Prospectus Filed Pursuant to Rule 424(b)(3) (424b3)
February 11 2022 - 3:01PM
Edgar (US Regulatory)
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-262466
Prospectus
American Virtual Cloud Technologies, Inc.
3,778,635 Shares of Common Stock
This prospectus relates to the resale by the selling
stockholders of up to an aggregate of 3,778,635 shares of common stock, par value $0.0001 per share (the “Common Stock”),
of American Virtual Cloud Technologies, Inc. (“AVCT,” “we,” “us” or the “Company”). The
shares of Common Stock offered for sale by such selling stockholders consist of shares of Common Stock issuable upon exercise of the Monroe
Warrants (as defined below).
We are registering these shares on behalf of the selling
stockholders, to be offered and sold by them from time to time, to satisfy certain registration rights that we have granted to the selling
stockholders. The selling stockholders identified in this prospectus, or their respective transferees, pledgees or donees, or their respective
successors, may offer the shares from time to time through public or private transactions at prevailing market prices, at prices related
to prevailing market prices or at privately negotiated prices. The selling stockholders may resell the shares of common stock directly
or through one or more underwriters, broker-dealers or agents. For additional information on the methods of sale that may be used by the
selling stockholders, see the section entitled “Plan of Distribution” on page 7. For a list of the selling stockholders, see
the section entitled “Selling Stockholders” on page 5.
Our registration of the shares of Common Stock
covered by this prospectus does not mean that the selling stockholders will offer or sell any of the shares. No underwriter or other person
has been engaged to facilitate the sale of the shares in this offering. The selling stockholders will pay or assume discounts, commissions,
fees of underwriters, selling brokers or dealer managers and similar expenses, if any, incurred for the sale of shares of our Common Stock.
We may amend or supplement this prospectus from
time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements
carefully before you make your investment decision.
Our Common Stock is listed on The Nasdaq Capital
Market under the symbol “AVCT.” The last reported sale price of our Common Stock on January 31, 2022 was $1.26 per share.
Investing in our securities involves certain
risks. See the risk factors in our most recent Annual Report on Form 10-K/A filed on May 14, 2021, which is incorporated by
reference herein, as well as in any other recently filed quarterly or current reports. We urge you to carefully read this prospectus,
together with the documents we incorporate by reference, describing the terms of these securities before investing.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.
The date of this Prospectus is February 9, 2022
TABLE OF CONTENTS
You should rely only on the information contained
in this prospectus. Neither we nor the selling stockholders have authorized any other person to provide you with information different
from or in addition to that contained in this prospectus. If anyone provides you with different or inconsistent information, you should
not rely on it. The selling stockholders are not making an offer to sell these securities in any jurisdiction where an offer or sale is
not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover
of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.
We further note that the representations, warranties
and covenants made by us in any document that is filed as an exhibit to the registration statement of which this prospectus is a part
and in any document that is incorporated by reference herein were made solely for the benefit of the parties to such agreement, including,
in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly,
such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
In this prospectus, we rely on and refer to information
and statistics regarding our industry. We obtained this statistical, market and other industry data and forecasts from publicly available
information. While we believe that the statistical data, market data and other industry data and forecasts are reliable, we have not independently
verified the data.
Unless the context otherwise requires, the terms
“AVCT,” the “Company,” “we,” “us,” “our” and similar terms used in this prospectus
refer to American Virtual Cloud Technologies, Inc.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This prospectus and the documents incorporated
by reference herein may contain forward looking statements that involve risks and uncertainties. All statements other than statements
of historical fact contained in this prospectus and the documents incorporated by reference herein, including statements regarding future
events, our future financial performance, business strategy, and plans and objectives of management for future operations, are forward-looking
statements. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,”
“can,” “continue,” “could,” “estimates,” “expects,” “intends,”
“may,” “plans,” “potential,” “predicts,” “should,” or “will” or
the negative of these terms or other comparable terminology. Although we do not make forward looking statements unless we believe we have
a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks outlined under “Risk Factors” or elsewhere in this prospectus
and the documents incorporated by reference herein, which may cause our or our industry’s actual results, levels of activity, performance
or achievements expressed or implied by these forward-looking statements. Moreover, we operate in a highly regulated and rapidly changing
environment. New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact
of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially
from those contained in any forward-looking statements.
