As filed with the Securities and Exchange Commission on November 17, 2004
Registration No. 333-
UNITED STATES.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
IT&E INTERNATIONAL GROUP
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(Exact name of registrant as specified in its charter
Nevada 27-0009939
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
505 Lomas Santa Fe Drive, Suite 200
Solana Beach, California 92075
(858) 366-0970
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(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
PETER R. SOLLENNE
Chief Executive Officer
IT&E INTERNATIONAL GROUP
505 Lomas Santa Fe Drive, Suite 200
Solana Beach, California 92075
(858) 366-0970
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
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RICHARD S. BEBB THOMAS C. COOK
Pillsbury Winthrop LLP The Law Offices of Thomas C. Cook, Ltd.
2475 Hanover Street 2921 N. Tenaya Way, Suite 234
Palo Alto, California 94304 Las Vegas, Nevada 89128
____________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _____
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _____
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH PROPOSED
CLASS OF PROPOSED MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED RESISTERED(1) SHARE(2) PRICE(2) FEE
Common Stock
$0.001 par value(3) 11,200,000 $0.60 $6,720,000 $852
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(1) The shares being registered for resale by the selling stockholder are
issuable upon conversion of a note and upon exercise of a warrant.
Pursuant to Rule 416 under the Securities Act of 1933, the number of shares
registered hereby shall also be deemed to include such indeterminate number
of additional shares of common stock that may be issued or have been issued
upon conversion of the note or upon exercise of the warrant solely as a
result of provisions to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the bid and ask prices of
the Company's common stock on the Over-the-Counter Bulletin Board on
November 16, 2004.
(3) The aggregate amount of common stock registered hereunder is limited to
that which is permissible under Rule 415(a)(4) under the Securities Action
of 1933.
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 SECURITIES AND EXCHANGE 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.
SUBJECT TO COMPLETION, DATED NOVEMBER 17, 2004
PROSPECTUS
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11,200,000 SHARES
IT&E INTERNATIONAL GROUP
COMMON STOCK
______________________
This prospectus relates to the offer and sale from time to time by the
selling stockholder identified herein of up to 11,200,000 shares of common
stock issuable upon the conversion of a secured convertible term note and the
exercise of a warrant. The warrant entitles the holder to purchase 962,000
shares of common stock for $0.94 per share and an additional 962,000 shares of
common stock for $1.12 per share.
The selling stockholder may offer and sell its shares in transactions on
the Over-the-Counter Bulletin Board, in negotiated transactions, or both. These
sales may occur at fixed prices that are subject to change, at prices that are
determined by prevailing market prices, or at negotiated prices.
The selling stockholder may sell shares to or through broker-dealers, who
may receive compensation in the form of discounts, concessions or commissions
from the selling stockholder, the purchasers of the shares or both. We will not
receive any of the proceeds from the sale of shares by the selling stockholder.
Our common stock is traded on the Over-the-Counter Bulletin Board under
the symbol "ITER.OB." The last reported sale price for our common stock on
November 16, 2004 was $0.58 per share.
Our principal executive offices are located at 505 Lomas Santa Fe Drive,
Suite 200, Solana Beach, California 92075 and our telephone number is (858)
366-0970.
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INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CAREFULLY READ AND CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 1.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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The date of this prospectus is , 2004.
TABLE OF CONTENTS
PAGE
THE COMPANY..................................................................1
FORWARD-LOOKING STATEMENTS...................................................4
USE OF PROCEEDS..............................................................5
SELLING STOCKHOLDER..........................................................5
PLAN OF DISTRIBUTION.........................................................6
LEGAL MATTERS................................................................7
EXPERTS......................................................................9
WHERE YOU CAN FIND MORE INFORMATION..........................................9
DOCUMENTS INCORPORATED BY REFERENCE..........................................9
You should carefully consider the risks described below before making a
decision to buy our common stock. If any of the following risks actually
occur, our business, financial condition and results of operations could be
harmed. In that case, the trading price of our common stock could decline and
you might lose all or part of your investment in our common stock. You should
also refer to the other information set forth in this prospectus, including our
consolidated financial statements and the related notes. The risks and
uncertainties describe below are not the only ones we face. Additional risks
and uncertainties not presently known to us or that we currently deem
immaterial may also negatively impact our business operations.
