As filed with the Securities and Exchange Commission on May 3, 2004
Registration No. 333-113071
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
PRE-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_______________
NANOPIERCE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
NEVADA 84-0992908
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
370 17TH STREET, SUITE 3640
DENVER, COLORADO 80202
(303) 592-1010
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
PAUL H. METZINGER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
NANOPIERCE TECHNOLOGIES, INC.
370 17TH STREET, SUITE 3640
DENVER, COLORADO
(303) 592-1010
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With copies sent to:
ROBERT J. AHRENHOLZ, ESQ.
JOSHUA M. KERSTEIN, ESQ.
KUTAK ROCK LLP
1801 CALIFORNIA STREET, SUITE 3100
DENVER, COLORADO 80202
(303) 297-2400
Approximate date of commencement of the proposed sale to the public: From
time to time after this Registration Statement becomes effective.
_______________
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, check the following box. [x]
If the registrant elects to deliver its latest annual report to
stockholders, or a complete and legal facsimile thereof, pursuant to Item
11(a)(1) of this Form, check the following box. [ ]
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,
check the following box. [ ]
CALCULATION OF REGISTRATION FEE
===============================================================================================
Proposed Proposed
Title of each class Amount maximum maximum Amount of
of securities to to be offering price aggregate offering registration
be registered registered(1) per share(2) price(2) fee(3)
-----------------------------------------------------------------------------------------------
Common stock, $.0001 par 82,600,000 $ 0.48 $ 39,648,000 $ 5,023.40
value per share
===============================================================================================
_______________
(1) All shares of common stock to be offered by selling stockholders of the
registrant, including 20,000,000 shares outstanding as of the date hereof
and the remaining 62,600,000 shares issuable upon the exercise of warrants.
In addition, pursuant to Rule 416 under the Securities Act of 1933, this
registration statement shall be deemed to cover or to proportionally
reduce, as applicable, an indeterminate number of shares of common stock of
the Registrant issuable in the event the number of shares of the Registrant
is increased, or reduced, as applicable, by reason of any stock split,
reverse stock split, stock dividend or other similar transaction.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933 based on the
average of the closing bid and asked prices of the common stock on February
20, 2004, as reported on the OTC Bulletin Board.
(3) Registration fee calculations are based on the filing fee of $126.70 per
$1,000,000 of securities registered.
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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SECTION 8(a), MAY DETERMINE.
The information in this prospectus is not complete and may be changed. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. Our selling stockholders may not sell
these securities until that registration statement becomes effective. This
prospectus is not an offer to sell securities and it is not soliciting an offer
to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 3, 2004
PROSPECTUS
NANOPIERCE TECHNOLOGIES, INC.
-----------------------------
370 17th Street, Suite 3640
Denver, Colorado 80202
82,600,000 SHARES OF COMMON STOCK, INCLUDING:
20,000,000 SHARES CURRENTLY OUTSTANDING
62,600,000 SHARES ISSUABLE UPON EXERCISE OF WARRANTS
THE SELLERS: All of our common stock offered by this prospectus is offered
from time to time by the selling stockholders identified in this
prospectus. We will not receive any proceeds from the sale of our
common stock offered by the selling stockholders.
MARKET FOR
SECURITIES: Our common stock is presently quoted on the over-the-counter
bulletin board under the symbol "NPCT." Our common stock also is
traded on the Frankfurt Stock Exchange and on the Hamburg Stock
Exchange under the symbol "NPI." On April 8, 2004, the last
reported sale price of our common stock on the over-the-counter
bulletin board was $0.37 per share (rounded to the nearest
penny). See "DESCRIPTION OF COMMON STOCK-Common Stock."
RISK
FACTORS: INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 5.
As of April 8, 2004, we have 86,209,033 shares of our common stock issued and
outstanding. The shares of common stock offered by this prospectus represent
about 46.05% of our issued and outstanding common stock as of April 8, 2004,
assuming that, as of that date, all of our outstanding warrants and options were
exercised and all of our reserved shares of common stock were issued.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED ANY OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this prospectus is __________ __, 2004.
TABLE OF CONTENTS
Page
----
FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . .2
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
DETERMINATION OF OFFERING PRICE . . . . . . . . . . . . . . . . . . . . . . .14
SELLING STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
DESCRIPTION OF COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . .17
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . .20
FORWARD-LOOKING STATEMENTS
This prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. We base these forward-looking statements on our current
expectations and projections about future events. These forward-looking
statements are subject to risks, uncertainties, and assumptions about our
company, including:
- the rate of market development and acceptance of the interconnect
technology in the industry within which we are concentrating our
business activities;
- the limited revenues and significant operating losses generated to
date;
- the possibility of significant ongoing capital requirements and our
ability to secure financing as and when necessary;
- our ability to compete successfully with the other providers of
interconnect technologies;
- our ability to retain the services of our key management, and to
attract new members of the management team; and
- our ability to obtain and retain appropriate patent, copyright and
trademark protection of our intellectual properties and any of our
products.
You should only rely on the information contained in this prospectus. We
have not authorized any person to provide you with different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. The selling stockholders are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should assume that the information appearing in this prospectus is accurate as
of the date on the front cover of this prospectus only. Our business, financial
condition, results of operations and prospects may have changed since that date.
2
PROSPECTUS SUMMARY
The following summary highlights certain information contained throughout
this prospectus. It is not complete and may not contain all of the information
that you should consider before investing in the securities offered by this
prospectus. To understand this offering fully, you should read this entire
prospectus carefully, including the risk factors. Before you make your
investment decision, you should also carefully read our attached annual report
on Form 10-KSB/A for our fiscal year ended June 30, 2003 and our quarterly
report on Form 10-QSB/A for the fiscal quarter ended December 31, 2003 (both
amended to the date of this prospectus).
THE COMPANY
We were incorporated on June 22, 1996 as a Nevada corporation. Our
corporate offices are located at 370 - 17th Street, Suite 3640, Denver, Colorado
80202, and our telephone number is (303) 592-1010. We maintain a website at
www.nanopierce.com.
------------------
On February 26, 1998, we acquired the intellectual property rights related
to our patented Particle Interconnect Technology (the "particle technology")
from Particle Interconnect Corporation, a Colorado corporation, a wholly owned
subsidiary of Intercell Corporation (now known as Intercell International
Corporation), a Nevada corporation that was our affiliate at the time of the
acquisition. We acquired the particle technology to pursue a more focused,
strategic application and development of the particle technology. We have
designated and are commercializing our particle technology as NCSTM. Since our
acquisition of the particle technology, we have focused on providing the
electronics industry with possible solutions to their "connection" problems. See
"THE COMPANY."
THE OFFERING
This offering includes 82,600,000 shares of our common stock, including:
- 20,000,000 shares outstanding as of the date of this prospectus
- 62,600,000 shares issuable upon the exercise of warrants owned by
the stockholders identified later in this prospectus
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of our common
stock offered by this prospectus. See "USE OF PROCEEDS" for more information.
RISK FACTORS
Your investment in our common stock offered by this prospectus involves a
high degree of risk. See "RISK FACTORS" beginning on page 5.
SUMMARY CONSOLIDATED FINANCIAL DATA
The summary consolidated financial data shown below as of and for the six
months ended December 31, 2003 and 2002, have been derived from the unaudited
financial statements appearing in our quarterly report on Form 10-QSB/A for the
quarter ended December 31, 2003 (as amended to the date of this prospectus),
which is incorporated by reference in and attached to this prospectus. The
summary consolidated financial data shown below as of and for the years ended
June 30, 2003 and 2002 have been derived from, and should be read in conjunction
with, the consolidated financial statements, related notes, and "MANAGEMENT'S
3
DISCUSSION AND ANALYSIS" appearing in our annual report on Form 10-KSB/A for the
year ended June 30, 2003 (as amended to the date of this prospectus), which is
incorporated by reference in and attached to this prospectus.
