As
filed
with the Securities and Exchange Commission on May
19,
2006
Registration
No. 333 -
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-8
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES
ACT OF 1933
MICROMEM
TECHNOLOGIES INC.
(Exact
name of Registrant as specified in its Charter)
Ontario,
Canada
|
|
Not
Applicable
|
(State
or other jurisdiction of incorporation or organization)
|
|
(I.R.S.
employer identification no.)
|
777
Bay Street, Suite 1910, Toronto, Ontario, Canada M5G 2E4
(Address,
including zip code, of principal executive offices)
Micromem
Technologies Inc. Directors, Senior Officers and Key Employees Stock Option
Plan
(Full
title of the plan)
Scott
A. Ziegler, Esq.
Ziegler,
Ziegler & Associates LLP
570
Lexington Avenue, 44th
Floor
New
York, New York 10022
(212)
319-7600
(Name,
address and telephone number,
including
area code, of agent for service)
Copies
of
all communications should be sent to:
Manoj
Pundit
Chitiz
Pathak LLP
154
University Avenue, Suite 500
Toronto,
Canada M5H 3Y9
(416)
368-0300 ext. 270
and
Scott
A. Ziegler, Esq.
Ziegler,
Ziegler & Associates LLP
570
Lexington Avenue, 44th
Floor
New
York, New York 10022
(212)
319-7600
CALCULATION
OF REGISTRATION FEE
Title
of Securities to be Registered
|
Amount
to
be
Registered(1)
|
Proposed
Maximum
Offering
Price
Per
Share (US$)
|
Proposed
Maximum
Aggregate
Offering
Price (US$)
|
Amount
of
Registration
Fee (US$)(11)
|
Common
Shares
|
3,600,000
|
0.30 (2)
|
1,080,000
|
$115.56
|
Common
Shares
|
300,000
|
0.80
(4)
|
240,000
|
$25.68
|
Common
Shares
|
100,000
|
0.91
(5)
|
91,000
|
$9.74
|
Common
Shares
|
2,500,000
|
0.72
(6)
|
1,800,000
|
$192.60
|
Common
Shares
|
1,800,000
|
0.65
(7)
|
1,170,000
|
$125.19
|
Common
Shares
|
300,000
|
0.60
(8)
|
180,000
|
$19.26
|
Common
Shares
|
50,000
|
0.72
(9)
|
36,000
|
$3.85
|
Common
Shares
|
100,000
|
0.68
(10)
|
68,000
|
$7.28
|
Total:
|
8,750,000
|
|
$4,665,000
|
$499.16
|
(1)
|
Common
shares subject to options granted under the Registrant’s Directors, Senior
Officers and Key Employees Stock Option Plan dated effective March
14,
2001 as amended and restated effective May 27, 2005 (collectively,
the
“Plan”). Pursuant to Rule 416(a) under the Securities Act of 1933, this
registration statement also covers any additional securities that
may
become issuable pursuant to the Plan to prevent dilution resulting
from
any future stock split, stock dividend or similar
transactions.
|
(2)
|
Common
shares subject to options granted under the Plan on July 19,
2004.
|
(3)
|
Common
shares subject to options granted under the Plan on January 9,
2005.
|
(5)
|
Common
shares subject to options granted under the Plan on February 10,
2005.
|
(6)
|
Common
shares subject to options granted under the Plan on May 27,
2005.
|
(7)
|
Common
shares subject to options granted under the Plan on August 1,
2005.
|
(8)
|
Common
shares subject to options granted under the Plan on October 15,
2005.
|
(9)
|
Common
shares subject to options granted under the Plan on December 15,
2005.
|
(10)
|
Common
shares subject to options granted under the Plan on January 19,
2006.
|
(11)
|
Estimated
solely for the purpose of calculating the amount of the registration
fee,
pursuant to Rule 457(h)(i) of the Securities Act of 1933 based on
the
exercise price for the options.
|
EXPLANATORY
NOTES
The
Registrant has prepared this Registration Statement pursuant to the requirements
of Form S-8 under the Securities Act of 1933, as amended (the “Securities Act”)
to register up to 8,750,000 common shares of the Registrant issuable under
the
Registrant’s Directors, Senior Officers and Key Employees Stock Option Plan
dated effective March 14, 2001 as amended and restated by the Directors, Senior
Officers and Key Employees Stock Option Plan dated effective May 27, 2005
(collectively, the “Plan”). This Form S-8 also includes a prospectus prepared in
accordance with General Instruction C of Form S-8 and in accordance with Part
I
of Form F-3.
PART
I
INFORMATION
REQUIRED IN SECTION 10(A) PROSPECTUS
The
Registrant will send the documents containing the information specified in
Part
I of Form S-8 to Plan participants as specified by Rule 428(b)(1) under the
Securities Act. Pursuant to the instructions to Form S-8, the Registrant is
not
required to file these documents either as a part of this Registration Statement
or as prospectuses or prospectus supplements under Rule 424 of the Securities
Act.
REOFFER
PROSPECTUS
MICROMEM
TECHNOLOGIES INC.
3,600,000
Common Shares subject to options granted under the Plan on July 19, 2004
300,000
Common Shares subject to options granted under the Plan on January 9,
2005
100,000
Common Shares subject to options granted under the Plan on February 10,
2005
2,500,000
Common Shares subject to options granted under the Plan on May 27,
2005
1,800,000
Common Shares subject to options granted under the Plan on August 1,
2005
300,000
Common Shares subject to options granted under the Plan on October 15,
2005
50,000
Common Shares subject to options granted under the Plan on December 15,
2005
100,000
Common Shares subject to options granted under the Plan on January 19,
2006
The
shareholders of Micromem Technologies Inc. (“Micromem” or the “Company“) listed
on page 22 of this prospectus may offer from time to time up to a total of
8,750,000 common
shares under this prospectus. The Company is not offering or selling any shares
under this prospectus and will not receive any of the proceeds from the sale
of
the shares offered by these selling shareholders. The selling shareholders
have
acquired the shares pursuant to the Micromem Technologies Inc. Directors,
Officers and Employees Stock Option Plan dated effective March 14, 2001 as
amended and restated effective May 27, 2005 (collectively, the
“Plan”).
The
selling shareholders may sell the shares in varying amounts through public
or
private transactions at prevailing market prices or at negotiated prices. Such
future prices are not currently known. Sales may be made through brokers or
to
dealers, who are expected to receive customary commissions or discounts. The
Company will not receive any proceeds from the sale of the shares. The selling
shareholders will bear all the sales commissions and similar expenses. Any
other
expenses incurred by us in connection with this registration and offering not
borne by the selling shareholders will be borne by us.
The
enforcement by investors of civil liabilities under the United States federal
securities laws may be affected adversely by the fact that (i) the Company
was
constituted under and is governed by the laws of the Province of Ontario, that
some or all of its directors and officers are or may be residents of Canada
(ii)
certain of the experts named herein are or may be residents of Canada, and
that
(iii) all or substantial portion of the assets of the Company and said persons
are or may be located outside the United States.
We
do not
know when, how or if the selling shareholders intend to sell their common shares
covered by this prospectus or what the price, terms or conditions of any sales
will be. See “Plan of Distribution” below. We understand that the Securities and
Exchange Commission (the “Commission”) may, under certain circumstances consider
persons reselling any shares of our common shares and dealers or brokers
handling a resale of shares of our common shares and dealers and brokers
handling a resale of shares of our common stock to be “underwriters” within the
meaning of the United States Securities
Act
of 1933,
as amended (the “Securities Act”).
Our
common shares are traded on the Over-the-Counter Bulletin Board, the principal
trading market for our securities, under the symbol “MMTIF.OB”. On May
17,
2006,
the
last reported sale price for our common shares on the Over-the-Counter Bulletin
Board was $1.03 per share.
Neither
the Commission nor any state securities commission has approved or disapproved
these securities or determined if this prospectus is truthful or complete.
Any
representation to the contrary is a criminal offense. This prospectus is not
an
offer to sell these securities and it is not a solicitation of an offer to
buy
these securities in any state where the offer or sale is not permitted.
YOU
SHOULD CAREFULLY CONSIDER THE “RISK FACTORS” BEGINNING ON PAGE 7 OF THIS
PROSPECTUS BEFORE PURCHASING OUR COMMON SHARES.
This
prospectus is dated May 19, 2006.
TABLE
OF
CONTENTS
Cautionary
Statement Regarding Forward-Looking Statements
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3
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Where
You Can Find More Information
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3
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Information
Incorporated by Reference
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4
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Prospectus
Summary
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5
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Risk
Factors
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7
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About
the Company
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16
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Capitalization
and Indebtedness
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16
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Recent
Developments
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17
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Price
Range of Common Shares of the Company
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18
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Share
Capital
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19
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Selling
Shareholders
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22
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Use
of Proceeds
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24
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Plan
of Distribution
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24
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Legal
Matters
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24
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Experts
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24
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Offering
Expenses
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25
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Disclosure
of Commission Position on Indemnification For Securities Act
Liabilities
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25
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You
should rely only on the information incorporated by reference or provided in
this prospectus or any prospectus supplement. We have not authorized anyone
to
give you different information. You should not assume that the information
incorporated by reference or provided in this prospectus or in any prospectus
supplement is accurate as of any date other than the date on the front of the
documents.
This
prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy, nor shall there be any sale of these shares by any person in any
jurisdiction in which it is unlawful for that person to make such an offer,
solicitation or sale.
CAUTIONARY
STATEMENT
REGARDING
FORWARD-LOOKING STATEMENTS
This
prospectus includes forward-looking statements. These forward-looking statements
are based on current expectations, estimates and projections about our business
and the industry in which we operate, management’s beliefs, and assumptions made
by management. In addition, we may make forward-looking statements in future
filings with the Commission and in written material, press releases and oral
statements issued by or on behalf of us. Words such as “may,” “will,” “should,”
“expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks” and
“estimates,” variations on such words and similar expressions and the negatives
thereof are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve certain risks,
uncertainties and assumptions which are difficult to predict. Actual results
could differ materially from those expressed or forecasted in these
forward-looking statements as a result of various factors, including those
described in the “Risk Factors” section beginning on page 7. This list of
factors is not exclusive and other risks and uncertainties may cause actual
results to differ materially from those in forward-looking
statements.
All
forward-looking statements in this prospectus are based on information available
to us on the date hereof. We may not be required to publicly update or revise
any forward-looking statements that may be made by us or on our behalf, in
this
prospectus or otherwise, whether as a result of new information, future events
or other reasons. Because of these risks and uncertainties, the forward-looking
events and circumstances discussed in this prospectus might not
transpire.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement on Form S-8 filed by us with
the
Commission (under the Securities Act) with respect to the common shares offered
pursuant to this prospectus. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits and
schedules to the registration statement, to which reference is made for further
information. Statements contained in this prospectus concerning the provisions
of any document are not necessarily complete and in each instance we refer
you
to the copy of the contract or other document filed as an exhibit to the
registration statement or otherwise filed by us, each such statement is
qualified in all respects by such reference.
We
are
subject to the informational requirements of the United States Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and in accordance
therewith, file reports and other information with the Commission. Under a
multijurisdictional disclosure system adopted by the United States, such reports
and other information may be prepared in accordance with the disclosure
requirements of Canada, which requirements are different from those of the
United States. We are exempt from the rules under the Exchange Act prescribing
the furnishing and content of proxy statements, and our officers, directors
and
principal shareholders are exempt from the reporting and short-swing profit
recovery provisions contained in Section 16 of the Exchange Act. Our Commission
filings, including the Registration Statement of which this prospectus is a
part, are available to the public through the Commission’s “EDGAR” (Electronic
Data Gathering, Analysis and Retrieval System), available on the Commission’s
website (http://www.sec.gov). You may also read and copy any document we file
at
the Commission’s public reference room at 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information
on the public reference room.