RISK FACTORS
WE OPERATE IN A MARKET THAT IS HIGHLY COMPETITIVE, AND IF WE ARE UNABLE TO
COMPETE SUCCESSFULLY, OUR REVENUE COULD DECLINE AND WE MAY BE UNABLE TO GAIN
MARKET SHARE.
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The market for life science outsourcing is relatively new and highly
competitive. Our future success will depend on our ability to adapt to changing
technologies, evolving industry standards, product offerings, evolving demands
of the marketplace and to expand our customer base through long-term contracts.
Some of our competitors have:
o longer operating histories;
o larger customer bases;
o more experience in completing clinical trials in order to obtain
regulatory approvals;
o greater marketing capabilities;
o greater name recognition and longer relationships with clients;
and
o significantly greater financial, technical, marketing and public
relations resources than IT&E.
Our competitors may also be better positioned to address technological
and market developments or may react more favorably to technological changes.
We compete on the basis of a number of factors, including;
o breadth and quality of services;
o creative design and systems engineering expertise;
o pricing;
o technological innovation; and
o understanding clients' strategies and needs.
If we fail to gain market share or lose existing market share, our
financial condition, operating results and business could be adversely affected
and the value of the investment in us could be reduced significantly. We may
not have the financial resources, technical expertise or marketing,
distribution or support capabilities to compete successfully.
WE MAY NOT BE ABLE TO ATTRACT, RETAIN OR INTEGRATE KEY PERSONNEL, WHICH MAY
PREVENT US FROM SUCCESSFULLY OPERATING OUR BUSINESS.
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We may not be able to retain our key personnel or attract other qualified
personnel in the future. Our success will depend upon the continued service of
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key management personnel. The loss of services of any of the key members of our
management team or our failure to attract and retain other key personnel could
disrupt operations and have a negative effect on employee productivity and
morale and harm our financial results.
WE MAY BE RESPONSIBLE FOR MAINTAINING SENSITIVE PATIENT INFORMATION, AND ANY
UNAUTHORIZED USE OR DISCLOSURE COULD RESULT IN SUBSTANTIAL DAMAGE AND HARM TO
OUR REPUTATION.
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We collect and utilize data derived from various sources to recruit
patients for clinical studies. We have access to names and addresses of
potential patients who may participate in these studies. As a result, we know
what studies are taking place, and who may be participating in these studies.
In order to deliver a targeted mail program, we compile specific demographic
information. We must protect this information to address privacy concerns. The
information keyed to a specific disease state could be inadvertently disclosed
without the consent of the patient. Due to these privacy concerns, we must
take steps to ensure patient lists remain confidential. Any unauthorized
disclosure or use could result in a claim against us for substantial damages
and could harm our reputation. There can be no assurance that any protection
will be available for such data or that others will not claim rights to such
data.
IF WE DO NOT ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY, OUR BUSINESS MAY
SUFFER, WE MAY LOSE REVENUE OR WE MAY BE REQUIRED TO SPEND SIGNIFICANT TIME AND
RESOURCES TO DEFEND OUR INTELLECTUAL PROPERTY RIGHTS.
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We rely on a combination of copyright, trademark, trade secrets,
confidentiality procedures and contractual procedures to protect our
intellectual property rights. If we are unable to adequately protect our
intellectual property, our business may suffer from the piracy of our
technology and the associated loss in revenue. Any copyrights that we may hold
may not sufficiently protect our intellectual property and may be challenged by
third parties. The more widely we employ successful recruiting methods, the
more likely these methods will become vulnerable to duplication. Other parties
may also independently develop similar or competing methods or services that do
not infringe upon our intellectual property rights. These infringement claims
or any future claims could cause us to spend significant time and money to
defend our intellectual property rights, redesign our products or develop or
license a substitute technology. We may be unsuccessful in acquiring or
developing substitute technology and any required license may be unavailable on
commercially reasonable terms, if at all. In the event of litigation to
determine the validity of any third party claims or claims by us against such
third party, such litigation, whether or not determined in our favor, could
result in significant expense and divert the efforts of our technical and
management personnel, regardless of the outcome of such litigation.
