As filed
with the Securities and Exchange Commission on August 3, 2005
Registration
No. 333-126856
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
SB-2/A
AMENDMENT
No. 3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
ADSOUTH
PARTNERS, INC.
(Name of
Small Business Issuer in Its Charter)
|
Nevada |
7310 |
68-0448219 |
|
(State
or Other Jurisdiction of |
(Primary
Standard Industrial |
(IRS
Employer |
|
Incorporation
or Organization) |
Classification
Code Number) |
Identification
No.) |
1515 N.
Federal Highway, Suite 418, Boca Raton, FL 33432, (561) 750-0410
(Address
and telephone number of Principal Executive Offices)
1515 N.
Federal Highway, Suite 418, Boca Raton, FL 33432
(Address
of principal place of business)
Mr. Anton
Lee Wingeier, Chief Financial Officer
Adsouth
Partners, Inc.
1515 N.
Federal Highway, Suite 418
Boca
Raton, FL 33432
Telephone:
(561) 750-0410
Fax:
(561) 750-0420
(Name,
address and telephone number of agent for service)
Please
send a copy of all communications to:
Asher S.
Levitsky P.C.
Esanu
Katsky Korins & Siger, LLP
605 Third
Avenue
New York,
NY 10158
Telephone:
(212) 716-3239
Fax:
(212) 716-3338
Approximate
date of proposed sale to the public: As soon as practicable after this
Registration Statement becomes effective.
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. o
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. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) 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. o
If
delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. o
CALCULATION
OF REGISTRATION FEE
|
Title
of each class of
securities
to be registered |
|
Amount
to be registered |
|
Proposed
maximum offering price per unit (1) |
|
Proposed
maximum aggregate offering price(1) |
|
Amount
of registration fee |
|
|
Common
Stock, par value $.0001 per share(2) |
|
|
12,572,548 |
|
$ |
.60 |
|
$ |
7,543,529 |
|
$ |
887.87 |
|
|
Common
Stock, par value $.0001 per share(3) |
|
|
12,893,350 |
|
$ |
1.283 |
|
$ |
16,545,760 |
|
$ |
1,947.44 |
|
| |
|
|
|
|
|
|
|
|
|
|
$ |
2,835.31 |
|
|
(1)
|
Estimated
solely for the purpose of calculating the registration fee pursuant to
Rule 457(a) promulgated under the Securities Act of 1933, as amended,
based on the last sale price of the common stock on the OTC Bulletin Board
of $.60 on July 20, 2005 for the outstanding shares of common stock and
the shares of common stock issuable upon conversion of the preferred stock
(12,572,548 shares) and the average exercise price with respect to the
12,893,350 shares of common stock issuable upon exercise of
warrants. |
|
(2) |
Represents
1,533,535 outstanding shares of common stock and 11,039,013 shares of
common stock issuable upon conversion of series B preferred
stock. |
|
(3) |
Represents
12,893,350 shares of common stock issuable upon exercise of warrants at an
average exercise price of $1.283 per share.
|
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.
PRELIMINARY
PROSPECTUS SUBJECT TO COMPLETION DATED AUGUST 3, 2005
PROSPECTUS
25,465,898
Shares
ADSOUTH
PARTNERS, INC.
Common
Stock
OTC
Bulletin Board Trading Symbol: ASPR
The
selling stockholders may offer and sell from time to time up to an aggregate of
25,465,898 shares of our common stock that they have acquired or may acquire
from us, including shares that they may acquire upon conversion of series B
convertible preferred stock and exercise of warrants. For information concerning
the selling stockholders and the manner in which they may offer and sell shares
of our common stock, including limitation on the number of shares that may be
issued upon conversion of the series B preferred stock or certain of the
warrants, see “Selling Stockholders” and “Plan of Distribution” in this
prospectus.
We will
not receive any proceeds from the sale by the selling stockholders of their
shares of common stock other than the exercise price of the outstanding warrants
if and when the warrants are exercised. We will pay the cost of the preparation
of this prospectus, which is estimated at $55,000.
On August
2, 2005, the last reported sales price for our common stock on the OTC Bulletin
Board was $.50.
Investing
in shares of our common stock involves a high degree of risk. You should
purchase our common stock only if you can afford to lose your entire investment.
See “Risk Factors,” which begins on page 8.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined whether this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The
selling stockholders have not engaged any underwriter in connection with the
sale of their shares of common stock.