INFORMATION
INCORPORATED BY REFERENCE
The
Commission allows us to incorporate by reference the documents we file with
it,
which means that we can disclose important information to you by referring
you
to those documents. The information incorporated by reference is an important
part of this prospectus, and information that we file later with the Commission
will automatically update and supersede this information. We incorporate by
reference the following documents:
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(i)
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our
Annual Report on Form 20-F for the fiscal year ended October 31,
2005, filed with the SEC on February 28,
2006;
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(ii)
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our
unaudited financial statements for the 3 months ended January 31,
2006,
filed with the SEC under cover of Form 6-K on March 31,
2006;
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(iii)
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our
Report on Form 6-K dated March 1, 2006 (filed with the Commission on
March 2, 2006), our Report on Form 6-K dated March 2, 2006 (filed
with the
Commission on March 2, 2006), our Report on Form 6-K dated March
7, 2006
(filed with the Commission on March 7, 2006) ), our Report on Form
6-K
dated March 30, 2006 (filed with the Commission on March 30, 2006),
our
Report on Form 6-K dated March 31, 2006 (filed with the Commission
on
April 3, 2006) and our Report on Form 6-K dated April 3, 2006 (filed
with
the Commission on April 3, 2006)
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(iv)
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any
Form 6-K subsequently filed with the SEC which is identified by us
as
being incorporated by reference into this
prospectus;
|
All
annual reports we file with the Commission pursuant to the Exchange Act on
Form
20-F after the date of this prospectus and prior to the termination of the
offering shall be deemed to be incorporated by reference into this prospectus
and to be part hereof from the date of filing of such documents. We may
incorporate by reference any Form 6-K subsequently submitted to the Commission
by identifying in such Form that it is being incorporated by reference into
this
prospectus. Any statement made in this prospectus, a prospectus supplement
or a
document incorporated by reference in this prospectus or a prospectus supplement
will be deemed to be modified or superseded for purposes of this prospectus
and
any applicable prospectus supplement to the extent that a statement contained
in
an amendment to the registration statement, any subsequent prospectus supplement
or in any other subsequently filed document incorporated by reference herein
or
therein adds, updates or changes that statement. Any statement so affected
will
not be deemed, except as so affected, to constitute a part of this prospectus
or
any applicable prospectus supplement.
We
shall
undertake to provide without charge to each person to whom a copy of this
prospectus has been delivered, upon the written or oral request of any such
person to us, a copy of any or all of the documents referred to above that
have
been or may be incorporated into this prospectus by reference, including
exhibits to such documents, unless such exhibits are specifically incorporated
by reference to such documents. Requests for such copies should be directed
to
Micromem Technologies Inc., 777 Bay Street, Suite 1910, Toronto, Ontario M5G
2E4, Canada, Attention: Jason Baun, telephone (416) 364-6513.
You
should rely only on the information incorporated by reference or provided in
this prospectus or any prospectus supplement. We have not authorized anyone
else
to provide you with different information. This prospectus is an offer to sell
or to buy only the securities referred to in this prospectus, and only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus or any prospectus supplement is current only as
of
the date on the front page of those documents. Also, you should not assume
that
there has been no change in our affairs since the date of this prospectus or
any
applicable prospectus supplement.
PROSPECTUS
SUMMARY
This
prospectus summary highlights selected information contained elsewhere in this
prospectus and the documents incorporated by reference. You should read the
following summary together with the more detailed information regarding our
Company and the shares being sold in this offering, which information appears
elsewhere in this prospectus and in selected portions of our Annual Report
on
Form 20-F for the year ended October 31, 2005, and other documents
filed with the SEC that we have incorporated by reference into this
prospectus.
Our
Business
Micromem
is in the business of research and development of magnetic based random access
memory. We have conducted ongoing internal research efforts for over five years,
and we are continuing with beginning stage development of our memory system.
We
intend to sell or license our technology for use in a variety of markets. We
initially plan to enter the market for applications in radio frequency
identification (RFID). RFID involves the use of a radio transmitter to read
data
stored in a transponder (known as a “tag”) containing a computer chip.
RFID
is
an estimated $23 billion global market. It is estimated that 60% of that market
consists of performance applications such as inventory control for
pharmaceutical products, automotive diagnostics and medical devices. We believe
our technology is suitable for performance applications being used at this
time,
as it has superior material characteristics and the system design indicates,
at
a preliminary level, that it would function with higher efficiency than memory
currently used in RFID. In general performance applications will withstand
a
cost premium in exchange for relatively superior system performance. Although
cost is not preliminarily indicated as an inhibitive factor moving forward
in
that market, we do not estimate having a cost driven memory system in place
for
the first round of market penetration. Cost driven applications in the RFID
industry would include cost sensitive applications such as retail tagging,
which
need high volumes of low cost tags as a priority over superior performance.
We
envision pursuing our strategy for the RFID industry in the following
way:
|
1)
|
We
will continue our internal research and development, seeking to form
partnerships with industrial entities at the appropriate stages,
to be
determined by us based on progress in research and development and
intellectual property protection.
|
|
2)
|
We
will seek to co-develop our memory technology for an application
in a
specific field of use. An example of this would be a partnership
between
us and an RFID tag manufacture in which we would, upon completing
a
developed memory array, co-develop a proprietary memory-RFID unit.
This
new unit could be sold for use in a specific area of the RFID market,
such
as automotive diagnostics.
|
|
3)
|
We
would seek multiple opportunities to commercialize our technology
through
partnering with a variety of industrial entities and attacking various
market applications within the RFID
industry.
|
|
4)
|
Concurrent
with our partnering strategy, we plan to continue ongoing research
and
development efforts with initiatives addressing topics such as cost
and
higher density memory systems.
|
Micromem's
primary research and development facility and staff at the present time are
at
the University of Toronto, through a collaborative research arrangement with
the
laboratory of Professor Harry Ruda.
Technology
The
various characteristics of our technology can be better understood by describing
the three basic types of memory used by present day computers, Random Access
Memory (RAM), Read Only Memory (ROM), and secondary storage devices such as
floppy and hard disks. The three types of memory are described
below:
Random
Access Memory (RAM)
is
memory that can be both read and written randomly, which means that its storage
locations can be accessed in any order. Thus a computer using RAM can find
and
go directly to the selected location rather than performing a sequential search.
Semiconductor RAM is usually the primary memory associated with the computer’s
central
processing unit (CPU),
the
computational unit of the computer responsible for interpreting and executing
instructions. However, RAM is volatile
which
means that all stored information vanishes once the power supply is removed
and
must be restored from a secondary storage device each time the power is
resumed.
Two
typical examples of RAM are Dynamic Random Access Memory and Static Random
Access Memory. Dynamic
Random Access Memory (DRAM)
uses
integrated circuits containing capacitors to achieve significant storage
capacity and speed. DRAM can be written and read in the speed range of less
than
100 nanoseconds. DRAM has a major drawback in that its capacitors lose their
charge over time and therefore information contained in DRAM must be continually
refreshed. Basically, this means that on average DRAM must stop operations
every
16-30 milliseconds and restore all of the data it contains or the data will
disappear. During this refresh time, the processor has no access to the
information being refreshed. Static
Random Access Memory (SRAM)
differs
from DRAM in that it stores information in a logic circuit referred to as a
flip-flop, rather than in a capacitor. SRAM memory does not need to be refreshed
while the power is on, but also loses its information once the power is turned
off.
Read
Only Memory (ROM),
like
RAM, can be read randomly, but cannot be written randomly. Unlike RAM, however,
it is non-volatile and therefore does not lose its information when a computer’s
power is cut off. ROM is typically employed to store vital program information
required during the first moments after a computer is powered on. It may be
used
for such purposes as forcing system test routines, directing the processor
to
input/output devices or for controlling access to certain computer subsystems
such as hard drives. EPROMs (erasable
programmable read-only memory)
and
EEPROMs
(electrically erasable read-only memory)
are read
only memories that can be erased and rewritten, but must be written “en masse,”
rather than at the individual word level. “Flash” memory is a form of EEPROM
that is widely used today in such devices as cell phones, modems and personal
digital assistants. The drawbacks to Flash memory are that write times are
slower, the number of read/write cycles are limited and the requirement for
significantly higher power than DRAM to store data.
Secondary
Storage Devices
include
Floppy
Disks and Hard disks.
Floppy
disks are light and portable and are written and read by a motor driven
mechanical drive. They normally have a storage capacity in the low megabyte
range. Hard
disks
far
exceed floppy disks in storage capacity and have become the standard for mass
storage of data to be written and read by the processor. Both floppy disks
and
hard disks are non-volatile and can be both written and read. However, since
they are serial (as opposed to parallel) devices, they are considerably slower
than RAM.
Micromem
develops magnetic based memory systems for RAM (MRAM). MRAM is a new form of
memory system that we believe will ultimately replace all other memory types
discussed above; SRAM, DRAM, EEPROM and flash memory because it combines
non-volatility and random access capability. Thus MRAM is often referred to
as a
universal memory. Micromem’s MRAM is aimed at low density applications such as
RFID. In contrast high density applications would include hard disk storage
and
even secondary storage devices as discussed above. Our strategy is to focus
our
efforts in this area in order to establish a favorable competitive position.
Micromem’s
technology combines the use of ferromagnetic semi-conducting materials with
a
sensor. When the magnetization of the magnetic material changes direction,
the
sensor senses the change in direction and records a “0” or “1”. In this fashion,
a bit is created that is non-volatile and based on magnetic properties.
Patent
Rights
We
believe that protection of our intellectual property is important to our ability
to generate revenues from our technologies in the future. We have both issued
patents and pending patent applications.
To
further protect our intellectual property and trade secrets we also enter into
confidentiality and other agreements with third parties and our employees.
We
intend to continue to actively pursue the protection of our intellectual
property. Management will determine from time to time the jurisdictions where
protection will be sought, which determination will be based on a number of
factors including: the state of development of our technology, the importance
of
a particular market for our technology, the costs of pursuing patent protection
in a jurisdiction; and our financial position.
Our
patent portfolio comprises thirteen issued patents and three patent applications
in the U.S. covering the magnetic memory designs that constitute our core
technology. These designs form the basis for the current development work being
performed in collaboration with the University of Toronto. Our rights to these
patents and patent applications are shared with Estancia Limited, an entity
controlled by one of the inventors of the technology covered by such patent
rights. Pursuant to an Asset Purchase Agreement dated as of December 10, 2000,
we purchased the rights of Estancia to these patents and patent applications.
However, under the terms of the Asset Purchase Agreement we have been required
to convey back to Estancia a 40% undivided interest in the patent rights, and
we
have retained a 60% interest therein. We also conveyed to Estancia a right
to
participate in gross profits and royalties from the license or sale of such
patents and patent applications. This participation right requires us to pay
to
Estancia 32% of (i) the gross profit, less expenses to be agreed by the parties,
for each license of the patents or patent applications sold or otherwise
transferred by us and (ii) all royalties received by us as a result of the
license or sale of the patents or patent applications, less reasonable expenses
directly related to the obtaining of such royalties.
In
addition to our core patents, we have filed two U.S. provisional patent
applications covering new technologies developed pursuant to research
collaborations with the University of Toronto, which were partially funded
by
certain Ontario based government granting agencies.
The
University and its personnel have ownership of these technologies and,
accordingly, the provisional applications have been filed on their behalf.
We
have the right to obtain an exclusive, world-wide and perpetual sub-license
to
use these technologies and any patent rights therein. We have also filed a
provisional U.S. patent application for both new and updated developments of
our
magnetic random access memory technology for use in aerospace, defense, sensors
and RFID applications which use radiation hardened materials.
RISK
FACTORS
You
should carefully consider the risks and the information about our business
described below, together with all of the other information included in this
prospectus, before buying common shares in this offering. You should not
interpret the order in which these considerations are presented as an indication
of their relative importance to you.
We
have a history of losses, and we may continue to generate losses in the
foreseeable future.
To
date
we have been solely a development company. We have not been profitable in any
of
the last three fiscal years. For the fiscal years ended October 31, 2005,
2004 and 2003, we reported losses of approximately $4,035,000, $2,314,298 and
$1,767,965 respectively. Our loss for the quarter ended January 31, 2006
was $734,482 based on unaudited results. Unless and until we are able to
successfully complete the development of our technology and develop markets
for
the commercialization of such technology, we may not be able to generate
revenues in future periods and we may not be able to attain
profitability.
The
development of non-volatile rapid access memory products is a capital intensive
business. Therefore, we expect to incur expenses without corresponding revenues
at least until we are able to license our technology to third parties. This
may
result in net operating losses, which will increase continuously until we can
generate an acceptable level of revenues, which we may never attain. Further,
even if we do achieve operating revenues, there can be no assurance that such
revenues will be sufficient to fund continuing operations. Therefore we cannot
predict whether we will ever be able to achieve profitability.
The
likelihood of success of our business plan must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered in connection with developing and expanding early stage businesses
and the competitive environment in which we operate.
We
may not be able to continue as a going concern.
We
have
prepared our financial statements on a “going concern” basis which presumes that
we will be able to realize our assets and discharge our liabilities in the
normal course of business for the foreseeable future.
We
are
still in the development stage and have incurred substantial losses to date.
We
must raise additional funds for the continued development, testing and
commercial exploitation of our technologies. The sources of these funds have
not
yet been identified and there can be no certainty that sources will be available
in the future.
At
October 31, 2005 we had approximately $640,000 cash on hand and our current
monthly cash expenses were approximately $100,000. Subsequent to October 31,
2005 through March 31, 2006 we have raised an additional $525,000 through the
exercise of stock options.