GOVERNMENT REGULATION COULD ADVERSELY EFFECT OUR PROFITABILITY.
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Many of our services, including patient recruitment, are subject to
government regulation. For example, our brochures and advertisements to
recruit patients are subject to a Independent Board Review and subsequent
approval from the physician researchers. Although we expect to obtain all
required federal and state permits, licenses, and bonds to operate our
business, there can be no assurance that we will obtain the necessary
approvals, which may significantly impact our revenues and profits. Further,
there can be no assurances that our business will not be subject to more
restrictive regulation.
FUTURE SALES OF OUR COMMON STOCK MAY CAUSE THE MARKET PRICE OF OUR COMMON STOCK
TO DECLINE.
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As of September 30, 2004, there were approximately 19,000,000 shares of
common stock outstanding, of which approximately 11,000,000 are restricted
securities under the Securities Act, which are held by our affiliates. These
restricted securities will be eligible for sale from time to time upon
expiration of applicable holding periods under Rule 144 under the Securities
Act. If these holders sell in the public market, these sales could cause the
market price of our common stock to decline. This also could make it more
difficult for us to raise funds through future offerings of our common stock.
ISSUANCE OF STOCK TO FUND OUR OPERATIONS MAY DILUTE YOUR INVESTMENT AND REDUCE
YOUR EQUITY INTEREST.
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We may need to raise capital in the future. Any equity financing may
have significant dilutive effect to stockholders and a material decrease in
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stockholders' equity interest in IT&E. We may be required to raise capital, at
time and in amount, which are uncertain, especially under the current capital
market conditions, and on undesirable terms. At its sole discretion, the board
of directors may issue additional securities without seeking stockholder
approval.
WE MAY PURSUE STRATEGIC ACQUISITIONS OR INVESTMENTS IN NEW MARKETS AND MAY
ENCOUNTER RISKS ASSOCIATED WITH THESE ACTIVITIES THAT COULD HARM OUR BUSINESS
AND OPERATING RESULTS.
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We may pursue acquisitions of, or investments in, businesses and assets
in new markets that we believe will complement or expand our existing business
or our customer base. Our acquisition strategy involves a number of risks,
including:
o difficulty in successfully integrating acquired operations,
personnel, technology, customers, partner relationships, services and
businesses with our operations;
o loss of key employees of acquired operations or inability to hire
key employees necessary for our expansion;
o diversion of our capital and management attention away from other
business issues;
o an increase in our expenses and working capital requirements; and
o other financial risks, such as potential liabilities of the
businesses we acquire.
Our growth may be limited and our competitive position may be harmed if
we are unable to identify, finance and complete future acquisitions. There
can be no assurance that we will be able to identify, negotiate or finance
future acquisitions successfully. Future acquisitions could result in
potentially dilutive issuances of equity securities, the incurrence of debt,
contingent liabilities, amortization expenses related to goodwill and other
intangible assets, a decrease in profitability, or future losses. The
incurrence of debt in connection with any future acquisitions could restrict
our ability to obtain working capital or other financing necessary to operate
our business. Our future acquisitions or investments may not be successful,
and if we fail to realize the anticipated benefits of these acquisitions
reinvestments, our business and operating results could be harmed.
THE ACTUAL OR ANTICIPATED RESALE BY THE SELLING STOCKHOLDER OF SHARES OF OUR
COMMON STOCK MAY CAUSE THE MARKET PRICE OF OUR COMMON STOCK TO DECLINE.
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The resale of our common stock by the selling stockholder through open
market transactions or other means may, depending upon the timing of the
resales, depress the market price of our common stock. Moreover, actual or
anticipated downward pressure on the market price of our common stock due to
actual or anticipated resales of our common stock could cause some institutions
or individuals to engage in short sales of our common stock, which may itself
cause the market price of our common stock to decline.
