Form S-3 -- Registration Statement under the Securites Act of 1933
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
ALANCO TECHNOLOGIES, INC.
(Exact name of registrant specified in charter)
Arizona 86-0220694
--------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
15575 North 83rd Way, Suite 3
Scottsdale, Arizona 85260
(480) 607-1010
(Address and telephone number of principal executive offices)
Robert R. Kauffman
Chief Executive Officer
Alanco Technologies, Inc.
15575 North 83rd Way, Suite 3
Scottsdale, Arizona 85260
(480) 607-1010
(Name, address and telephone number of agent for service)
With a Copy to:
Steven P. Oman, Esq.
8664 E. Chama Rd
Scottsdale, Arizona 85255
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective, as determined by
market conditions and other factors.
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 this form is a registration statement pursuant to General Instruction 1.D. or
a post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box.|_|
If this form is a post-effective amendment to a registration statement filed
pursuant to General Instruction 1.D. filed to register additional securities or
additional classes of securities pursuant to Rule 413(b) under the Securities
Act, check the following box.|_|
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller reporting company |X|
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
Title of each Proposed
class of securities maximum aggregate Amount of
to be registered offering price (1)(2)(3) registration fee (4)
--------------------------------------------------------------------------------
Class A Common Stock ---- ----
Rights attached to above ---- ----
shares of Class A Common
Stock Under Shareholder
Rights Plan (5) ---- ----
Warrants ---- ----
Units ---- ----
TOTAL $5,000,000 $279.00
--------------------------------------------------------------------------------
(1) There are being registered hereunder such indeterminate number of shares
of common stock and preferred stock, such indeterminate number of
warrants to purchase shares of common stock, and such indeterminate
number of units as may be sold by the registrant from time to time, which
together shall have an aggregate initial offering price not to exceed
$5,000,000 or its equivalent in any other currency, currency units, or
composite currency or currencies. The proposed maximum offering price per
unit will be determined, from time to time, by the registrant in
connection with the issuance by the registrant of the securities
registered hereunder. Any securities registered hereunder may be sold
separately or as units with the other securities registered hereunder.
Pursuant to Rule 416 under the Securities Act, the shares being
registered hereunder include such indeterminate number of shares of
common stock, and such indeterminate number of warrants to purchase
shares of common stock as may be issuable with respect to the shares
being registered hereunder as a result of stock splits, stock dividends
or similar transactions. The aggregate amount of the registrant's common
stock, and/or warrants registered hereunder that may be sold in "at the
market" offerings for the account of the registrant is limited to that
which is permissible under Rule 415(a)(4) under the Securities Act. The
proposed maximum offering price per unit will be determined, from time to
time, by the registrant in connection with the issuance by the registrant
of the securities registered hereunder. Any securities registered
hereunder may be sold separately or as units with the other securities
registered hereunder.
(2) Not specified as to each class of securities to be registered hereunder
pursuant to General Instruction II.D. to Form S-3 under the Securities
Act.
(3) Subject to footnote (1), there are also being registered hereunder an
indeterminate principal amount or number of shares of common stock or
preferred stock that may be issued upon conversion of, or in exchange
for, preferred stock registered hereunder or upon exercise of warrants
registered hereunder, as the case may be.
(4) Calculated pursuant to Rule 457(o) under the Securities Act, which
permits the registration fee to be calculated on the basis of the maximum
aggregate offering price of all securities listed.
(5) Each share of the Company's Class A Common Stock has a Right attached to
it in accordance with the Company's Shareholder Rights Plan (more fully
described on page 10 of this Prospectus). These Rights are also being
registered in this Prospectus.
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 of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
ALANCO TECHNOLOGIES, INC.
Class A Common Stock
Warrants
Units
And the Rights Attached to the Shares of Class A Common Stock
THE SHARES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" ON PAGE 4 FOR INFORMATION THAT YOU SHOULD CONSIDER.
We have not offered any securities during the past 12 months pursuant to
General Instruction I.B.6. of Form S-3.
We may offer, issue and sell shares of our Class A common stock, warrants
and units from time to time, in one or more issuances. This prospectus provides
a general description of offerings of these securities that we may undertake.
The aggregate public offering price of securities being offered will not exceed
$5,000,000.
Each time we sell shares of our securities pursuant to this prospectus,
we will provide the specific terms of such offering in a supplement to this
prospectus. The prospectus supplement may also add, update, or change
information contained in this prospectus. You should read this prospectus and
the accompanying prospectus supplement, together with additional information
described under the headings "Where You Can Find More Information" and
"Information Incorporated by Reference," before you make your investment
decision.
This prospectus may not be used to offer or sell our securities unless
accompanied by a prospectus supplement. The information contained or
incorporated in this prospectus or in any prospectus supplement is accurate only
as of the date of this prospectus, or such prospectus supplement, as applicable,
regardless of the time of delivery of this prospectus or any sale of these
securities.
Our Class A common stock is listed on the NASDAQ Capital Market under the
symbol "ALAN." On November 17, 2009, the last reported per share sale price of
our common stock was $0.34. You are urged to obtain current market quotations
of our common stock before purchasing any of the shares being offered for sale
pursuant to this prospectus. The aggregate market value of our outstanding
common stock held by non-affiliates is $7,900,300, based on 33,939,300 shares of
outstanding Class A common stock, of which 23,236,100, or 68.5%, are held by
non-affiliates, and a per share price of $0.34 based on the closing sale price
of our common stock on November 17, 2009.
We may offer securities through underwriting syndicates managed or
co-managed by one or more underwriters, through agents, or directly to
purchasers. The prospectus supplement for each offering of securities will
describe the plan of distribution for that offering. For general information
about the distribution of securities offered, please see "Plan of Distribution"
in this prospectus.
Investing in the securities being offered pursuant to this prospectus
involves a high degree of risk. You should carefully read and consider the
information set forth in the section of this prospectus titled "Risk Factors,"
beginning on page 4, when determining whether to purchase any of these shares.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus or any prospectus supplement is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus is November 20, 2009
TABLE OF CONTENTS
Page
Information Contained in this Prospectus 3
About this Prospectus 3
About Our Company 4
Risk Factors 4
Ratio Of Earnings To Combined Fixed Charges And Ratio Of Earnings To
Combined Fixed Charges And Preferred Dividends 4
Special Note Regarding Forward-Looking Information 4
Use of Proceeds 5
The Securities We May Offer 5
Description of Capital Stock 5
Description of Warrants 7
Description of Units 8
Arizona Corporate Takeover Act, Certain Charter Provisions And
Shareholders Rights Plan 9
Plan of Distribution 11
Legal Matters 14
Experts 14
Where You Can Find More Information 14
Information Incorporated By Reference 14
2
INFORMATION CONTAINED IN THIS PROSPECTUS
You should rely only on the information we have provided or incorporated
by reference in this prospectus, or any prospectus supplement. No person has
been authorized to give any information or to make any representation not
contained in this prospectus in connection with the offering of our securities
and, if given or made, no one may rely on such unauthorized information or
representations. This prospectus does not constitute an offer to sell or the
solicitation of an offer to buy these securities in any jurisdiction in which
such offer or solicitation may not be legally made. Neither the delivery of
this prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that the information contained herein is correct as of
any date subsequent to the date hereof. You should assume that the information
in this prospectus or any prospectus supplement is accurate only as of the date
on the front of the document and that any information we have incorporated by
reference is accurate only as of the date of the document incorporated by
reference, regardless of the time of delivery of this prospectus or any sale of
our securities.
In this prospectus and any prospectus supplement, unless otherwise
indicated, "ALAN," "the Company," "we," "us" and "our" refer to Alanco
Technologies, Inc. and its subsidiaries.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission, or SEC, using a "shelf" registration
process. Under this shelf registration process, we may offer shares of common
stock, warrants or units described in this prospectus in one or more offerings
up to a total dollar amount of $5,000,000. Each time we offer such securities
we will provide a prospectus supplement that will contain more specific
information about the securities offered. We may also add, update or change in
the prospectus supplement any of the information contained in this prospectus.
