.
Our data centers contain tanks for the storage of diesel fuel for our generators
and significant quantities of lead acid batteries used to provide back-up power
generation for uninterrupted operation of our customers' equipment. We cannot
assure you that our systems will be free from leaks or that use of our systems
will not result in spills. Any leak or spill, depending on such factors as the
nature and quantity of the materials involved and the environmental setting,
could result in interruptions to our operations and the incurrence of
significant costs; particularly to the extent we incur liability under
applicable environmental laws. This could have a material adverse effect on our
business, financial position and results of operations.
RISKS RELATING TO OUR CLASS A COMMON STOCK
THE LIQUIDITY OF OUR CLASS A COMMON STOCK IS UNCERTAIN; THE LIMITED TRADING
VOLUME OF OUR CLASS A COMMON STOCK MAY DEPRESS THE PRICE OF SUCH STOCK OR CAUSE
IT TO FLUCTUATE SIGNIFICANTLY.
Although shares of our Class A common stock are listed on the American Stock
Exchange (the "AMEX"), there has been a limited public market for our Class A
common stock and there can be no assurance that an active trading market for our
common stock will develop. As a result, you may not be able to sell your shares
of Class A common stock in short time periods, or possibly at all. The absence
of an active trading market may cause the price per share of our Class A common
stock to fluctuate significantly.
SUBSTANTIAL RESALES OF OUR CLASS A COMMON STOCK COULD DEPRESS OUR STOCK PRICE.
The market price for our Class A common stock could decline, perhaps
significantly, as a result of resales of a large number of shares of Class A
common stock in the public market or even the perception that such resales could
occur, including resales of the shares being registered hereunder pursuant to
the registration statement of which this prospectus is a part. In addition, we
have outstanding a substantial number of options, warrants and other securities
convertible into shares of our Class A common stock that may be exercised in the
future. Certain holders of these warrants and convertible securities, as well as
holders of our outstanding shares of Class A common stock, have piggy-back
registration rights and the holder of shares of Class A common stock issuable in
exchange for its shares of preferred stock and certain warrants has demand and
piggy-back registration rights. These factors could also make it more difficult
for us to raise funds through future offerings of our equity securities.
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YOU WILL INCUR SUBSTANTIAL DILUTION AS A RESULT OF CERTAIN FUTURE EQUITY
ISSUANCES.
We have a substantial number of options, warrants and other securities currently
outstanding which may be immediately converted into shares of our Class A common
stock. To the extent that these options, warrants or similar securities are
exercised or converted, as the case may be, there will be further dilution to
holders of shares of our Class A common stock.
PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND DELAWARE LAW COULD MAKE IT
MORE DIFFICULT FOR A THIRD PARTY TO ACQUIRE US.
Provisions of our certificate of incorporation, as well as of Section 203 of the
Delaware General Corporation Law (the "DGCL") could make it more difficult for a
third party to acquire us, even if doing so might be beneficial to our
stockholders.
Our certificate of incorporation authorizes the issuance of 15,000,000 shares of
preferred stock. The terms of our preferred stock may be fixed by the company's
board of directors without further stockholder action. The terms of any
outstanding series or class of preferred stock may include priority claims to
assets and dividends and special voting rights, which could adversely affect the
rights of holders of our Class A common stock. Any future issuance(s) of
preferred stock could make the takeover of the company more difficult,
discourage unsolicited bids for control of the company in which our stockholders
could receive premiums for their shares, dilute or subordinate the rights of
holders of Class A common stock and adversely affect the trading price of our
Class A common stock.
Under Section 203 of the DGCL, Delaware corporations whose securities are listed
on a national securities exchange, like the AMEX, may not engage in business
combinations such as mergers or acquisitions with any interested stockholders,
defined as an entity or person beneficially owning 15% or more of our
outstanding common stock without obtaining certain prior approvals. As a result
of the application of Section 203, potential acquirers of the company may be
discouraged from attempting to effect an acquisition transaction with the
company, thereby depriving holders of the company's securities of opportunities
to sell or otherwise dispose of the securities at prices above prevailing market
prices.