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THE COMPANY
We are a life sciences organization focused on providing our clients with
solutions to complex needs in clinical research and regulatory compliance. Our
strengths are derived from a solid foundation of forward thinking and
continuous investment in training and research. We serve a variety of clients,
including those in the private industry, public institutions, research
facilities and the government. By focusing on specialized practice areas in
regulatory compliance, clinical research, international development, global
health and advanced technology research, we are able to offer solutions with
one common goal in mind, to improve the human condition by delivering forward
thinking solutions to the global community.
We operate our business in two divisions, Regulatory Compliance and
Clinical Services & Solutions. The Regulatory Compliance division serves the
pharmaceutical, biotech, biopharmaceutical, medical device and other life
science companies by providing them with outsourced expertise to evaluate,
structure, implement and maintain effective quality programs and processes that
ensure compliance with applicable Food and Drug Administration, or FDA,
regulations. We offer a breadth of solutions for validation and compliance
systems, computer systems, networks, lab and manufacturing processes, clinical
data systems, laboratory automation, content management, electronic document
management, facilities and utilities.
Our Clinical Services & Solutions division offers a full complement of
clinical trial support services. We provide case report form design, protocol
development, data entry and verification, full tracking and audit trail
documentation, adverse event reporting and a complete solution in biometrics
and analysis. The biostatistical group also provides data mining studies, data
base design, representation at FDA and other regulatory meetings, and
specialized biostatistical analysis.
We were incorporated in Nevada in 2002 as Clinical Trials Assistance
Corporation. In April 2004, we merged with IT&E International, Inc. and changed
our name to IT&E International Group. Our executive offices are located at 505
Lomas Santa Fe Drive, Suite 200, Solana Beach, California 92075 and our
telephone number is (858) 366-0970. Our website address is located at
http://www.iteinternational.com. The information contained in our website does
not form any part of this prospectus or the registration statement of which
this prospectus is a part.
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FORWARD-LOOKING STATEMENTS
When used in this prospectus, the words "expects," "anticipates,"
"believes," "plans," "will" and similar expressions are intended to identify
forward-looking statements. These are statements that relate to future periods
and include, but are not limited to, statements as to recruiting methodologies
and required federal and state permits, license and bonds. Forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those projected. These risks and
uncertainties include, but are not limited to, those discussed above, as well
as risks related to ability to develop efficient and cost effective
methodologies, government regulations, and the risks set forth above under the
caption, "Risk Factors." These forward-looking statements speak only as of the
date hereof. IT&E expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements contained
herein to reflect any change in our expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares by the
selling stockholder. However, we will receive the exercise price if the
selling stockholder exercises its warrant. We cannot be certain as to when and
if the warrant will be exercised. All proceeds from the sale of the shares
will be for the account of the selling stockholder, as described below. See
"Selling Stockholder" and "Plan of Distribution."
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SELLING STOCKHOLDER
The following table sets forth information regarding the beneficial
ownership of common stock as of September 30, 2004 by the selling stockholder
and the shares issuable upon conversion of the secured convertible term note
and upon exercise of the warrants being offered by the selling stockholder.
Laurus Master Fund, Ltd. is offering for resale up to an aggregate of
11,200,000 shares of our common stock. In October 2004, we entered into a
securities purchase agreement with Laurus, pursuant to which we sold a secured
convertible term note in an aggregate principal amount of $5,000,000, due
October 18, 2007, with interest at prime rate plus 2.50% per annum. We may
issue to Laurus an additional note up to $2,000,000 prior to July 15, 2005.
Such note, if any, will be governed by the terms and conditions of the
securities purchase agreement. Prior to October 18, 2007, Laurus may convert
the note, including principal and accrued interest, into shares of common stock
at an initial conversion price of $0.75 per share, subject to certain
adjustments. In connection with this note, we issued to Laurus a warrant to
purchase up to 1,924,000 shares of our common stock. The warrant is fully
vested and exercisable at any time until October 18, 2011. The exercise price
for the first 962,000 shares is $0.94 per shares and the exercise price for the
second 962,000 shares is $1.12 per share, subject to certain adjustments. In
connection with the transaction, we paid to Laurus a fee equal to 3.5% of the
aggregate principal amount of the note.