This prospectus, together with applicable prospectus supplements, includes all
material information relating to this offering. Please read carefully both this
prospectus and any prospectus supplement, together with the additional
information described below under the headings "Where You Can Find More
Information" and "Information Incorporated by Reference." THIS PROSPECTUS MAY
NOT BE USED TO CONSUMMATE A SALE OF SECURITIES UNLESS IT IS ACCOMPANIED BY A
PROSPECTUS SUPPLEMENT.
3
ABOUT OUR COMPANY
Alanco Technologies, Inc., together with our subsididaries, is a provider
of advanced information technology solutions. In recent years we reported three
business segments: (i) Data Storage - incorporating the manufacturing, marketing
and distribution of data storage products, (ii) RFID Technology - incorporating
design, production, marketing and distribution of RFID (Radio Frequency
Identification) tracking technology, and (iii) Wireless Asset Management -
incorporating the design, production, marketing, distribution and monitoring of
wireless asset management products, primarily for the transportation industry.
During fiscal year ended June 30, 2009, we implemented a plan to divest the
operations of our Data Storage segment and reinvest the proceeds into the
Company's continuing operating segments. During the fiscal quarter ended
September 30, 2009, we expanded the divestiture plan to include the RFID
Technology segment. Accordingly, at September 30, 2009, both the Data Storage
and RFID Technology segment assets were classified as "Assets Held for Sale."
Continuing operations consisted of Wireless Asset Management operations also
known as our StarTrak Systems LLC subsidiary.
The Company acquired StarTrak Systems, LLC, a Delaware limited liability
company ("StarTrak") located in Morris Plains, New Jersey in a June 2006
acquisition that created the Wireless Asset Management business segment., a
business segment described as a provider of wireless cellular and GPS tracking
and monitoring services, which are offered on a monthly subscription basis to
various industry segments. The company's primary focus is currently the
refrigerated or "Reefer" segment of the transport industry, providing the
dominant share of all wireless tracking, monitoring and control services to this
market segment.
Our principal executive offices are located at 15575 North 83rd Way,
Suite 3, Scottsdale, AZ 85260, and our telephone number is (480) 607-1010.
RISK FACTORS
Investing in our securities involves significant risks. Please see the
risk factors under the heading "Risk Factors" in our most recent Annual Report
on Form 10-K, as revised or supplemented by our Quarterly Reports on Form 10-Q
filed with the SEC since the filing of our most recent Annual Report on Form
10-K, each of which are on file with the SEC and are incorporated by reference
in this prospectus. Before making an investment decision, you should carefully
consider these risks as well as other information we include or incorporate by
reference in this prospectus and any prospectus supplement. The risks and
uncertainties we have described are not the only ones facing our company.
Additional risks and uncertainties not presently known to us or that we
currently deem immaterial may also affect our business operations.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus includes and incorporates forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). We intend such forward-looking statements to be
covered by the safe harbor provisions for forward-looking statements contained
in the United States Private Securities Litigation Reform Act of 1995. All
statements, other than statements of historical facts, included or incorporated
in this prospectus regarding our strategy, future operations, financial
position, future revenues, projected costs, prospects, plans and objectives of
management are forward-looking statements. The words "anticipates," "believes,"
"estimates," "expects," "intends," "may," "plans," "projects," "will," "would"
and similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these identifying words. We
cannot guarantee that we actually will achieve the plans, intentions or
expectations disclosed in our forward-looking statements and you should not
place undue reliance on our forward-looking statements. There are a number of
important factors that could cause our actual results to differ materially from
those indicated by these forward-looking statements. These important factors
include the factors that we identify in the documents we incorporate by
reference in this prospectus, as well as other information we include or
incorporate by reference in this prospectus and any prospectus supplement. See
"Risk Factors." You should read these factors and other cautionary statements
made in this prospectus and any accompanying prospectus supplement, and in the
documents we incorporate by reference as being applicable to all related
forward-looking statements wherever they appear in the prospectus and any
accompanying prospectus supplement, and in the documents incorporated by
reference. We do not assume any obligation to update any forward-looking
statements made by us, except to the extent required by federal securities laws.
4
USE OF PROCEEDS
We currently intend to use the estimated net proceeds from the sale of
these securities for working capital and other general corporate purposes,
including, without limitation, for the funding of potential acquisitions of
other businesses. Working capital and other general corporate purposes may
include redeeming outstanding preferred stock or warrants from certain warrant
holders, making capital expenditures, funding general and administrative
expenses and any other purpose that we may specify in any prospectus supplement.
We have not yet determined the amount of net proceeds to be used specifically
for any of the foregoing purposes. Accordingly, our management will have
significant discretion and flexibility in applying the net proceeds from the
sale of these securities. Pending any use, as described above, we intend to
invest the net proceeds in high-quality, short-term, interest-bearing
securities. Our plans to use the estimated net proceeds from the sale of these
securities may change, and if they do, we will update this information in a
prospectus supplement.
THE SECURITIES WE MAY OFFER
The descriptions of the securities contained in this prospectus, together
with the applicable prospectus supplements, summarize the material terms and
provisions of the various types of securities that we may offer. We will
describe in the applicable prospectus supplement relating to any securities the
particular terms of the securities offered by that prospectus supplement. If we
so indicate in the applicable prospectus supplement, the terms of the securities
may differ from the terms we have summarized below. We will also include in the
prospectus supplement information, where applicable, about material United
States federal income tax considerations relating to the securities, and the
securities exchange, if any, on which the securities will be listed.
We may sell from time to time, in one or more offerings:
o common stock;
o warrants to purchase common stock or preferred stock;
o units comprised of common stock, preferred stock and/or warrants in
any combination.
In this prospectus, we refer to the common stock, warrants and units
collectively as "securities." The total dollar amount of all securities that we
may issue will not exceed $5,000,000.
This prospectus may not be used to consummate a sale of securities unless
it is accompanied by a prospectus supplement.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital consists of 75,000,000 shares of Class A Common
Stock, 25,000,000 shares of Class B Common Stock, and 25,000,000 shares of
preferred stock. The preferred stock is issuable in series with such
designation, preferences, voting rights, privileges, and other restrictions and
qualifications as our Board of Directors may establish in accordance with
Arizona law. As of November 17, 2009 there were 33,939,300 shares of Class A
Common Stock outstanding, and no shares of Class B Common Stock outstanding, no
shares of Series A Convertible Preferred Stock outstanding, 103,200 shares of
Series B Convertible Preferred Stock outstanding, 133,000 shares of Series D
Preferred Stock outstanding, and 220,000 shares of Series E Convertible
Preferred Stock outstanding. Shares of the Series A Convertible Preferred Stock
are convertible into shares of Class A Common Stock at a rate of 1.2 shares of
Class A Common Stock for every one share of Series A Convertible Preferred
Stock. Shares of the Series B Convertible Preferred Stock are convertible into
shares of Class A Common Stock at a rate of 5.2 shares of Class A Common Stock
for every one share of Series B Convertible Preferred Stock. Shares of the
Series D Preferred Stock are not convertible into shares of Class A Common
Stock. Shares of the Series E Convertible Preferred Stock are convertible into
shares of Class A Common Stock at a rate of 12 shares of Class A Common Stock
for every one share of Series E Convertible Preferred Stock. As of November 17,
2009, options to purchase 7,013,000 shares of Class A Common Stock were
outstanding, and the weighted average exercise price of such options was $0.86.
In addition, as of November 17, 2009, the Company had 4,386,400 warrants to
purchase Class A Common Stock outstanding, and the weighted average exercise
price of such warrants was $1.79. Our Class A Common Stock is traded on the
NASDAQ Capital Market under the symbol "ALAN". No other securities of the
Company are currently traded on any market.
5
Common Stock
Holders of shares of our Class A Common Stock are entitled to one vote
per share on all matters to be voted on by our shareholders. Holders of shares
of Class B Common Stock are entitled to one-one hundredth of one vote per share
of Class B Common Stock on all matters to be voted on by our shareholders. Our
Class A Common Stock and our Class B Common Stock have cumulative voting rights
with respect to the election of directors. Our bylaws require that only a
majority of the issued and outstanding voting shares of common stock need be
represented to constitute a quorum and to transact business at a shareholders'
meeting.
