EXHIBIT 99.1
RE-OFFERING PROSPECTUS
EXHIBIT 99.1
Dated January 31, 2014
RE-OFFERING PROSPECTUS
SOLAR3D, INC.
26 WEST MISSION AVENUE
SANTA BARBARA, CALIFORNIA 93101
4,000,000 SHARES OF COMMON STOCK
This prospectus covers 4,000,000 shares (the "Shares") of the common
stock ("Common Stock"), par value $0.001 per share, of Solar3D, Inc., a Delaware
corporation ("Solar3D," "we," or the "Company"). The Shares covered by this
prospectus include 4,000,000 Shares that are eligible for vesting and issuance
to our chief executive officer pursuant to a restricted stock agreement. Our
chief executive officer is referred to as the "Selling Securityholder." We will
not receive any of the proceeds from the sale of securities by the Selling
Securityholder.
Solar3D's Common Stock trades on the OTC-QB Market under the symbol
"SLTD" and the last bid price and ask price on January 23, 2014 for the Common
Stock as reported on the OTC Bulletin Board was $0.114 and $0.12, respectively.
For a discussion of certain factors that should be considered in
connection with an investment in Solar3D's Common Stock, see "Risk Factors"
beginning on page 3 of this prospectus.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------
The Securityholder may from time to time sell all or a portion of the
securities offered by this prospectus in transactions in the over-the-counter
market, in negotiated transactions, or otherwise, at fixed prices that may be
changed, at market prices prevailing at the time of sale, or at negotiated
prices. The Securityholder may affect such transactions by selling such
securities directly to purchasers or through dealers or agents who may receive
compensation in the form of discounts, concessions or commissions from the
Securityholder or the purchasers of the securities for whom they may act as
agents.
-1-
ADDITIONAL INFORMATION
This prospectus is part of a registration statement on Form S-8
(together with all amendments and exhibits (the "Registration Statement") which
has been filed by Solar3D with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), relating to the securities offered by this prospectus. This prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, you may read the Registration
Statement. Statements made in this prospectus as to the contents of any
contract, agreement or other documents referred to in this prospectus are not
necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, you may read the
exhibit for a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such reference.
Solar3D is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance with the Exchange Act Solar3D files reports, proxy and information
statements and other information with the Commission. Such reports, proxy and
information statements and other information, as well as the Registration
Statement and Exhibits of which this Prospectus is a part, filed by Solar3D may
be inspected and copied at the public reference facilities of the Commission,
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549. You
may obtain copies of such material from the Commission by mail at prescribed
rates. You should direct your requests to the Commission's Public Reference
Section, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC
20549. The Commission maintains a web site that contains reports, proxies, and
information statements regarding registrants that file electronically with the
Commission. The address of the web site is http://www.secgov. Solar3D's Common
Stock is traded on the OTC Bulletin Board. Reports and other information
concerning Solar3D can also be obtained at the offices of the National
Association of Security Dealers, Inc., Market Listing Section, 1735 K Street,
N.W., Washington, D.C., 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Solar3D hereby incorporates by reference into this prospectus the
following documents previously filed with the Commission:
1. The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 2012.
2. The Registrant's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2013, June 30, 2013, and September
30, 2013.
3. The Registrant's Definitive 14C Information Statement filed by
the Company with the Securities and Exchange Commission on
April 23, 2013.
4. All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), since January 1, 2011.
All documents filed by Solar3D pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering are deemed incorporated by reference in this
prospectus and are a part of this prospectus from the date of the filing of such
documents. See "Additional Information." Any statement contained in a document
incorporated or deemed to be incorporated in this prospectus by reference shall
be deemed to be modified or superseded for purposes of this prospectus to the
extent that a statement contained in this prospectus or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference in this prospectus modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
Solar3D will provide without charge to each person to whom this
prospectus is delivered, upon request of any such person, a copy of any of the
foregoing documents incorporated in this prospectus by reference, other than
-2-
exhibits to such documents not specifically incorporated by reference. Written
or telephone requests should be directed to Solar3D's chief executive officer at
its principal executive offices: Solar3D, Inc., 26 West Mission Avenue, Santa
Barbara, California 93101, telephone number (805) 690-9000.