To our knowledge, Laurus is not a registered broker-dealer. Unless
otherwise described below, to our knowledge, neither selling stockholder nor
any of its affiliates has held any position or office with, been employed by or
otherwise has had any material relationship with us or our affiliates during
the three years prior to the date of this prospectus.
Information with respect to beneficial ownership of the selling
stockholder is based upon information furnished by the selling stockholder.
Information with respect to shares owned beneficially after the offering
assumes the sale of all of the shares offered and no other purchases or sales
of common stock.
Number
Shares Beneficially of Shares Beneficially
Owned Prior to Shares Owned After
Offering (1) Being Offering (1)
Name of Beneficial Owner Number Percent Offered Number Percent
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Laurus Master Fund, Ltd.(2) 948,000 4.99% 11,200,000 0 -
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(1)There were 19,000,000 shares of common stock outstanding as of September 30,
2004. In computing the number of shares of common stock beneficially owned
by a person or entity and the percentage ownership of that person or entity
prior to the offering, we deemed outstanding shares of common stock subject
to options and shares of common stock subject to convertible securities held
by that person that are currently exercisable or exercisable within 60 days
of September 30, 2004. However, in computing the number of shares of
common stock beneficially owned by a person or entity and the percentage of
ownership of that person or entity after the offering, we have assumed that
19,000,000 shares of common stock will be outstanding upon completion of the
offering assuming conversion and exercise of all outstanding convertible
securities held by the selling stockholder listed above.
(2)Eugene Grin and David Grin are the sole members of Laurus Capital Management
L.L.C., the manager of Laurus Master Fund Ltd., and consequently have voting
and investment control over the securities held by Laurus Master Fund Ltd.
The selling stockholder holds a convertible note and a warrant to purchase
shares of our common stock as set forth in the Selling Stockholder table and
has exercised his right to include such shares in this prospectus pursuant
to a registration rights agreement dated October 18, 2004. As of the date
hereof, the selling stockholder has not converted any portion of the note or
exercised the warrant. Under the terms of the secured convertible term not
and the warrant, the selling stockholder may not convert the note or the
warrant if the number of shares issued upon such conversion and/or exercise
would cause the selling stockholder to beneficially own more than 4.99% of
our issued and outstanding shares of common stock without 75 days prior
notice.
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PLAN OF DISTRIBUTION
The selling stockholder may offer and sell the shares covered by this
prospectus at various times. As used in this prospectus, the term "selling
stockholder" includes donees, pledgees, transferees or other successors-in-
interest selling shares received from a named selling stockholder as a gift,
partnership distribution, or other non-sale-related transfer after the date of
this prospectus. The selling stockholder will act independently of IT&E in
making decisions with respect to the timing, manner and size of each sale. The
shares may be sold by or for the account of the selling stockholder in
transactions on the Over-the-Counter Bulletin Board or otherwise. These sales
may be made at fixed prices, at market prices prevailing at the time of sale,
at prices related to prevailing market prices, or at negotiated prices. The
shares may be sold by means of one or more of the following methods:
o a block trade in which the broker-dealer so engaged will attempt
to sell the shares as agent, but may position and resell a portion of
the block as a principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by that
broker-dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions in which the broker solicits
purchasers;
o in connection with the loan or pledge of shares registered
hereunder to a broker-dealer, and the sale of the shares so loaned or
the sale of the shares so pledged upon a default;
o in connection with the writing of non-traded and exchange-traded
call options, in hedge transactions and in settlement of other
transactions in standardized or over-the-counter options;
o privately negotiated transactions; or
o in a combination of any of the above methods.
If required, we will distribute a supplement to this prospectus to
describe material changes in the terms of the offering.
The selling stockholder may sell the shares described in this prospectus
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. In effecting sales, broker-dealers engaged by the selling
stockholder may arrange for other broker-dealers to participate in resales.
Broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the selling stockholder or from the purchasers of the
shares or from both. This compensation may exceed customary commissions. The
selling stockholder may also transfer, devise or gift these shares by other
means not described in this prospectus.