Subject to the dividend rights of the holders of preferred stock, if
applicable, holders of shares of common stock are entitled to share, on a
ratable basis, such dividends as may be declared by the Board of Directors out
of funds legally available.
Upon our liquidation, dissolution or winding up, after payment of
creditors and holders of any of our senior securities, including preferred
stock, our assets will be divided pro rata on a per share basis among the
holders of the shares of common stock. Our common stock has no preemptive or
other subscription rights, and there are no conversion rights or redemption or
sinking fund provisions. All outstanding shares of common stock are fully paid
and non-assessable.
Transfer Agent and Registrar
The transfer agent and registrar for our Class A Common Stock is
Computershare Trust Company, 350 Indiana Street, Suite 800, Golden, Colorado
80401.
Preferred Stock
Our Board of Directors is authorized to issue preferred stock in one or
more series and denominations and to fix the rights, preferences, privileges,
and restrictions, including dividend, conversion, voting, redemption,
liquidation rights or preferences, and the number of shares constituting any
series and the designation of such series, without any further vote or action
by our shareholders. The issuance of preferred stock may have the effect of
delaying, deferring, or preventing a change of control of our company without
further action by the shareholders. The issuance of preferred stock with voting
and conversion rights may adversely affect the voting power of the holders of
common stock.
Our Board of Directors has previously authorized the issuance of a series
of preferred stock referred to as Series B Convertible Preferred Stock. Without
the affirmative vote of a majority of the holders of the Series B Preferred
Stock, we may not amend, alter or repeal any of the provisions of our articles
of incorporation or articles of designation for the Series B Convertible
Preferred Stock. We also need the affirmative vote of a majority of the holders
of the Series B Convertible Preferred Stock if we want to authorize any
reclassification of the Series B Convertible Preferred Stock that would
adversely affect the preferences, special rights or privileges or voting power
of the Series B Convertible Preferred Stock. We may not create or issue any
class of stock ranking prior to the Series B Convertible Preferred Stock as to
dividends or distribution of assets, or create or issue any shares of any series
of the authorized preferred stock ranking prior to the Series B Convertible
Preferred Stock's rights to dividends or distribution on liquidation. The
Series B Convertible Preferred Stock is convertible into 5.2 shares of Class A
Common Stock, shall have voting rights as if converted into Class A Common
Stock, is paid dividends quarterly when declared by the Company's Board of
Directors in-kind at the annual rate of 10% and has a preference upon
liquidation of Company before any other stock of the Company. The Series B
Convertible Preferred Stock can be redeemed at any time by either the Company or
the holder, provided that if called for redemption by the holder, the Company
may pay the redemption price in cash, or, provided the trading volume of the
Company's Class A Common Stock has been at least 10,000 shares for the 20
trading days preceding the date of redemption, in shares of the Company's Class
A Common Stock.
Our Board of Directors has also authorized the issuance of a series of
preferred stock referred to as Series A Convertible Preferred Stock. Without
the affirmative vote of a majority of the holders of the Series A Convertible
Preferred Stock, we may not amend, alter or repeal any of the provisions of our
articles of incorporation or articles of designation for the Series A
Convertible Preferred Stock. We also need the affirmative vote of a majority of
the holders of the Series A Convertible Preferred Stock if we want to authorize
any reclassification of the Series A Convertible Preferred Stock that would
adversely affect the preferences, special rights or privileges or voting power
of the Series A Convertible Preferred Stock. We may not create or issue any
class of stock ranking prior to the Series A Convertible Preferred Stock (other
than the existing Series B Convertible Preferred Stock) as to dividends or
distribution of assets, or create or issue any shares of any series of the
6
authorized preferred stock ranking prior to the Series A Convertible Preferred
Stock's rights to dividends or distribution on liquidation. The Series A
Convertible Preferred Stock is convertible into 1.2 shares of Class A Common
Stock, shall have voting rights as if converted into Class A Common Stock, is
paid dividends quarterly when declared by the Company's Board of Directors
in-kind or cash at the holder's option at the annual rate of 12% and has a
preference upon liquidation of Company before any other stock of the Company
except the Series B Convertible Preferred Stock. The Series A Convertible
Preferred Stock can be redeemed at any time by the Company.
Our Board of Directors has also authorized the issuance of a series of
preferred stock referred to as Series D Preferred Stock. Without the
affirmative vote of a majority of the holders of the Series D Preferred Stock,
we may not amend, alter or repeal any of the provisions of our articles of
incorporation or articles of designation for the Series D Preferred Stock. We
also need the affirmative vote of a majority of the holders of the Series D
Preferred Stock if we want to authorize any reclassification of the Series D
Preferred Stock that would adversely affect the preferences, special rights or
privileges or voting power of the Series D Preferred Stock. We may not create
or issue any class of stock ranking prior to the Series D Preferred Stock (other
than the existing series of Preferred Stock) as to dividends or distribution of
assets, or create or issue any shares of any series of the authorized preferred
stock ranking prior to the Series D Preferred Stock's rights to dividends or
distribution on liquidation. The Series D Preferred Stock shall have voting
rights equal to seven shares of Class A Common Stock on all matters, is paid
dividends quarterly when declared by the Company's Board of Directors in shares
of Class A Common Stock, in-kind or in cash at the holder's option at the annual
rate of 15% through December 31, 2009 and at the annual rate of 20% thereafter,
and has a preference upon liquidation of the Company before any other stock of
the Company except the Series B Convertible Preferred Stock or the Series A
Convertible Preferred Stock. The Series D Convertible Preferred Stock can be
redeemed at any time by the Company.
Our Board of Directors has also authorized the issuance of a series of
preferred stock referred to as Series E Convertible Preferred Stock. Without
the affirmative vote of a majority of the holders of the Series E Convertible
Preferred Stock, we may not amend, alter or repeal any of the provisions of our
articles of incorporation or articles of designation for the Series E
Convertible Preferred Stock. We also need the affirmative vote of a majority of
the holders of the Series E Convertible Preferred Stock if we want to authorize
any reclassification of the Series E Convertible Preferred Stock that would
adversely affect the preferences, special rights or privileges or voting power
of the Series E Convertible Preferred Stock. We may not create or issue any
class of stock ranking prior to the Series E Convertible Preferred Stock (other
than the existing series of Preferred Stock) as to dividends or distribution of
assets, or create or issue any shares of any series of the authorized preferred
stock ranking prior to the Series E Convertible Preferred Stock's rights to
dividends or distribution on liquidation. The Series E Convertible Preferred
Stock is convertible into 12 shares of Class A Common Stock, shall have voting
rights as if converted into Class A Common Stock, is paid dividends quarterly
when declared by the Company's Board of Directors in cash at the annual rate of
5% and has a preference upon liquidation of Company before any other stock of
the Company except the Series B Convertible Preferred Stock, Series A
Convertible Preferred Stock or Series D Preferred Stock. The Series E
Convertible Preferred Stock can be redeemed at any time by the Company.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of common stock or preferred
stock. Warrants may be issued independently or together with common stock or
preferred stock, and the warrants may be attached to or separate from such
securities. We may issue warrants directly or under a warrant agreement to be
entered into between us and a warrant agent. We will name any warrant agent in
the applicable prospectus supplement. Any warrant agent will act solely as our
agent in connection with the warrants of a particular series and will not assume
any obligation or relationship of agency or trust for or with any holders or
beneficial owners of warrants.
The following is a description of the general terms and provisions of any
warrants we may issue and may not contain all the information that is important
to you. You can access complete information by referring to the applicable
prospectus supplement. In the applicable prospectus supplement, we will describe
the terms of the warrants and any applicable warrant agreement, including, where
applicable, the following:
o the offering price and aggregate number of warrants offered;
o the designation and terms of the securities with which the warrants
are issued and the number of warrants issued with each such
security;
o the date on and after which the warrants and the related securities
will be separately transferable, if any;
o the number of shares of common stock or preferred stock, as the case
may be, purchasable upon the exercise of one warrant and the price
at which these securities may be purchased upon such exercise;
7
o the effect of any merger, consolidation, sale or other disposition
of our business on the warrant agreement and the warrants;
o the terms of any rights to redeem or call the warrants;
o any provisions for changes to or adjustments in the exercise price
or number of securities issuable upon exercise of the warrants;
o the dates on which the right to exercise the warrants will commence
and expire;
o the manner in which the warrant agreement and warrants may be
modified;
o a discussion of any material U.S. federal income tax considerations
of holding or exercising the warrants;
o the terms of the securities issuable upon exercise of the warrants;
and
o any other specific terms, preferences, rights or limitations of or
restrictions on the warrants.