RISK FACTORS
Purchasing Shares of Common Stock in Solar3D, Inc. entails substantial
risk. You should be able to bear a complete loss of your investment. You should
carefully consider the following factors, among others.
FORWARD-LOOKING STATEMENTS
The following cautionary statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 in order for Solar3D to avail itself of
the "safe harbor" provisions of that Act. The discussions and information in
this prospectus including the documents incorporated by reference may contain
both historical and forward-looking statements. To the extent that the
prospectus contains forward-looking statements regarding the financial
condition, operating results, Solar3D's business prospects or any other aspect
of Solar3D's business, please be advised that Solar3D's actual financial
condition, operating results and business performance may differ materially from
that projected or estimated by management in forward-looking statements. Solar3D
has attempted to identify, in context, certain of the factors that management
currently believes may cause actual future experience and results to differ from
Solar3D's current expectations. The differences may be caused by a variety of
factors, including but not limited to, adverse economic conditions, intense
competition, including entry of new competitors and products, adverse federal,
state and local government regulation, inadequate capital, unexpected costs and
operating deficits, lower sales and revenues than forecast, failure to obtain
commercial orders for our products and services, failure to effectively
commercialize our technology, loss of customers, loss of supplies, price
increases for supplies and components, inability to raise prices, failure to
obtain customers, failure to establish a facility for onsite production of our
3D solar cell technology, inability to produce our 3D solar cell technology in
sufficient volume to meet demand or on a cost effective basis, failure to market
our 3D solar cell technology effectively, our inability to execute our business
plan and in particular our plan to earn revenue by licensing our 3D solar cell
technology, failure of business acquisitions by us to be profitable or
successful, the risk of litigation and administrative proceedings involving us
or our employees, higher than anticipated labor costs, the possible fluctuation
and volatility of Solar3D operating results and financial condition, adverse
publicity and news coverage, Solar3D's inability to carry out marketing and
sales plans, increases in short-term interest rates and the cost of its credit
lines, inflationary factors, and other specific risks that may be alluded to in
this prospectus or in other reports issued by Solar3D.
WE HAVE BEEN INCURRING OPERATING LOSSES SINCE INCEPTION. We are not
currently earning revenue and continue to expend funds for the development of
our 3D solar cell technology, which we have not yet effectively commercialized.
While our solar energy conversion test results are promising, we are still
seeking a mass production methodology by which the 3D solar cells can be
manufactured on a cost competitive basis.
WE HAVE A LIMITED OPERATING HISTORY, WHICH COULD MAKE IT DIFFICULT TO
ACCURATELY EVALUATE OUR BUSINESS AND PROSPECTS. Although we were formed in
January 2002, we have only recently begun to test market our 3D solar cell
technology. We have no orders for our products or services to date and no
assurance that our technology can be commercialized or manufactured on a cost
effective basis to enable us to be cost competitive in the solar energy industry
market. We cannot assure at this time that we will operate profitably or that we
will have adequate working capital to meet our obligations as they become due.
Management believes that our success will depend in large part on the
competitiveness of our pricing and the industry's acceptance of our 3D solar
cell technology as an alternative to traditional energy sources. We intend to
invest heavily in completing development of, enhancing, and marketing our 3D
solar cell technology. As a result, we expect to continue to incur operating
losses with our 3D solar cell technology in the foreseeable future.
WE CANNOT ASSURE THAT OUR BUSINESS WILL BE PROFITABLE. Our business is
speculative and dependent upon the acceptance of our proprietary 3D solar cell
technology and our ability to commercialize and market it. S3D cannot assure
that industry will accept our 3D solar cell technology as an alternative to
-3-
existing energy sources, or that S3D will earn any profit. We cannot assure that
we will earn any revenues or that investors will not lose their entire
investment.
WE MAY NOT SUCCESSFULLY IMPLEMENT OUR BUSINESS MODEL. Our business
model is predicated on our ability, or the ability of our potential licensees,
if any, to produce 3D solar cell technology in qualified facilities. We intend
to outsource manufacturing or to license the proprietary technology to customers
for production in their own facilities. S3D cannot assure that customers will
license our technology to produce it in their own facilities, that various
industries will adopt our 3D solar cell technology, or that prospective
customers will agree to pay the prices that we propose to charge. In the event
our customers resist paying the prices projected in our business plan to
purchase our 3D solar cell technology or to license the technology to produce it
themselves, our business, financial condition, and results of operations will be
materially and adversely affected.