The date
of this Prospectus is August __, 2005
You
should rely only on the information contained in this prospectus. We have not
authorized any dealer, salesperson or other person to provide you with
information concerning us, except for the information contained in this
prospectus. The information contained in this prospectus is complete and
accurate only as of the date on the front cover page of this prospectus,
regardless when the time of delivery of this prospectus or the sale of any
common stock. This prospectus is not an offer to sell, nor is it a solicitation
of an offer to buy, our common stock in any jurisdiction in which the offer or
sale is not permitted.
TABLE OF
CONTENTS
| |
Page |
|
Prospectus
Summary |
3 |
|
Risk
Factors |
8 |
|
Forward-Looking
Statements |
20 |
|
Use
of Proceeds |
20 |
|
Selling
Stockholders |
21 |
|
Plan
of Distribution |
26 |
|
Market
for Common Stock and Stockholder Matters |
28 |
|
Management’s
Discussion and Analysis of Financial Condition and Results of Operations
|
28 |
|
Business |
37 |
|
Management |
42 |
|
Principal
Stockholders |
48 |
|
Certain
Relationships and Related Transactions |
49 |
|
Description
of Capital Stock |
49 |
|
Experts |
54 |
|
Legal
Matters |
54 |
|
How
to Get More Information |
54 |
|
Financial
Statements |
F-1 |
PROSPECTUS
SUMMARY
This
summary does not contain all of the information that is important to you. You
should read the entire prospectus, including the Risk Factors and our
consolidated financial statements and related notes appearing elsewhere in this
prospectus before making an investment decision.
Our
Business
Our
business consists of two operating segments, advertising and products. Since
July 8, 2003, when Adsouth, Inc. was formed, we have provided advertising agency
services specializing in direct response media campaigns. Our advertising agency
services include:
| • |
the
placement of advertising in television, internet and print media
outlets; |
| • |
the
production of advertising content including television commercials, print
advertising and other graphics design literature; and
|
| • |
advertising
and marketing consulting services. |
Our
advertising segment generated revenue of $415,000 for the three months ended
March 31, 2005, $2,925,000 for 2004 and $789,000 for 2003. Because we were
organized and commenced business in July 2003, financial information for 2003
relates to the period from July 8, 2003 (date of inception) to December 31,
2003.
Our
strategy is to combine our advertising and direct marketing resources with our
knowledge of the retail market to develop, acquire or obtain rights to products
which we believe can our enhance our overall business. In furtherance of this
strategy we have obtained the rights to the following products since February
2004.
| • |
We
acquired the Dermafresh line of skin care products in February 2004. At
that time, there was one Dermafresh product, a microdermabrasion kit skin
care product. Since then, we have expanded the line and it presently
consists of nine skin care
products. |
| • |
We
entered into an exclusive distribution agreement for Simon Cosmetic’s line
of skin care products covering North America. The initial Simon Solutions
Line product is a lip solution product, which is a lip enhancement product
that is endorsed by Pamela Sue Anderson and was introduced in the retail
market in April 2005. |
| • |
In
January 2005, we acquired the Miko brand, which consists of a line of
marinades and dressing sauces. |
| • |
In
February 2005, we entered into an agreement with Great American Products,
Inc. which granted us the one-year exclusive right to sell Great American
Products’ Ultimate HGH nutritional product in Asia, Africa, the former
Soviet Union, Eastern and Western Europe, the South Pacific, Mexico and
South America. |
| • |
In
February 2005, we entered into a agreement with Delmar, Inc., pursuant to
which Delmar is creating a new line of skin care products which utilize
Delmar’s proprietary technology that incorporates the nutrients included
in the whole egg and is used in Delmar’s proprietary L’Avenir products.
The agreement gives us exclusive distribution rights for mass market
distribution in the United States and Canada. We intend to market these
products under the name “e70.” |
We
generated product revenue from our products segment of $1,306,000 for the three
months ended March 31, 2005 and $1,119,000 for 2004. We did not sell any
products in 2003. All of our product sales for 2004 were sales of our Dermafresh
products. We did not sell any other products in 2004. We filled our initial
orders for the Simon Solutions Lip Solution Product in January 2005, and we
formally introduced the product in the retail market in April 2005. We intend to
introduce other skin care products during 2005. We commenced marketing the Miko
brand marinades and dressings in January 2005. We intend to introduce the Great
American Ultimate HGH nutritional product in selected markets during
2005.
About
Us
We are a
Nevada corporation organized under the name Zenith Transportation, Inc., in
December 1998. Our name was changed to Zenith Technology, Inc. in February 1999.
In January 2004, in a transaction characterized as a reverse acquisition, we
acquired Adsouth, Inc. and our corporate name was changed to Adsouth Partners,
Inc. The transaction by which we acquired the stock of Adsouth, Inc. is referred
to in this prospectus as the “reverse acquisition.” From and after January 4,
2004, our business was the business conducted by Adsouth, Inc. prior to the
reverse acquisition.