DESCRIPTION OF UNITS
The following description, together with the additional information we
include in any applicable prospectus supplement, summarizes the material terms
and provisions of the units that we may offer under this prospectus. Units may
be offered independently or together with common stock and warrants offered by
any prospectus supplement, and may be attached to or separate from those
securities.
While the terms we have summarized below will generally apply to any
future units that we may offer under this prospectus, we will describe the
particular terms of any series of units that we may offer in more detail in the
applicable prospectus supplement. The terms of any units offered under a
prospectus supplement may differ from the terms described below.
We will incorporate by reference into the registration statement of which
this prospectus is a part the form of unit agreement, including a form of unit
certificate, if any, that describes the terms of the series of units we are
offering before the issuance of the related series of units. The following
summaries of material provisions of the units and the unit agreements are
subject to, and qualified in their entirety by reference to, all the provisions
of the unit agreement applicable to a particular series of units. We urge you
to read the applicable prospectus supplements related to the units that we sell
under this prospectus, as well as the complete unit agreements that contain the
terms of the units.
General
We may issue units consisting of common stock, warrants, or any
combination thereof. Each unit will be issued so that the holder of the unit is
also the holder of each security included in the unit. Thus, the holder of a
unit will have the rights and obligations of a holder of each included security.
The unit agreement under which a unit is issued may provide that the securities
included in the unit may not be held or transferred separately, at any time, or
at any time before a specified date.
We will describe in the applicable prospectus supplement the terms of the
series of units, including the following:
o the designation and terms of the units and of the securities
comprising the units, including whether and under what circumstances
those securities may be held or transferred separately;
o any provisions of the governing unit agreement that differ from
those described below; and
o any provisions for the issuance, payment, settlement, transfer, or
exchange of the units or of the securities comprising the units.
The provisions described in this section, as well as those described
under "Description of Our Securities," "Description of Warrants" and
"Description of Units" will apply to each unit and to any common stock,
preferred stock or warrant included in each unit, respectively.
8
Issuance in Series
We may issue units in such amounts and in such numerous distinct series
as we determine.
Enforceability of Rights by Holders of Units
Each unit agent will act solely as our agent under the applicable unit
agreement and will not assume any obligation or relationship of agency or trust
with any holder of any unit. A single bank or trust company may act as unit
agent for more than one series of units. A unit agent will have no duty or
responsibility in case of any default by us under the applicable unit agreement
or unit, including any duty or responsibility to initiate any proceedings at law
or otherwise, or to make any demand upon us. Any holder of a unit, without the
consent of the related unit agent or the holder of any other unit, may enforce
by appropriate legal action its rights as holder under any security included in
the unit.
Title
We, the unit agent, and any of their agents may treat the registered
holder of any unit certificate as an absolute owner of the units evidenced by
that certificate for any purposes and as the person entitled to exercise the
rights attaching to the units so requested, despite any notice to the contrary.
ARIZONA CORPORATE TAKEOVER ACT, CERTAIN CHARTER PROVISIONS
AND SHAREHOLDER RIGHTS PLAN
We are subject to the provisions of the Arizona Corporate Takeover Act.
The Arizona Corporate Takeover Act and certain provisions of our articles of
incorporation and bylaws, as summarized in the following paragraphs, may have
the effect of discouraging, delaying, or preventing hostile takeovers (including
those that might result in a premium over the market price of our common stock),
or discouraging, delaying, or preventing changes in control or management of our
company.
Arizona Corporate Takeover Act
Article 1 of the Arizona Corporate Takeover Act is intended to restrict
"greenmail" attempts by prohibiting us from purchasing any shares of our capital
stock from any beneficial owner of more than 5% of the voting power of our
company at a per share price in excess of the average market price during the 30
trading days prior to the purchase, unless
o the 5% owner has beneficially owned the shares to be purchased for a
period of at least three years prior to the purchase;
o a majority of our shareholders (excluding the 5% owner, its
affiliates or associates, and any officer or director of our
company) approves the purchase; or
o we make the offer available to all holders of shares of our capital
stock.
Article 2 of the Arizona Corporate Takeover Act is intended to discourage
the direct or indirect acquisition by any person of beneficial ownership of our
shares (other than an acquisition of shares from us) that would constitute a
control share acquisition. A "control share acquisition" is defined as an
acquisition of shares by any person, when added to other shares of our company
beneficially owned by such person, immediately after the acquisition entitles
such person to exercise or direct the exercise of
o at least 20% but less than 33 1/3%;
o at least 33 1/3% but less than or equal to 50%; or
o more than 50% of the voting power of our capital stock.
9
The Arizona Corporate Takeover Act (1) gives our shareholders other than
any person that makes or proposes to make a control share acquisition or our
company's directors and officers the right to limit the voting power of the
shares acquired by the acquiring person that exceed the threshold voting ranges
described above, other than in the election of directors, and (2) gives us the
right to redeem such shares from the acquiring person at a price equal to their
fair market value under certain circumstances.
Article 3 of the Arizona Corporate Takeover Act is intended to discourage
us from entering into certain mergers, consolidations, share exchanges, sales or
other dispositions of our assets, liquidation or dissolution of our company,
reclassification of securities, stock dividends, stock splits, or other
distribution of shares, and certain other transactions with any interested
shareholder (as defined in the takeover act) or any of the interested
shareholder's affiliates for a period of three years after the date that the
interested shareholder first acquired the shares of common stock that qualify
such person as an interested shareholder, unless either the business combination
or the interested shareholder's acquisition of shares is approved by a
committee of our Board of Directors (comprised of disinterested directors or
other persons) prior to the date on which the interested shareholder first
acquired the shares that qualify such person as an interested shareholder. In
addition, Article 3 prohibits us from engaging in any business combination with
an interested shareholder or any of the interested shareholder's affiliates
after such three-year period unless:
o the business combination or acquisition of shares by the interested
shareholder was approved by our Board of Directors prior to the date
on which the interested shareholder acquired the shares that
qualified such person as an interested shareholder;
o the business combination is approved by our shareholders (excluding
the interested person or any of its affiliates) at a meeting called
after such three-year period; or
o the business combination satisfies each of certain statutory
requirements.
Article 3 defines an "interested shareholder" as any person (other than
us and our subsidiaries) that either (a) beneficially owns 10% or more of the
voting power of our outstanding shares, or (b) is an affiliate or associate of
our company and who, at any time within the three-year period preceding the
transaction, was the beneficial owner of 10% or more of the voting power of our
outstanding shares.
Certain Charter Provisions
In addition to the provisions of the Arizona Corporate Takeover Act
described above, our articles of incorporation and bylaws contain a number of
provisions relating to corporate governance and the rights of shareholders.
These provisions include the following:
o the authority of our Board of Directors to fill vacancies on the
Board of Directors;
o the authority of our Board of Directors to issue preferred stock in
series with such voting rights and other powers as our Board of
Directors may determine;
o a provision that, unless otherwise prohibited by law, special
meetings of the shareholders may be called only by our Board of
Directors, or by holders of not fewer than 10% of all shares
entitled to vote at the meeting; and
o a provision for cumulative voting in the election of directors,
pursuant to Arizona law.
Shareholder Rights Plan
In addition to the shares of Class A Common Stock included in this
Prospectus, we are also registering the Right per our Shareholder Rights Plan
attached to each of these shares. The definition of a Right, as well as a
description of our Shareholder Rights Plan, follows.