We have based these forward-looking statements
largely on our current expectations and projections about future events and financial trends that we believe may affect our financial
condition, results of operations, business strategy, short term and long term business operations, and financial needs. These forward-looking
statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected
in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed
in this prospectus, and in particular, the risks discussed below and under the heading “Risk Factors” and those discussed
in other documents we file with the Securities and Exchange Commission, or SEC. The following discussion should be read in conjunction
with the financial statements for the fiscal years ended December 31, 2020 and 2019 and notes incorporated by reference therein. We undertake
no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.
In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may
not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statement.
You should not place undue reliance on any forward-looking
statement, each of which applies only as of the date of this prospectus. Except as required by law, we undertake no obligation to update
or revise publicly any of the forward-looking statements after the date of this prospectus to conform our statements to actual results
or changed expectations.
Any forward-looking statement you read in this
prospectus or any document incorporated by reference reflects our current views with respect to future events and is subject to these
and other risks, uncertainties and assumptions relating to our operations, operating results, growth strategy and liquidity. You should
not place undue reliance on these forward-looking statements because such statements speak only as to the date when made. We assume no
obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could
differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future,
except as otherwise required by applicable law. You are advised, however, to consult any further disclosures we make on related subjects
in our reports on Forms 10-Q, 8-K and 10-K filed with the SEC. You should understand that it is not possible to predict or identify all
risk factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
PROSPECTUS SUMMARY
This summary highlights selected information
contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before investing
in our Company. You should carefully read the entire prospectus, including all documents incorporated by reference herein.
In particular, attention should be directed to our “Risk Factors,” “Information With Respect to the Company,” “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related notes thereto
contained herein or otherwise incorporated by reference hereto, before making an investment decision.
Overview
We were incorporated, in Delaware, as Pensare
Acquisition Corp, a special purpose acquisition company (“SPAC”) on April 7, 2016 for the purpose of entering into one or
more mergers, share exchanges, asset acquisitions, stock purchases, recapitalizations, reorganizations or other similar business combinations
with one or more target businesses.
On April 7, 2020, we consummated a business combination
transaction (the “Computex Business Combination”) in which we acquired Stratos Management Systems, Inc. (“Computex”),
a private operating company that does business as Computex Technology Solutions. The Computex Business Combination was consummated pursuant
to the terms of an amended agreement originally entered into on July 25, 2019. In connection with the closing of the Computex Business
Combination, the Company changed its name to American Virtual Cloud Technologies, Inc.
On December 1, 2020, we acquired the Kandy Communications
business (hereafter referred to as “Kandy” or “Kandy Communications”) from Ribbon Communications, Inc. and certain
of its affiliates (“Ribbon”), by acquiring certain assets, assuming certain liabilities and acquiring all of the outstanding
membership interests of Kandy Communications LLC.
Recent Developments
On September 16, 2021,
we issued a press release announcing that as a result of the decision by the Company’s Board of Directors (the “Board”)
to explore strategic alternatives announced April 7, 2021, the Board had authorized the Company to focus its strategy on acquisitions
and organic growth in its cloud technologies business as well as to explore strategic opportunities for its IT solutions business, including
the planned divestiture of Computex Technology Group (Computex). The Company further announced that the process that was established upon
receipt of the Company’s previously announced non-binding proposal did not result in the submission of a definitive offer, and that
it had completed the conversion of $133.9 million of outstanding debentures into 38.8 million common shares which had been registered
for resale.
On January 26, 2022,
we and certain of our subsidiaries (the “Companies”) entered into an Asset Purchase Agreement with Calian Corp. (the “Buyer”),
pursuant to which the Companies agreed to sell substantially all of the assets that constitute the Computex business, to the Buyer, in
consideration for a purchase price of $30 million in cash, subject to certain adjustments, and the assumption by the Buyer of certain
liabilities relating to the assets to be purchased. Consummation of the transactions contemplated by such Asset Purchase Agreement is
subject to the approval of our stockholders, as well as satisfaction of certain other customary closing conditions.