WE MAY ACQUIRE BUSINESSES IN THE FUTURE THAT ARE NOT PROFITABLE OR
SUCCESSFUL. There is no assurance that any business or company that we acquire
in the future will be profitable or successful, or will not incur unexpected
operating losses and liabilities which adversely affect our operating results,
financial condition and business performance. New businesses we acquire may not
perform as we expect or project for a variety of reasons, many of which may be
beyond our ability to control.
WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY AGAINST COMPANIES WITH
SUBSTANTIALLY GREATER RESOURCES. The alternative energy and related industries
are extremely competitive. There are a substantial number of traditional
providers that compete directly and indirectly with us, many of which have
significantly greater financial resources, higher revenues, and greater
economies of scale than those of the Company. New alternative energy technology
may be developed in the future which will compete with our 3D solar cell
technology, and such competition from such alternative technologies may already
exist. We will attempt to distinguish ourselves from our competitors, but we
cannot assure that we will be able to penetrate the market. We believe that our
3D solar cell technology is attractive to prospective customers because our
technology is able to eliminate surface reflection and maximize the conversion
of photons into electrons to achieve greater efficiency and a lower cost per
watt. Nevertheless, there is no assurance that the Company will compete
successfully with existing or future competitors in the alternative energy or
any other industry.
OUR BUSINESS STRATEGY DEPENDS ON THE WIDESPREAD ADOPTION OF SOLAR POWER
TECHNOLOGY. The market for solar power products is emerging and rapidly
evolving, and its future success is uncertain. The adoption and use of solar
energy is currently encouraged by financial subsidies at the federal and state
level, which is also true in many foreign jurisdictions. If solar power
technology proves unsuitable for widespread commercial deployment or if
government incentives are withdrawn and the demand for solar power products
fails to develop sufficiently, we would be unable to generate enough revenues to
achieve and sustain profitability and positive cash flow. The factors
influencing the widespread adoption of solar power technology include but are
not limited to:
o cost-effectiveness of solar power technologies as compared
with conventional and non-solar alternative energy
technologies;
o performance and reliability of solar power products as
compared with conventional and non-solar alternative energy
products;
o fluctuations in economic and market conditions which impact
the viability of conventional and non-solar alternative energy
sources, such as increases or decreases in the prices of oil
and other fossil fuels;
o continued deregulation of the electric power industry and
broader energy industry; and
o availability of governmental subsidies and incentives.
OUR BUSINESS IS SUBJECT TO VARIOUS GOVERNMENT REGULATIONS AND DEPENDENT
ON CERTAIN SUBSIDIES. Our business is subject to various federal, state, and
local laws affecting businesses in general, especially those affecting
alternative energy businesses. The Federal Trade Commission and equivalent state
agencies regulate advertising and representations made by businesses in the sale
of their products, which apply to us. Our business is also subject to government
laws and regulations governing health, safety, working conditions, employee
relations, wrongful termination, wages, taxes and other matters applicable to
-4-
businesses in general. In addition, our manufacturing operations, if
established, will be subject to a variety of federal, state and local
requirements governing the protection of the environment. Because the public is
focusing more attention on the environmental impact of the operations of
manufacturing industries, these requirements may become more stringent in the
future. Failure to comply with environmental laws could subject us to
substantial liability or force us to change our manufacturing operations
significantly. In addition, under some of these laws and regulations, we could
be held financially responsible for remedial measures if our properties are
contaminated, even if we did not cause the contamination. Our failure to comply
with applicable government rules or regulations could have a material adverse
effect on our financial condition and business operations.
WE MAY INCUR INDEBTEDNESS THAT WE ARE UNABLE TO REPAY. We cannot assure
that we will not incur debt in the future, that we will have sufficient funds to
repay our indebtedness or that we will not default on our debt, jeopardizing our
business viability. Furthermore, we may not be able to borrow or raise
additional capital in the future to meet our needs or to otherwise provide the
capital necessary to conduct our business.