SIX MONTHS ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
----------------------------------------- --------------------------
2003 2002 2003 2002
------------------ --------------------- ------------ ------------
Revenues . . . . . . . . . . . . . . . . $ 28,449 $ 9,227 $ 37,017 $ 4,737
------------------ --------------------- ------------ ------------
Operating expenses:
Research and development . . . . . . 53,053 184,787 316,403 316,438
General and administrative . . . . . 694,338 1,165,981 2,414,077 3,516,534
Selling and marketing. . . . . . . . 39,709 134,411 238,817 112,178
Impairment of intellectual property
and equipment (Note 1). . . . . . . . . - - 210,000 104,375
------------------ --------------------- ------------ ------------
787,100 1,485,179 3,179,297 4,049,525
------------------ --------------------- ------------ ------------
------------------ --------------------- ------------ ------------
Loss from operations . . . . . . . . . . (758,651) (1,475,952) (3,142,280) (4,044,788)
------------------ --------------------- ------------ ------------
Other income (expense):
Interest income. . . . . . . . . . . 8,199 4,948 7,251 98,574
Equity losses of affiliates. . . . . (19,833) - - -
Interest expense . . . . . . . . . . (2,790) - (38) -
------------------ --------------------- ------------ ------------
(14,424) 4,948 7,213 98,574
------------------ --------------------- ------------ ------------
Loss from continuing operations. . . . . (773,075) (1,471,004) (3,135,067) (3,946,214)
------------------ --------------------- ------------ ------------
Discontinued operations,
income (loss) from
operations of subsidiary (Note 3). . . . 16,177 (403,226) (882,718) (782,858)
------------------ --------------------- ------------ ------------
Net loss . . . . . . . . . . . . . . . . $ (756,898) $ (1,874,230) $(4,017,785) $(4,729,072)
================== ===================== ============ =============
Basic and diluted loss per share:
Loss from continuing operations. . . $ (0.01) $ (0.02) $ (0.05) $ (0.07)
Loss from discontinued operations. . (-) (0.01) (0.02) (0.01)
------------------ --------------------- ------------ ------------
Net loss per share, basic and diluted. . $ (0.01) $ (0.03) $ (0.07) $ (0.08)
================== ===================== ============ =============
Weighted average number of
common shares outstanding . . . . . . . 65,912,263 59,117,467 61,647,688 56,194,682
================== ===================== ============ =============
With respect to the note references in this table relating to the summary
consolidated financial data for the six months ended December 31, 2003 and 2002,
see the respective notes to the consolidated financial statements in our our
quarterly report on Form 10-QSB/A for the fiscal quarter ended December 31, 2003
(as amended to the date of this prospectus), incorporated into this prospectus.
With respect to the note references in this table relating to the summary
consolidated financial data for the years ended June 30, 2003 and 2002, see the
respective notes to the consolidated financial statements in our annual report
on Form 10-KSB/A for our fiscal year ended June 30, 2003 (as amended to the date
of this prospectus), incorporated by reference into this prospectus.
4
RISK FACTORS
When deciding whether or not to purchase our common stock offered by this
prospectus, you should carefully consider the risks described below.
WE HAVE A HISTORY OF LOSSES
Developing our particle technology and products has been and we expect will
continue to be expensive. We recently have incurred increased operating
expenses without a corresponding increase in revenues. We reported a net loss
of $4,017,785, $4,729,072 and $3,598,543 for our fiscal years ended June 30,
2003, 2002 and 2001, respectively, and a net loss of $756,898 for the six-month
period ended December 31, 2003.
WE MAY NOT BE ABLE TO CONTINUE AS A GOING CONCERN
Our independent auditors' report on our consolidated financial statements
as of June 30, 2003 includes an explanatory paragraph expressing substantial
doubt about our ability to continue as a going concern. As a result of this
going concern modification in our auditor's report on our financial statements,
we may have a difficult time obtaining significant additional financing. If we
are unable to secure significant additional financing, we may be obligated to
seek protection under the bankruptcy laws and our shareholders may lose their
investment.
WE DO NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE
We have never paid cash dividends on our common stock. We do not expect to
pay cash dividends on our common stock at any time in the foreseeable future.
The future payment of dividends directly depends upon our future earnings,
capital requirements, financial requirements and other factors that our board of
directors will consider. Since we do not anticipate paying cash dividends on
our common stock, return on your investment, if any, will depend solely on an
increase, if any, in the market value of our common stock.
THIS OFFERING AND THE SALE OF SECURITIES BY CURRENT STOCKHOLDERS COULD CAUSE
DILUTION OF EXISTING HOLDERS OF OUR COMMON STOCK BY DECREASING THE PRICE OF OUR
COMMON STOCK
The market price of our common stock could be adversely affected by sales
of substantial amounts of common stock in the public market after this offering,
by the perception that those types of sales could occur or by the fact or
perception of events which would have a dilutive effect on the market for our
common stock. As of April 8, 2004, we had 86,209,033 shares of our common stock
outstanding, including shares of our common stock issued as described under "THE
COMPANY." If all of our outstanding options and warrants were exercised and all
of our reserved shares of common stock were issued, we could have up to
179,360,030 shares of common stock outstanding. Future transactions with other
investors could further depress the price of our common stock because of
additional dilution. See "DESCRIPTION OF COMMON STOCK."
OUR ARTICLES OF INCORPORATION MAY LIMIT OUR ABILITY TO SELL ADDITIONAL SHARES OF
OUR COMMON STOCK IN THE FUTURE
We are authorized to issue up to 200,000,000 shares of our common stock.
Overall, we would have a total of 179,360,030 shares of common stock issued and
outstanding if all of our outstanding warrants and options were exercised and
all of our reserved shares of common stock were issued. Unless we amend our
5
articles of incorporation, our ability to issue additional shares of our common
stock or securities convertible into our common stock is limited.
COMMON STOCK PRICE COULD BE EFFECTED BY THE ABILITY OF HOLDERS OF OUR COMMON
STOCK TO SELL THEIR STOCK
The market price of our common stock will be influenced by the ability of
common stock holders to sell their stock. As of April 8, 2004, approximately
52,357,305 shares of our common stock were freely transferable and constitute
the "float" in the public market for our common stock. If all of our
outstanding options and warrants were exercised and all of our reserved shares
were issued, the "float" for our common stock could increase to a total of
138,263,949 shares. As of April 8, 2004, approximately 33,851,728 shares of our
common stock were "restricted" or "control" securities within the meaning of
Rule 144 under the Securities Act of 1933. These restricted securities cannot
be sold unless they are registered under the Securities Act of 1933, or unless
an exemption from registration is otherwise available, including the exemption
that is contained in Rule 144. If all of our outstanding options and warrants
were exercised and all of our reserved shares were issued, the number of
"restricted" or "control" shares of our common stock could increase to a total
of 41,396,031 shares.
WE COULD ISSUE PREFERRED STOCK THAT COULD ADVERSELY EFFECT THE RIGHTS OF OUR
COMMON STOCKHOLDERS
We are authorized to issue up to 5,000,000 shares of our preferred stock,
$.0001 par value per share. Our articles of incorporation gives our board of
directors the authority to issue preferred stock without approval of our common
stockholders. We may issue preferred stock to finance our operations. We may
authorize the issuance of our preferred stock in one or more series. In
addition, we may set several of the terms of the preferred stock, including:
- dividend and liquidation preferences,
- voting rights,
- conversion privileges,
- redemption terms, and
- other privileges and rights of the shares of each authorized series.