We have established a shareholder rights plan under which each share of
common stock presently outstanding or which is issued hereafter prior to the
"distribution date," defined below, is granted one preferred share purchase
right, or a right, and each share of Series A or Series B preferred stock
presently outstanding or hereafter issued prior to the distribution date, which
is convertible into common stock of the Company, is granted such number of
rights equal to the number of common shares such preferred stock is convertible
in to. Each right entitles the registered holder to purchase from us one
one-hundredth (1/100th) of a share of the series C junior participating
preferred stock of the Company at a price of $25.00 per 1/100th of a series C
preferred share, subject to adjustment in the event of stock dividends and
similar events occurring prior to the distribution date. Each 1/100th of a
series C preferred share would have voting, dividend and liquidation rights
which are the approximate equivalent of one share of Class A common stock.
10
The rights are not exercisable until the distribution date, which is the
earlier to occur of (i) 10 days following the date, or the stock acquisition
date, of a public announcement that a person or group, or an acquiring person,
has acquired beneficial ownership, of 25% or more of the outstanding common
stock of the Company, or (ii) 10 business days, unless extended by our board,
following the commencement of a tender offer or exchange offer the consummation
of which would result in the beneficial ownership by a person or group of 25% or
more of the outstanding common stock.
Until the distribution date, the rights will be transferred with and only
with the common stock or the preferred stock, and the surrender for transfer of
any certificate for common stock or preferred stock will also constitute the
transfer of the rights associated with the shares represented by such
certificate. As soon as practicable following the distribution date, separate
certificates evidencing the rights will be mailed to holders of record of the
common stock and preferred stock as of the close of business on the distribution
date, and the rights will then become separately tradable.
In the event that any person or group becomes the beneficial owner of 25%
or more of the outstanding shares of common stock, other than pursuant to a
tender or exchange offer for all outstanding shares of common stock at a price
and on terms determined by a majority of our board who are not representatives,
affiliates or associates of an acquiring person, to be at a price which is fair
to our shareholders and otherwise in the best interests of our Company and our
shareholders, each holder of a right, other than rights beneficially owned by,
or in certain circumstances acquired from, the acquiring person or its
associates or affiliates, which will be void, will thereafter have the right to
receive upon exercise that number of shares of common stock, or, in certain
circumstances, cash, property or other securities of our Company, having a value
equal to two times the exercise price of the right. However, the rights are not
exercisable following any such event until such time as the rights are no longer
redeemable by us as set forth below.
In the event that after the stock acquisition date, (i) we engage in a
merger or consolidation in which we are not the surviving corporation or in
which shares of our common stock are converted or exchanged, other than a
transaction pursuant to a qualifying offer, or (ii) 50% or more of the Company's
consolidated assets or earning power are sold or transferred, proper provision
will be made so that each holder of a right, other than rights which have
previously been voided as set forth above, will thereafter have the right to
receive, upon exercise of the right, that number of shares of common stock of
the acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the right.
At any time after a person or group becomes an acquiring person and prior
to the acquisition by such person or group of 50% or more of the outstanding
common stock, our board may exchange the rights, other than rights owned by such
person or group, which have become void, in whole or in part, at an exchange
ratio of one share of common stock, or 1/100th of a series C junior
participating preferred share, into a share of a class or series of our
preferred stock having equivalent rights, preferences and privileges, per right,
subject to adjustment.
At any time until 10 days following the stock acquisition date, our board
may redeem the rights in whole, but not in part, at a redemption price of $.001
per right, subject to adjustment.
Prior to the distribution date, the terms of the rights may, without the
consent of the holders of the rights, be amended by our board in any respect
whatsoever, except for an amendment that would change the redemption price, the
exercise price of the rights, the number of 1/100ths of a series C preferred
share purchasable upon exercise of the rights or the final expiration date of
the rights. After the distribution date, our board may amend the rights
agreement to cure any ambiguity or inconsistency, to make changes which do not
adversely affect the interests of holders of rights, excluding the interest of
any acquiring person, or to shorten or lengthen any time period under the rights
agreement; provided, however, that no amendment to adjust the time period
governing redemption may be made at such time as the rights are not redeemable.
The rights will expire on June 30, 2014, unless the rights are earlier redeemed
by us as described above.
PLAN OF DISTRIBUTION
We may sell the securities being offered hereby in one or more of the
following ways from time to time:
o through agents to the public or to investors;
o to one or more underwriters or dealers for resale to the public or
to investors;
11
o in "at the market offerings," within the meaning of Rule 415(a)(4)
of the Securities Act of 1933, as amended, to or through a market
maker or into an existing trading market, or an exchange or
otherwise;
o directly to investors in privately negotiated transactions; or
o through a combination of these methods of sale.
The securities that we distribute by any of these methods may be sold, in
one or more transactions, at:
o a fixed price or prices, which may be changed;
o market prices prevailing at the time of sale;
o prices related to prevailing market prices; or
o negotiated prices.
We will set forth in a prospectus supplement the terms of the offering of
our securities, including:
o the name or names of any agents or underwriters;
o the purchase price of our securities being offered and the proceeds
we will receive from the sale;
o any over-allotment options under which underwriters may purchase
additional securities from us;
o any agency fees or underwriting discounts and commissions and other
items constituting agents' or underwriters' compensation;
o the public offering price;
o any discounts or concessions allowed or reallowed or paid to
dealers; and
o any securities exchanges on which such common stock may be listed.
Underwriters
Underwriters, dealers and agents that participate in the distribution of
the securities may be underwriters as defined in the Securities Act and any
discounts or commissions they receive from us and any profit on their resale of
the securities may be treated as underwriting discounts and commissions under
the Securities Act. We will identify in the applicable prospectus supplement
any underwriters, dealers or agents and will describe their compensation. We may
have agreements with the underwriters, dealers and agents to indemnify them
against specified civil liabilities, including liabilities under the Securities
Act. Underwriters, dealers and agents may engage in transactions with or perform
services for us or our subsidiaries in the ordinary course of their businesses.
If we use underwriters for a sale of securities, the underwriters will
acquire the securities for their own account. The underwriters may resell the
securities in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The obligations of the underwriters to purchase the securities will be subject
to the conditions set forth in the applicable underwriting agreement. The
underwriters will be obligated to purchase all the securities offered if they
purchase any of the securities offered. We may change from time to time any
initial public offering price and any discounts or concessions the underwriters
allow or reallow or pay to dealers. We may use underwriters with whom we have a
material relationship. We will describe in the prospectus supplement naming the
underwriters and the nature of any such relationship.
If indicated in the applicable prospectus supplement, we will authorize
underwriters or other persons acting as our agents to solicit offers by
particular institutions to purchase securities from us at the public offering
price set forth in such prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on the date or dates stated in such
prospectus supplement. Each delayed delivery contract will be for an amount no
less than, and the aggregate principal amounts of securities sold
12
under delayed delivery contracts shall be not less nor more than, the respective
amounts stated in the applicable prospectus supplement. Institutions with which
such contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but will in all cases be subject to our
approval. The obligations of any purchaser under any such contract will be
subject to the conditions that (a) the purchase of the securities shall not at
the time of delivery be prohibited under the laws of any jurisdiction in the
United States to which the purchaser is subject, and (b) if the securities are
being sold to underwriters, we shall have sold to the underwriters the total
principal amount of the securities less the principal amount thereof covered by
the contracts. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
Agents
We may designate agents who agree to use their reasonable efforts to
solicit purchases for the period of their appointment or to sell securities on a
continuing basis.
Direct Sales
We may also sell securities directly to one or more purchasers without
using underwriters or agents.
Trading Markets and Listing of Securities
Unless otherwise specified in the applicable prospectus supplement, each
class or series of securities will be a new issue with no established trading
market, other than our common stock, which is traded on the Nasdaq Capital
Market. We may elect to list any other class or series of securities on any
exchange, but we are not obligated to do so. It is possible that one or more
underwriters may make a market in a class or series of securities, but the
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. We cannot give any assurance as to the
liquidity of the trading market for any of the securities.