WE MAY INCUR UNINSURED LOSSES. We cannot assure that will not incur
uninsured liabilities and losses as a result of the conduct of our business. We
plan to maintain comprehensive liability and property insurance at customary
levels. We will also evaluate the availability and cost of business interruption
insurance. However, should uninsured losses occur, stockholders could lose their
invested capital.
WE CANNOT ASSURE THAT WE WILL HAVE THE RESOURCES TO REPAY ALL OF OUR
LIABILITIES IN THE FUTURE. We may have liabilities to affiliated or unaffiliated
lenders. These liabilities would represent fixed costs which would be required
to be paid regardless of the level of business or profitability experienced by
us. We cannot assure that we will be able to pay all of our liabilities.
Furthermore, we are always subject to the risk of litigation from customers,
suppliers, employees, and others because of the nature of our business,
including but not limited to consumer lawsuits. Litigation can cause us to incur
substantial expenses and, if cases are lost, judgments, and awards can add to
our costs.
WE MAY INCUR COST OVERRUNS IN THE DEVELOPMENT, MANUFACTURE, AND
DISTRIBUTION OF OUR VARIOUS PRODUCTS. We may incur substantial cost overruns in
the development, enhancement, and marketing of our 3D solar cell technology.
Management is not obligated to contribute capital to us. Unanticipated costs may
force us to obtain additional capital or financing from other sources, or may
cause us to lose our entire investment in us if we are unable to obtain the
additional funds necessary to implement our business plan. We cannot assure that
we will be able to obtain sufficient capital to implement our business plan
successfully. If a greater investment is required in the business because of
cost overruns, the probability of earning a profit or a return of stockholders'
investment in us is diminished.
IF WE ARE UNABLE TO PAY FOR MATERIAL AND SERVICES TIMELY, WE COULD BE
SUBJECT TO LIENS. If we fail to pay for materials and services for our business
on a timely basis, our assets could be subject to material men's and workmen's
liens. We may also be subject to bank liens in the event that we default on
loans from banks, if any.
WE MAY NOT HAVE ADEQUATE CAPITAL TO FUND OUR BUSINESS. We will have
limited capital available to us, to the extent that we raise capital from this
offering or from any subsequent offering. If our entire original capital is
fully expended and additional costs cannot be funded from borrowings or capital
from other sources, then our financial condition, results of operations and
business performance would be materially adversely affected. We cannot assure
that we will have adequate capital to conduct our business.
STOCKHOLDERS MUST RELY ON MANAGEMENT TO MAKE DECISIONS FOR US. Under
applicable state corporations law and our bylaws, our officers and directors
have the power and authority to manage all aspects of our business. Stockholders
must be willing to entrust all aspects of our business to our directors and
executive officers.
IF WE WERE TO LOSE THE SERVICES OF OUR KEY PERSONNEL, WE MAY NOT BE
ABLE TO EXECUTE OUR BUSINESS STRATEGY. Our success is substantially dependent on
the performance of our executive officers and key employees and consultants.
Given our early stage of development, we are dependent on our ability to retain
and motivate high quality personnel. Although we believe we will be able to
engage qualified personnel for such purposes, an inability to do so could
materially adversely affect our ability to market, sell, and enhance our 3D
-5-
solar cell technology products. The loss of our chief executive officer or one
or more of our key consultants or our inability to hire and retain other
qualified personnel, including but not limited to research and development
staff, sales staff, and corporate office support staff, could have a material
adverse effect on our business.
THE CONSIDERATION BEING PAID TO OUR MANAGEMENT WAS NOT BASED ON ARMS
LENGTH NEGOTIATION. The Common Stock and cash consideration being paid by us to
our management have not been determined based on arms length negotiation. We may
grant net profits interests or warrants to certain of our executive officers and
consultants in addition to stock options, which may further dilute stockholders'
ownership of us. While management believes that the consideration is fair for
the work being performed, we cannot assure that the consideration to management
reflects the true market value of its services.
OUR EXECUTIVE OFFICERS' PARTICIPATION IN OTHER ENTITIES COULD CREATE
CONFLICTS OF INTEREST. The relationship of management and its affiliates to us
could create conflicts of interest. While management has a fiduciary duty to us,
it also determines its compensation from us. Management believes that it will
have the resources necessary to fulfill its management obligations to all
entities for which it is responsible. Management's compensation from us has not
been determined pursuant to arm's-length negotiation.