The issuance of large blocks of preferred stock could have a dilutive
effect on our existing shareholders and it can negatively impact our existing
stockholders' liquidation preferences. In addition, while we include preferred
stock in our capitalization to improve our financial flexibility, we could
possibly issue our preferred stock to third parties as a method of discouraging,
delaying or preventing a change in control in our present management.
THE RESALE OF OUR COMMON STOCK BY YOU MAY BE LIMITED BECAUSE OF ITS LOW PRICE
WHICH COULD MAKE IT MORE DIFFICULT FOR BROKER/DEALERS TO SELL OUR COMMON STOCK
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure relating to the market for penny stocks in connection with
trades in any stock defined as a penny stock. Regulations enacted by the SEC
generally define a penny stock as an equity security that has a market price of
less than $5.00 per share, subject to some exceptions. Unless an exception
applies, a disclosure schedule explaining the penny stock market and the risks
associated with investing in penny stocks must be delivered before any
transaction in penny stock can occur.
6
Our common stock is not a reported security and is currently subject to the
Securities and Exchange Commission's "penny stock" rules and it is anticipated
that trading in our common stock will continue to be subject to the penny stock
rules for the foreseeable future.
Until such time as our common stock meets an exception to the penny stock
regulations cited above, trading in our securities is covered by Rule 15g-9
promulgated under the Securities Exchange Act of 1934. Under this rule,
broker/dealers who recommend penny stocks to persons that are not established
customers or accredited investors must make a special determination in writing
for the purchaser that the investment is suitable, and must also obtain the
purchaser's written agreement to a transaction before the sale.
The regulations could limit the ability of broker/dealers to sell our
securities and thus the ability of purchasers of our securities to sell their
securities in the secondary market for so long as our common stock has a market
price of less than $5.00 per share.
OUR REVENUES DEPEND ON OUR ABILITY TO LICENSE COMPANIES TO APPLY OUR PARTICLE
TECHNOLOGY TO PRODUCTS THAT THEY BRING TO THE MARKETPLACE WHICH WE HAVE BEEN
UNABLE TO ACCOMPLISH TO DATE
We do not anticipate generating significant revenues until we are able to
license companies to apply our particle technology to products that are brought
to the marketplace. To date, we have not successfully licensed companies to
apply our particle technology to products that are brought to the marketplace.
Even if we are successful and products utilizing our particle technology are
brought to the marketplace, we may still not generate enough revenue to offset
our operating costs.
We do not have licensing relationships with manufacturers to develop and
market products using our particle technology in place, and if we are unable to
secure these agreements, we believe that we may not become profitable in the
future.
We believe that our long-term profitability and growth depends on entering
into licensing or joint venture relationships with various manufacturers to
develop and market products using the particle technology. We have not entered
into any formal agreements to date, and even if we do enter into agreements in
the future, we cannot assure you that the agreements will be profitable.
CONSUMERS MAY USE ALTERNATIVE TECHNOLOGIES UNLESS WE ESTABLISH A MARKET PRESENCE
WITH OUR PARTICLE TECHNOLOGY
The interconnect market is subject to rapid technology changes. New
products are introduced, old products are enhanced and others become obsolete.
The entire interconnect market may be replaced by a newer form of technology.
To be competitive, we believe that we must develop, market and sell our products
on a timely and cost-effective basis and respond to the ever changing
requirements and demands of our customers, which in turn depends in part on our
capability to upgrade our products and quality control procedures and to adapt
to technological changes and advances in the electronics industry.
We cannot assure that we will be successful in selecting, developing, and
marketing new technologies or that compatibility issues with an evolving
generation of electronic components and manufacturing equipment and errors or
flaws in the new technologies will not prevent or delay market acceptance. Any
further delay in bringing our particle technology to the marketplace could cause
prospective customers to use alternative technologies and could result in our
inability to generate sufficient revenues to cover our operating costs.
7
WE MAY BE UNABLE TO SUCCESSFULLY COMPETE IN THE MARKETPLACE
The interconnect market is highly competitive. Our success will depend in
part on how quickly competitors can design and develop competing products and
technologies. We will compete with suppliers of other interconnect technologies
including Alien Technologies, Inc., Interconnect Technologies and major
electronic technology manufacturing leaders including Philips, Siemens, Infineon
and IBM. We are disadvantaged competing against these competitors in several
different areas, including:
- financial resources;
- technological resources;
- manufacturing capabilities;
- diversity of revenue sources and business opportunities;
- personnel and human resources; and
- research and development capabilities.
Our larger competitors have long term advantages over us in research and
new product development and have a greater ability to withstand periodic
downturns in the interconnect market because they have diverse product lines
that can provide revenue even when there is a downturn in the interconnect
market.
WE CANNOT GUARANTEE THE QUALITY, PERFORMANCE OR RELIABILITY OF OUR PRODUCTS
We have no prior experience in taking technology to the manufacturing or
production stage. We plan to have licensees or co-joint venturers manufacture
products using the particle technology. We expect that the customers of these
products will demand quality, performance and reliability. We cannot assure you
that our future licensees or co-joint venturers will be able to meet the quality
control standards that may be established by equipment manufacturers and other
customers of products utilizing the particle technology.
THERE MAY BE INSUFFICIENT DEMAND FOR OUR PARTICLE TECHNOLOGY
We must convince our potential customers that the particle technology is
technologically sound and can be manufactured efficiently and cost-effectively
before connector manufacturers and electronic equipment manufacturers will be
willing to use our technology. To create this consumer demand, we have to
successfully market and sell our technology. Even after these efforts, our
particle technology may not be viewed by consumers as an improvement over
existing technologies and may not achieve commercial acceptance.
WE MAY BE UNABLE TO MEET OUR ONGOING NEEDS FOR ADDITIONAL CAPITAL
We cannot accurately predict how much funding we will need to implement our
strategic business plan or to continue operations. Our future capital
requirements, the likelihood that we can obtain money and the terms of any
financing will be influenced by many different factors, including:
8
- our revenues,
- the status of competing products in the marketplace,
- our performance in the marketplace,
- our overall financial condition,
- our business prospects,
- the perception of our growth potential by the public, including potential
lenders,
- our ability to enter into joint venture or licensing relationships to
achieve a market presence and
- our progress in developing, marketing and selling the particle technology.
If we cannot obtain adequate financing or if the terms on which we are able
to acquire financing are unfavorable, our business and financial condition could
be negatively affected. We may have to delay, scale back or eliminate some or
all of our development and marketing programs, if any. We may also have to go to
third parties to seek financing, and in exchange, we may have to give up rights
to some of our technologies, patents, patent applications, potential products or
other assets.
WE MAY BE UNABLE TO HIRE AND RETAIN KEY PERSONNEL
Our future success depends on our ability to attract qualified technical
personnel capable of working with our technology. We may be unable to attract
these necessary personnel. If we fail to attract or retain skilled employees,
or if a key employee fails to perform in his or her current position, we may be
unable to bring our particle technology to the marketplace and to generate
sufficient revenues to offset our operating costs.
WE MAY BE UNABLE TO OBTAIN AND RETAIN APPROPRIATE PATENT, COPYRIGHT AND
TRADEMARK PROTECTION OF OUR PRODUCTS
We protect our intellectual property rights through patents, trademarks,
trade names, trade secrets and a variety of other measures. However, these
measures may be inadequate to protect our intellectual property or other
proprietary information.
- TRADE SECRETS MAY BECOME KNOWN BY THIRD PARTIES. Our trade secrets or
proprietary technology may become known or be independently developed by
competitors.