WE MAY NOT BE ABLE TO MAINTAIN LISTING ON THE AMEX, WHICH MAY ADVERSELY AFFECT
THE ABILITY OF PURCHASERS IN THIS OFFERING TO RESELL THEIR SECURITIES IN THE
SECONDARY MARKET.
Our Class A common stock is presently listed on the AMEX. However, we cannot
assure you that the company will meet the criteria for continued listing on the
AMEX. If the company is unable to meet the continued listing criteria of the
AMEX and became delisted, trading of the Class A common stock could thereafter
be conducted in the over-the-counter market in the so-called "pink sheets" or,
if available, the NASD's Electronic Bulletin Board. In such case, an investor
would likely find it more difficult to dispose of, or to obtain accurate market
quotations for, the company's securities.
If the shares of Class A common stock were delisted from the AMEX, they may
become subject to Rule 15g-9 under the Exchange Act, which imposes sales
practice requirements on broker-dealers that sell such securities to persons
other than established customers and "accredited investors." Application of this
Rule could adversely affect the ability and/or willingness of broker-dealers to
sell the company's securities and may adversely affect the ability of purchasers
in this offering to resell their securities in the secondary market.
USE OF PROCEEDS
We will receive no proceeds from the sale of any of or all of the shares being
offered by the selling security holders under this prospectus. We may receive an
amount of up to approximately $8.7 million upon the exercise of the warrants, if
exercised, as to which we are registering the resale of the underlying shares of
Class A common stock. Any proceeds that we receive from the exercise of
outstanding warrants will be used by us for general working capital. The actual
allocation of proceeds realized from the exercise of these securities will
depend upon the amount and timing of such exercises, our operating revenues and
cash position at such time and our working capital requirements. There can be no
assurances that any of the outstanding warrants will be exercised.
16
SELLING STOCKHOLDERS
The following table sets forth as of October 28, 2005, certain information with
respect to the beneficial ownership of the Class A common stock as to each
selling stockholder.
Shares which may
be offered
Shares Beneficially Owned Pursuant to this Shares Beneficially
Prior to Offering Offering Owned After Offering
----------------------------------------- ------------------------------ ------------------- -------------------------
Name Number(b) Percent(a) Number(b) Number(c) Percent(a)
----------------------------------------- ------------- ---------------- ------------------- ------------ ------------
Alexandra Global Master Fund, Ltd.
c/o Alexandra Investment Management
LLC, 767 Third Avenue, 39th Floor
New York, New York 10017 322,058 2.0% 82,062 239,996 1.6%
AG Offshore Convertibles, Ltd.
245 Park Avenue, 26th Floor
New York, New York 10167 643,239 4.0% 164,123 479,116 3.0%
Basso Multi-Strategy Holding Fund Ltd.
1266 East Main Street
Stamford, Connecticut 06902 1,134,373 7.8% 277,367 857,006 6.0%
Basso Private Opportunity
Holding Fund Ltd.
1266 East Main Street
Stamford, Connecticut 06902 383,717 2.6% 78,231 305,486 2.1%
Berkowitz Family Limited Partnership
140 Kent Drive
Berkeley Heights, NJ 07922 32,503 * 32,503 __ __
Catalyst Associates, L.P.
20 West Avenue
Darien, Connecticut 06820 351,446 2.5% 65,649 285,797 1.9%
Debi Brett Salzer
One Fifth Avenue
New York, NY 10003 18,057 * 18,057 __ __
Marilyn Thypin
400 East 56th Street
New York, NY 10022 20,234 * 20,234 __ __
17
Pequot Scout Fund
c/o Pequot Capital Management, Inc.
500 Nyala Farm Road
Westport, Connecticut 06080 391,004 2.7% 99,338 291,666 2.0%
Pequot Mariner Master Fund, L.P.
c/o Pequot Capital Management, Inc.