Our
ability to continue as a going concern is dependent upon completing the
development of our technology for a particular application, achieving profitable
operations, obtaining additional financing and successfully bringing our
technologies to the market. The outcome of these matters cannot be predicted
at
this time. Our consolidated financial statements have been prepared on a going
concern basis and do not include any adjustments to the amounts and
classifications of the assets and liabilities that might be necessary should
we
be unable to continue in business.
If
the
going concern assumption was not appropriate for our financial statements then
adjustments would be necessary in the carrying value of assets and liabilities,
the reported expenses and the balance sheet classifications used.
We
currently have no operating revenue.
We
have
no revenues and there is no certainty that we will generate revenues in the
near
future. If we fail to enter into license agreements we will have no revenues.
If
we enter into such agreements the amount of the revenues we receive will depend
on the terms we are able to get from each licensee and the ability of each
licensee to compete in its particular market.
We
may need to issue additional securities which may cause our shareholders to
experience dilution.
Our
Board
of Directors has the authority to issue additional common shares or other of
our
securities without the prior consent or vote of our shareholders. The issuance
of additional common shares would dilute the proportionate equity interest
and
voting power of our shareholders.
The
sale of common shares issuable upon exercise of currently outstanding warrants
and options could adversely affect our share price.
As
of
March 31, 2006 we had 6,484,688 common stock purchase warrants outstanding
and
an aggregate of 8,750,000 outstanding options to purchase common shares, all
of
which are fully vested. Any
future sales of the shares issuable upon exercise of our outstanding warrants
and options would have a depressive effect on the market for our common shares,
even if our business is doing well.
Our
technology is under development
Our
Magnetic Random Access Memory, also referred to herein as MRAM, which is a
non-volatile memory technology that uses magnetic, thin film elements on a
silicon substrate to store information, is currently under development and
is
therefore not yet proven to be commercially viable. As such, we are unsure
if
our development efforts will succeed and, accordingly, significant development
work remains to be completed.
In
the
event our technology is developed, we will face competition when we are ready
to
sell or license our products. We will be required to introduce our technology
into a well-developed market and compete with major corporations who
manufacture, sell and license existing memory products such as DRAM, SRAM,
EPROM, EEPROM and Flash memory. The market for memory technologies is dominated
by major corporations who have established market segments for their memory
technologies and products. These corporations have significantly greater
financial resources which are required to design, develop, manufacture, market,
sell and license their products and technologies. Many of these major
corporations have worldwide wafer manufacturing and integrated circuit
production facilities.
Our
success will be determined by the following factors which have not yet been
tested or measured:
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the
ability of manufacturers to incorporate the technology into existing
manufacturing capabilities without significant retooling and material
costs;
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price
competitiveness; and
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the
availability and costs of raw
materials.
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After
completion of the development of our technology, our ability to compete
successfully will depend on elements outside of our control, including the
rate
at which customers incorporate our technology into their products, the success
of such customers in selling those products, our protection of our intellectual
property, the number, nature and success of our competitors and their product
introductions and general market and economic conditions. In addition, our
success will depend on our ability to develop, introduce, and license or sell
in
a timely manner our technology or products incorporating our technology and
to
compete effectively on the basis of factors such as speed, density, die size
and
packaging.
Products
using our technology have not yet been manufactured.
Our
success depends on whether our technology can be manufactured in large
quantities at competitive prices. Our failure to manufacture large quantities
at
competitive prices would seriously hurt our ability to generate
revenues.
We
lack manufacturing capacity and will be dependent on third party
manufacturers.
Our
success will depend upon our ability to manufacture our technology in large
quantities and at competitive prices. We have no in-house manufacturing capacity
and do not anticipate developing such capacity. To the extent we are successful
in completing the development of our technology we will likely be required
to
rely upon contract manufacturers to produce our products. We may not be able
to
enter into manufacturing arrangements on terms that are favorable to us.
Moreover, there is no assurance that any future manufacturers will have the
capability to manufacture our products in sufficient quantities to achieve
profitability and within the quality, price, and technical standards required
by
our customers. In addition, because our technologies use semi-conducting
materials other than silicon, there may be a limited number of contract
manufacturers capable of producing our products since most are focusing on
silicon-based manufacturing. If any future manufacturers should cease doing
business with us or experience delays, shortages of supply or excessive demands
on their capacity, we may not be able to obtain adequate quantities of product
in a timely manner, or at all. Manufacturing new products involves integrating
complex designs and processes, coordinating with suppliers for parts and
components, and managing manufacturing capacities to accommodate forecasted
demand. Failure to obtain sufficient quantities of parts and components, as
well
as other manufacturing delays or constraints, could adversely affect the timing
of new product introductions. Any manufacturing problem or the loss of a
contract manufacturer could be disruptive to our operations and result in lost
sales.
Our
competitors are seeking to develop other magnetic based memory
technologies.
MRAM
as a
market segment is both crowded and competitive. We understand that other
companies have research and development efforts under way in connection with
non-volatile random access memory, also referred to herein as RAM. Much work
is
being done in the MRAM research and development at companies such as NVE,
Cypress, Freescale, Phillips, Motorola and others. Other research and
development efforts at IBM, Hewlett Packard and Nantero are focused on
non-magnetic based non-volatile RAM. While these companies may be considered
our
competitors, their focus is on high density RAM applications. As we anticipate
introducing our product in the less competitive, low density applications
market, we believe our more direct competitors are Honeywell, Naval Research
Laboratories, Ramtron and NVE. All of these companies have substantial resources
at their disposal.
We
may be
materially affected by aggressive competition as
the
memory and data storage industry is highly competitive and customers make their
decisions based on a number of competitive factors, including functionality,
technology, performance, reliability, system scalability, price, quality,
product availability, customer service and brand recognition. We must address
each of these factors effectively in order to successfully compete.
We
will be dependent upon the success of a limited range of
products.
The
range
of products we intend to commercialize is currently limited to applications
of
non-volatile random access memory technologies. Reliance on a limited range
of
products could restrict our ability to respond to adverse business conditions.
If we are not successful in developing this specific technology, or if there
is
not adequate demand for such technology or the market for such technology
develops less rapidly than we anticipate, we may not have the capability to
shift our resources to the development of alternative products. In such case
our
business would likely be at a significant disadvantage to other competitors
in
the field. As a result, the limited range of products we intend to develop
could
limit our revenues and profitability.
We
may not realize income from the licensing of our technologies if our licensees
fail to commercialize the products that incorporate these
technologies.
In
order
to generate revenues from our MRAM technology, we will likely need to enter
into
licensing arrangements with third parties who can integrate our technology
into
products that will gain acceptance in the market. We have not yet entered into
any licensing agreements, and there is no assurance that we will be able to
do
so on acceptable terms or at all. To the extent we are successful in licensing
our technology, in general we will seek upfront payments plus ongoing royalties
based on anticipated commercial sales of the products into which our technology
is incorporated. Our ability to realize royalties will thus depend upon the
successful manufacture and commercialization of such products, which will be
primarily within the control of the licensee. There is no assurance that any
eventual licensees’ products will be technologically viable or that such
licensees will be successful in marketing and selling such products. In
addition, licensees could decide to delay or discontinue the commercialization
of products for financial or other business reasons. Even if our licensees
succeed in developing products that incorporate our technology, in all
likelihood a significant amount of research, development and testing will be
required before such products can be introduced to market. Therefore we may
not
receive royalty income for a substantial period following the commencement
of
any licensing arrangements. If our licensees are unable to commercialize
products on a timely basis, they may lose market share to competing or
alternative technologies. Any failure by the companies to which we license
our
technologies to successfully develop marketable products would have an adverse
affect on our future royalty payments and financial condition.
Our
supply of future products could be dependent upon relationships with key
suppliers.
We
will
be reliant on third parties to supply the raw materials needed to manufacture
our future products. Any reliance on suppliers may involve several risks,
including a potential inability to obtain critical materials and reduced control
over production costs, delivery schedules, reliability and quality. Any
unanticipated disruption to future contract manufacture caused by problems
at
suppliers could delay shipment of products, increase our cost of goods sold
and
result in lost sales.
In
order to commercialize our future products, we will need to establish a sales
and marketing capability.
At
present, we do not have any sales or marketing capability since our technology
is currently in the development stage. However if we are successful in
completing our development efforts, we will need to add marketing and sales
personnel who have expertise in the computer technology business. We must also
develop the necessary supporting distribution channels. Although we believe
we
can build the required infrastructure, we may not be successful in doing so
if
we cannot attract personnel or generate sufficient capital to fund these
efforts. Failure to establish a sales force and distribution network would
have
a material adverse effect on our ability to grow our business.
Failure
to secure continued financing will cause our business to
suffer.
Since
there is no assurance that revenues will be realized in the near future, we
will
need additional financing to continue our research and development and to
successfully market our technology to potential licensees. While we have had
sufficient funds thus far to meet our requirements, there is no assurance we
will be able to continue to do so and failure to raise sufficient funds in
the
future will affect our ability to develop and market our
technology.
Because
much of our success and value depends on our ownership and use of intellectual
property, our failure to protect our property could adversely affect our future
growth and success.
Our
success will depend on our ability to protect our intellectual property. We
rely
primarily on patent, copyright, trademark and trade secret laws, as well as
nondisclosure agreements and other methods to protect our proprietary technology
and processes. Despite our efforts to do so, unauthorized parties may attempt
to
copy or otherwise obtain and use our products or technology, develop similar
technology independently or design around our patents. Policing unauthorized
use
of our products is expensive and difficult, and we cannot be certain that the
steps we have taken will prevent misappropriation or infringement of our
intellectual property.
Our
operations may be materially affected by the risks associated with developing
and protecting intellectual property.
We
cannot
provide any assurance that we will be able to continue to develop new
intellectual property or that we will continue to have it developed for us.
We
rely on a combination of U.S. patent, copyright, trademark, and trade secret
laws to protect our intellectual property rights. Due to financial constraints,
we have decided to not file patent and trademark registration applications
with
foreign governments and this may expose our technologies to infringement in
foreign jurisdictions. We enter into confidentiality agreements relating to
our
intellectual property with our employees and consultants. Despite all of our
efforts to protect our intellectual property rights, unauthorized parties may
attempt to copy or otherwise obtain or use our intellectual property. Monitoring
the unauthorized use of our intellectual property is difficult and we cannot
provide assurance that we will be able to adequately protect our intellectual
property in the future.
The
rights to certain of our patented technologies are shared with a third
party.
Our
core
technology includes a memory design with the magnetic bit aligned vertically
to
the substrate, also referred to herein as our VEMRAM technology, and a memory
design with the magnetic bit aligned horizontally to the substrate, also
referred to herein as our HEMRAM technology. We acquired ownership of certain
patents and patent applications covering the VEMRAM and HEMRAM technologies,
as
well as certain related rights, pursuant to an Asset Purchase Agreement dated
as
of December 10, 2000 with Estancia Limited, also referred to herein as
Estancia. However, under the terms of the Asset Purchase Agreement we have
been
required to convey back to Estancia a 40% undivided interest in the VEMRAM
and
HEMRAM patents, as well as the right to participate in gross profits and
royalties from the license or sale of such patents. This participation right
requires us to pay to Estancia 32% of (i) the gross profit, less expenses to
be
agreed by the parties, for each license of the patents sold or otherwise
transferred by us and (ii) all royalties received by us as a result of the
license or sale of the patents less reasonable expenses directly related to
the
obtaining of such royalties.
We
will be reliant upon contractual rights to use certain technologies that are
material to our business.
Certain
technologies material to our business are being developed through collaborative
arrangements with the University of Toronto. We have entered into a number
of
successive Research Collaboration Agreements with the University of Toronto
under which research and development programs have been led by a University
research team. We have provided funding, equipment and background technology
to
these projects. Certain Canadian governmental entities are also parties to
these
agreements and have provided additional funding. The University of Toronto
has
ownership rights to all intellectual property developed under these programs.
We
have no ownership rights but have the right to obtain exclusive, world-wide
and
perpetual sub-licenses from the governmental participants to use such
intellectual property; the governmental participants in turn have the right
to
obtain an exclusive, world-wide license to such technology directly from the
University of Toronto.
Intellectual
property claims against us, no matter how groundless, could cause our business
to suffer.
Our
future success and competitive position depend in part on our ability to retain
exclusive rights to our technology, including any improvements that may be
made
on that technology from time to time by us or on our behalf. While our
technology is patented or is subject to pending patent applications in the
U.S.A. and we know of no challenge that has been made either against our
technology or our rights to it, and we have no reason to believe that any such
challenge might be made or that the grounds for any such challenge exist, if
any
intellectual property litigation were to be commenced against us, no matter
how
groundless, the result could be a significant expense to us, adversely affecting
further development, licensing and sales, diverting the efforts of our technical
and management personnel and, in the event of an adverse outcome, damages and
possible restrictions on the further development, licensing and use of our
technology.