- RIGHTS TO PATENTS AND TRADE SECRETS MAY BE INVALIDATED. Disputes may
arise with third parties over the ownership of our intellectual property rights.
Our patents may be invalidated, circumvented or challenged, and the rights
granted under those patents that provide us with a competitive advantage may be
nullified.
- PROBLEMS WITH FUTURE PATENT APPLICATIONS. Our pending or future patent
applications may not be approved, or the scope of the granted patent may be less
than the coverage sought.
- INFRINGEMENT CLAIMS BY THIRD PARTIES. Infringement, invalidity, right to
use or ownership claims by third parties or claims for indemnification may be
asserted by third parties in the future. If any claims or actions are asserted
9
against us, we can attempt to obtain a license for that third party's
intellectual property rights. However, the third party may not provide a license
under reasonable terms, or may not provide us with a license at all.
- THIRD PARTIES MAY DEVELOP SIMILAR PRODUCTS. Competitors may develop
similar products, duplicate our products or may design around the patents that
are owned by us.
- LAWS IN OTHER COUNTRIES MAY INSUFFICIENTLY PROTECT INTELLECTUAL PROPERTY
RIGHTS ABROAD. Foreign intellectual property laws may not adequately protect our
intellectual property rights abroad. Our failure to protect these rights could
adversely affect our business and financial condition.
- LITIGATION MAY BE REQUIRED TO PROTECT INTELLECTUAL PROPERTY RIGHTS.
Litigation may be necessary to protect our intellectual property rights and
trade secrets, to determine the validity of and scope of the rights of third
parties or to defend against claims of infringement or invalidity by third
parties. This litigation could be expensive, would divert resources and
management's time from our sales and marketing efforts, and could have a
materially adverse effect on our business, financial condition and results of
operations and on our ability to enter into joint ventures or partnerships with
others.
LICENSE RIGHTS TO PARTICLE TECHNOLOGY MAY LIMIT OUR ABILITY TO COMPETE
Before we acquired the patents, patent applications and licenses from the
original owners of the particle technology, the inventor of the particle
technology granted five companies exclusive and non-exclusive licenses to use
the patents and patent applications relating to the particle technology. At
this time, only two of the original five licensees are using our technology and
none of these licenses relate to either smart card or smart label technology. A
non-exclusive, two year license was also granted to the inventor of the particle
technology in October 2002 in connection with the settlement of certain
litigation with the inventor. These licenses restrict us as follows:
- EXCLUSIVE LICENSES PREVENT US FROM COMPETING AGAINST THE EXCLUSIVE
LICENSES. We cannot compete in the fields in which exclusive licenses have been
granted. An exclusive license was granted in the field of sockets for use in the
automated handling and testing of integrated circuits, a type of semiconductor
in which a number of transistors and other elements are combined to form a more
complicated circuit.
- NON-EXCLUSIVE LICENSES ALLOW LICENSEES TO COMPETE AGAINST US IN CERTAIN
AREAS. The licensees with non-exclusive licenses can compete directly with us or
our other future licensees. Non-exclusive licenses have been granted to use the
particle technology for electrically conductive components, laminate-based and
metal-based products and semiconductor products. If the present licensees decide
to compete with us or our future licensees, this competition could adversely
affect our business.
WE DO NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE
We have never paid cash dividends on our common stock. We do not expect to
pay cash dividends on our common stock at any time in the foreseeable future.
The future payment of dividends directly depends upon our future earnings,
capital requirements, financial requirements and other factors that our board of
directors will consider. Since we do not anticipate paying cash dividends on
our common stock, return on your investment, if any, will depend solely on an
increase, if any, in the market value of our common stock.
10
THE COMPANY
GENERAL
We were incorporated on June 22, 1996 as a Nevada corporation. Our
corporate offices are located at 370 - 17th Street, Suite 3640, Denver, Colorado
80202, and our telephone number is (303) 592-1010. We maintain a website at
www.nanopierce.com, which is not incorporated in and is not a part of this
------------------
prospectus.
On February 26, 1998, we acquired the intellectual property rights related
to our patented Particle Interconnect Technology (the "particle technology")
from Particle Interconnect Corporation, a Colorado corporation, a wholly owned
subsidiary of Intercell Corporation (now known as Intercell International
Corporation), a Nevada corporation that was once our affiliate as a result of
the acquisition. We acquired the particle technology to pursue a more focused,
strategic application and development of the particle technology.
We have designated and are commercializing our particle technology as the
Nanopierce Connection System ("NCSTM "). NCSTM is an alternative method of
providing temporary or permanent electrical connections between different
flexible, rigid, metallic and non-metallic surfaces. Through the use of our
particle technology, we can also attach semi-conductors directly to various
surfaces. We have trademarked this process as WaferPierce.(TM)
We have three subsidiaries:
1. NANOPIERCE CARD TECHNOLOGIES, GMBH. "NanoPierce Card" is a
wholly-owned subsidiary that was established in January 2000 and is located in
Hohenbrunn, Germany. NanoPierce Card was responsible for the marketing of the
Company's technology, services and products on an international basis. On April
1, 2003, Nanopierce Card filed insolvency with the Courts of Munich, Germany.
The insolvency was necessary in order to comply with specific German legal
requirements. In conjunction with the insolvency filing, management made a
decision in April 2003 to discontinue operations at NanoPierce Card and to
liquidate NanoPierce Card through the German courts through self-liquidation.
Subsequently, the German courts rejected the application for insolvency and
Nanopierce Card is currently implementing a plan of self-liquidation as provided
by German law. We anticipate that the liquidation will be completed by June 30,
2004.
2. NANOPIERCE CONNECTION SYSTEMS, INC. "NanoPierce Connection," a Nevada
corporation, is a wholly-owned subsidiary established in January 2002 that is
located in Colorado Springs, Colorado. NanoPierce Connection is the center of
our research and development activities and the development of various
applications of NCS. NanoPierce Connection also provides the WaferPierce(TM)
service to potential customers. In September 2003, NanoPierce Connection entered
into a joint venture with Scimaxx, LLC in order to further the marketing of the
services offered by NanoPierce Connection.
3. EXYPNOTECH, GMBH "ExypnoTech" was organized as a wholly-owned
subsidiary in February 2002. ExypnoTech produces inlay components used in the
manufacturing of, among other things, smart labels (often referred to as radio
frequency identification tags or "RFID"). ExypnoTech, in addition to the inlay
components, plans to manufacture and sell other types of RFID components. In
December 2003, ExpnoTech sold a controlling 51% interest in ExpnoTech to
TagStar Systems, GmbH for $98,000 in cash. As a result of this sale, we do not
have a controlling interest in ExpnoTech and we are only entitled to 49% of the
revenues generated by ExpnoTech. ExpnoTech pays
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dividends on an annual basis. We are entitled to 49% of the dividends, if any,
paid as a result of any future profits of ExpnoTech. The sale of the
controlling interest in ExpnoTech may decrease our revenues from ExpnoTech.
We do not currently plan to manufacture or develop products that utilize
our particle technology and we have no prior experience in taking technology to
the manufacturing or production stage. We expect to generate revenue by
licensing companies to apply our particle technology to products that are
brought to the marketplace by those licensees or by entering into joint ventures
with companies that manufacture products using the particle technology. To date,
we have not successfully licensed companies to manufacture, develop and market
products using our particle technology, and we do not currently have licensing
relationships in place.