500 Nyala Farm Road
Westport, Connecticut 06080 254,992 1.8% 64,785 190,207 1.3%
Tim Novoselski
33730 Pacific Coast Highway 99,475 * 99,475 __ __
Malibu, CA 90265
Roth Capital Partners, LLC
24 Corporate Plaza
Newport Beach, CA 92660 69,655 * 8,780 60,875 *
Total Selling Stockholder 3,720,753 1,010,604 2,710,149
--------------------
* Less than 1%
(a) Applicable percentage of ownership is based on 14,362,685 shares of
Class A common stock outstanding as of October 28, 2005 together with
all applicable options, warrants and other securities convertible into
shares of our Class A common stock for the named 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 60 days after October 28,
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.
(b) Includes shares issuable upon the exercise of warrants as follows:
Selling Stockholder Number of Shares
------------------- ----------------
Alexandra Global Master Fund, Ltd. 94,757
AG Domestic Convertibles, L.P. 52,514
AG Offshore Convertibles, Ltd. 97,525
Basso Multi-Strategy Holding Fund Ltd. 264,222
Basso Private Opportunity Holding Fund Ltd. 90,465
Catalyst Associates, L.P. 60,015
Pequot Scout Fund 90,813
Pequot Mariner Master Fund, L.P. 59,226
Roth Capital Partners 60,875
(c) Assumes sale of all shares offered under this prospectus.
No selling stockholder has held a position as a director or officer nor has had
a material relationship with us or any of our affiliates, or our or their
predecessors, within the past three years.
18
PLAN OF DISTRIBUTION
Each selling stockholder of the Class A common stock of the Company and any
of their pledgees, assignees and successors-in-interest may, from time to time,
sell any or all of their shares of Class A common stock on the AMEX or any other
stock exchange, market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated prices. A
selling stockholder may use any one or more of the following methods when
selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer 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-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;
o broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale;
o through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise; or
o any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with NASDR IM-2440.
In connection with the sale of the Class A common stock or interests
therein, the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn engage in
short sales of the Class A common stock in the course of hedging the positions
they assume. The selling stockholders may also sell shares of the Class A common
stock short and deliver these securities to close out their short positions, or
loan or pledge the Class A common stock to broker-dealers that in turn may sell
these securities. The selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
The selling stockholders and any broker-dealers or agents that are involved
in selling 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 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. Each selling stockholder has informed the
Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Class A common stock.
In no event shall any broker-dealer receive fees, commissions and markups which,
in the aggregate, would exceed eight percent (8%).
The Company is required to pay certain fees and expenses incurred by the
Company incident to the registration of the shares. The Company has agreed to
indemnify the selling stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
19
Because selling stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather than under this prospectus. Each selling
stockholder has advised us that they have not entered into any written or oral
agreements, understandings or arrangements with any underwriter or broker-dealer
regarding the sale of the resale shares. There is no underwriter or coordinating
broker acting in connection with the proposed sale of the resale shares by the
selling stockholders.
We have agreed to keep this prospectus effective until the earlier of (i)
the date on which the shares may be resold by the selling stockholders without
registration and without regard to any volume limitations pursuant to Rule 144
under the Securities Act or any other rule of similar effect or (ii) the date on
which all of the shares have been sold pursuant to the prospectus or Rule 144
under the Securities Act or any other rule of similar effect. The resale shares
will be sold only through registered or licensed brokers or dealers if required
under applicable state securities laws. In addition, in certain states, the
resale shares may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirements is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale shares may not simultaneously engage
in market making activities with respect to the Class A common stock for a
period of two business days prior to the commencement of the distribution. In
addition, the selling stockholders will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder, including Regulation
M, which may limit the timing of purchases and sales of shares of the Class A
common stock by the selling stockholders or any other person. We will make
copies of this prospectus available to the selling stockholders and have
informed them of the need to deliver a copy of this prospectus to each purchaser
at or prior to the time of the sale.
LEGAL MATTERS
The validity of the offered shares of Class A common stock has been passed
on for us by Kelley Drye & Warren LLP of New York, New York.