There
is
no assurance that any of our pending patent applications will be issued as
patents or that any issued patent will not be determined to be invalid at a
later date.
We
depend on key personnel.
Our
senior managers and employees are Salvatore Fuda, who serves as the Chairman
of
the Board of Directors, Joseph Fuda, who serves as our Chief Executive Officer,
and Dr. Cynthia Kuper who serves as our Chief Technology Officer. Dr. Harry
Ruda, and a number of researchers forming the team that he oversees, are key
technical personnel engaged pursuant to research collaboration agreements
between us and the University of Toronto. Our success depends on our ability
to
retain certain of our senior management and key technical personnel and our
ability to attract and retain additional highly skilled personnel in the
future.
We
may be materially affected if we are unable to attract, retain and motivate
key
employees.
Our
future success depends, in large part, on our ability to attract, retain and
motivate key employees. We face significant competition for individuals who
possess the skills required to design, develop, manufacture, and market our
technologies. An inability to successfully attract, retain, and motivate these
employees in the future could have an adverse effect on our future operating
and
financial performance.
We
may be materially affected by rapid technological change and evolving industry
standards
Short
product life cycles are inherent in high-technology companies due to rapid
technological change and evolving industry standards. Our future financial
condition and results of operations depend on our ability to respond effectively
to these changes. We cannot provide any assurance that we will be able to
successfully develop, manufacture, and market innovative new products or adapt
our current products to new technologies or new industry standards. In addition,
our customers may be reluctant to adopt new technologies and standards or they
may prefer competing technologies and standards. Because the technology market
changes so rapidly, it is difficult for us to predict the rate adoption of
our
MRAM technology.
We
may be materially affected by risks associated with new product development.
Our
new
product research and development is complex and requires us to investigate
and
evaluate multiple alternatives, as well as plan the design and manufacture
of
those alternatives selected for further development. Our research and
development efforts could be adversely affected by hardware and software design
flaws, product development delays, changes in data storage technology, changes
in operating systems and changes in industry standards.
The
manufacturing of new products involves integrating complex designs and
processes, coordinating with suppliers for parts and components and managing
manufacturing capacities to accommodate forecasted demand. Our failure to obtain
sufficient quantities of parts and components or other manufacturing delays
and
constraints could adversely affect our ability to timely introduce new
products.
The
price of our common shares and volume of our common shares may be
volatile.
Our
shareholders may be unable to sell a significant number of our common shares
on
the NASD OTC-BB without a significant reduction in the price of the
shares.
Furthermore,
there can be no assurance that we will be able to meet the listing requirements
of, or achieve listing on, any other stock exchange. The market price of the
common shares may be affected significantly by factors such as fluctuations
in
our operating results, announcements of technological innovations or new
products by us or our competitors, action by governmental agencies against
us or
the industry in general, developments with respect to patents or proprietary
rights, public concern as to the safety of products developed by us or others,
the interest of investors, traders and others in public companies such as ours
and general market conditions. In recent years, the securities markets in the
United States and Canada have experienced a high level of price and volume
volatility, and the market price of securities of many companies, particularly
small capitalization companies, have experienced fluctuations which have not
necessarily been related to the operating performance, underlying asset values
or business prospects of such companies.
Our
stock is subject to the penny stock regulations, which may discourage brokers
from effecting transactions in the stock and adversely affect the stock’s market
price and liquidity.
Our
common shares constitute “penny stock” under applicable regulations of the
Securities and Exchange Commission. Penny stock is defined as shares of stock
that (a) are issued by a company that has less than $5,000,000 in net
tangible assets and has been in business less than three years, by a company
that has less than $2,000,000 in net tangible assets and has been in business
for more than three years, or by a company that has average revenues of less
than $6,000,000 for the last three years; (b) have a market price of less
than $5 per share; and (c) are not quoted on the NASDAQ National Stock
Market or listed on a U.S. stock exchange. The penny stock regulations impose
significant restrictions on brokers who sell penny stock to persons other than
established customers and institutional accredited investors. Broker-dealers
participating in sales of our stock will be subject to the so called “penny
stock” regulations covered by Rule 15g-9 under the Securities Exchange Act
of 1934, as amended, also referred to herein as the Exchange Act). Under the
rule, broker-dealers must furnish to all investors in penny stocks a risk
disclosure document required by the rule, make a special suitability
determination of the purchaser and have received the purchaser’s written
agreement to the transaction prior to the sale. In order to approve a person’s
account for a transaction in penny stock, the broker or dealer must
(i) obtain information concerning the person’s financial situation,
investment experience and investment objectives; (ii) reasonably determine,
based on the information required by paragraph (i) that the transactions in
penny stocks are suitable for the person and that the person has sufficient
knowledge and experience in financial matters that the person reasonably may
be
expected to be capable of evaluating the risks of transactions in penny stock;
and (iii) deliver to the person a written statement setting forth the basis
on which the broker or dealer made the determination required by paragraph
(ii) in this section, stating in a highlighted format that it is unlawful
for the broker or dealer to effect a transaction in a penny stock unless the
broker or dealer has received, prior to the transaction, a written agreement
to
the transaction from the person; and stating in a highlighted format immediately
preceding the customer signature line that the broker or dealer is required
to
provide the person with the written statement and the person should not sign
and
return the written statement to the broker or dealer if it does not accurately
reflect the person’s financial situation, investment experience and investment
objectives, and obtain from the person a manually signed and dated copy of
the
written statement. Our common shares are subject to the penny stock regulations,
which may discourage brokers from effecting transactions in the common shares.
This would decrease market liquidity, adversely affect market price and make
it
difficult for you to use the common shares as collateral.
We
do not anticipate paying dividends.
We
have
never paid a dividend on our securities and we do not anticipate paying
dividends in the foreseeable future.
The
rights of our shareholders may differ from the rights typically afforded to
shareholders of a U.S. corporation.
We
are
incorporated under the Business Corporations Act (Ontario), also referred to
herein as the Business Corporations Act (Ontario). The rights of holders of
our
common shares are governed the laws of the Province of Ontario, including the
Business Corporations Act (Ontario), by the applicable laws of Canada, and
by
our Articles of Incorporation and all amendments thereto, also referred to
herein as the Articles, and our By-laws. These rights differ in certain respects
from the rights of shareholders in typical U.S. corporations. The principal
differences include without limitation the following:
Under
the
Business Corporations Act (Ontario), we have a lien on any common share
registered in the name of a shareholder or the shareholder’s legal
representative for any debt owed by the shareholder to us. Under U.S. state
law,
corporations generally are not entitled to any such statutory liens in respect
of debts owed by shareholders.
With
regard to certain matters, we must obtain approval of our shareholders by way
of
at least 662/3% of the votes cast at a meeting of shareholders duly called
for
such purpose being cast in favor of the proposed matter. Such matters include
without limitation: (a) the sale, lease or exchange of all or substantially
all of our assets out of the ordinary course of our business; and (b) any
amendments to our Articles including, but not limited to, amendments affecting
our capital structure such as the creation of new classes of shares, changing
any rights, privileges, restrictions or conditions in respect of our shares,
or
changing the number of issued or authorized shares, as well as amendments
changing the minimum or maximum number of directors set forth in the Articles.
Under U.S. state law, the sale, lease, exchange or other disposition of all
or
substantially all of the assets of a corporation generally requires approval
by
a majority of the outstanding shares, although in some cases approval by a
higher percentage of the outstanding shares may be required. In addition, under
U.S. state law the vote of a majority of the shares is generally sufficient
to
amend a company’s certificate of incorporation, including amendments affecting
capital structure or the number of directors. Under certain circumstances the
board of directors may also have the ability to change the number of directors
under U.S. state law.
Pursuant
to our By-laws, two persons present in person or represented by proxy and each
entitled to vote thereat shall constitute a quorum for the transaction of
business at any meeting of shareholders. Under U.S. state law, a quorum
generally requires the presence in person or by proxy of a specified percentage
of the shares entitled to vote at a meeting, and such percentage is generally
not less than one-third of the number of shares entitled to vote.
Under
rules of the Ontario Securities Commission, a meeting of shareholders must
be called for consideration and approval of certain transactions between a
corporation and any “related party” (as defined in such rules). A “related
party” is defined to include, among other parties, directors and senior officers
of a corporation, holders of more than 10% of the voting securities of a
corporation, persons owning a block of securities that is otherwise sufficient
to affect materially the control of the corporation, and other persons that
manage or direct, to a substantial degree, the affairs or operations of the
corporation. At such shareholders’ meeting, votes cast by any related party who
holds common shares and has an interest in the transaction may not be counted
for the purposes of determining whether the minimum number of required votes
have been cast in favor of the transaction. Under U.S. state law, a transaction
between a corporation and one or more of its officers or directors can generally
be approved either by the shareholders or a by majority of the directors who
do
not have an interest in the transaction. Corporations that are listed on a
U.S.
securities exchange or are quoted on Nasdaq may also be required to have
transactions with officers and directors and other related party transactions
reviewed by an audit committee comprised of independent directors.
There
is
no limitation imposed by our articles or other charter documents on the right
of
a non-resident to hold or vote our common shares. However, the Investment Canada
Act , also referred to herein as the Investment Act, as amended by the World
Trade Organization Agreement Implementation Act, also referred to herein as
the
WTOA Act, generally prohibits implementation of a reviewable investment by
an
individual, government or agency thereof, corporation, partnership, trust or
joint venture that is not a “Canadian,” as defined in the Investment Act,
unless, after review, the minister responsible for the Investment Act is
satisfied that the investment is likely to be a net benefit to Canada. An
investment in our common shares by a non-Canadian would be reviewable under
the
Investment Act if it were an investment to acquire direct control of Micromem,
and the value of our assets were CDN $5.0 million or more. However, an
investment in our shares by a national of a country (other than Canada) that
is
a member of the World Trade Organization or has a right of permanent residence
in such a country (or by a corporation or other entity that is a “WTO
Investor-controlled entity” pursuant to detailed rules set out in the
Investment Act) would be reviewable at a higher threshold of CDN $223 million
in
assets, except for certain economic sectors with respect to which the lower
threshold would apply. A non-Canadian, whether a national of a WTO member or
otherwise, would acquire control of Micromem for purposes of the Investment
Act
if he or she acquired a majority of our common shares. The acquisition of less
than a majority, but at least one-third of our common shares, would also be
presumed to be an acquisition of control of Micromem, unless it could be
established that Micromem was not controlled in fact by the acquirer through
the
ownership of voting shares. The United States is a WTO Member for purposes
of
the Investment Act. Certain transactions involving our common shares would
be
exempt from the Investment Act, including:
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an
acquisition of our common shares if the acquisition were made in
connection with the person’s business as a trader or dealer in securities;
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an
acquisition of control of Micromem in connection with the realization
of a
security interest granted for a loan or other financial assistance
and not
for any purpose related to the provisions of the Investment Act;
and
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an
acquisition of control of Micromem by reason of an amalgamation,
merger,
consolidation or corporate reorganization, following which the ultimate
direct or indirect control of Micromem, through the ownership of
voting
interests, remains unchanged. Under U.S. law, except in limited
circumstances, restrictions generally are not imposed on the ability
of
non-residents to hold a controlling interest in a U.S.
corporation.
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U.S.
shareholders may not be able to enforce civil liabilities against
us.
Micromem
is incorporated under the laws of the Province of Ontario. Additionally, a
number of our directors and executive officers are non-residents of the U.S.,
and all or a substantial portion of the assets of such persons are located
outside the U.S. As a result, should any investor commence an action in the
U.S.
against Micromem or its directors or executive officers, Micromem or its
directors or officers, as the case may be, may be able to insist that any action
against them take place in the jurisdiction of the Province of Ontario. In
addition, if an investor were to obtain a U.S. judgment against Micromem or
its
directors or executive officers, there is doubt as to the enforceability of
such
U.S. judgment in Canada.
There
are foreign exchange risks associated with our company.
Because
we have historically raised funding in U.S. dollars, and a significant portion
of our costs are denominated in Canadian dollars, our funding is subject to
foreign exchange risks. A decrease in the value of the U.S. dollar relative
to
the Canadian dollar could affect our costs and potential future profitability.
We do not currently hold forward exchange contracts or other hedging instruments
to exchange foreign currencies for U.S. dollars to offset potential currency
rate fluctuations.
We
may be materially affected by global economic and political
conditions.
Our
ability to generate revenue may be adversely affected by uncertainty in the
global economy and could also be affected by unstable global political
conditions. Terrorist attacks or acts of war could significantly disrupt our
operations and the operations of our future customers, suppliers, distributors,
or resellers. We cannot predict the potential impact on our financial condition
or our results of operations should such events occur.
Our
auditors have identified significant deficiencies in our internal accounting
controls.
We
operate as a development stage company and have historically had only limited
accounting personnel and resources with which to address our internal control
procedures.