DIRECTORS AND OFFICERS HAVE LIMITED LIABILITY. Our bylaws provide that
we will indemnify and hold harmless our officers and directors against claims
arising from our activities, to the maximum extent permitted by Delaware law. If
we were called upon to perform under our indemnification agreement, then the
portion of our assets expended for such purpose would reduce the amount
otherwise available for our business.
WE ONLY HAVE ONE INDEPENDENT DIRECTOR. Currently, the only members of
the board of directors are James B. Nelson and Mark J. Richardson. Only Mark J.
Richardson is considered an "independent director," as defined under Financial
Industry Regulatory Authority ("FINRA") listing standards and Nasdaq Marketplace
Rules. We do not have any committees of the board of directors. Therefore,
decisions of the board of directors will not be made by a majority of persons
who are considered to be independent directors.
OUR BYLAWS MAY BE AMENDED BY OUR BOARD AND OUR ARTICLES AND BYLAWS MAY
BE AMENDED BY A MAJORITY VOTE OF OUR STOCKHOLDERS. Under the Delaware
Corporations Law, a corporation's certificate of incorporation may be amended by
the affirmative vote of the holders of a majority of the outstanding shares
entitled to vote, and a majority of the outstanding shares of each class
entitled to vote as a class, unless the certificate requires the vote of a
larger percentage of shares. Our Certificate of Incorporation, as amended, does
not require the vote of a larger percentage of shares. As permitted under the
Delaware Corporations Law, our bylaws give our board of directors the power to
adopt, amend, or repeal our bylaws. Our stockholders entitled to vote have
concurrent power to adopt, amend, or repeal our bylaws.
THE MARKET FOR OUR COMMON STOCK IS CURRENTLY LIMITED. There currently
is a limited market for our shares, and we cannot give investors any assurances
that a market will become more liquid or, if such a liquid market should
develop, that it will be sustained with sufficient liquidity to permit the
investor to sell his or her Shares at any time.
WE EXPECT TO ISSUE ADDITIONAL SHARES OF OUR STOCK, CAUSING OUR
STOCKHOLDERS TO EXPERIENCE DILUTION IN THEIR OWNERSHIP OF us. We have the right
to raise additional capital or incur borrowings from third parties to finance
our business. We are authorized to issue up to 1,000,000,000 shares of Common
Stock, par value $0.001 per share, and up to 5,000,000 shares of preferred
stock. The board of directors has the authority to cause us to issue more shares
of our Common or Preferred Stock and to determine the rights, preferences and
privileges of such stock, without the consent of any of our stockholders. We
have in the past and may in the future continue to issue convertible promissory
notes, warrants and other securities to finance our operations that cause
significant dilution of ownership to our stockholders. We may also issue net
profits interests in us. We may register newly issued shares for free trading,
possibly causing the public trading price of our stock, if any, to decline
significantly. The issuance of additional shares of capital stock or net profits
interests by us would dilute stockholders' ownership in us.
WE CANNOT ASSURE THAT WE WILL PAY DIVIDENDS. We do not currently
anticipate declaring and paying dividends to our stockholders in the near
future. It is our current intention to apply net earnings, if any, in the
foreseeable future to increasing our capital base and marketing. Prospective
investors seeking or needing dividend income or liquidity should therefore not
-6-
purchase shares. We cannot assure that we will ever have sufficient earnings to
declare and pay dividends to the holders of our Common Stock, and in any event,
a decision to declare and pay dividends is at the sole discretion of our board
of directors.
OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE
SECURITIES AND EXCHANGE COMMISSION AND MAY BE DIFFICULT TO SELL. Our shares of
Common Stock are "penny stocks" because they are not be registered on a national
securities exchange or listed on an automated quotation system sponsored by a
registered national securities association, and they trade below the threshold
price set forth in Rule 3a51-1(a) of the Exchange Act. For any transaction
involving a penny stock, unless exempt, the rules require that a broker or
dealer approve a person's account for transactions in penny stocks and that the
broker or dealer receives from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to be
purchased. The broker or dealer must also deliver, prior to any transaction in a
penny stock, a disclosure schedule prescribed by the Commission relating to the
penny stock market, which sets forth the basis on which the broker or dealer
made the suitability determination and that the broker or dealer received a
signed, written agreement from the investor prior to the transaction. Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules. This may make it more difficult for investors to dispose of
our Common Stock and cause a decline in the market value of our stock.