We
effected the reverse acquisition through a share exchange agreement dated
January 4, 2004 by and among The Tiger Fund, Inc., which was then our
controlling stockholders, us and John P. Acunto, Jr. and Angela E. Acunto, who
were the sole stockholders of Adsouth, Inc. Pursuant to the share exchange
agreement, The Tiger Fund transferred 1,866,667 shares of common stock to Mr.
and Mrs. Acunto in consideration for which they transferred all of the
outstanding stock of Adsouth, Inc. to us. Upon completion of the share exchange
transaction, the control of our company had changed such that Mr. and Mrs.
Acunto collectively owned more than 50% of our outstanding common
stock.
The
accounting rules for reverse acquisitions require that beginning January 4,
2004, our balance sheet includes the assets and liabilities of Adsouth, Inc. and
our equity accounts were recapitalized to reflect the net equity of Adsouth,
Inc. In addition, the 2003 operating results are those of Adsouth,
Inc.
Our
executive offices are located at 1515 North Federal Highway, Suite 418, Boca
Raton, Florida 33432, telephone (561) 750-0410. Our website is www.adsouthinc.com. Neither
the information nor other statements contained in our website nor the
information contained in any other Internet website is a part of this
prospectus.
References
to “we,”“us,”“our” and similar words refer to Adsouth Partners, Inc. and its
subsidiaries, unless the context indicates otherwise, and prior to the
effectiveness of the reverse acquisition these terms refer to Adsouth, Inc.
Reverse
Split
On March
25, 2005, we effected a one-for-15 reverse split of our common stock. All share
and per share information in this prospectus retroactively reflect such reverse
split.
Issuance
of Securities to the Selling Stockholders
The
selling stockholders acquired their shares in private placements during 2004 and
2005.
In June
and July 2004, we issued 180,001 shares of common stock to two investors for a
total of $251,000.
In
February 2005, we issued to ten of the selling stockholders (i) our 10%
convertible notes in the principal amount of $810,100; (ii) 1,620,200
shares of common stock, and (iii) warrants to purchase 675,083 shares of common
stock at an exercise price of $1.28 per share, for which we received $810,100.
At the closing of our June 2005 private placement, we paid a total of $792,120
to nine of these investors who held convertible notes in the principal amount of
$660,100. The subscription agreements relating to the issuance of the notes gave
us the right to redeem the notes at a premium and gave the holders of the notes
the right to demand redemption of the notes at a premium if we raise money in a
subsequent private placement. In connection with our payment of the notes, the
investors also cancelled warrants to purchase 550,087 shares of common stock.
The remaining $150,000 principal amount of convertible notes, together with the
warrants and shares of common stock issued in connection with the issuance of
the notes, were exchanged for shares of series B preferred stock and warrants,
based on the amount of principal and interest being exchanged. The nine selling
stockholders whose notes were repaid hold 1,320,200 shares of common stock which
they may sell pursuant to this prospectus.
In May
2005, we issued to two of the selling stockholders (i) our 12% convertible notes
due March 2007 in the principal amount of $650,000, (ii) 279,834 shares of
common stock, and (iii) warrants to purchase 812,500 shares of common stock at
an exercise price of $1.275 per share, for which we received $650,000. These two
selling stockholders exchanged the notes, shares of common stock and warrants
issued in the May private placement for shares of series B preferred stock and
warrants, based on the amount of principal and interest being exchanged. As a
result, none of the shares of common stock issued or issuable upon conversion of
the notes and exercise of warrants are included in this prospectus.
In June
2005, we completed a private placement of our series B preferred stock with
common stock purchase warrants pursuant to a purchase agreement with three of
the selling stockholders. Pursuant to the agreement, one selling stockholder
purchased 925,926 shares of series B preferred stock and warrants to purchase
9,058,780 shares of the common stock, and the two selling stockholders who
participated in the May 2005 private placement (one of whom participated in the
February 2005 private placement) purchased a total of 300,361 shares of series B
preferred stock and warrants to purchase 2,941,219 shares of common stock in
exchange for the cancellation of (i) principal and interest on $150,000 of the
promissory note we issued in February 2005 and the $650,000 promissory notes we
issued in May 2005, (ii) warrants to purchase a total of 937,500 shares of
common stock issued in the February and May 2005 private placements and (iii)
570,833 shares of common stock which were issued in the February and May 2005
private placements. Each share of series B preferred stock is convertible into
nine shares of common stock.