In
2005,
we engaged an independent firm of chartered accountants to complete an in depth
review of our internal accounting procedures and controls and are now in the
process of implementing the recommendations which were made. We have upgraded
our accounting software and have developed formalized budgets in 2005. The
Audit
Committee has met on a quarterly basis to assess our financial performance
and
to review the progress management has made in upgrading its accounting
procedures and controls. The Audit Committee has also interacted with our
external auditors in 2005 on reporting and control related matters.
When
our
auditors audited our financial statements as of and for the year ended October
31, 2005 they identified significant deficiencies in our internal accounting
controls. Significant deficiencies noted were that we lacked certain formalized
accounting policies and procedures including written procedures for the monthly,
quarterly and annual closing of our financial books and records, our staff
was
not always subject to timely review and supervision and security practices
over
our information technology were not sufficiently robust.
Our
management is implementing measures required to remedy these material weaknesses
and reportable conditions in our internal controls but has not managed to make
these changes effective in their entirety. These control deficiencies are not
expected to have any future material impact on our financial statements. If,
however, we fail to continue to adequately staff our accounting and finance
function and maintain adequate internal controls, we may not meet the demands
that are placed upon us as a public company, including the requirements of
the
Sarbanes-Oxley Act of 2002 and our business would accordingly face
repercussions. We expect to implement all measures required to remedy the
material deficiencies and reportable controls by the end of fiscal 2006.
We
are
engaged in the development of memory technology having the characteristic of
non-volatility, which is the ability to retain information after power has
been
shut off. Our technology is based on our ability to use magnetic materials
in
combination with a sensor to record the “state of magnetization”. Each magnetic
element stores one bit of data based on its ability to alternate between states
of magnetic polarization, which states are determined by a sensor. Our
technology represents “1”s and “0”s by the different polarization of magnets.
For example, a magnet oriented north/south is a “1” and a magnet oriented
south/north is a “0”. The magnetic field strength and direction do not decay
when power is switched off, and, therefore, the memory is
non-volatile.
We
were
incorporated under the laws of the Province of Ontario, Canada, on October
21,
1985 as Mine Lake Minerals Inc. We subsequently changed our name to Avanti
Capital Corp. on June 23, 1988 and to AvantiCorp International Inc. on
April 30, 1992 before becoming Micromem Technologies Inc. on
January 14, 1999 in connection with our acquisition of Pageant Technologies
Incorporated. Our principal executive offices are located at 777 Bay Street
Suite 1910, Toronto, Ontario M5G 2E4, Canada, and our telephone number is (416)
364-6513.
CAPITALIZATION
AND INDEBTEDNESS
The
following table sets forth, on a Canadian GAAP basis, our capitalization and
indebtedness, as of March 31, 2006. This table should be read in conjunction
with our consolidated financial statements for the three years ended October
31,
2005, 2004 and 2003 set forth in our Annual Report on Form 20-F for the year
ended October 31, 2005.
SHARE
CAPITAL
|
|
Number
of shares
|
|
US$
|
|
|
|
|
|
Authorized
|
|
|
|
|
|
|
|
|
|
Preference
Shares
|
|
2,000,000
special preference shares, redeemable, voting
|
|
|
|
|
|
|
|
Common
Shares
|
|
Unlimited
number of common shares without par value
|
|
|
|
|
|
|
|
Issued
and Outstanding
|
|
|
|
|
|
|
|
|
|
Preference
Shares
|
|
Nil
|
|
|
|
|
|
|
|
Common
shares
|
|
66,469,449
|
|
|
|
|
|
|
|
SHAREHOLDERS’
EQUITY
|
|
|
|
|
|
|
|
|
|
Common
Shares
|
|
|
|
34,830,087
|
|
|
|
|
|
Contributed
surplus
|
|
|
|
20,283,898
|
|
|
|
|
|
Deficit
|
|
|
|
(
55,454,512)
|
|
|
|
|
|
Total
Capitalization
|
|
|
|
(340,527)
|
The
above
table does not reflect $725,000 of accounts payable and accrued
liabilities.
RECENT
DEVELOPMENTS
The
following summarizes recent material events relating to our business, including
material changes in our affairs that have occurred since October 31, 2005,
the end of the most recent fiscal year for which audited financial statements
are included in the registration statement of which this prospectus is a part.
This discussion should be read in conjunction with the other information
included in this prospectus, including “Risk Factors” beginning on page 7.
You should also refer to the information contained in the documents incorporated
herein by reference, including our Annual Report on Form 20-F for the year
ended October 31, 2005 and the audited financial statements contained
therein.
We
continue our research and development activities at the University of Toronto.
Discussions with potential strategic development partners have been initiated
and are ongoing.
In
November 2005, Mr. Larry Blue joined our Board of Directors.. Mr. Blue was
previously employed as Vice President and General Manager of Symbol Technologies
Inc. and currently serves as Chief Executive Officer of Hi-G-Tek, Ltd., an
RFID
company based in Israel that provides products and services that enable real
time sensing and monitoring of its client's assets. Hi-G-Tek, Ltd. is relocating
its corporate headquarters from Israel to Rockville, Maryland, where Mr. Blue
is
based. Mr. Blue holds a Master's degree in Electrical Engineering.
We
realized cash proceeds of $525,000 from the exercise of stock options by certain
directors between January 2006 and March 31, 2006. These funds are being used
to
meet our general working capital requirements.
In
March
2006, we filed a provisional patent application in the United States for both
new and updated developments of our magnetic random access memory technology
for
applications in aerospace, defense, sensors and RFID applications which use
radiation hardened materials.
PRICE
RANGE OF COMMON SHARES OF THE COMPANY
The
following table sets forth the range of high and low closing sale prices for
our
common shares for the periods indicated, as reported by the Over-the-Counter
Bulletin Board. These prices do not include retail mark-ups, markdowns, or
commissions. The table below sets forth the high and low sales prices for Common
Shares in U.S. Dollars as reported for the periods specified. Our common shares
are traded in the United States and are quoted on the Over-the-Counter Bulletin
Board under the symbol MMTIF.OB. The common shares are not quoted or listed
in
Canada.
|
|
US$
High
|
|
US$
Low
|
|
Fiscal
Year Ended
|
|
|
|
|
|
|
|
October
31, 2001
|
|
|
5.28
|
|
|
1.28
|
|
October
31, 2002
|
|
|
1.77
|
|
|
0.05
|
|
October
31, 2003
|
|
|
0.31
|
|
|
0.05
|
|
October
31, 2004
|
|
|
1.17
|
|
|
0.15
|
|
October
31, 2005
|
|
|
0.90
|
|
|
0.65
|
|
|
|
|
|
|
|
|
|
Fiscal
Year Ended October 31, 2004
|
|
|
|
|
|
|
|
First
Quarter
|
|
|
0.56
|
|
|
0.15
|
|
Second
Quarter
|
|
|
0.39
|
|
|
0.22
|
|
Third
Quarter
|
|
|
1.17
|
|
|
0.21
|
|
Fourth
Quarter
|
|
|
0.99
|
|
|
0.54
|
|
|
|
|
|
|
|
|
|
Fiscal
Year Ended October 31, 2005
|
|
|
|
|
|
|
|
First
Quarter
|
|
|
1.129
|
|
|
0.60
|
|
Second
Quarter
|
|
|
1.01
|
|
|
0.66
|
|
Third
Quarter
|
|
|
0.85
|
|
|
0.55
|
|
Fourth
Quarter
|
|
|
0.80
|
|
|
0.55
|
|
|
|
|
|
|
|
|
|
Quarter
Ended January 31, 2006
|
|
|
0.72
|
|
|
0.47
|
|
Quarter
Ended April 30, 2006
|
|
|
1.20
|
|
|
0.43
|
|
Quarter
Ending July 31, 2006 (through May 17, 2006)
|
|
|
1.12
|
|
|
0.71
|
|
|
|
|
|
|
|
|
|
November
2005
|
|
|
0.71
|
|
|
0.55
|
|
December
2005
|
|
|
0.69
|
|
|
0.47
|
|
January
2006
|
|
|
0.72
|
|
|
0.58
|
|
February
2006
|
|
|
0.70
|
|
|
0.57
|
|
March
2006
|
|
|
0.60
|
|
|
0.44
|
|
April
2006
|
|
|
1.20
|
|
|
0.43
|
|
On
May
17, 2006, the closing price of a common share as reported on the
Over-the-Counter Bulletin Board was US$1.03 per share.
SHARE
CAPITAL
The
authorized capital of Micromem consists of an unlimited number of common shares,
no par value each, of which 64,719,449 common shares were issued and outstanding
as of October 31, 2005, and 2,000,000 special, redeemable, voting preference
shares (special shares), none of which were outstanding, as of October 31,
2005.
The number of special shares that may be issued and outstanding at any time
is
limited to 500,000.
On
March
31, 2006, 66,469,449 common shares were issued and outstanding and no special
shares were issued and outstanding. All of our issued common shares were fully
paid on those dates.
All
of
our outstanding common shares and preference shares pursuant to the due
authorization of our Board of Directors. Neither the Company nor any of its
subsidiaries holds common shares or special shares.
Convertible
Securities
Micromem
has adopted a stock option plan pursuant to which options are offered to
directors, executive officers and employees to purchase common shares at an
exercise price equal to or above the market price for the common shares at
the
date that the options are granted. Since October 31, 2005, the date of our
most
recent audited balance sheet, the following options were exercised: in January
2006 a director exercised 150,000 options at a price of $0.30 per share and
the
Company realized $45,000 of subscription proceeds; and in February and March
of
2006 four of our directors each exercised 400,000 options for an aggregate
of
1,600,000 options at a price of $0.30 per share and the Company realized
$480,000 of subscription proceeds from the exercise of such options. Since
October 31, 2005 we have made the following stock option grants: in November
2005 we granted 50,000 options to purchase common shares to an employee at
an
exercise price of $0.72 per share, which options expire in December 2010; in
November 2005 we granted 300,000 options to purchase common shares to a new
director at an exercise price of $0.60 per share, which options expire in
November 2009; and in January 2006 we granted 100,000 options to our Chief
Technology Officer at an exercise price of $0.68 per share, which options expire
in January 2011. As of March 31, 2006 an aggregate of 8,750,000 options to
purchase common shares issued under the stock option plan were outstanding,
of
which 3,600,000 are exercisable at $0.30 per share and expire in 2009, 2,550,000
are exercisable at $0.72 per share and expire in 2010, 1,800,000 are exercisable
at $0.65 per share and expire in 2009, 50,000 are exercisable at $0.91 per
share
and expire in 2009, 300,000 are exercisable at $0.80 per share and expire in
2007, 50,000 are exercisable at $0.80 and expire in 2009, 300,000 are
exercisable at $0.60 per share and expire in 2009, and 100,000 are exercisable
at $0.68 per share and expire in January 2011.
As
of
March 31, 2006 there were 6,484,668 common shares issuable upon the exercise
of
outstanding warrants. These warrants are exercisable as follows: (i) an
aggregate of 1,028,334 currently have an exercise price of $0.60 per share,
or
such lower amount as the Board of Directors may elect, and expire June 30,
2006
or such later date as the Board of Directors may elect (ii) an aggregate of
1,028,334 have an exercise price of $0.60 per share, or such lower amount as
the
Board of Directors may elect, and expire December 31, 2006 or such later date
as
the Board of Directors may agree, (iii) an aggregate of 14,000 have an exercise
price of $0.75 per share or such lower amount as the Board of Directors may
elect and expire June 30, 2006 or such later date as the Board of Directors
may
elect, (iv) an aggregate of 14,000 have an exercise price of $0.75 per share
and
expire December 31, 2006 or such later date as the Board of Directors may elect,
(v) an aggregate of 1,300,000 have an exercise price of $0.65 per share, or
such
lower amount as the Board of Directors may agree, and expire June 30, 2006
or
such later date as our Board of Directors may elect (vi) an aggregate of
1,300,000 have an exercise price of $0.65 per share, or such lower amount as
the
Board of Directors may agree, and expire December 31, 2006 or such later date
as
the Board of Directors may elect (vii) an aggregate of 800,000 have an exercise
price of $0.70 per share, or such lower amount as the Board of Directors may
agree, and expire December 31, 2006 or such later date as the Board of Directors
may elect and (viii) an aggregate of 1,000,000 have an exercise price of $0.70
per share and expire June 8, 2006 or such later date as the Board of Directors
may elect.
Changes
in Share Capital - Fiscal Year Ended October 31, 2005 and subsequent
periods
In
December 2004 we completed a private placement of units to several U.S.
investors at a purchase price of US$0.60 per unit. We received $617,000 in
gross
proceeds from the sale of 1,028,334 units. Each unit consisted of one common
share and one Series A Warrant. Each Series A Warrant entitled the holder to
purchase one common share and one Series B Warrant at an exercise price of
$0.60. Each Series B Warrant entitled the holder to purchase one additional
common share at an exercise price of $0.60 per share. We subsequently revised
the terms of this private placement as described below.