Disclosure also has to be made about the risks of investing in penny
stocks in both public offerings and in secondary trading and about the
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny stocks.
THE MARKET FOR PENNY STOCKS HAS SUFFERED IN RECENT YEARS FROM PATTERNS
OF FRAUD AND ABUSE. Stockholders should be aware that, according to SEC Release
No. 34-29093, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include:
o control of the market for the security by one or a few
broker-dealers that are often related to the promoter or
issuer;
o manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases;
o boiler room practices involving high-pressure sales tactics
and unrealistic price projections by inexperienced
salespersons;
o excessive and undisclosed bid-ask differential and markups by
selling broker-dealers; and
o the wholesale dumping of the same securities by promoters and
broker-dealers after prices have been manipulated to a desired
level, along with the resulting inevitable collapse of those
prices and with consequential investor losses. Our management
is aware of the abuses that have occurred historically in the
penny stock market. Although we do not expect to be in a
position to dictate the behavior of the market or of
broker-dealers who participate in the market, management will
strive within the confines of practical limitations to prevent
the described patterns from being established with respect to
our shares of common stock. The occurrence of these patterns
or practices could increase the volatility of our share price.
OUR FAILURE TO MAINTAIN EFFECTIVE INTERNAL CONTROLS OVER FINANCIAL
REPORTING COULD HAVE AN ADVERSE IMPACT ON US. We are required to establish and
maintain appropriate internal controls over financial reporting. Failure to
establish those controls, or any failure of those controls once established,
could adversely impact our public disclosures regarding our business, financial
condition or results of operations. In addition, management's assessment of
internal controls over financial reporting may identify weaknesses and
conditions that need to be addressed in our internal controls over financial
reporting or other matters that may raise concerns for investors. Any actual or
perceived weaknesses and conditions that need to be addressed in our internal
control over financial reporting, disclosure of management's assessment of our
internal controls over financial reporting or disclosure of our public
accounting firm's attestation to or report on management's assessment of our
-7-
internal controls over financial reporting may have an adverse impact on the
price of our Common Stock.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares offered by
the Selling Securityholder.
DILUTION
The difference between the public price per share of common stock at
which purchaser buys the Shares covered by this prospectus and the as adjusted
pro forma net tangible book value per share of common stock after the issuance
of the Shares covered by this prospectus constitutes the dilution to purchasers
of Shares. Net tangible book value per share is determined by dividing the net
tangible book value (total assets less intangible assets and total liabilities)
by the number of outstanding shares of Common Stock.
As of September 30, 2013, the net tangible book value of Solar3D was
($2,284,183) or approximately ($0.0120) per share of Common Stock. Net tangible
book value per share consists of total assets less intangible assets and
liabilities, divided by the total number of shares of Common Stock outstanding.
Without giving effect to any changes in such net tangible book value after
September 30, 2013, other than to give effect to the 4,000,000 Shares being
registered pursuant to the Registration Statement, the net tangible book value
at September 30, 2013, would have been ($2,284,183) or approximately ($0.0118)
per share. As of September 30, 2013, the net tangible book value per share of
Common Stock owned by Solar3D's current stockholders would have increased by
approximately $0.0002 per share without any additional investment on their part
and the purchasers of Common Stock will incur an immediate dilution of
approximately $0.1318 per share, assuming the Shares are purchased for $0.12 per
Share, the last sale price of the Company's Common Stock on January 23, 2014 as
reported on the OTC -QB Market. "Dilution" means the difference between the
offering price and the net tangible book value per share after giving effect to
the offering. Holders of Common Stock may be subjected to additional dilution if
any additional securities are issued as compensation or to raise additional
financing. The following table illustrates the dilution which investors
participating in this offering will incur and the benefit to current
stockholders as a result of this offering:
Net tangible book value per share as of September 30, 2013(1)......... ($0.0120)
Increase per share attributable to this issuance...................... $0.0002
Net tangible book value after issuance................................ ($0.0118)
Dilution per share to new investors(2)................................ $0.1318
----------------------
(1) Based on 190,103,450 shares of Common Stock outstanding as of September 30,
2013.