On November 5, 2021,
we consummated (the “Closing”) the transactions contemplated by the securities purchase agreement, dated as of November 2,
2021 (the “Purchase Agreement”), between the Company and the buyer set forth on the signature page thereto (the “Buyer”).
At the Closing, the Company
issued to the Buyer, in addition to 2,500,000 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”),
(i) a warrant to purchase up to 5,000,000 shares of Common Stock, as described below (the “Series A Warrant”) and (ii) a warrant
to purchase up to 2,500,000 shares of Common Stock (the “Series B Warrant” and, collectively with the Series A Warrant, the
“Warrants”). The Series A Warrant and the Series B Warrant each was, at the time, immediately exercisable at an initial exercise
price of $2.00 per share, subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject
to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible,
exercisable or exchangeable for, Common Stock at a price below the then-applicable exercise price (subject to certain exceptions). The
Series A Warrant and Series B Warrant will expire on November 5, 2026 and November 5, 2023, respectively. Commencing on November 15, 2021,
the Company will have the right to force the Buyer to exercise the Series B Warrant in the event shares of Common Stock trade at or above
$2.40 per share for a period of five consecutive trading days, subject to certain conditions, including equity conditions. Initially,
the Series A Warrant was only exercisable for 2,500,000 shares of Common Stock, but upon any exercise of the Series B Warrant, the number
of shares issuable upon exercise of the Series A Warrant increased by the number of shares of Common Stock issued upon exercise of the
Series B Warrant.
Also at the Closing,
the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Buyer. Pursuant to the
terms of the Registration Rights Agreement, the Company agreed to prepare and file with the SEC within 30 days following the Closing a
registration statement covering the resale of the shares of Common Stock issuable upon exercise of the Series A Warrant, and to use reasonable
best efforts to cause such registration statement to be declared effective under the Securities Act of 1933, as amended (the “Securities
Act”), as soon as practicable. If the registration statement was not filed within 30 days after the Closing or was not declared
effective by the applicable deadline set forth in the Registration Rights Agreement, or under certain other circumstances described in
the Registration Rights Agreement, then the Company would be obligated to pay to the Buyer an amount in cash equal to 1% of the Buyer’s
“Effective Purchase Price” (as defined in the Registration Rights Agreement) until the applicable event giving rise to such
payments was cured, subject to a cap of 10% of the Buyer’s Effective Purchase Price. The Registration Rights Agreement also provides
that the Company is obligated to file additional registration statements under certain circumstances, and provides the Buyer with customary
“piggyback” registration rights.
On December 2, 2021, the Company entered into
a Credit Agreement (the “Credit Agreement”) with Monroe Capital Management Advisors, LLC (“Administrative Agent”)
and the lenders party thereto. The Credit Agreement provides for a $27,000,000 term loan facility (the “Credit Facility”),
which matures on the earliest of (i) December 2, 2022, (ii) termination of Term Loan Commitments (as defined in the Credit Agreement”)
and (iii) the date on which the Company consummates a sale of Computex. The Company is required to comply with terms, conditions and timeframes
set forth in specified sale milestones for its consummation of the sale of Computex. The Company is required to use the proceeds of the
term loans solely to repay debt under that certain credit agreement, dated as of December 18, 2017 (as amended, the “Prior Credit
Agreement”), by and among Stratos Management Systems, Inc. (f/k/a Tango Merger Sub Corp.), the Company, certain domestic subsidiaries
of the Company and Comerica Bank, as lender, for working capital purposes, and for other general business purposes.