During
the first quarter of calendar year 2005, we completed a private placement of
units to one Canadian investor at a purchase price of US$0.75 per unit. We
received $10,500 in gross proceeds for the sale of 14,000 units. Each unit
consisted of one common share and one Series A Warrant. Each Series A Warrant
entitled the investor to purchase one common share and one Series B Warrant
at
an exercise price of $0.75. Each Series B Warrant entitled the holder to
purchase one additional common share at an exercise price of $0.75. We
subsequently revised the terms of this private placement as described
below.
During
the first quarter of calendar year 2005, we arranged a private placement of
units to several investors at a purchase price of US$0.65 per unit. We received
$845,000 in gross proceeds for the sale of 1,300,000 units. Each unit consisted
of one common share and one Series A Warrant. Each Series A Warrant entitled
the
holder to purchase one common share and one Series B Warrant at an exercise
price of $0.65. Each Series B Warrant entitled the holder to purchase one
additional common share at an exercise price of $0.65. We subsequently revised
the terms of this private placement as described below.
In
June
2005 we issued 800,000 warrants to certain parties in consideration of ongoing
services. Each such Warrant entitles the holder to purchase one common share
at
an exercise price of $0.70 and terminates on December 31, 2006 or such later
date as the Board of Directors may elect. Such Warrants were issued in payment
of advisory services provided by Corinthian Holdings LLC in connection with
the
Company's filing of the Registration Statement of which this prospectus is
a
part. Pursuant to the terms of its agreement with the Company, Corinthian
Holdings has directed that a portion of the warrants issuable under the
agreement be issued to certain individuals designated by
Corinthian.
On
June
8, 2005 we entered into a financial advisory services agreement with an “arm’s
length” entity and, as consideration, issued a warrant to purchase 1,000,000 of
our common shares. The warrant entitles the holder to purchase our common shares
at $0.70 per share. The warrant expires on June 8, 2006 or such later date
as
the Board of Directors may elect.
We
have
revised the terms of certain private placements completed in fiscal 2005 in
which we received proceeds totaling $1,472,500 through the sale of units at
prices ranging from $0.60 to $0.75 per unit. These units consisted of one common
share, one Series A warrant which entitled the holder to acquire one common
share and one Series B warrant at an exercise price equal to the price of the
unit, and one Series B warrant which entitled the holder to purchase one
additional common share at an exercise price equal to the price of the unit.
The
Series A warrants and Series B warrants expired 12 months after issuance if
unexercised. Our Board of Directors approved of the restructuring of these
private placements to provide that each unit consists of one common share,
one
Series A Warrant which entitles the holder to purchase one common share and
terminates on June 30, 2006 (unless extended by the Company), and one Series
B
Warrant which entitles the holder to purchase one common share and terminates
on
December 31, 2006 (unless extended by the Company). As a result of this
restructuring the Series B Warrants are currently outstanding and exercisable
without any requirement that the holders must first exercise the Series A
Warrants. The Board of Directors may also decrease the exercise price and extend
the term of the Warrants as it so elects. The remaining terms of the warrants
are unchanged.
In
February 2005 two Canadian private investors exercised 1,406,250 Series B
Warrants resulting in the issuance of 1,406,250 common shares. We received
proceeds of $112,500 from such warrant exercises. In August 2005 these investors
exercised an additional 625,000 Series B Warrants resulting in the issuance
of
625,000 common shares. We received proceeds of $50,000 from such warrant
exercises. Such warrants were part of a private placement of 2,031,250 units
to
these investors which was completed in August 2003. Each unit consisted of
one
common share and one Series A Warrant which entitled the holder to purchase
one
common share and one Series B Warrant. The investors had previously exercised
all of their 2,031,250 Series A Warrants in August 2004.
In
November 2004 and February 2005 two Canadian private investors exercised 100,000
Series A and 300,000 Series B Warrants, resulting in the issuance of 400,000
common shares. We received proceeds of $44,000 from such warrant exercises.
Such
warrants were part of a private placement of 300,000 units to these investors
which was completed in December 2003. Each unit consisted of one common share
and one Series A Warrant which entitled the holder to purchase one common share
and one Series B Warrant. The investors had previously exercised 200,000 of
their Series A Warrants in October 2004.
During
the fiscal year ended October 31, 2005, 1,820,000 common shares were issued
in respect of the exercise of outstanding options. We realized proceeds of
$553,600 on the exercise of these options. Subsequent to October 31, 2005 we
issued 300,000 options at $0.60 and 50,000 options at $0.72. These options
are
fully vested and expire in 5 years if unexercised. We also issued 100,000
options at $0.68, which options are fully vested and expire in January 2011
if
unexercised. In January 2006, a director exercised 150,000 options at a price
of
$0.30 per share and accordingly the Company realized proceeds of $45,000. In
February and March 2006, several directors exercised a total of 1,600,000
options at a price of $0.30 per share and accordingly the Company realized
proceeds of $480,000.
Changes
in Share Capital—Fiscal Year Ended October 31, 2004
In
August
2004 two Canadian private investors exercised 2,031,250 Series A Warrants
resulting in the issuance of 2,031,250 common shares and 2,031,250 Series B
Warrants. We received proceeds of $162,500 from such warrant exercises. Such
warrants were part of a private placement of 2,031,250 units to these investors
which was completed in August 2003. Each unit consisted of one common share
and
one Series A Warrant which entitled the holder to purchase one common share
and
one Series B Warrant. Subsequent to the exercise of the Series A Warrants,
these
investors exercised 1,406,250 of their Series B Warrants in February 2005 and
the remaining 625,000 Series B Warrants in August 2005.
In
October 2004 two Canadian private investors exercised 200,000 Series A Warrants
resulting in the issuance of 200,000 common shares and 200,000 Series B
Warrants. We realized proceeds of $22,000 from such warrant exercises. Such
warrants were part of a private placement of 300,000 units to these investors
which was completed in December 2003. Each unit consisted of one common share
and one Series A Warrant which entitled the holder to purchase one common share
and one Series B Warrant. Subsequent to the exercise of the 200,000 Series
A
Warrants, the investors exercised the balance of their Series A and Series
B
Warrants in November 2004 and February 2005.
In
June
2004 one Canadian private investor exercised 500,000 Series A Warrants,
resulting in the issuance of 500,000 common shares and 500,000 Series B
Warrants. We realized proceeds of $40,000 from such warrant exercise. In
September 2004 the investor exercised all his Series B Warrants, resulting
in
the issuance of 500,000 common shares. We received proceeds of $40,000 from
such
warrant exercise. Such warrants were part of a private placement of 500,000
units to this investor which was completed in December 2003. Each unit consisted
of one common share and one Series A Warrant which entitled the holder to
purchase one common share and one Series B Warrant.
During
the fiscal year ended October 31, 2004, 5,300,000 common shares were issued
in respect of the exercise of outstanding options. We realized proceeds of
$530,000 on the exercise of these options.
Changes
in Share Capital—Fiscal Year Ended October 31, 2003
In
August
2003 we completed private placements of units to two Canadian private investors
at a purchase price of US$0.08 per unit. We received an aggregate of $162,500
in
gross proceeds from the sale of 2,031,250 units to such investors. Each unit
consisted of one common share and one Series A Warrant. Each Series A Warrant
entitled the holder to purchase one common share and one Series B Warrant at
an
exercise price of $0.08. Each Series B Warrant entitled the holder to purchase
one additional common share at an exercise price of $0.08. The investors
exercised all of their 2,031,250 Series A Warrants in August 2004, resulting
in
the issuance of 2,031,250 common shares and 2,031,250 Series B Warrants, and
subsequently exercised 1,406,250 of their Series B Warrants in February 2005
and
the remaining 625,000 Series B Warrants in August 2005.
In
December 2003 we completed private placements of units to two Canadian private
investors at a purchase price of US$0.11 per unit. We received an aggregate
of
$33,000 in gross proceeds from the sale of 300,000 units to such investors.
Each
unit consisted of one common share and one Series A Warrant. Each Series A
Warrant entitled the holder to purchase one common share and one Series B
Warrant at an exercise price of $0.11. Each Series B Warrant entitled the holder
to purchase one additional common share at an exercise price of $0.11. The
investors exercised 200,000 of their Series A Warrants in October 2004,
resulting in the issuance of 200,000 common shares and 200,000 Series B
Warrants, and subsequently exercised the balance of their Series A and Series
B
Warrants in November 2004 and February 2005.
We
completed a private placement of units to one Canadian private investor in
December 2003 at a purchase price of US$.08 per unit. We received $40,000 in
gross proceeds from the sale of 500,000 units. Each unit consisted of one common
share and one Series A Warrant. Each Series A Warrant entitled the holder to
purchase one common share and one Series B Warrant at an exercise price of
$0.08. Each Series B Warrant entitled the holder to purchase one additional
common share at an exercise price of $0.08. The investor exercised all of his
500,000 Series A Warrants in June 2004, resulting in the issuance of 500,000
common shares and 500,000 Series B Warrants, and subsequently exercised the
Series B Warrants in September 2004.
For
more
information on our share capital, options and warrants please see our
consolidated financial statements for the three years ended October 31,
2005 beginning on page F-1 of our Annual Report on Form 20-F for the year
ended October 31, 2005.
SELLING
SHAREHOLDERS
The
selling shareholders are eligible to offer and sell up to a total of
8,750,000 common
shares under this prospectus. The following table sets forth:
|
·
|
the
name of each selling shareholder;
|
|
·
|
the
number of common shares beneficially owned by each selling shareholder
as
of the date of this prospectus, assuming exercise of all outstanding
options;
|
|
·
|
the
maximum number of common shares beneficially owned by each selling
shareholder that may be offered pursuant to this prospectus, some
or all
of which may be sold pursuant to this prospectus;
and
|
|
·
|
the
number of common shares that would be beneficially owned by each
selling
shareholder after the completion of this offering, assuming the sale
pursuant to this offering of all shares that are beneficially owned
by
such selling shareholder and offered pursuant to this prospectus.
|
The
information set forth in the table below is based on 75,219,449 common shares
outstanding as of March 31, 2006, which includes all of the shares the selling
shareholders are eligible to offer under this prospectus and assumes the
exercise of all stock options outstanding as of the date of this prospectus
and
exercisable within 60 days after such date, but does not take into account
common shares issuable upon exercise of warrants. All information with respect
to share ownership has been provided by the selling shareholders. This table
has
been prepared to comply with the rules and regulations of the Commission but
does not reflect any knowledge that we have with respect to the present intent
of the persons listed as selling shareholders. The shares covered by this
prospectus may be offered by the selling shareholders or their transferees
from
time to time, in whole or in part.
Name
of
Selling
Shareholder
(3)
|
|
Number
of Common Shares Beneficially Owned Prior to the Offering (1)
|
|
Number
of Shares which may be Offered
|
|
Common
Shares Beneficially Owned after the Offering (2)
|
|
|
|
Number
|
|
Percent
|
|
|
|
Number
|
|
Percent
|
|
Salvatore
Fuda,
Chairman,
|
|
|
6,055,292
|
|
|
7.8
|
%
|
|
3,600,000
|
|
|
2,455,292
|
|
|
3.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph
Fuda,
President,
Chief Executive Officer and Director,
|
|
|
1,851,780
|
|
|
4.7
|
%
|
|
1,800,000
|
|
|
51,780
|
|
|
<
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manoj
Pundit,
Secretary
and Director,
|
|
|
602,478
|
|
|
1.3
|
%
|
|
600,000
|
|
|
2,478
|
|
|
<
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dan
Amadori,
Chief
Financial Officer,
|
|
|
750,000
|
|
|
1.0
|
%
|
|
750,000
|
|
|
None
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
Van Fleet,
Director
|
|
|
600,000
|
|
|
<
1.0
|
%
|
|
600,000
|
|
|
None
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen
Fleming,
Director,
|
|
|
300,000
|
|
|
<
1.0
|
%
|
|
300,000
|
|
|
None
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
George
A. Kennedy,
Director,
|
|
|
300,000
|
|
|
<
1.0
|
%
|
|
150,000
|
|
|
150,000
|
|
|
<
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cynthia
Kuper
Chief
Technology Officer
|
|
|
400,000
|
|
|
<
1.0
|
%
|
|
400,000
|
|
|
None
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Larry
Blue
Director
|
|
|
300,000
|
|
|
<
1.0
|
%
|
|
300,000
|
|
|
None
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jason
Baun
Employee
|
|
|
100,000
|
|
|
<
1.0
|
%
|
|
100,000
|
|
|
None
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martha
McGroarty,
Employee
|
|
|
59,833
|
|
|
<
1.0
|
%
|
|
50,000
|
|
|
9,833
|
|
|
<
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nina
George
Employee
|
|
|
80,100
|
|
|
<
1.0
|
%
|
|
50,000
|
|
|
30,100
|
|
|
<
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joyce
Brunton
Employee
|
|
|
75,000
|
|
|
<
1.0
|
%
|
|
50,000
|
|
|
25,000
|
|
|
<
1.0
|
%
|
(1)
|
The
amounts shown are derived from information available to the Company
after
taking reasonable efforts to determine the beneficial ownership of
the
selling shareholders listed. Beneficial ownership is determined in
accordance with the rules and regulations of the Commission. In computing
the number of shares beneficially owned by a person and the percentage
ownership of that person, common shares subject to options held by
that
person that are currently exercisable or exercisable within 60 days
of the
date of this prospectus are deemed outstanding.
|
(2)
|
Assumes
the sale of all shares offered pursuant to this prospectus and no
other
purchases of our common shares.
|
(3)
|
The
addresses of all of the selling shareholders are c/o Micromem Technologies
Inc., 777 Bay Street, Suite 1910, Toronto, Ontario M5G
2E4.
|
USE
OF PROCEEDS
The
proceeds from the sale of the common shares offered pursuant to this prospectus
are solely for the account of the selling shareholders. We will not receive
any
of the proceeds from any sale of shares by the selling
shareholders.