During the fiscal year ended June 30, 2003, we have not generated any
revenues from continuing operations in the United States. All of our revenues
from continuing operations during those periods were generated solely in
Germany. During the fiscal year ended June 30, 2003, we recognized revenue of
$37,017 from continuing operations, including $33,117 from the sale of inlays by
ExpnoTech and $3,900 from the preparation of samples using WaferPierce(TM) for
potential customers by NanoPierce Connection. During the fiscal year ended June
30, 2003, we also recognized $128,947 in revenue from discontinued operations
from the software development and project management activities of Nanopierce
Card. The software development and project management activities of Nanopierce
Card, in industries with potential application of the particle technology, were
discontinued in April of 2003 in connection with the liquidation and
discontinuance of operations at Nanopierce Card described above.
During the six months ended December 31, 2003, we recognized revenue of
$28,449 from the sale of inlay components to customers by ExypnoTech. We expect
ExpnoTech to continue to generate revenues in the future from the preparation of
inlays for those customers for which it has non-disclosure agreements and
cooperation agreements and from the sale of inlays.
This prospectus is accompanied by a copy of our annual report on Form
10-KSB/A for our fiscal year ended June 30, 2003 and our quarterly report on
Form 10-QSB/A for the quarter ended December 31, 2003 (both as amended to the
date of this prospectus) and our quarterly report on Form 10-QSB for the quarter
ended September 30, 2003.
RECENT DEVELOPMENTS
On January 12, 2004, we entered into a placement agent agreement with
Charleston Capital Corp. in connection with a proposed sale of our securities to
a number of "accredited investors" (as defined in the Securities Act of 1933, as
amended), in a private placement transaction exempt from registration pursuant
to Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D
promulgated under the Securities Act of 1933. Jason Lyons, unrelated to us,
received a fee for introducing us to Charleston Capital Corp. and the purchasers
and for various consulting work done on our behalf. GRQ Consultants, also
unrelated to us, received a fee for introducing us to Jason Lyons and for
various consulting work done on our behalf.
In January of 2004, we sold 20,000,000 units for a total of $2,000,000 to a
limited number of accredited investors in a private placement transaction exempt
from registration under Section 4(2) of the Securities Act of 1933 and
Regulation D promulgated under the Securities Act of 1933. Each unit consists
of:
- one share of our common stock;
12
- a warrant to purchase one share of our common stock at an exercise
price of $0.10 per share; and
- a warrant to purchase two shares of our common stock at an exercise
price of $0.25 per share.
The warrants will expire January 20, 2009 unless exercised earlier. In
connection with the private placement, we also issued to Charleston Capital
Corp. (who transferred as compensation certain warrants to one of its registered
representatives, Chris Messalas), Jason Lyons and GRQ Consultants, Inc. warrants
to purchase 2,600,000 shares of our common stock. The warrants have an exercise
price of $0.10 per share and expire on January 20, 2009 unless exercised
earlier. We are also required to issue to Charleston Capital Corp., Chris
Messalas, Jason Lyons and GRQ Consultants, Inc. additional warrants to purchase
a total of 13% of the total number of shares issued as a result of the exercise
of the $0.10 warrants described in the second bullet point above. If all of the
$0.10 warrants described in the second bullet point above are exercised, we will
be required to issue additional warrants to purchase 2,600,000 shares of our
stock. All of the additional warrants will also have an exercise price of $0.10
per share and expire on January 20, 2009 unless exercised earlier. If all of
the warrants and additional warrants described in this paragraph were exercised,
we expect to receive an additional $12,500,000. However, no assurance can be
given that any of these warrants will be exercised. We will not receive any
proceeds from the sale of our common stock by the selling stockholders.
We are registering the shares of our common stock offered for resale by
this prospectus in order to satisfy our obligations to the selling stockholders
named below. See "SELLING STOCKHOLDERS."
USE OF PROCEEDS
The shares of our common stock offered by this prospectus are being
registered for the account of the selling stockholders named in this prospectus.
Therefore, any proceeds from the sale of our common stock will be received by
the related selling stockholders for their own account, and we will not receive
any proceeds from the sale of our common stock offered by this prospectus.
With respect to the shares of our common stock offered by this prospectus,
we previously received $2,000,000 from the sale of units described in "THE
COMPANY." We used a portion of the proceeds from the sale of the units to pay in
full several outstanding promissory notes, the interest rates, principal amounts
and maturity dates of which are set forth in the following table.
INTEREST RATE PRINCIPAL
LENDER (PER ANNUM) AMOUNT MATURITY DATE
Intercell International 7% $ 35,000 September 2004
Corporation
Intercell International 7% $ 100,000 November 2004
Corporation
Paul H. Metzinger,
(President, Chief Executive 7% $ 10,000 December 2003
Officer and director)
Paul H. Metzinger, 7% $ 30,000 September 2004
(President, Chief Executive
Officer and director)
13
The remainder of the proceeds from the sale of the units were used for general
working capital purposees. Assuming that all of the warrants that we issued to
the selling stockholders described in "THE COMPANY" were exercised, we expect to
receive an additional $12,500,000, substantially all of which we expect to use
for general working capital purposes, including strategic acquisitions of
technology or other businesses. However, no assurance can be given that any of
these warrants will be exercised. We will incur all of the costs associated
with the registration of the shares of our common stock offered by this
prospectus other than underwriting discounts and selling commissions, if any.
See "PLAN OF DISTRIBUTION."
DETERMINATION OF OFFERING PRICE
The selling stockholders may sell all or a portion of their shares of our
stock in the over-the-counter market at prices prevailing at the time of sale,
or related to the market price at the time of sale, or at other negotiated
prices. See "PLAN OF DISTRIBUTION."
SELLING STOCKHOLDERS
BACKGROUND
We are registering the shares of our common stock offered for resale by
this prospectus in order to satisfy our obligations to the selling stockholders
named below. In January 2004, we sold units to the first ten selling
stockholders named below as described in "THE COMPANY-Recent Developments."
Pursuant to the securities purchase agreement between us and the first ten
selling stockholders named below, we are obligated to register under the
Securities Act of 1933, all the shares of our common stock purchased by each of
these selling stockholders, as well as the shares of our common stock that will
be held by each of these stockholders assuming these stockholders exercise all
of the warrants that we sold to each of the stockholders as described in "THE
COMPANY-Recent Developments." We are obligated to keep the registration
statement of which this prospectus forms a part effective until the earliest of
the date on which the warrants have all been exercised and January 20, 2009.
We are registering the remaining shares of our common stock for Charleston
Capital Corp., Chris Messalas, Jason Lyons and GRQ Consultants, Inc. as a result
of so-called "piggy-back" registration rights, which means that, because we are
required by the securities purchase agreement to file the registration statement
of which this prospectus forms a part, holders of "piggy-back" registration
rights must also be given the opportunity to have their shares of our common
stock registered in the registration statement of which this prospectus forms a
part.
SELLING STOCKHOLDERS TABLE
The shares of our common stock offered by this prospectus are being sold
for the account of the selling stockholders identified in the following table.
The information in the following table and footnotes is based solely on
information furnished to us by the selling stockholders which, for each selling
stockholder, includes:
(a) the name and address of the selling stockholder,
(b) any position, office or other material relationship, if any, which
the selling stockholder has had with us, our predecessors or our affiliates
within the past three years,
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(c) the number of shares of our common stock currently beneficially
owned by the selling stockholder and the percentage that those shares of
our common stock represent of all of our outstanding common stock as of
April 8, 2004 (on a fully-diluted basis),
(d) the number of shares of our common stock offered by the selling
stockholder, and
(e) the amount and, if 1% or more, the percentage of shares of our
common stock that will be beneficially owned by the selling stockholder
after completion of the offering, assuming the sale of all of the shares of
our common stock as shown in (d) above.