The selling stockholder also may resell all or a portion of the shares
covered by this prospectus that qualify for sale under Rule 144 of the
Securities Act and any applicable state securities laws in open market
transactions in reliance upon Rule 144 under the Securities Act and such state
securities laws. The selling stockholder has not advised us of any specific
plans for the distribution of the shares covered by this prospectus. When and
if we are notified by the selling stockholder that any material arrangement has
been entered into with a broker-dealer or underwriter for the sale of a
material portion of the shares covered by this prospectus, we will file a
prospectus supplement or post-effective amendment to the registration statement
with the SEC. This supplement or amendment will include the following
information:
o the name of the participating broker-dealer(s) or underwriters;
o the number of shares involved;
o the price(s) at which the shares were sold;
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o the commissions paid or discounts or concessions allowed by the
selling stockholder to the broker- dealers or underwriters, if any;
and
o other information material to the transaction.
The selling stockholder and any broker-dealers, agents or underwriters
that participate with the selling stockholder in the distribution of the shares
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933. Any commissions paid or any discounts or concessions allowed to any of
those persons, and any profits received on the resale of the shares purchased
by them, may be deemed to be underwriting commissions or discounts under the
Securities Act. The selling stockholder will be subject to the prospectus
delivery requirements of the Securities Act. We have advised the selling
stockholder that the anti-manipulation rules promulgated under the Exchange
Act, including Regulation M, may apply to sales of the shares offered by the
selling stockholder.
The selling stockholder may agree to indemnify any agent, broker or
dealer that participates in sales of common stock against liabilities arising
under the Securities Act from sales of common stock.
We will not receive any proceeds from the sale of the shares by the
selling stockholder. However, we will receive the exercise price if a selling
stockholder exercises its warrant. We cannot be certain as to when and if this
warrant will be exercised.
IT&E has agreed to bear all expenses of registration of the shares,
including fees and expenses, if any, of one counsel to the selling stockholder.
Any commissions, discounts, concessions or other fees, if any, payable to
broker-dealers in connection with any sale of the shares will be borne by the
selling stockholder selling those shares.
There can be no assurances that the selling stockholder will sell all or
any of the shares of common stock offered under this prospectus.
This registration statement to which this prospectus relates is being
filed pursuant to the Investors Agreement. Subject to the terms and conditions
of the Registration Rights Agreement, we agreed to keep this registration
statement effective until the earlier of:
o the date as of which all shares of our common stock registered
under this registration statement have been sold; or
o the date as of which the selling stockholder may sell all its
shares of our common stock registered under this registration
statement during any 90 day period pursuant to Rule 144 of the
Securities Act and are registered or qualified or exempt form
registration or qualification under the registration, permit or
qualification of all applicable state securities laws.
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LEGAL MATTERS
The validity of any securities offered by this prospectus is being passed
upon for us by The Law Offices of Thomas C. Cook, Ltd., Las Vegas, Nevada.
EXPERTS
Our financial statements are incorporated in this prospectus by reference
to the Annual Report on Form 10-KSB for the year ended December 31, 2003 have
been so incorporated in reliance upon the report of Beckstead and Watts, LLP,
independent registered public accountants, given upon the authority of said
firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements, and
other information with the Securities and Exchange Commission. You may read
and copy any materials we file with the Commission at the Commission's public
reference room at 450 Fifth Street, N.W., Room 1024, Washington, D.C. Please
call the Commission at 1-800-SEC-0330 for more information on its public
reference room. The Commission also maintains an Internet website at
http://www.sec.gov that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the
Commission.
Our website is http://www.iteinternational.com. We make available free of
charge, on or through our website, our annual, quarterly and current reports,
and any amendments to those reports, as soon as reasonably practicable after
electronically filing such reports with the SEC. Information contained on our
website is not part of this registration statement.
We have filed with the Commission a registration statement, which
contains this prospectus, on Form S-3 under the Securities Act of 1933. The
registration statement relates to the common stock offered by the selling
stockholder. This prospectus does not contain all of the information set forth
in the registration statement and the exhibits and schedules to the
registration statement. Please refer to the registration statement and its
exhibits and schedules for further information with respect to us and the
common stock. Statements contained in this prospectus as to the contents of
any contract or other document are not necessarily complete and, in each
instance, we refer you to the copy of that contract or document filed as an
exhibit to the registration statement. You may read and obtain a copy of the
registration statement and its exhibits and schedules from the Commission, as
described in the preceding paragraph.