PLAN
OF DISTRIBUTION
The
selling shareholders may sell all or a portion of the shares offered under
this
prospectus from time to time in transactions, including one or more block
transactions, on the OTC Bulletin Board, in the public market off the OTC
Bulletin Board, in privately negotiated transactions, or in a combination of
such transactions. Each sale may be made either at the market price prevailing
at the time of sale or at a negotiated price. The selling shareholders may
effect these transactions by selling their shares directly to purchasers or
to
or through a broker or brokers, which may act as agents or principals. These
brokers may receive compensation in the form of discounts, concessions or
commissions from the selling shareholders and/or the purchasers of shares for
whom these broker-dealers may act as agents or to whom they sell as principal,
or both (which compensation as to a particular broker-dealer might be in excess
of customary commissions). Any shares covered by this prospectus that qualify
for sale under Rule 144 of the Securities Act may be sold under Rule 144 rather
than under this prospectus. All expenses of registration incurred in connection
with this offering are being borne by the Company, but all brokerage commissions
and other expenses incurred by a selling shareholder will be paid by that
selling shareholder.
The
selling shareholders and any brokers that act in connection with the sale of
the
shares might be deemed to be “underwriters“ within the meaning of Section 2(11)
of the Securities Act. Consequently, any commissions received by these broker
and any profit on the resale of the shares sold by them while acting as
principals might be deemed to be underwriting discounts or commissions under
the
Securities Act. The selling shareholders may agree to indemnify any agent or
dealer that participates in transactions involving sales of the shares against
certain liabilities, including liabilities arising under the Securities
Act.
Because
the selling shareholders may be deemed to be “underwriters“ within the meaning
of Section 2(11) of the Securities Act, the selling shareholders will be subject
to the prospectus delivery requirements of the Securities Act, which may include
delivery through the facilities of the Nasdaq National Market pursuant to Rule
153 under the Securities Act.
LEGAL
MATTERS
The
validity of the issuance of the common shares being offered hereby will be
passed upon by Chitiz Pathak LLP of Toronto, Ontario.
EXPERTS
The
financial statements incorporated in this prospectus by reference from the
Company’s Annual Report on Form 20-F for the year ended October 31, 2005 have
been audited by Schwartz Levitsky Feldman LLP, independent auditors, as stated
in their report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
The
financial statements incorporated in this prospectus by reference from the
Company’s Annual Report on Form 20-F for the year ended October 31, 2004 have
been audited by Grant Thornton LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
The
financial statements incorporated by reference from the Company’s annual report
on Form 20-F for the year ended October 31, 2003 have been audited by Ernst
& Young LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance
upon
the report of such firm given upon their authority as experts in accounting
and
auditing.
OFFERING
EXPENSES
We
will
bear all costs, expenses and fees in connection with the registration of the
common shares offered by this prospectus. The selling shareholders will bear
brokerage commissions and similar selling expenses, if any, attributable to
the
sale of common shares, as well as any fees and disbursements of counsel to
the
selling shareholders.
The
following table sets forth the estimated expenses payable by us in connection
with the offering described in this registration statement. All amounts are
subject to future contingencies other than the SEC registration
fee.
|
|
$
|
|
Securities
and Exchange Commission Registration Fee
|
|
|
176.34
|
|
Printing
and Engraving Expenses
|
|
|
100.00
|
|
Legal
Fees and Expenses
|
|
|
10,000.00
|
|
Accounting
Fees and Expenses
|
|
|
7,500.00
|
|
Blue
Sky Qualification Fees and Expenses
|
|
|
-
|
|
Miscellaneous
|
|
|
-
|
|
Total
|
|
|
17,776.34
|
|
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
FOR
SECURITIES ACT LIABILITIES
Reference
is made to Section 136 of the Business
Corporations Act
(Ontario), which provides:
Indemnification
of Directors
|
(1)
|
A
corporation may indemnify a director or officer of the corporation,
a
former director or officer of the corporation or a person who acts
or
acted at the corporation’s request as a director or officer of a body
corporate of which the corporation is or was a shareholder or creditor,
and his or her heirs and legal representatives, against all costs,
charges
and expenses, including an amount paid to settle an action or satisfy
a
judgement, reasonably incurred by him or her in respect of any civil,
criminal or administrative action or proceeding to which he or she
is made
a party by reason of being or having been a director or officer of
such
corporation or body corporate, if,
|
|
(a)
|
he
or she acted honestly and in good faith with a view to the best interests
of the corporation; and
|
|
(b)
|
in
the case of a criminal or administrative action or proceeding that
is
enforced by a monetary penalty, he or she had reasonable grounds
for
believing that his or her conduct was
lawful.
|
|
(2)
|
A
corporation may, with the approval of the court, indemnify a person
referred to in subsection (1) in respect of an action by or on behalf
of
the corporation or body corporate to procure a judgement in its favor,
to
which the person is made a party by reason of being or having been
a
director or an officer of the corporation or body corporate, against
all
costs, charges and expenses reasonably incurred by the person in
connection with such action if he or she fulfils the conditions set
out in
clauses (1)(a) and (b).
|
|
(3)
|
Despite
anything in this section, a person referred to in subsection (1)
is
entitled to indemnity from the corporation in respect to all costs,
charges and expenses reasonably incurred by him in connection with
the
defense of any civil, criminal or administrative action or proceeding
to
which he or she is made a party by reason of being or having been
a
director or officer of the corporation or body corporate, if the
person
seeking indemnity,
|
(a) was
substantially successful on the merits in his or her defense of the action
or
proceeding; and
(b) fulfils
the conditions set out in clauses (1)(a) and (b).
Liability
Insurance
|
(4)
|
A
corporation may purchase and maintain insurance for the benefit of
any
person referred to in subsection (1) against the liability incurred
by the
person,
|
|
(a)
|
in
his or her capacity as a director or officer of the corporation,
except
where the liability relates to the person’s failure to act honestly and in
good faith with a view to the best interests of the corporation;
or
|
|
(b)
|
in
his or her capacity as a director or officer of another body corporate
where the person acts or acted in that capacity at the corporation’s
request, except where the liability relates to the person’s failure to act
honestly and in good faith with a view to the best interests of the
body
corporate.
|
Application
to court
|
(5)
|
A
corporation or a person referred to in subsection (1) may apply to
the
court for an order approving an indemnity under this section and
the court
may so order and make any further order it thinks
fit.
|
|
(6)
|
Upon
an application under subsection (5), the court may order notice to
be
given to any interested person and such person is entitled to appear
and
be heard in person or by counsel.
|
Reference
is made to Paragraph 25 of the Company’s Bylaw No. 1, which sets forth the
following provisions relating to the indemnification of directors and
officers:
“The
Corporation shall indemnify the directors and officers of the Corporation,
former directors or officers of the Corporation or a person who acts or acted
at
the Corporation’s request as a director or officer of a body corporate of which
the Corporation is or was a shareholder or creditor and his heirs and legal
representatives against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, reasonably incurred by him
in
respect of any civil, criminal or administrative action or proceeding to which
he is made a party by reason of being or having been a director or officer
of
the Corporation or body corporate and with the approval of the court in respect
of an action by or on behalf of the Corporation or body corporate to procure
a
judgment in its favour to which he is made a party by reason of being or having
been a director or officer of the Corporation or body corporate against all
costs, charges and expenses reasonably incurred by him in connection with such
action, if, he acted honestly and in good faith with a view to the best
interests of the Corporation; and in the case of a criminal or administrative
action or proceeding that is enforced by a monetary penalty, he had reasonable
grounds for believing that his conduct was lawful.”
Reference
is made to Paragraph 26 of the Company’s Bylaw No. 1, which sets forth the
following provisions relating to insurance for directors and
officers:
“The
Corporation may purchase and maintain insurance for the benefit of the directors
or officers of the Corporation, former directors or officers of the Corporation
or persons who act or acted at the Corporation’s request as a director or
officer of a body corporate of which the Corporation is or was a shareholder
or
creditor and his heirs and legal representatives against any liability incurred
by him, in his capacity as a director or officer of the Corporation, except
where the liability relates to his failure to act honestly and in good faith
with a view to the best interests of the Corporation; or in his capacity as
a
director or officer of another body corporate where he acts or acted in that
capacity at the Corporation’s request, except where the liability relates to his
failure to act honestly and in good faith with a view to the best interests
of
the body corporate.”
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling us pursuant to the
foregoing provisions, we have been informed that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
PART
II
INFORMATION
REQUIRED IN THE REGISTRATION STATEMENT
Item
3. Incorporation
of Documents by Reference.
The
following documents filed by Micromem Technologies Inc. (the “Registrant”) with
the Commission are incorporated by reference in this Registration
Statement:
|
(i)
|
our
Annual Report on Form 20-F for the fiscal year ended October 31,
2005, filed with the SEC on February 28,
2006;
|
|
(ii)
|
our
Report on Form 6-K dated March 1, 2006 (filed with the SEC on March
2, 2006), our Report on Form 6-K dated March 2, 2006 (filed with
the SEC
on March 2, 2006), our Report on Form 6-K dated March 7, 2006 (filed
with
the SEC on March 7, 2006) ), our Report on Form 6-K dated March 30,
2006
(filed with the SEC on March 30, 2006), our Report on Form 6-K dated
March
31, 2006 (filed with the SEC on April 3, 2006) and our Report on
Form 6-K
dated April 3, 2006 (filed with the SEC on April 3, 2006);
and
|
|
(iii)
|
the
description of our common shares which is contained under the heading
“Description of Securities to be Registered” in the prospectus that is
part of our Registration Statement on Form 20-F filed pursuant to
Section
12(g) of the Securities Exchange Act of 1934 (SEC file no. 000-26005),
and any amendment or report filed for the purpose of updating such
description.
|
All
documents filed pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act by the registrant subsequent to the date of this Registration Statement
and
prior to the filing of a post-effective amendment which indicates that all
securities being offered pursuant hereto have been sold or which deregisters
all
of such securities then remaining unsold, also shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
Any
statement made in this prospectus, a prospectus supplement or a document
incorporated by reference in this prospectus or a prospectus supplement will
be
deemed to be modified or superseded for purposes of this prospectus and any
applicable prospectus supplement to the extent that a statement contained in
an
amendment to the registration statement, any subsequent prospectus supplement
or
in any other subsequently filed document incorporated by reference herein or
therein adds, updates or changes that statement. Any statement so affected
will
not be deemed, except as so affected, to constitute a part of this prospectus
or
any applicable prospectus supplement.
Item
4. DESCRIPTION
OF SECURITIES
Not
applicable.
Item
5. INTEREST
OF NAMED EXPERTS AND COUNSEL
Certain
legal matters in connection with the common shares being issued by the Company
and registered pursuant to this Registration Statement have been passed upon
for
us by Chitiz Pathak LLP, Toronto, Ontario. Manoj Pundit, Secretary and a
Director of the
Company,
is a
partner at Chitiz Pathak LLP. Mr. Pundit is one of the selling shareholders
named herein and may offer up to 600,000 common shares pursuant to this
prospectus. Mr. Pundit owns less than 2% of all issued and outstanding common
shares of the Company.