In
connection with the February, May and June 2005 private placements, we issued to
brokers and their designees warrants to purchase an aggregate of 893,350 shares
of common stock. At the time of the February 2005 private placement, we issued
to Atlas Capital Services, LLC or its designees 33,334 shares of common stock
for nominal consideration pursuant to an option we granted to Atlas at the time
we engaged Atlas.
We are
registering the 1,533,535 shares of common stock held by selling stockholders,
the 11,039,013 shares of common stock which are issuable upon conversion of the
series B preferred stock, and 12,893,350 shares of common stock issuable upon
conversion of the warrants issued to the investors and the brokers in the three
private placements.
The
Offering
|
Common
Stock Offered:
|
The
selling stockholders are offering a total of 25,465,898 shares of common
stock of which 1,533,535 shares are outstanding and 11,039,013 shares are
issuable upon conversion of the series B preferred stock and 12,893,350
shares are issuable upon exercise of warrants
|
|
Limitation
on Issuance of Common Stock:
|
The
holders of the series B preferred stock and the holders of the warrants
that were issued in the June 2005 private placement can not convert their
shares of series B common stock or exercise the warrants issued in the
private placement to the extent that such exercise would result in the
holders and their affiliates owning more than 4.9% of our outstanding
common stock.
|
|
Outstanding
Shares of Common Stock:
|
7,660,931
shares1,2
|
|
Common
Stock to be Outstanding After Offering:
|
31,593,295
shares1
|
|
Use
of Proceeds:
|
We
will receive no proceeds from the sale of any shares by the selling
stockholders. In the event that any selling stockholders exercise their
warrants, we would receive the exercise price. If all warrants are
exercised, we would receive approximately $16.5 million, all of which, if
and when received, would be used for working capital and other corporate
purposes.
|
|
Principal
Markets:
|
The
common stock is traded on the OTC Bulletin Board.
|
|
Trading
Symbol:
|
ASPR
|
|
1 |
Does
not include a total of 6,309,601 shares of common stock, of which
2,628,078 shares are reserved for options, stock grants or other
equity-based incentives under our stock incentive plans, including
outstanding options to purchase 2,031,963 shares issuable upon exercise of
outstanding options, 3,620,003 shares are reserved for outstanding options
which were not issued pursuant to our stock incentive plans and 61,520
shares are issuable upon exercise of other outstanding warrants held by
persons other than the selling
stockholders. |
|
2 |
Does
not include the shares of common stock issuable upon conversion of the
series B preferred stock or exercise of warrants held by the selling
stockholders. |
Summary
Financial Information
(in
thousands, except per share amounts)
The
following information as at December 31, 2004 and for the year ended December
31, 2004 and the period from inception (July 8, 2003) to December 31, 2003 has
been derived from our audited financial statements which appear elsewhere in
this prospectus. The following information as at March 31, 2005 and for the
three months ended March 31, 2005 and 2004 has been derived from our unaudited
financial statements which appear elsewhere in this prospectus.
Sector
Statement of Operation Information:
| |
|
Three
Months Ended March 31, |
|
Year Ended |
|
Inception (July 8,
2003) |
|
| |
|
2005 |
|
2004 |
|
December
31, 2004 |
|
to
December 31, 2003 |
|
Advertising |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
415 |
|
$ |
375 |
|
$ |
2,925 |
|
$ |
789 |
|
|
Operating
(loss) income |
|
|
(129 |
) |
|
(3,876 |
) |
|
(4,288 |
) |
|
385 |
|
|
Net
(loss) income - advertising |
|
|
(153 |
) |
|
(3,886 |
) |
|
(4,302 |
) |
|
385 |
|
|
Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
1,306
|
|
|
--
|
|
|
1,119
|
|
|
--
|
|
|
Operating
income (loss) |
|
|
305
|
|
|
--
|
|
|
(1,471 |
) |
|
--
|
|
|
Net
income (loss) - products |
|
|
244
|
|
|
--
|
|
|
(1,509 |
) |
|
--
|
|
|
Total
Company |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
|
|
91
|
|
|
(3,886 |
) |
|
(5,811 |
) |
|
385 |
|
|
Weighted
average shares of common stock outstanding (basic) |
|
|
6,984
|
|
|
4,589
|
|
|
5,560
|
|
|
2,890 |
|
|
Net
income (loss) per share of common stock, (basic) |
|
$ |
.01 |
|
|
(.85 |
) |
$ |
(1.05 |
) |
$ |
.13 |
|
|
Weighted
average shares of common stock outstanding (diluted) |
|
|
7,064
|