Stabilization Activities
In connection with an offering, an underwriter may purchase and sell
securities in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Shorts sales involve the sale by the underwriters of a greater number of
securities than they are required to purchase in the offering. "Covered" short
sales are sales made in an amount not greater than the underwriters' option to
purchase additional securities from us, if any, in the offering. If the
underwriters have an over-allotment option to purchase additional securities
from us, the underwriters may close out any covered short position by either
exercising their over-allotment option or purchasing securities in the open
market. In determining the source of securities to close out the covered short
position, the underwriters may consider, among other things, the price of
securities available for purchase in the open market as compared to the price at
which they may purchase securities through the over-allotment option. "Naked"
short sales are any sales in excess of such option or where the underwriters do
not have an over-allotment option. The underwriters must close out any naked
short position by purchasing securities in the open market. A naked short
position is more likely to be created if the underwriters are concerned that
there may be downward pressure on the price of the securities in the open market
after pricing that could adversely affect investors who purchase in the
offering.
Accordingly, to cover these short sales positions or to otherwise
stabilize or maintain the price of the securities, the underwriters may bid for
or purchase securities in the open market and may impose penalty bids. If
penalty bids are imposed, selling concessions allowed to syndicate members or
other broker-dealers participating in the offering are reclaimed if securities
previously distributed in the offering are repurchased, whether in connection
with stabilization transactions or otherwise. The effect of these transactions
may be to stabilize or maintain the market price of the securities at a level
above that which might otherwise prevail in the open market. The impositions of
a penalty bid may also affect the price of the securities to the extent that it
discourages resale of the securities. The magnitude or effect of any
stabilization or other transactions is uncertain. These transactions may be
effected on the Nasdaq Capital Market or otherwise and, if commenced, may be
discontinued at any time.
13
LEGAL MATTERS
Certain legal matters with respect to the validity of the issuance of the
Securities offered hereby will be passed upon by The Law Office of Steven P.
Oman, P.C., Scottsdale, Arizona. Said firm, and Steven P. Oman, owned, as of
the date of this prospectus, an aggregate of 280,404 shares of our Class A
Common Stock on an as-converted basis.
Lawyers and employees of The Law Office of Steven P. Oman, P.C. and
entities controlled by lawyers at The Law Office of Steven P. Oman, P.C. may
engage in transactions in the open market or otherwise to purchase or sell our
securities from time to time.
The Company is a party to litigation which is more fully described in our
Form 10-K for the fiscal year ended June 30, 2009, filed with the SEC on
September 30, 2009.
EXPERTS
The consolidated financial statements and related financial statement
schedule incorporated in this prospectus by reference from our Annual Report on
Form 10-K for the fiscal year ended June 30, 2009 have been audited by Semple,
Marchal & Cooper, LLP, independent registered public accountants, as stated in
their reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other documents with the SEC. You
may read and copy any document we file at the SEC's public reference room at 100
F Street, N.E., Room 1580, Washington, DC 20549. You should call 1-800-SEC-0330
for more information on the operation of the public reference room. Our SEC
filings are also available to you on the SEC's Internet site at
http://www.sec.gov. The SEC's Internet site contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the SEC.
This prospectus is part of a registration statement that we filed with
the SEC. The registration statement contains more information than this
prospectus regarding us and our securities, including certain exhibits and
schedules. You can obtain a copy of the registration statement from the SEC at
the address listed above or from the SEC's Internet site.
Our Internet address is www.Alanco.com. The information on our Internet
website is not incorporated by reference in this prospectus.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate" into this prospectus information that
we file with the SEC in other documents. This means that we can disclose
important information to you by referring to other documents that contain that
information. Any information that we incorporate by reference is considered part
of this prospectus. The documents and reports that we list below are
incorporated by reference into this prospectus. In addition, all documents and
reports which we file pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this prospectus are incorporated by reference
in this prospectus as of the respective filing dates of these documents and
reports. Statements contained in documents that we file with the SEC and that
are incorporated by reference in this prospectus will automatically update and
supersede information contained in this prospectus, including information in
previously filed documents or reports that have been incorporated by reference
in this prospectus, to the extent the new information differs from or is
inconsistent with the old information.
We have filed the following documents with the SEC. These documents are
incorporated herein by reference as of their respective dates of filing:
1. The description of our Class A Common Stock set forth in our
registration statement on Form 10/A filed with the SEC on March
27, 1981, and any subsequent amendment or report filed for the
purpose of updating this description.
2. Our annual report on Form 10-K for the fiscal year ended June 30,
2009 filed with the SEC on September 30, 2009.
14
3. Our Form 8-K filed with the SEC on October 2, 2009.
4. Our Form 8-K filed with the SEC on October 6, 2009.
5. Our Form 10-Q filed with the SEC on November 16, 2009
6. Our Form 8-K filed with the SEC on November 17, 2009
7. Our Form 8-K filed with the SEC on November 18, 2009
8. Our Form 8-K filed with the SEC on November 20, 2009
We also are incorporating by reference in this prospectus and any
subsequent prospectus supplements all reports and other documents that we file
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this prospectus and prior to the termination of this offering of
securities. These reports and documents will be incorporated by reference in
and considered to be a part of this prospectus and any subsequent prospectus
supplements as of the date of filing of such reports and documents.
Upon request, whether written or oral, we will provide without charge to
each person to whom a copy of this prospectus is delivered, including any
beneficial owner, a copy of any or all of the information that has been or may
be incorporated by reference in this prospectus or any prospectus supplements
but not delivered with the prospectus or any subsequent prospectus supplements.
You should direct any requests for this information to the office of the
Secretary, at our principal executive offices, located at 15575 North 83rd Way,
Suite 3, Scottsdale, AZ 85260. The telephone number at that address is
(480) 607-1010.
You should rely only on the information contained or incorporated by
reference in this prospectus or any applicable prospectus supplement. We have
not authorized anyone to provide you with any other information. The securities
offered in this prospectus may only be offered in states where the offer is
permitted, and we are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus or any applicable prospectus supplement is accurate as of any date
other than the dates on the front of these documents.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is an itemization of all expenses (subject to future
contingencies) incurred or to be incurred by us in connection with the issuance
and distribution of the securities being registered. None of the following
expenses will be borne by the selling stockholders unless specifically indicated
below.
Registration fee $279
Printing expenses* $5,000
Accounting fees and expenses* $5,000
Legal fees and expenses* $10,000
Transfer agent fees* $2,000
Miscellaneous* $20,000
TOTAL $42,279
* Estimated
15
Item 15. Indemnification of Directors and Officers.
The General Corporation Law of the State of Arizona allows corporations to
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 or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
or she 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, partner, trustee, or agent of another corporation, partnership, joint
venture, trust, other enterprise or employee benefit plan, unless it is
established that:
o the act or omission was material to the matter giving rise to the
proceeding and either was committed in bad faith or was the result
of active and deliberate dishonesty;
o the person actually received an improper personal benefit in money,
property or services; or
o in the case of any criminal proceeding, the person had reasonable
cause to believe that the act or omission was unlawful.
Under Arizona law, indemnification may be provided against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by the person in
connection with the proceeding. The indemnification may be provided, however,
only if authorized for a specific proceeding after a determination has been made
that indemnification is permissible under the circumstances because the person
met the applicable standard of conduct. This determination is required to be
made:
o by the Board of Directors by a majority vote of a quorum consisting
of directors not, at the time, parties to the proceeding or, if a
quorum cannot be obtained, then by a majority vote of a committee of
the board consisting solely of two or more directors not, at the
time, parties to the proceeding and who a majority of the Board of
Directors designated to act in the matter;
o by special legal counsel selected by the board or board committee by
the vote set forth above, or, if such vote cannot be obtained, by a
majority of the entire board; or
o by the stockholders.
If the proceeding is one by or in the right of the corporation, indemnification
may not be provided as to any proceeding in which the person is found liable to
the corporation.