(2) Based on $0.12 per share, the last sale price of the Company's Common Stock
on January 23, 2014 as reported on the OTC -QB Market.
SELLING SECURITYHOLDER
The Shares of Common Stock being offered by the Selling Securityholder
are eligible for vesting and issuance pursuant to a restricted stock agreement.
As of the date of this prospectus, none of the Shares have been issued. Unless
we satisfy the requirements for the use of Form S-3, the Shares of Common Stock
being offered by the Selling Securityholder are subject to the volume
restrictions specified in Rule 144(e) of the Securities Act of 1933, as amended.
We believe that we currently satisfy the requirements for use of Form S-3, so
-8-
the volume limitations of Rule 144(e) may not apply unless imposed by an
applicable Rule 10b5-1 trading plan that may be adopted by the Selling
Securityholder.
The following table set forth certain information with respect to the
Shares. Beneficial ownership of the Common Stock by such Selling Securityholder
after this offering will depend on the number of Shares issued and the number of
shares of Common Stock sold by the Selling Securityholder.
NO. OF
NAME OF STOCK POSITION RESTRICTED VESTING EXPIRATION
OPTION HOLDER WITH SOLAR3D SHARES SCHEDULE DATE
---------------- --------------- ---------------- --------------- ----------
James B. Nelson Chairman, CEO, 4,0000,000(1)(2) None issued (3) (3)
President, CEO,
and Secretary
--------------
(1) Mr. Nelson also owns 15,000,000 stock options to purchase 15,000,000 shares
of the Company's Common Stock exercisable until July 22, 2017 at an
exercise price of $0.05 per share. These stock options vested 1/36th per
month, commencing on August 21, 2010, on a monthly basis for as long as Mr.
Nelson is an employee or consultant of Solar3D.
(2) Mr. Nelson also owns 5,000,000 stock options to purchase 5,000,000 shares
of the Company's Common Stock exercisable until November 1, 2019 at an
exercise price of $0.01 per share. These stock options vest according to
the following schedule: 1,388,889 on the date of grant, 138,889 on the
first day of each month thereafter commencing on December 1, 2012 until
December 1, 2014, and then 138,886 on January 1, 2015, provided that Mr.
Nelson is an employee or consultant of Solar3D.
(3) Mr. Nelson's restricted stock agreement provides for the issuance of up to
20,000,000 shares of the Company's Common Stock to Mr. Nelson in stages as
certain milestones are achieved by the Company, 4,000,000 of these shares
are currently eligible for vesting and issuance and are covered by the
Registration Statement. See the Report on Form 8K filed by the Company with
the SEC on September 27, 2013 for a detailed description of the milestones
and other terms of the restricted stock agreement.
PLAN OF DISTRIBUTION
Sales of the Shares of Common Stock by the Selling Securityholder may
be effected from time to time in transactions (which may include block
transactions) in the over-the-counter market, in negotiated transactions,
through the writing of options on the Common Stock or a combination of such
methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, or at negotiated prices. The Selling
Securityholder may affect such transactions by selling the Shares of Common
Stock directly to purchasers or through broker-dealers that may act as agents or
principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Securityholder and/or the
purchasers of the Shares of Common Stock for whom such broker-dealers may act as
agents or to whom they sell as principals, or both. Such compensation as to a
particular broker-dealer might be in excess of customary commissions.
The Selling Securityholder and any broker-dealers that act in
connection with the sale of the Shares of Common Stock as principals may be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act. Any commissions received by them and any profit on the resale of
the Shares of Common Stock earned by them as principals might be deemed to be
underwriting discounts and commissions under the Securities Act. The Selling
Securityholder may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the Shares of Common Stock
against certain liabilities, including liabilities under the Securities Act. We
will not receive any proceeds from the sale of the Shares of Common Stock.
The Shares of Common Stock are offered by the Selling Securityholder on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act. We
have agreed to pay all expenses incurred in connection with the registration of
the Shares offered by the Selling Securityholder except that the Selling
-9-
Securityholder is exclusively liable to pay all commissions, discounts and other
payments to broker-dealers incurred in connection with his sale of Common Stock.