Except as indicated in the footnotes to this table, the persons named in the
table have sole voting and investment power with respect to all shares of our
common stock shown as beneficially owned by them. Each selling stockholder that
is a broker-dealer or is affiliated with a broker-dealer has represented to us
that it purchased the securities to be resold pursuant to this prospectus in the
ordinary course of business and, at the time of the purchase of such securities,
had no agreements or understandings, directly or indirectly, with any person to
distribute such securities. One of the selling stockholders, Charleston Capital
Corp., is a broker-dealer, and will be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933.
(a) (b) (c) (d) (e)
MATERIAL
RELATIONSHIP WITH AMOUNT OF COMMON AMOUNT OF
NANOPIERCE STOCK/PERCENTAGE OF AMOUNT OF COMMON STOCK
NAME AND ADDRESS OF WITHIN THE LAST 3 OUR COMMON STOCK COMMON STOCK OWNED AFTER
SELLING STOCKHOLDER YEARS OWNED BEFORE OFFERING OFFERED OFFERING(1)
M/S Family Foundation(2)
242 4th Street
Lakewood, NJ 08701 None 2,000,000(3) / 1.12% 2,000,000(3) 0
Platinum Partners Value
Arbitrage Fund LP(4)
152 West 57th Street
New York, NY 10019 None 28,000,000(3) / 15.61% 28,000,000(3) 0
Peekskill, LLC(5)
152 West 57th Street
New York, NY 10019 None 12,000,000(3) /6.70% 12,000,000(3) 0
Laura Huberfeld Naomi
Bodner Partnership(6)
15 Manor Lane
Lawrence, NY 11559 None 4,000,000(3) / 2.23% 4,000,000(3) 0
Omega Capital Small Cap
Fund, LTD(7)
1243 48th Street
Brooklyn, NY 11219 None 17,600,000(3) / 9.81% 17,600,000(3) 0
Colbart Birnet LP(8)
10 West 40th Street
22nd Floor
New York, NY 10016 None 1,000,000(3) / 0.56% 1,000,000(3) 0
Goldstrand Investments(9)
1040 1st Ave., Suite 190
New York, NY 10022 None 3,400,000(3) / 1.90% 3,400,000(3) 0
Marketwise Trading, Inc. (10)
21 Crestview Terrace
Monsey, NY 10952 None 4,000,000(3) / 2.23% 4,000,000(3) 0
15
Jules Nordlicht
225 West Beach Street
Long Beach, NY 11561 None 4,000,000(3) / 2.23% 4,000,000(3) 0
Ellis International (11)
27 Old Gloncester Street
London Wein 3xx None 4,000,000(3) / 2.23% 4,000,000(3) 0
Charleston Capital Corp. (12)
216 E. 45th Street, Ste. 903
New York, NY 10017 None 110,000(13) / 0.006% 110,000(13) 0
Jason Lyons(14)
7239 San Salvador Drive
Boca Raton, FL 33433 None 1,000,000(15) / 0.56% 1,000,000(15) 0
GRQ Consultants, Inc. (16)
3290 NW 53rd Circle
Boca Raton, Florida 33496 None 1,000,000(15) / 0.56% 1,000,000(15) 0
Chris Messalas
20 Carlton Place
Staten Island, NY 10301 None 390,000(13) / 0.22% 390,000(13) 0
(1) Assumes that all of the shares of our common stock relating to 20,000,000
units that we previously sold to a number of accredited investors as
described under "THE COMPANY-Recent Developments," including those issued
upon the exercise of warrants, are sold by the selling stockholders. There
is no assurance that the selling stockholders will exercise all or any of
their warrants or that they will sell any or all of their shares offered by
this prospectus.
(2) Shoshana Englander has voting and dispositive power over the shares of
common stock being offered.
(3) Assumes the exercise of all of the $0.10 warrants and the $0.25 warrants
purchased by the named selling stockholder as part of the 20,000,000 units
we sold to a number of accredited investors as described under "THE
COMPANY-Recent Developments."
(4) Mark Nordlict is the general partner of the listed selling stockholder and
has voting and dispositive power over the shares of common stock being
offered.
(5) Mark Nordlict is the general partner of the listed selling stockholder and
has voting and dispositive power over the shares of common stock being
offered.
(6) Laura Huberfeld, partner, has voting and dispositive power over the shares
of common stock being offered.
(7) Herman Segal, President, has voting and dispositive power over the shares
of common stock being offered.
(8) Ezra Birnbaum is the general partner of the listed selling stockholder and
has voting and dispositive power over the shares of common stock being
offered. The selling stockholder is the general partner of the owner of
Pond Equities, a registered broker-dealer.
(9) Seth Fireman has voting and dispositive power of the shares of common stock
being offered.
(10) Rachel L. Gershan, President of the selling stockholder, has voting and
dispositive power over the shares of common stock being offered.
(11) Wilhelm Ungar has voting and dispositive power over the shares of common
stock being offered.
(12) Robert O. Lau has voting and dispositive power over the shares of common
stock being offered. Charleston Capital Corp. is a registered
broker-dealer.
(13) Assumes that the warrants to purchase 600,000 shares of our common stock
issued to Charleston Capital Corp. (390,000 of which were transferred to
Chris Messalas, a registered representative of Charleston Capital Corp.)
were exercised.
(14) Jason Lyons is a registered representative of Sunrise Securities Corp., a
registered broker-dealer.
(15) Assumes that the warrants to purchase 2,000,000 shares of our common stock
issued to Jason Lyons (1,000,000 of which were transferred to GRQ
Consultants, Inc.) were exercised.
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(16) Barry Honig has sole voting and dispositive power over the shares of common
stock being offered by the selling stockholder.
DESCRIPTION OF COMMON STOCK
Our authorized capital stock consists of 200,000,000 shares of common
stock, $.0001 par value per share, and 5,000,000 shares of preferred stock,
$.0001 par value per share. As of April 8, 2004 we had 86,209,033 shares of
common stock and no shares of preferred stock issued and outstanding. We have
outstanding warrants and options which, if exercised, would total 81,231,877
shares of common stock. We have also reserved 11,919,120 shares of our common
stock in connection with our ongoing litigation with Harvest Court, LLC
described in our quarterly report on Form 10-QSB/A for the quarterly period
ended December 31, 2003 (as amended to the date of this prospectus). Overall,
we would have a total of 179,360,030 shares of common stock issued and
outstanding if all of our outstanding warrants and options were exercised and
all of our reserved shares of common stock were issued.
COMMON STOCK
Each share of our common stock is entitled to one vote on each matter
submitted to a vote of the stockholders and is equal to each other share of our
common stock with respect to voting, liquidation and dividend rights. Holders
of our common stock are entitled to receive the dividends, if any, as may be
declared by our board of directors out of assets legally available therefor and
to receive net assets in liquidation after payment of all amounts due to
creditors and any liquidation preference due to preferred stockholders. Holders
of our common stock have no conversion rights and are not entitled to any
preemptive or subscription rights. Our common stock is not subject to
redemption or any further calls or assessments. Our common stock does not have
cumulative voting rights in the election of directors.
The transfer agent for our common stock is Corporate Stock Transfer, Inc.,
3200 South Cherry Creek Drive, Suite 430, Denver, Colorado 80209.
DIVIDEND POLICY
While there currently are no restrictions prohibiting us from paying
dividends to our stockholders, we have not paid any cash dividends on our common
stock in the past and we do not anticipate paying any dividends in the
foreseeable future. Earnings, if any, are expected to be retained to fund our
future operations. There can be no assurance that we will pay dividends at any
time in the future.
TRADING OF OUR COMMON STOCK
Our common stock presently is quoted on the over-the-counter bulletin board
maintained by the National Association of Securities Dealers, Inc. under the
symbol "NPCT." Our common stock also is traded on the Frankfurt Stock Exchange
and on the Hamburg Stock Exchange under the symbol under the symbol "NPI." The
average of the closing bid and asked prices for our common stock was $0.37 on
April 8, 2004.