An Arizona corporation may pay, before final disposition, the expenses,
including attorneys' fees, incurred by a director, officer, employee or agent in
defending a proceeding. Under Arizona law, expenses may be advanced to a
director or officer when the director or officer gives a written affirmation of
his or her good faith belief that he or she has met the standard of conduct
necessary for indemnification and a written undertaking to the corporation to
repay the amounts advanced if it is ultimately determined that he or she is not
entitled to indemnification. Arizona law does not require that the undertaking
be secured, and the undertaking may be accepted without reference to the
financial ability of the director or officer to repay the advance. An Arizona
corporation is required to indemnify any director who has been successful, on
the merits or otherwise, in defense of a proceeding for reasonable expenses. The
determination as to reasonableness of expenses is required to be made in the
same manner as required for indemnification.
Under Arizona law, the indemnification and advancement of expenses provided by
statute are not exclusive of any other rights to which a person who is not a
director seeking indemnification or advancement of expenses may be entitled
under any articles of incorporation, bylaw, agreement, vote of stockholders,
vote of directors or otherwise.
Our bylaws provide that we shall indemnify each director, officer or employee
16
o to the fullest extent permitted by the General Corporation Law of
the State of Arizona, or any similar provision or provisions of
applicable law at the time in effect, in connection with 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 at any time serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, other enterprise or
employee benefit plan; and
o to the fullest extent permitted by the common law and by any
statutory provision other than the General Corporation Law of the
State of Arizona in connection with 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 at any time a director, officer or employee of the corporation,
or is or was at any time serving at the request of the corporation
as a director, officer, or employee of another corporation,
partnership, joint venture, trust, other enterprise or employee
benefit plan.
Reasonable expenses incurred in defending any action, suit or proceeding
described above shall 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, officer or employee to repay such amount to the
corporation if it shall ultimately be determined that he is not entitled to be
indemnified by us.
In addition to the general indemnification described above, Arizona law permits
corporations to include any provision expanding or limiting the liability of its
directors and officers to the corporation or its stockholders for money damages,
but may not include any provision that restricts or limits the liability of its
directors or officers to the corporation or its stockholders:
o to the extent that it is proved that the person actually received an
improper benefit or profit in money, property, or services for the
amount of the benefit or profit in money, property or services
actually received; or
o to the extent that a judgment or other final adjudication adverse to
the person is entered in a proceeding based on a finding in the
proceeding that the person's action, or failure to act, was the
result of active and deliberate dishonesty and was material to the
cause of action adjudicated in the proceeding.
We have adopted, in our articles of incorporation, a provision that eliminates
and limits the personal liability of each of our directors and officers to the
full extent permitted by the laws of the State of Arizona.
Item 16. Exhibits.
EXHIBIT DESCRIPTION OF EXHIBIT
NUMBER
1.2* Form of Underwriting Agreement, if any.
4.6* Form of Warrant Agreement, if any, including form of Warrant.
5.1 Opinion of Law Office of Steven P. Oman, P.C.
23.1 Consent of Law Office of Steven P. Oman, P.C. (included in
Exhibit 5).
23.2 Consent of Semple, Marchal & Cooper, LLP, Independent Auditors.
24.1 Power of Attorney. Located following signature page of this
Registration Statement.
99.1* Stock Purchase Agreement, if any
* To be filed by an amendment to the registration statement or as an
exhibit to a Current Report on Form 8-K under the Exchange Act,
subsequent to effectiveness, if necessary.
17
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(A) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(B) To reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume 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 high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(C) To include any additional or changed material information with
respect to the plan of distribution;
provided, however, that paragraphs (1)(A), (1)(B) and (1)(C) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant under the
Exchange Act, or is contained in a form of prospectus filed pursuant to
Rule 424(b) that is deemed part of and included in the registration statement
material.
(2) That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) That, for the purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act that is incorporated by reference in the 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.
(5) That, for purposes of determining any liability under the Securities Act to
any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering shall be deemed to be part of and
included in the registration statement as of the date it was first used after
effectiveness. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use, supersede or
modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any document immediately
prior to such date of first use.
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 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.
18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Scottsdale, State of Arizona, on November 20, 2009.
ALANCO TECHNOLOGIES, INC.
an Arizona corporation
By: /s/ Robert R. Kauffman
Robert R. Kauffman
Chief Executive Officer
(Principal Executive Officer)
19
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints jointly and severally, Robert R. Kauffman
and John A. Carlson, and each one of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including pre-effective and
post-effective amendments) to this registration statement, and to sign any
registration statement and amendments thereto for the same offering pursuant to
Rule 462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all which said attorneys-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do, or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated:
Signature Title Date
/s/ Robert R. Kauffman Chief Executive Officer (Principal
---------------------- Executive Officer), Director and
Robert R. Kauffman Chairman of the Board November 20, 2009
/s/ John A. Carlson Chief Financial Officer (Principal
------------------- Financial Officer and Principal
John A. Carlson Accounting Officer) and Director November 20, 2009
/s/ Harold S. Carpenter
-----------------------
Harold S. Carpenter Director November 20, 2009
/s/ Donald E. Anderson
----------------------
Donald E. Anderson Director November 20, 2009
/s/ James T. Hecker
-------------------
James T. Hecker Director November 20, 2009
/s/ Thomas C. LaVoy
-------------------
Thomas C. LaVoy Director November 20, 2009
/s/ Timothy P. Slifkin
----------------------
Timothy P. Slifkin Director November 20, 2009
20
EXHIBIT 5.1
Law Office of
STEVEN P. OMAN, P.C.
8664 E. Chama Road
Telephone: (480) 348-1470 Scottsdale, Arizona 85255
Facsimile: (480) 348-1471
e-mail: soman@omanlaw.net
November 20, 2009
Alanco Technologies, Inc.
15575 N. 83rd Way, Suite 3
Scottsdale, Arizona 85260
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as legal counsel to Alanco Technologies, Inc., an Arizona
corporation (the "Company"), in connection with the registration statement on
Form S-3 (the "Registration Statement") being filed by the Company with the U.S.
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"), on the date hereof.
You have provided us with a draft of the Registration Statement in the
form in which it will be filed with the Commission. The Registration Statement
includes a base prospectus (the "Prospectus"), which provides that it will be
supplemented in the future by one or more supplements to the Prospectus (each, a
"Prospectus Supplement"). The Prospectus provides for the offering of the
following securities: (i) shares of the Company's Class A common stock ("Common
Stock"), (ii) warrants to purchase Common Stock ("Warrants"), and (iii) units
comprised of the foregoing ("Units"). The Common Stock, Warrants and Units are
collectively referred to as the "Securities." The Securities may be offered and
sold from time to time pursuant to Rule 415 promulgated under the Act, in
amounts, at prices and on terms to be determined at the time of the offering
thereof, at an aggregate initial offering price not to exceed $5,000,000.
We have made such legal and factual examinations and inquiries, including
an examination of originals or copies certified or otherwise identified to our
satisfaction of such documents, corporate records and instruments, as we have
deemed necessary or appropriate for purposes of this opinion. In our
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, and the conformity to authentic
original documents of all documents submitted to us as copies. As to facts
material to the opinions, statements and assumptions expressed herein, we have
relied upon oral or written statements and representations of officers and other
representatives of the Company and others. We have not independently verified
such factual matters.
In expressing our opinions below, we have assumed that:
(a) the Registration Statement (including any and all required
post-effective amendments thereto) will have become effective under the Act and
will comply with all applicable laws;
(b) the Registration Statement (including any and all required
post-effective amendments thereto) will be effective under the Act and will
comply with all applicable laws at the time the Securities are offered or sold
as contemplated by the Registration Statement (including any and all required
post-effective amendments thereto), the Prospectus and the applicable
Prospectus Supplement(s);
(c) no stop order suspending the effectiveness of the
Registration Statement (including any and all required post-effective amendments
thereto) will have been issued and remain in effect;
21
(d) a Prospectus Supplement describing the Securities offered
thereby and the offering thereof and complying with all applicable laws will
have been prepared and filed with the Commission;
(e) the Securities will be offered and sold in the form and with
the terms set forth in the Registration Statement (including any and all
required post-effective amendments thereto), the Prospectus and the applicable
Prospectus Supplement(s) and the organizational documents of the Company;
(f) the Securities will be offered and sold in compliance with
all applicable federal and state securities laws and in the manner stated in the
Registration Statement (including any and all required post-effective amendments
thereto), the Prospectus and the applicable Prospectus Supplement(s);
(g) the Company will have obtained any and all legally required
consents, approvals, authorizations and other orders of the Commission and any
and all other regulatory authorities and other third parties necessary to offer
and sell the Securities being offered;
(h) the Securities offered and sold comply with all requirements
and restrictions, if any, applicable to the Company, whether imposed by any
court or governmental or regulatory body having jurisdiction over the Company;
(i) a definitive purchase, underwriting or similar agreement
(each a "Purchase Agreement") with respect to any Securities offered and sold
will have been duly authorized and validly executed and delivered by the Company
and the other parties thereto; and
(j) any Securities or other securities issuable upon conversion,
exchange or exercise of any Security being offered and sold will be duly
authorized, created and, if appropriate, reserved for issuance upon such
conversion, exchange or exercise.