EXPERTS
The consolidated financial statements of AccessIT at March 31, 2004 and for
the fiscal year ended March 31, 2004 incorporated by reference into this
prospectus have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, an independent registered public accounting firm,
given on the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of AccessIT at March 31, 2005 and for
the fiscal year ended March 31, 2005 incorporated by reference into this
prospectus have been so incorporated in reliance on the report of Eisner LLP, an
independent registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.
INDEMNIFICATION AGAINST LIABILITY UNDER THE SECURITIES ACT
We are permitted to indemnify to the fullest extent now or hereafter
permitted by law, each director, officer or other authorized representative of
the Company who was or is made a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was an authorized representative of the Company, against all expenses (including
attorneys' fees and disbursements), judgments, fines (including excise taxes and
penalties) and amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding.
A director of the Company shall not be personally liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director, provided, however that this provision shall not eliminate or limit the
liability of a director to the extent that such elimination or liability is
expressly prohibited by the Delaware General Corporation Law as in effect at the
time of the alleged breach of duty by such director.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons pursuant to
any arrangement, provision or otherwise, we have been advised that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by any of our directors, officers or controlling
persons 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, we will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by us is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
20
TABLE OF CONTENTS
Page
----
About this prospectus..................................................... 1
Where you can find more information....................................... 1
Incorporation of certain documents by reference........................... 1
Forward looking statements................................................ 2
Prospectus summary........................................................ 4
Risk factors.............................................................. 9
Use of proceeds........................................................... 16
Selling stockholders...................................................... 17
Plan of distribution...................................................... 18
Legal matters............................................................. 20
Experts................................................................... 20
Indemnification against liability under the Securities Act................ 20
1,010,604 Shares
Class A common stock
PROSPECTUS
[________] __, 2005
21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table presents the costs and expenses, payable by us in
connection with the sale of the Class A common stock being registered under this
registration statement. The selling stockholders will not pay any expenses,
other than commissions or discounts. All amounts are estimates except for the
SEC registration fee and the AMEX listing fee.
SEC registration fee $ 906
Printing expenses 1,113
Legal fees and expenses 20,000
Accounting fees and expenses 12,000
Miscellaneous fees and expenses 300
-------
Total: $34,319
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
We are permitted to indemnify to the fullest extent now or hereafter
permitted by law, each director, officer or other authorized representative of
the Company who was or is made a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was an authorized representative of the Company, against all expenses (including
attorneys' fees and disbursements), judgments, fines (including excise taxes and
penalties) and amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding.
A director of the Company shall not be personally liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director, provided, however that this provision shall not eliminate or limit the
liability of a director to the extent that such elimination or liability is
expressly prohibited by the Delaware General Corporation Law ("DGCL") as in
effect at the time of the alleged breach of duty by such director.
The amended and restated certificate of incorporation and the bylaws of the
registrant provide that the registrant shall indemnify its officers, directors
and certain others to the fullest extent permitted by the Delaware General
Corporation Law ("DGCL"). Section 145 of the DGCL, provides in pertinent part as
follows:
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
II-1
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
Section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this Section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in subsections
(a) and (b) of this Section. Such determination shall be made with respect to a
person who is a director or officer at the time of such determination (1) by a
majority vote of directors who are not parties to such action, suit or
proceeding, even though less than a quorum, (2) by a committee of such directors
designated by majority vote of such directors, even though less than a quorum,
(3) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion or (4) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorneys' fees) incurred
by former directors and officers or other employees and agents may be so paid
upon such terms and conditions, if any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this Section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person, who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this Section.
(h) For purposes of this Section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this Section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this Section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation, which
imposes duties on, or involves services by, such director, officer, employee, or
agent of the corporation, which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit plan,
its participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to in
this Section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this Section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
As permitted by Section 102(b)(7) of the DGCL, the registrant's fourth
amended and restated certificate of incorporation eliminates the personal
liability of each of the registrant's directors to the registrant and its
II-2
stockholders for monetary damages for breaches of his or her fiduciary duties as
a director except that the fourth amended and restated certificate of
incorporation does not eliminate or limit the liability of a director to the
extent that such elimination or limitation of liability is expressly prohibited
by the DGCL as in effect at the time of the alleged breach of duty by such
director.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The exhibits listed in the following table have been filed as part of
this registration statement.