DOCUMENTS INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be a part of this prospectus, and later information that we
file with the Commission will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings we make with the Commission under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until this offering is completed.
The documents we incorporate by reference are:
o Our Annual Report on Form 10-KSB for the year ended December 31,
2003.
o Our Quarterly Reports on Form 10-QSB for the quarters ended March
31, June 30 and September 30, 2004.
o Our Current Report on Form 8-K filed with the Commission on April
15 and October 22, 2004 and on Form 8-K/A filed on June 15, 2004.
o The description of our common stock contained in our registration
statement on Form 10-SB/A filed under the Exchange Act on June 24,
2003.
9
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address and number:
505 Lomas Santa Fe Drive, Suite 200, Solana Beach, California 92075
Telephone (858) 366-0970
We have not authorized anyone to provide you with information or to
represent anything not contained in this prospectus. You must not rely on any
unauthorized information or representations. The selling stockholder is
offering to sell, and seeking offers to buy, only the shares of IT&E common
stock covered by this prospectus, and only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date, regardless of the time of delivery
of this prospectus or of any sale of the shares.
10
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14.OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses payable by the
Registrant in connection with the sale and distribution of the securities being
registered hereby. Normal commission expenses and brokerage fees are payable
by the selling stockholder. All amounts are estimated except the SEC
registration fee.
SEC registration fee.............. $ 852
Blue Sky Qualification Fees and Expenses 1,500
Legal Fees and Expenses........... 17,000
Accounting Fees and Expenses...... 2,500
Miscellaneous..................... 598
--------
$ 22,450
ITEM 15.INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 78.7502 and 78.751 of the General Corporation Law of Nevada
provides for the indemnification of officer, directors, and other corporate
agents in terms sufficiently broad to indemnify such persons under certain
circumstances for liabilities (including reimbursement for expenses incurred)
arising under the Securities Act. Nevada Law provides, among other things,
that a corporation may indemnify a person who was or is a party to or is
threatened to be made a party to, any threatened pending or completed action by
reason of their service to the corporation. Expenses include attorney's fees,
judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with the action suit or proceeding. In
order to be entitled to indemnification such person must have reasonably relied
on information provided by the corporation or acted in good faith. Further,
discretionary indemnification may be authorized by the Board of Directors, the
stockholders, a majority vote of a quorum of disinterested directors, of if no
quorum can be obtained, by legal opinion of counsel. Article V of the
Registrant's Bylaws (Exhibit 3.2 to the Registrant's Form 10-SB (File No. 000-
50095)) provide for indemnification of the Registrant's directors, officers,
employees and other agents to the extent and under the circumstances permitted
by the General Corporation Law of Nevada.
ITEM 16.EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
4.1 Secured Convertible Term Note (incorporated by reference to
Exhibit 4.1 of the Registrant's Current Report on Form 8-K
filed on October 22, 2004).
4.2 Common Stock Purchase Warrant(incorporated by reference to
Exhibit 4.2 of the Registrant's Current Report on Form 8-K
filed on October 22, 2004).
4.3 Registration Rights Agreement dated October 18, 2004, by and
between the Registrant and Laurus Master Fund Ltd.
(incorporated by reference to Exhibit 4.3 of the Registrant's
Current Report on Form 8-K filed on October 22, 2004).
5.1 Opinion of The Law Offices of Thomas C. Cook, Ltd.
10.1 Securities Purchase Agreement dated October 18, 2004, by and
between the Registrant and Laurus Master Fund Ltd.
(incorporated by reference to Exhibit 99.1 of the
Registrant's Current Report on Form 8-K filed on October 22,
2004).
II-1
10.2 Restricted Account Agreement dated October 18, 2004, by and
among the Registrant, North Fork Bank, and Laurus Master
Fund, Ltd. (incorporated by reference to Exhibit 99.2 of the
Registrant's Current Report on Form 8-K filed on October 22,
2004).