PLAN OF DISTRIBUTION
The selling stockholders may, from time to time, use this prospectus to
sell all or a portion of the shares of our common stock offered by this
prospectus. These sales and transfers of our common stock may be effected from
time to time in one or more transactions on the over-the-counter bulletin board,
17
in the over-the-counter market, in negotiated transactions or otherwise, at a
fixed price or prices, which may be changed, at market prices prevailing at the
time of sale, at negotiated prices, or without consideration, or by any other
legally available means.
These transfers or sales may occur directly or by or through brokers,
dealers, agents or underwriters, who may receive compensation in the form of
underwriting discounts, concessions or commissions from the selling holders
and/or from purchasers of the common stock for whom they may act as agent. Any
or all of the shares of common stock may be sold or transferred from time to
time by means of:
- a block trade in which the broker or dealer so engaged will
attempt to sell the common stock as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
- purchases by a broker or dealer as principal and resale by that
broker or dealer for its account based on this prospectus;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
- the writing of options on the common stock;
- pledges as collateral to secure loans, credit or other financing
arrangements and any subsequent foreclosure, if any, under those
arrangements;
- gifts, donations and contributions; and
- any other legally available means.
To the extent required by the Securities Act of 1933, the number of shares
of common stock to be sold or transferred, the purchase price, the name of any
agent, broker, dealer or underwriter and any applicable discounts or commissions
and any other required information with respect to a particular offer will be
shown in an accompanying prospectus supplement or post-effective amendment.
In the event of the transfer by any selling stockholder of shares of our
common stock offered by this prospectus to any pledge, donee or other
transferee, we will supplement or amend this prospectus (as required by the
Securities Act of 1933) and the registration statement of which this prospectus
forms a part in order to have the pledge, donee or other transferee included as
a selling stockholder.
We have agreed to keep this prospectus effective until the earlier of the
date on which no warrants that we previously issued or are required to issue to
the selling stockholders described above under "SELLING STOCKHOLDERS-Background"
to purchase shares of our common stock remain unexercised by the selling
stockholders and January 20, 2009.
If necessary to comply with state securities laws, the common stock will be
sold only through registered or licensed brokers or dealers. In addition, the
common stock may not be sold unless it has been registered or qualified for sale
in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The selling stockholders and any brokers, dealers, agents or underwriters
that participate in the distribution of the common stock may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, in which event
any discounts, concessions and commissions received by those brokers, dealers,
agents or underwriters and any profit on the resale of the common stock
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act of 1933.
18
No underwriter, broker, dealer or agent has been engaged by us or, to our
knowledge, any of the selling stockholders, in connection with the distribution
of the common stock.
We and the selling stockholders will be subject to the applicable
provisions of the Securities Exchange Act of 1934 and the rules and regulations
under it, including, without limitation, Rule 10b-5 and, insofar as the selling
stockholders are distributors and we, under certain circumstances, may be a
distribution participant, under Regulation M.
The anti-manipulation provisions of Regulation M under the Securities
Exchange Act of 1934 will apply to purchases and sales of shares of our common
stock by the selling stockholders, and there are restrictions on market-making
activities by persons engaged in the distribution of the shares of our common
stock. Under Regulation M, a selling stockholder or its agents may not bid for,
purchase, or attempt to induce any person to bid for or purchase, shares of our
common stock while they are distributing shares of our common stock covered by
this prospectus. Accordingly, the selling stockholders are not permitted to
cover short sales by purchasing shares of our common stock while the
distribution is taking place.
Any common stock covered by this prospectus which also qualify for sale
based on Rule 144 under the Securities Act of 1933 may be sold under Rule 144
rather than based on this prospectus. There is no assurance that the selling
stockholders identified in this prospectus will sell any or all of the common
stock. The selling stockholders may transfer, devise or gift common stock by
other means not described in this prospectus.
We will pay all of the expenses incident to the registration of the common
stock, other than underwriting discounts and selling commissions, if any. The
aggregate proceeds to the selling holders from the sale of the common stock will
be the purchase price of that common stock less any of these discounts or
commissions.
We have agreed to indemnify the selling stockholders against some of the
liabilities under the Securities Act of 1933 arising from this prospectus or the
registration statement of which it is a part.
EXPERTS
Our audited financial statements incorporated into this prospectus by
reference have been so incorporated in reliance upon the report of Gelfond
Hochstadt Pangburn, P.C., independent certified public accountants ("our
auditor"), which expresses an unqualified opinion and includes an explanatory
paragraph relating to our ability to continue as a going concern, given upon
their authority as experts in auditing and accounting.
With respect to our unaudited financial statements incorporated into this
prospectus by reference, our auditor has applied limited procedures in
accordance with professional standards for a review of such information.
However, as stated in their separate reports included in our quarterly report on
Form 10-QSB/A for the quarter ended December 31, 2003 (as amended to the date of
this prospectus) and our quarterly report on Form 10-QSB for the quarter ended
September 30, 2003, and incorporated by reference into this prospectus, our
auditor did not audit and they do not express an opinion on that interim
financial information. Because of the limited nature of the review procedures
applied, the degree of reliance on our auditor's reports on our interim
financial information should be restricted. Our auditor is not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on our unaudited interim financial information because those reports are
not a "report" or a "part" of the registration statement of which this
prospectus forms a part prepared or certified by our auditor within the meaning
of Section 7 and 11 of the Securities Act of 1933.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934 and, in compliance with this act, file periodic reports and other
information with the SEC. These reports and the other information we file with
the SEC can be inspected and copied at the public reference room facilities
maintained by the SEC in Washington, D.C. at 450 Fifth Street, N.W., Washington,
D.C. 20549. The SEC's telephone number to obtain information on the operation of
the public reference room is (800) SEC-0330. In addition, the SEC maintains a
World Wide Web site that contains reports, proxy statements and other
information regarding registrants like the company that file electronically
with the SEC at the following Internet address: (http://www.sec.gov). The SEC's
telephone number is (800) SEC-0330.
We have filed with the SEC in Washington, D.C. a registration statement on
Form S-2 under the Securities Act of 1933 with respect to the shares of our
common stock offered by this prospectus.
ADDITIONAL INFORMATION
This prospectus is part of a registration statement on Form S-2 that we
have filed with the SEC. This prospectus is only a part of that registration
statement, and does contain all of the information that is included in the
registration statement, several sections of which are not included at all in
this prospectus. The statements contained in this prospectus, including
statements as to the contents of any contract or other document, are not
necessarily complete. You should refer to the registration statement and to an
actual copy of the contract or document filed as an exhibit to the registration
statement for more complete information. The registration statement may be
obtained from the SEC through one of the methods described above in "AVAILABLE
INFORMATION."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The following documents filed with the SEC
are incorporated in this prospectus by reference:
- Annual Report on Form 10-KSB for our fiscal year ended June 30, 2003
that was filed with the SEC on September 29, 2003;
- Amendment No. 1 to Annual Report on Form 10-KSB/A for our fiscal year
ended June 30, 2003 that was filed with the SEC on February 25, 2004;
- Amendment No. 2 to Annual Report on Form 10-KSB/A for our fiscal year
ended June 30, 2003 that was filed with the SEC on April 13, 2004;
- Quarterly Report on Form 10-QSB for the quarter ended September 30,
2003 that was filed with the SEC on November 14, 2003;
- Quarterly Report on Form 10-QSB for the quarter ended December 31,
2003 that was filed with the SEC on February 17, 2004;
- Amendment No. 1 to Quarterly Report on Form 10-QSB/A for the quarter
ended December 31, 2003 that was filed with the SEC on April 13, 2004;
and
- Current Report on Form 8-K that was filed with the SEC on December 15,
2003;
- Current Report on Form 8-K that was filed with the SEC on January 26,
2004; and
- Amendment to Current Report on Form 8-K originally filed January 26,
2004 that was filed with the SEC on January 30, 2004.