Exhibit
Number Description of Document
------- -----------------------
2.5 -- Asset Purchase Agreement, dated as of March 29, 2004,
between the Registrant and The Boeing Company. (1)
2.6 -- Form of Exchange Agreement (debt for equity), dated as of
March 24, 2004, between the Registrant and each investor
taking part in the March 24, 2004 exchange offering. (2)
2.7 -- Form of Exchange Agreement (debt for debt), dated as of
March 24, 2004, between the Registrant and each investor
taking part in the March 24, 2004 exchange offering. (2)
2.8 -- Securities Purchase Agreement, dated as of June 2, 2004,
among the Registrant and certain investors.(3)
2.9 -- Asset Purchase Agreement, dated as of October 19, 2004,
among the Registrant, FiberSat Global Services, Inc.,
FiberSat Global Services LLC, Richard Wolfe, Ravi Patel,
McKebben Communications, Globecomm Systems, Inc., Timothy
Novoselski, Scott Smith and Farina. (4)
2.10 -- Asset Purchase Agreement, dated as of December 23, 2004,
among ADM Cinema Corporation, Pritchard Square Cinema, LLC
and Norman Adie. (6)
2.11 -- Stock Purchase Agreement, dated as of October 26, 2004,
among the Registrant and the purchasers identified
therein. (6)
2.12 -- Securities Purchase Agreement, dated as of February 9,
2005, among the Registrant and certain investors. (5)
2.13 -- Securities Purchase Agreement, dated as of July 19, 2005,
among the Registrant and certain investors. (7)
4.24 -- Form of Registration Rights Agreement, dated as of July
19, 2005. (7)
4.26 -- Registration Rights Agreement, dated as of November 16,
2005.*
5.1 -- Opinion of Kelley Drye & Warren LLP.*
10.1 -- Form of Warrant, dated August 29, 2005.*
23.1 -- Consent of Kelley Drye & Warren LLP (included in Exhibit
5.1).*
23.2 -- Consent of PricewaterhouseCoopers LLP.*
23.3 -- Consent of Eisner LLP.*
24.1 -- Powers of Attorney (included on signature page).*
* Filed herewith.
Documents Incorporated Herein by Reference:
(1) Previously filed with the Securities and Exchange Commission on April 2,
2004 as an exhibit to the Registrant's Form 8-K (File No. 001-31810).
(2) Previously filed with the Securities and Exchange Commission on April 29,
2004 as an exhibit to the Registrant's Form 8-K (File No. 001-31810).
(3) Previously filed with the Securities and Exchange Commission on June 2,
2004 as an exhibit to the Registrant's Form 8-K (File No. 001-31810).
(4) Previously filed with the Securities and Exchange Commission on November 8,
2004 as an exhibit to the Registrant's Form 8-K (File No. 001-31810).
(5) Previously filed with the Securities and Exchange Commission on February
10, 2005 as an exhibit to the Registrant's Form 8-K (File No. 001-31810).
(6) Previously filed with the Securities and Exchange Commission on February
14, 2005 as an exhibit to the Registrant's Form 10-QSB for the quarter
ended December 31, 2004 (File No. 001-31810).
(7) Previously filed with the Securities and Exchange Commission on July 22,
2005 as an exhibit to the Registrant's Form 8-K/A (File No. 001-31810).
(b) Financial Statement Schedules
All schedules are omitted as the required information is inapplicable or
the information is presented in the Consolidated Financial Statements or Notes
thereto.
ITEM 17. UNDERTAKINGS
UNDERTAKINGS REQUIRED BY REGULATION S-B, ITEM 512(A).
The undersigned registrant hereby undertakes:
II-3
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration
Statement to:
(i) Include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the
securities offered, and the offering of such securities at that
time to be the initial bona fide offering.