Item
6. INDEMNIFICATION
OF DIRECTORS AND OFFICERS
Reference
is made to Section 136 of Business
Corporations Act (Ontario),
which provides:
Indemnification
of Directors
|
(1)
|
A
corporation may indemnify a director or officer of the corporation,
a
former director or officer of the corporation or a person who acts
or
acted at the corporation’s request as a director or officer of a body
corporate of which the corporation is or was a shareholder or creditor,
and his or her heirs and legal representatives, against all costs,
charges
and expenses, including an amount paid to settle an action or satisfy
a
judgement, reasonably incurred by him or her in respect of any civil,
criminal or administrative action or proceeding to which he or she
is made
a party by reason of being or having been a director or officer of
such
corporation or body corporate, if,
|
|
(a)
|
he
or she acted honestly and in good faith with a view to the best interests
of the corporation; and
|
|
(b)
|
in
the case of a criminal or administrative action or proceeding that
is
enforced by a monetary penalty, he or she had reasonable grounds
for
believing that his or her conduct was
lawful.
|
|
(2)
|
A
corporation may, with the approval of the court, indemnify a person
referred to in subsection (1) in respect of an action by or on behalf
of
the corporation or body corporate to procure a judgement in its favor,
to
which the person is made a party by reason of being or having been
a
director or an officer of the corporation or body corporate, against
all
costs, charges and expenses reasonably incurred by the person in
connection with such action if he or she fulfils the conditions set
out in
clauses (1)(a) and (b).
|
|
(3)
|
Despite
anything in this section, a person referred to in subsection (1)
is
entitled to indemnity from the corporation in respect to all costs,
charges and expenses reasonably incurred by him in connection with
the
defense of any civil, criminal or administrative action or proceeding
to
which he or she is made a party by reason of being or having been
a
director or officer of the corporation or body corporate, if the
person
seeking indemnity,
|
|
(a)
|
was
substantially successful on the merits in his or her defense of the
action
or proceeding; and
|
|
(b) |
fulfils
the conditions set out in clauses (1)(a) and
(b).
|
Liability
Insurance
|
(4)
|
A
corporation may purchase and maintain insurance for the benefit of
any
person referred to in subsection (1) against the liability incurred
by the
person,
|
|
(a)
|
in
his or her capacity as a director or officer of the corporation,
except
where the liability relates to the person’s failure to act honestly and in
good faith with a view to the best interests of the corporation;
or
|
|
(b)
|
in
his or her capacity as a director or officer of another body corporate
where the person acts or acted in that capacity at the corporation’s
request, except where the liability relates to the person’s failure to act
honestly and in good faith with a view to the best interests of the
body
corporate.
|
Application
to court
|
(5)
|
A
corporation or a person referred to in subsection (1) may apply to
the
court for an order approving an indemnity under this section and
the court
may so order and make any further order it thinks
fit.
|
|
(6)
|
Upon
an application under subsection (5), the court may order notice to
be
given to any interested person and such person is entitled to appear
and
be heard in person or by counsel.
|
Reference
is made to Paragraph 25 of the Corporation’s Bylaw No. 1, which sets forth the
following provisions relating to the indemnification of Directors and
Officers:
“The
Corporation shall indemnify the directors and officers of the Corporation,
former directors or officers of the Corporation or a person who acts or acted
at
the Corporation’s request as a director or officer of a body corporate of which
the Corporation is or was a shareholder or creditor and his heirs and legal
representatives against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, reasonably incurred by him
in
respect of any civil, criminal or administrative action or proceeding to which
he is made a party by reason of being or having been a director or officer
of
the Corporation or body corporate and with the approval of the court in respect
of an action by or on behalf of the Corporation or body corporate to procure
a
judgment in its favour to which he is made a party by reason of being or having
been a director or officer of the Corporation or body corporate against all
costs, charges and expenses reasonably incurred by him in connection with such
action, if, he acted honestly and in good faith with a view to the best
interests of the Corporation; and in the case of a criminal or administrative
action or proceeding that is enforced by a monetary penalty, he had reasonable
grounds for believing that his conduct was lawful.”
Reference
is made to Paragraph 26 of the Corporation’s Bylaw No. 1, which sets forth the
following provisions relating to insurance for Directors and
Officers:
“The
Corporation may purchase and maintain insurance for the benefit of the directors
or officers of the Corporation, former directors or officers of the Corporation
or persons who act or acted at the Corporation’s request as a director or
officer of a body corporate of which the Corporation is or was a shareholder
or
creditor and his heirs and legal representatives against any liability incurred
by him, in his capacity as a director or officer of the Corporation, except
where the liability relates to his failure to act honestly and in good faith
with a view to the best interests of the Corporation; or in his capacity as
a
director or officer of another body corporate where he acts or acted in that
capacity at the Corporation’s request, except where the liability relates to his
failure to act honestly and in good faith with a view to the best interests
of
the body corporate.”
Item
7. EXEMPTION
FROM REGISTRATION CLAIMED
Not
Applicable.
Item
8. EXHIBITS
Exhibit
Number |
Description
|
4.1 |
Articles
of Incorporation of the Company and amendments thereto in effect
as of
January 11, 2000 (1)
|
4.2 |
Articles
of Amendment, dated as of October 17, 2001, to the Company’s Articles of
Incorporation (2)
|
4.3 |
Articles
of Amendment, dated as of June 24, 2002, to the Company’s Articles of
Incorporation (2)
|
4.4 |
By-Laws
of the Company in effect as of January 11, 2002
(1)
|
4.5 |
Amendment
to the By-Laws of the
Company (2)
|
4.6 |
Amended
and Restated Directors, Officers and Employees Stock Option Plan
of
Micromem Technologies
Inc. dated effective April 8, 2005*
|
5.1 |
Opinion
of Chitiz Pathak LLP regarding legality of common shares being
offered*
|
23.1 |
Consent
of Schwartz Levitsky Feldman LLP*
|
23.2 |
Consent
of Grant Thornton LLP*
|
23.3 |
Consent
of Ernst & Young LLP*
|
23.4 |
Consent
of Chitiz Pathak LLP (included in Exhibit
5.1)*
|
24.1 |
Power
of Attorney (contained on the signature page
hereto)*
|
(1) |
Incorporated
herein by reference to certain exhibits to the Company’s Registration
Statement on Form 20-F/A,
filed with the Securities and Exchange Commission on January 11,
2000.
|
(2) |
Incorporated
herein by reference to certain exhibits to the Company's Annual Report
on
Form 20-F for the
year ended October 31, 2002.
|
Item
9. UNDERTAKINGS
The
undersigned Registrant hereby undertakes:
(1) To
file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement:
(i) to
include any prospectus required by Section 10(a)(3) of the Securities
Act;
(ii) to
reflect in the prospectus any facts or events arising after the effective date
of this Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement; and
(iii) to
include any material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or ant material change
to
such information in this Registration Statement;
provided,
however, that paragraphs (1)(i) and (1)(ii) above 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 pursuant
to
Section 13 or 15 (d) of the Exchange Act that are incorporated by reference
in
this Registration Statement.
(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 the time shall be deemed to be the initial bona
fide
offering
thereof; and
(3) to
remove
from registration by means of post-effective amendment any of the securities
being registered which remain unsold at the termination of the
offering.
(4)
That,
for the purpose of determining liability under the Securities Act to any
purchaser:
(i)
If
the registrant is relying on Rule 430B:
(A)
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed
to
be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
(B)
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7)
as
part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose
of providing the information required by Section 10(a) of the Securities
Act shall be deemed to be part of and included in the registration statement
as
of the earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of securities in the
offering described in the prospectus. As provided in Rule 430B, for liability
purposes of the issuer and any person that is at that date an underwriter,
such
date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that time shall
be
deemed to be the initial bona fide offering thereof. 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 effective date, 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 such document immediately prior to such effective
date;
or
(ii)
If
the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule
424(b) as part of a registration statement relating to an offering, other than
registration statements relying on Rule 430B or other than prospectuses filed
in
reliance on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is 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 such document immediately prior to such date of first use.
(5)
That,
for the purpose of determining liability of the Registrant under the Securities
Act to any purchaser in the initial distribution of the securities, the
undersigned Registrant undertakes that in a primary offering of securities
of
the undersigned Registrant pursuant to this Registration Statement, regardless
of the underwriting method used to sell the securities to the purchaser, if
the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned Registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
Any
preliminary prospectus or prospectus of the undersigned Registrant relating
to
the offering required to be filed pursuant to Rule 424, any free writing
prospectus relating to the offering prepared by or on behalf of the undersigned
Registrant or used or referred to by the undersigned Registrant, the portion
of
any other free writing prospectus relating to the offering containing material
information about the undersigned Registrant or its securities provided by
or on
behalf of the undersigned Registrant, and any other communication that is an
offer in the offering made by the undersigned Registrant to the purchaser.
The
undersigned Registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act, each filing of the Registrant’s annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan’s annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in 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.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the
Securities Act
of 1933,
as amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Toronto, Province of Ontario, Canada,
on this 19th
day of
May, 2006.
|
|
|
|
MICROMEM TECHNOLOGIES
INC. |
|
|
|
|
By: |
/s/
Joseph Fuda |
|
Name:
Joseph
Fuda |
|
Title:
President |
POWER
OF ATTORNEY
KNOW
ALL
MEN BY THESE PRESENTS, that each officer or director of Micromem Technologies
Inc. whose signature appears below constitutes and appoints Manoj
Pundit and
Joseph Fuda,
each respectively his
true
and lawful attorney-in-fact and agent, with full and several power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments, including post-effective amendments,
and supplements to this Registration Statement, and any subsequent registration
statement filed by the Registrant pursuant to Rule 462(b) under the Securities
Act,
as
amended, and to file the same, with all exhibits thereto and other documents
in
connection therewith, with the United States Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority
to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might
or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his 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,
as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature
|
|
Title
|
|
Date
|
/s/
Joseph Fuda
Joseph
Fuda
|
|
President,
Chief Executive Officer and Director (Principal Executive
Officer)
|
|
May
19, 2006
|
/s/
Dan Amadori
Dan
Amadori
|
|
Chief
Financial Officer (Principal Financial and Accounting
Officer)
|
|
May
19, 2006
|
/s/
Salvatore Fuda
Salvatore
Fuda
|
|
Chairman
of the Board of Directors
|
|
May
19, 2006
|
/s/
Charles A. Harnick Q.C.
Charles
Harnick, Q.C.
|
|
Director
|
|
May
19, 2006
|
/s/
David Sharpless
David
Sharpless
|
|
Director
|
|
May
19, 2006
|
/s/
Steven Van Fleet
Steven
Van Fleet
|
|
Director
|
|
May
19, 2006
|
/s/
Stephen Fleming
Stephen
Fleming
|
|
Director
|
|
May
19, 2006
|
/s/
George A. Kennedy
George
A. Kennedy
|
|
Director
|
|
May
19, 2006
|
/s/
Manoj Pundit
Manoj
Pundit
|
|
Secretary
and Director
|
|
May
19, 2006
|
/s/
Larry Blue
Larry
Blue
|
|
Director
|
|
May
19, 2006
|
Pursuant
to the requirements of Section 6(a) of the Securities
Act,
as
amended, the undersigned has signed this Registration Statement, solely in
the
capacity of the duly authorized representative of Micromem Technologies Inc.
in
the United States, in the City of New York, in the State of New York, U.S.A.,
on
May 19, 2006.
|
By:
/s/
Scott A. Ziegler
Scott
A. Ziegler
|
EXHIBIT
INDEX
Exhibit
Number |
Description
|
4.1 |
Articles
of Incorporation of the Company and amendments thereto in effect
as of
January 11, 2000 (1)
|
4.2 |
Articles
of Amendment, dated as of October 17, 2001, to the Company’s Articles of
Incorporation (2)
|
4.3 |
Articles
of Amendment, dated as of June 24, 2002, to the Company’s Articles of
Incorporation (2)
|
4.4 |
By-Laws
of the Company in effect as of January 11, 2002
(1)
|
4.5 |
Amendment
to the By-Laws of the
Company (2)
|
4.6 |
Amended
and Restated Directors, Officers and Employees Stock Option Plan
of
Micromem Technologies
Inc. dated effective April 8, 2005*
|
5.1 |
Opinion
of Chitiz Pathak LLP regarding legality of common shares being
offered*
|
23.1 |
Consent
of Schwartz Levitsky Feldman LLP*
|
23.2 |
Consent
of Grant Thornton LLP*
|
23.3 |
Consent
of Ernst & Young LLP*
|
23.4 |
Consent
of Chitiz Pathak LLP (included in Exhibit
5.1)*
|
24.1 |
Power
of Attorney (contained on the signature page
hereto)*
|
(1) |
Incorporated
herein by reference to certain exhibits to the Company’s Registration
Statement on Form 20-F/A,
filed with the Securities and Exchange Commission on January 11,
2000.
|
(2) |
Incorporated
herein by reference to certain exhibits to the Company's Annual Report
on
Form 20-F for the year ended October 31,
2002.
|