10.3 Security Agreement dated October 18, 2004, by and between the
Registrant and Laurus Master Fund Ltd. (incorporated by
reference to Exhibit 99.3 of the Registrant's Current Report
on Form 8-K filed on October 22, 2004).
10.4 Amendment to Securities Purchase Agreement dated November 16,
2004, by and between the Registrant and Laurus Master Fund,
Ltd.
23.1 Consent of Independent Registered Public Accountants.
23.2 Consent of The Law Offices of Thomas C. Cook, Ltd. (included
in its opinion filed as Exhibit 5.1).
24.1 Power of Attorney (see page II-3).
ITEM 17.UNDERTAKINGS.
The undersigned Registrant hereby undertakes that it will:
(1)File, during any period in which offers or sales are being made,
a post-effective amendment to the Registration Statement to:
(i)Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii)Reflect in the prospectus any facts or events arising which,
individually or together, represent a fundamental change in the
information in the Registration Statement; and
(iii)Include any additional or changed material information on
the plan of distribution.
(2)For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time shall
be deemed to be the initial bona fide offering.
(3)File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
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 Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-2
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 and Form S-3 and has duly caused this
Registration Statement of Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Solana Beach, State of
California, on November 16, 2004.
IT&E INTERNATIONAL GROUP
By: /s/ Peter R. Sollenne
-------------------------------
Peter R. Sollenne,
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Peter R. Sollenne and Kelly Alberts, and each of
them, his or her true and lawful attorneys-in-fact and agents, each with full
power of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and all
amendments, including post-effective amendments, to this Registration
Statement, and to file the same, with 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, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that each of said
attorneys-in-fact and agents or their substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement on Form S-3 to be signed
on its behalf by the undersigned, and in the capacities and on the dates
indicated.
Name Title Date
---- ----- -----
Peter R. Sollenne Chief Executive Officer November 16,
(Principal Executive Officer 2004
and Principal Financial and
Accounting Officer) and
Director
------------------------------------------------------------------------------
Kelly Alberts President, Chief Operations November 16,
Officer and Director 2004
------------------------------------------------------------------------------
Tony Allocca Director November 16,
2004
------------------------------------------------------------------------------
II-3
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
4.1 Secured Convertible Term Note (incorporated by reference to
Exhibit 4.1 of the Registrant's Current Report on Form 8-K
filed on October 22, 2004).
4.2 Common Stock Purchase Warrant(incorporated by reference to
Exhibit 4.2 of the Registrant's Current Report on Form 8-K
filed on October 22, 2004).
4.3 Registration Rights Agreement dated October 18, 2004, by and
between the Registrant and Laurus Master Fund Ltd.
(incorporated by reference to Exhibit 4.3 of the Registrant's
Current Report on Form 8-K filed on October 22, 2004).
5.1 Opinion of The Law Offices of Thomas C. Cook, Ltd.
10.1 Securities Purchase Agreement dated October 18, 2004, by and
between the Registrant and Laurus Master Fund Ltd.
(incorporated by reference to Exhibit 99.1 of the
Registrant's Current Report on Form 8-K filed on October 22,
2004).
10.2 Restricted Account Agreement dated October 18, 2004, by and
among the Registrant, North Fork Bank, and Laurus Master
Fund, Ltd. (incorporated by reference to Exhibit 99.2 of the
Registrant's Current Report on Form 8-K filed on October 22,
2004).
10.3 Security Agreement dated October 18, 2004, by and between the
Registrant and Laurus Master Fund Ltd. (incorporated by
reference to Exhibit 99.3 of the Registrant's Current Report
on Form 8-K filed on October 22, 2004).
10.4 Amendment to Securities Purchase Agreement dated November 16,
2004, by and between the Registrant and Laurus Master Fund,
Ltd.
23.1 Consent of Independent Registered Public Accountants.
23.2 Consent of The Law Offices of Thomas C. Cook, Ltd. (included
in its opinion filed as Exhibit 5.1).
24.1 Power of Attorney (see page II-3).