(3) To file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
UNDERTAKING REQUIRED BY REGULATION S-B, ITEM 512(E).
Insofar as indemnification for liabilities arising under the
Securities Act, may be permitted to directors, officers and controlling persons
of the registrant pursuant to any arrangement, provision or otherwise, the
registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by 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.
UNDERTAKINGS REQUIRED BY REGULATION S-B, ITEM 512(F).
The undersigned registrant hereby undertakes that:
(1) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant under Rule 424(b)(1) or (4) or 497(h) under
the Securities Act as part of this Registration Statement as of the time the SEC
declared it effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement for the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering of these securities.
II-4
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant hereby certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 for the resale of shares of
Class A common stock and authorized this Form S-3 registration statement to be
signed on its behalf by the undersigned, in the City of Morristown, State of New
Jersey, on the 16 day of November, 2005.
ACCESS INTEGRATED TECHNOLOGIES, INC.
By: /s/ A. Dale Mayo
---------------------------------
A. Dale Mayo
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints A. Dale Mayo and Gary S. Loffredo,
and each of them individually, his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to (i) act on, sign
and file with the Securities and Exchange Commission any and all amendments to
the registration statement (which includes any additional registration statement
under Rule 462(b)) together with all schedules and exhibits thereto, (ii) act
on, sign and file with the Securities and Exchange Commission any and all
exhibits to the registration statement and any and all exhibits and schedules
thereto, (iii) act on, sign and file any and all such certificates,
applications, registration statements, notices, reports, instruments, agreements
and other documents necessary or appropriate in connection with the registration
or qualification under foreign and state securities laws of the securities
described in the registration statement or any amendment thereto, or obtain an
exemption therefrom, in connection with the offerings described therein and (iv)
take any and all such actions which may be necessary or appropriate in
connection therewith, granting unto such agents, proxies and attorneys-in-fact,
and each of them individually, full power and authority to do and perform each
and every act and thing necessary or appropriate to be done, as fully for all
intents and purposes as he or she might or could do in person, and hereby
approving, ratifying and confirming all that such agents, proxies and
attorneys-in-fact, any of them or any of his or her or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated. Signature(s) Title(s) Date
/s/ A. Dale Mayo
------------------------------------ President, Chief Executive Officer and November 16, 2005
A. Dale Mayo Chairman of the Board of Directors
(Principal Executive Officer)
/s/ Kevin J. Farrell
------------------------------------ Senior Vice President - Data Center November 16, 2005
Kevin J. Farrell Operations and Director
/s/ Brett E. Marks
------------------------------------ Senior Vice President - Business Development November 16, 2005
Brett E. Marks and Director
/s/ Gary S. Loffredo
------------------------------------ Senior Vice President - Business Affairs, November 16, 2005
Gary S. Loffredo General Counsel, Secretary and Director
/s/ Brian D. Pflug
------------------------------------ Senior Vice President - Accounting and Finance November 16, 2005
Brian D. Pflug (Principal Financial and Accounting Officer)
/s/ Robert Davidoff
------------------------------------ Director November 16, 2005
Robert Davidoff
/s/ Wayne L. Clevenger
------------------------------------ Director November 16, 2005
Wayne L. Clevenger
/s/ Matthew W. Finlay
------------------------------------ Director November 16, 2005
Matthew W. Finlay
/s/ Gerald C. Crotty
------------------------------------ Director November 16, 2005
Gerald C. Crotty
INDEX TO EXHIBITS
Exhibit
Number Description of Document
------- -----------------------
4.26 -- Registration Rights Agreement dated as of November 16, 2005
5.1 -- Opinion of Kelley Drye & Warren LLP
10.1 -- Form of Warrant, issued to purchasers pursuant to Letter
Agreement dated August 29, 2005.
23.1 -- Consent of Kelley Drye & Warren LLP (included in Exhibit
5.1)
23.2 -- Consent of PricewaterhouseCoopers LLP
23.3 -- Consent of Eisner LLP
24.1 Powers of Attorney (included on signature page)