Our opinions expressed below are subject to the qualifications that we
express no opinion as to the applicability of, compliance with or effect of: (i)
any bankruptcy, insolvency, reorganization, preference, fraudulent conveyance,
fraudulent transfer, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors generally; (ii) general principles of
equity, whether considered in a proceeding in equity or at law (including the
possible unavailability of specific performance or injunctive relief), concepts
of materiality, reasonableness, good faith and fair dealing, and the discretion
of the court before which a proceeding is brought; or (iii) public policy
considerations that may limit the rights of parties to obtain certain remedies.
We express no opinion as to (i) any provision to the extent it requires
any party to indemnify any other person against loss in obtaining the currency
due following a court judgment rendered in another currency, (ii) any provision
providing for the indemnification of or contribution to a party with respect to
a liability where such indemnification or contribution is contrary to public
policy, (iii) any provision for liquidated damages, default interest, late
charges, monetary penalties, prepayment or make-whole premiums or other economic
remedies to the extent such provisions are deemed to constitute a penalty, (iv)
consents to, or restrictions upon, governing law, jurisdiction, venue,
arbitration, remedies or judicial relief, (v) any provision requiring the
payment of attorneys' fees, where such payment is contrary to law or public
policy, (vi) any provision requiring the payment of interest on interest, (vii)
the creation, validity, attachment, perfection, or priority of any lien or
security interest, (viii) advance waivers of claims, defenses, rights granted by
law, or notice, opportunity for hearing, evidentiary requirements, statutes of
limitation, trial by jury or at law, or other procedural rights, (ix) waivers of
broadly or vaguely stated rights, (x) provisions for exclusivity, election or
cumulation of rights or remedies, (xi) provisions authorizing or validating
conclusive or discretionary determinations, (xii) grants of setoff rights,
(xiii) proxies, powers and trusts, (xiv) provisions prohibiting, restricting, or
requiring consent to assignment or transfer of any right or property, (xv)
provisions purporting to make a guarantor primarily liable rather than as a
surety, (xvi) provisions purporting to waive modifications of any guaranteed
obligation to the extent such modification constitutes a novation, (xvii) any
provision to the extent it requires that a claim with respect to a security
denominated in other than U.S. dollars (or a judgment in respect of such a
claim) be converted into U.S. dollars at a rate of exchange at a particular
date, to the extent applicable law otherwise provides, (xviii) compliance with
any usury laws, (xix) the severability, if invalid, of provisions to the
foregoing effect, (xx) the securities or "blue sky" laws of any state to the
offer or sale of the Securities, and (xxi) the antifraud provisions of the
securities or other laws of any jurisdiction.
22
We have also assumed that: (i) the Warrants and any related warrant
agreement and the Units and any related unit agreement (collectively, the
"Documents") will be governed by the internal laws of the State of Arizona; (ii)
each of the Documents will be duly authorized, executed and delivered by the
parties thereto; (iii) each of the Documents will constitute legally valid and
binding obligations of the parties thereto other than the Company, enforceable
against each of them in accordance with their respective terms; and (iv) the
status of each of the Documents as legally valid and binding obligations of the
parties thereto will not be affected by any (a) breaches of, or defaults under,
any agreements or instruments, (b) violations of any statutes, rules,
regulations or court or governmental orders, or (c) failures to obtain required
consents, approvals or authorizations from, or to make required registrations,
declarations or filings with, any governmental authorities or other third
parties.
We are opining herein only as to the federal laws of the United States,
the internal laws of the State of Arizona, in each case as in effect on the date
of this opinion, and we express no opinion with respect to the laws of any other
jurisdiction or as to any matters of municipal law or the laws of any other
local agencies within any state.
Subject to the foregoing and the other matters set forth herein, it is
our opinion that, as of the date hereof:
1. Upon adoption by the board of directors of the Company of a
resolution in form and content as required by applicable law duly authorizing
the issuance of shares of Common Stock (with such shares, together with all
shares of Common Stock previously issued or reserved for issuance and not duly
and lawfully retired, not exceeding the then authorized shares of Common Stock),
and upon issuance and delivery of and payment of legal in accordance with the
applicable Purchase Agreement and all applicable law, such shares of Common
Stock will be validly issued, fully paid and nonassessable.
2. When (a) a warrant agreement, if any, has been duly
authorized by all necessary corporate action of the Company (including, without
limitation, the adoption by the board of directors of the Company of a
resolution in form and content as required by applicable law duly authorizing
the execution and delivery of such warrant agreement) and duly executed and
delivered by the Company, (b) the specific terms of a particular issuance of
Warrants have been duly established in accordance with such warrant agreement,
if any, and all applicable law and authorized by all necessary corporate action
of the Company (including, without limitation, the adoption by the board of
directors of the Company of a resolution in form and content as required by
applicable law duly authorizing the issuance and delivery of the Warrants), and
(c) the Warrants have been duly executed, issued and delivered against payment
therefor in accordance with such warrant agreement, if any, the applicable
Purchase Agreement and all applicable law (and assuming the satisfaction of the
conditions described in the applicable numbered paragraphs of this opinion
letter with respect to our opinion regarding any Securities issuable upon
exercise of the Warrants), such Warrants will be legally valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms.
3. When (a) a unit agreement has been duly authorized by all
necessary corporate action of the Company (including, without limitation, the
adoption by the board of directors of the Company of a resolution duly
authorizing the execution and delivery of such unit agreement) and duly
executed and delivered by the Company, (b) the specific terms of a particular
issuance of the related Units have been duly established in accordance with such
unit agreement and all applicable law and authorized by all necessary corporate
action of the Company (including, without limitation, the adoption by the board
of directors of the Company of a resolution in form and content as required by
applicable law duly authorizing the issuance and delivery of the Units), and (c)
such Units have been duly executed, issued and delivered against payment
therefor in accordance with such unit agreement, the applicable Purchase
Agreement and all applicable law (and assuming the satisfaction of the
conditions described in the applicable numbered paragraphs of this opinion
letter with respect to our opinion regarding the Securities underlying the
Units), such Units will be legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.
This opinion is to be used only in connection with the offer and sale of
the Securities while the Registration Statement and any and all required
post-effective amendments thereto are effective.
This opinion is being delivered solely for the benefit of the Company and
such other persons as are entitled to rely upon it pursuant to applicable
provisions of the Securities Act. This opinion may not be used, quoted, relied
upon or referred to for any other purpose nor may this opinion be used, quoted,
relied upon or referred to by any other person, for any purpose, without our
prior written consent.
23
We consent to your filing this opinion as an exhibit to the Registration
Statement and to the reference to our firm in the Prospectus under the heading
"Legal Matters." In giving such consent, we do not thereby admit that we are in
the category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission thereunder.
Very truly yours,
LAW OFFICE OF STEVEN P. OMAN, P.C.
By: /s/ Steven P. Oman
------------------
Steven P. Oman
24
EXHIBIT 23.2
Consent of Independent Registered Public Accounting Firm
Alanco Technologies, Inc. and Subsidiaries
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated
September 28, 2009, relating to the consolidated financial statements of Alanco
Technologies, Inc. and Subsidiaries appearing in the Company's Annual Report on
Form 10-K for the year ended June 30, 2009.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
/s/ Semple, Marchal & Cooper, LLP
Phoenix, Arizona
November 20, 2009
25