LIMITATION ON LIABILITY AND INDEMNIFICATION OF DIRECTORS
Under Delaware General Corporation Law and Solar3D's bylaws, Solar3D's
directors will have no personal liability to Solar3D's stockholders for monetary
damages incurred as the result of the breach or alleged breach by a director of
his "duty of care." This provision does not apply to the directors' (i) acts or
omissions that involve intentional misconduct or a knowing and culpable
violation of law, (ii) acts or omissions that a director believes to be contrary
to the best interests of the corporation or its shareholders or that involve the
absence of good faith on the part of the director, (iii) approval of any
transaction from which a director derives an improper personal benefit, (iv)
acts or omissions that show a reckless disregard for the director's duty to the
corporation or its shareholders in circumstances in which the director was
aware, or should have been aware, in the ordinary course of performing a
director's duties, of a risk of serious injury to the corporation or its
shareholders, (v) acts or omissions that constituted an unexcused pattern of
inattention that amounts to an abdication of the director's duty to the
corporation or its shareholders, or (vi) approval of an unlawful dividend,
distribution, stock repurchase or redemption. This provision would generally
absolve directors of personal liability for negligence in the performance of
duties, including gross negligence.
The effect of this provision in Solar3D's bylaws is to eliminate the
rights of Solar3D's stockholders (through stockholder's derivative suits on
behalf of Solar3D) to recover monetary damages against a director for breach of
his fiduciary duty of care as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) through (vi) above. This provision does not limit nor eliminate the
rights of Solar3D or any stockholder to seek non-monetary relief such as an
injunction or rescission in the event of a breach of a director's duty of care.
In addition, Solar3D's Bylaws provide that if Delaware law is amended to
authorize the future elimination or limitation of the liability of a director,
then the liability of the directors will be eliminated or limited to the fullest
extent permitted by the law, as amended. Delaware General Corporation Law grants
corporations the right to indemnify their directors, officers, employees and
agents in accordance with applicable law. These provisions will not alter the
liability of the directors under federal securities laws.
Furthermore, management plans to enter into agreements to indemnify
Solar3D's directors and officers, in addition to the indemnification provided
for in Solar3D's bylaws. These agreements, among other things, will indemnify
Solar3D's directors and officers for certain expenses (including attorneys'
fees), judgments, fines, and settlement amounts incurred by any such person in
any action or proceeding, including any action by or in the right of Solar3D,
arising out of such person's services as a director or officer of Solar3D, any
subsidiary of Solar3D or any other company or enterprise to which the person
provides services at the request of Solar3D. We believe that these provisions
and agreements are necessary to attract and retain qualified directors and
officers.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling Solar3D
pursuant to the foregoing provisions, Solar3D has been informed that in the
opinion of the SEC, such indemnification is against public policy as expressed
in the Act and is therefore unenforceable.
INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the issuance of the Shares of Common Stock covered by
this prospectus will be passed upon for Solar3D by Richardson & Associates,
counsel to Solar3D, 1453 Third Street Promenade, Suite 315, Santa Monica,
California, 90401. Mark J. Richardson owns 2,000,000 stock options to purchase
2,000,000 shares of the Company's common stock and 2,304,000 shares of the
Company's common stock, none of which are covered by this prospectus.
-10-
EXPERTS
The financial statements and the related supplemental schedules
incorporated in this prospectus by reference from Solar3D's Annual Report on
Form 10-K for the year ended December 31, 2012 have been audited by HJ
Associates & Consultants, LLP, independent certified public accountants, as set
forth in their report appearing with the financial statements, and have been so
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing. No dealer, salesman or any other person has
been authorized by Solar3D to give any information or to make any
representations other than those contained in this prospectus in connection with
the offering made hereby, and if given or made, such information or
representations may not be relied upon. The prospectus does not constitute an
offer to sell or the solicitation of an offer to buy any securities other than
those specifically offered hereby or an offer to sell, or a solicitation of an
offer to buy, to any person in any jurisdiction in which such offer or sale
would be unlawful. Neither the delivery of this prospectus nor any sale made
hereunder shall under any circumstances create any implication that there has
been no change in the affairs of Solar3D since the dates as of which information
is furnished or since the date of this prospectus.
-11-