Our commission file number is 033-19598-D.
Any statement contained in a document incorporated or deemed to be
incorporated by reference into this prospectus shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus modifies or supersedes that statement or to the
extent that an amendment to an incorporated document modifies or supersedes the
incorporated document. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
prospectus.
On request we will provide at no cost to each person, including any
beneficial owner, who receives a copy of this prospectus, a copy of any or all
of the documents incorporated in this prospectus by reference other than
exhibits to these documents. Requests for these copies should be directed to
Nanopierce Technologies, Inc., 370 17th Street, Suite 3640, Denver, Colorado
80202, telephone number (303) 592-1010, attention: Kristi J. Kampmann, email
address: kristi@nanopierce.com.
19
================================================================================
THE ONLY SOURCES OF INFORMATION GIVEN TO YOU BY US ABOUT YOUR INVESTMENT
DECISION ARE THIS PROSPECTUS AND ANY DOCUMENTS REFERRED TO IN THIS PROSPECTUS.
WE DID NOT AUTHORIZE ANYONE TO GIVE YOU ANY OTHER INFORMATION ABOUT YOUR
INVESTMENT DECISION.
THIS PROSPECTUS IS NOT AN OFFER TO SELL SECURITIES AND IS NOT MEANT TO
INDUCE THE SALE OF SECURITIES IF IT WOULD VIOLATE STATE LAW. IF THE PERSONS WHO
ARE TRYING TO OFFER THE SECURITIES FOR SALE, OR THE PERSONS WHO RECEIVE THOSE
OFFERS FOR SALE ARE PROHIBITED FROM DOING SO UNDER STATE LAW, THIS PROSPECTUS IS
NOT MEANT TO INDUCE SALE OF THE SECURITIES DESCRIBED IN THIS PROSPECTUS.
TABLE OF CONTENTS
Page
----
FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
DETERMINATION OF OFFERING PRICE . . . . . . . . . . . . . . . . . . . . . . . 14
SELLING STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
DESCRIPTION OF COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . 17
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
================================================================================
82,600,000 SHARES OF COMMON STOCK
NANOPIERCE
TECHNOLOGIES, INC.
COMMON STOCK
_____________________
PROSPECTUS
_____________________
________ __, 2004
================================================================================
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER The following are the estimated expenses in connection
EXPENSES OF with the registration and distribution of the shares of the
ISSUANCE AND registrant's common stock:
DISTRIBUTION.
Securities and Exchange Commission
Registration Fee $ 5,023.40
Printing and Engraving Expenses 3,000*
Accounting Fees and Expenses 7,500*
Legal Fees and Expenses 40,000*
Miscellaneous 5,000*
======================================================
Total $60,523.40*
All the expenses will be incurred by the registrant and not
by the selling stockholders.
_______________
*Estimated.
Item 15. Article VII of the registrant's Articles of
INDEMNIFICATION Incorporation, as amended, provides that the registrant
OF DIRECTORS AND shall indemnify its directors, officers, employees and
OFFICERS. agents to the maximum extent and in accordance with the
provisions of the Nevada General Corporation Law, as in
effect from time to time. Sections 78.7502 and 78.751 of the
Nevada General Corporation Law provide generally and in
pertinent part that a Nevada corporation may indemnify its
directors and officers against expenses, judgments, fines
and settlements actually and reasonably incurred by them in
connection with any civil suit or action or any
administrative or investigative proceeding, except actions
by or in the right of the corporation, if, in connection
with the matters in issue, they acted in good faith and in a
manner they reasonably believed to be in, or not opposed to,
the best interests of the corporation, and in connection
with any criminal suit or proceeding, if in connection with
the matters in issue, they had no reasonable cause to
believe their conduct was unlawful. Section 78.7502 further
provides that in connection with the defense or settlement
of any action by or in the right of the corporation, a
Nevada corporation may indemnify its directors and officers
against expenses actually and reasonably incurred by them in
connection therewith, provided that they acted in good faith
and in a manner they reasonably believed to be in, or not
opposed to, the best interests of the corporation. Section
78.751 permits a Nevada corporation to grant its directors
and officers additional rights of indemnification through
bylaw provisions and otherwise and Section 78.752 permits a
Nevada corporation to purchase indemnity insurance or make
other financial arrangements on behalf of its directors and
officers.
Article VIII of the registrant's Articles of
Incorporation provides that directors shall not be liable to
the registrant or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability
arising from (a) any breach of the director's loyalty to the
registrant or its stockholders, (b) acts or omissions not in
good faith or which involve intentional misconduct or a
knowing violation of law, (c) any transaction from which the
director receives an improper personal benefit, or (d) any
other act expressly proscribed or for which directors are
otherwise liable under the Nevada General Corporation Law.
See Item 17 "Undertakings" herein.
II-1
Item 16. (a) EXHIBITS. The following is a complete list of Exhibits
EXHIBITS AND filed as part of this registration statement. Exhibit
FINANCIAL numbers correspond to the numbers in the exhibit table of
STATEMENT Item 601 of Regulation S-K.
SCHEDULES.
EXHIBIT NO. DESCRIPTION
#5.00 Opinion from Kutak Rock LLP
*23.01 Consent of independent certified public accountants,
Gelfond Hochstadt Pangburn, P.C.
*23.02 Acknowledgement of independent certified public accountants,
Gelfond Hochstadt Pangburn, P.C.
#23.03 Consent of Kutak Rock LLP (included in Exhibit 5.00)
#24.00 Power of Attorney
____________________
*Filed herewith.
# Previously filed.
Item 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes to:
(i) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(1) include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(2) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and Notwithstanding the
forgoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or 7high end of the
estimated maximum offering range may be reflected in the form of
prospects filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in the volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(3) include any additional or changed material information on
the plan of distribution.
(ii) 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 the securities at that time to be the initial
bona fide offering.
(iii) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
II-2
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act of 1934, as amended (the "Exchange Act") (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in 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.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado, on MAY 3, 2004.
NANOPIERCE TECHNOLOGIES, INC.
By /s/ Paul H. Metzinger
------------------------------------
Paul H. Metzinger, President, Chief
Executive Officer and Director
II-4
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-2 is signed by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Paul H. Metzinger President, Chief Executive MAY 3, 2004
---------------------- Officer and Director
Paul H. Metzinger (Principal Executive
Officer)
/s/ *** Director MAY 3, 2004
----------------------
Herbert J. Neuhaus
/s/ Kristi J. Kampmann Chief Financial Officer MAY 3, 2004
---------------------- (Principal Accounting
Kristi J. Kampmann Officer) and Secretary
/s/ *** Director MAY 3, 2004
----------------------
Robert Shaw
/s/ *** Director MAY 3, 2004
----------------------
John Hoback
*** By: /s/ Paul H. Metzinger
---------------------------
Paul H. Metzinger, as attorney-in-fact
II-5
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
#5.00 Opinion from Kutak Rock LLP
*23.01 Consent of independent certified public accountants,
Gelfond Hochstadt Pangburn, P.C.
*23.02 Acknowledgement of independent certified public accountants,
Gelfond Hochstadt Pangburn, P.C.
#23.03 Consent of Kutak Rock LLP (included in Exhibit 5.00)
#24.00 Power of Attorney
____________________
*Filed herewith.
# Previously filed.