In connection with the closing of the Credit Facility
and pursuant to a subscription agreement, the Company issued to certain funds affiliated with Monroe Capital (the “Holders”)
warrants to purchase, in the aggregate, up to 2,508,352 shares of Common Stock (the “Monroe Warrants”). The number of shares
of Common Stock issuable upon exercise of the Monroe Warrants is subject to, in addition to customary adjustments for stock dividends,
stock splits, reclassifications and the like, adjustment for certain issuances (or deemed issuances) of common stock at a price per share
below $1.564 while the Monroe Warrants are outstanding, such that the Monroe Warrants will remain exercisable for, in the aggregate, approximately
2.5% of the total number of shares of Common Stock outstanding, calculated on a fully-diluted basis. As a result of the adjustment provisions
described in the immediately preceding sentence, the Monroe Warrants are currently exercisable for an aggregate of up to 2,519,089 shares
of Common Stock. The Monroe Warrants were, at that time, immediately exercisable and will expire on January 31, 2029.
Also in connection with the closing of the Credit
Facility and the issuance of the Monroe Warrants, the Company entered into a registration rights agreement (the “Monroe Registration
Rights Agreement”) with the Holders. Pursuant to the terms of the Monroe Registration Rights Agreement, the Company agreed to prepare
and file with the SEC on the 61st day following the closing of the Credit Facility the registration statement of which this prospectus
forms a part, covering the resale of the shares of Common Stock issuable upon exercise of the Monroe Warrants (the “Monroe Registrable
Securities”), and to use reasonable best efforts to cause such registration statement to be declared effective under the Securities
Act, as soon as practicable but no later than the Initial Effectiveness Deadline (as defined therein). If the registration statement is
not declared effective by the applicable deadline set forth in the Monroe Registration Rights Agreement, or under certain other circumstances
described in the Monroe Registration Rights Agreement, then the Company shall be obligated to pay to each Holder an amount in cash equal
to 1% of such Holder’s original purchase price until the applicable event giving rise to such payments is cured, subject to a cap
of 10% of such Holder’s initial purchase price. The Monroe Registration Rights Agreement also provides that the Company is obligated
to file additional registration statements under certain circumstances.
Also on December 2, 2021, in connection with the
closing of the Credit Facility, the Company entered into an amendment and waiver (the “Amendment”) with the Buyer under the
Purchase Agreement. Pursuant to the Amendment, the Buyer waived certain of its rights under the Purchase Agreement related to the issuance
of the Monroe Warrants (and any underlying shares of Common Stock), including standstill and preemptive rights under the Purchase Agreement.
The Buyer also agreed that the issuance of shares of Common Stock pursuant to the Monroe Warrants, subject to a cap of 5,016,704 shares
(subject to adjustment for stock splits and similar events), would not result in any adjustment to the exercise price of the Series A
Warrant and Series B Warrant (except as set forth in the following sentence). Also pursuant to the Amendment, the Company lowered the
per share exercise price of the Series A Warrant and Series B Warrant from $2.00 to $1.50, which resulted in an adjustment in the number
of shares of Common Stock then issuable upon exercise of each of the Series A Warrant and Series B Warrant from 2,500,000 to 3,333,334.
In consideration of the waivers by the Buyer in the Amendment, on December 2, 2021 the Company issued to the Buyer a warrant to purchase
up to 1,500,000 shares of Common Stock, at an exercise price of $0.0001 per share (the “Series C Warrant”). The Series C Warrant
was immediately exercisable, and was subsequently exercised in full.
On December 15, 2021, the Company consummated
(the “December Closing”) the transactions contemplated by the securities purchase agreement, dated as of December 13, 2021
(the “December Purchase Agreement”), between the Company and the Buyer.
At the December Closing, the Company issued to
the Buyer (i) a warrant (the “Series D Warrant”) to purchase up to 15,625,000 shares of Common Stock, in a private placement
(the “Private Placement”); and (ii) an aggregate of 7,840,000 shares of Common Stock (the “Common Shares”), and
12,456 shares (the “Preferred Shares”) of the Company’s newly-designated Series A convertible preferred stock (the “Series
A Preferred”) with a stated value of $1,000 per share, initially convertible into 7,785,000 shares of Common Stock at a conversion
price of $1.60 per share, in a registered direct offering (the “Public Offering”). The aggregate purchase price paid by the
Buyer at the December Closing for the Common Shares, the Preferred Shares and the Series D Warrant was $25,000,000.
The Series D Warrant has an exercise price of
$2.00 per share, subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based
adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible, exercisable
or exchangeable for, Common Stock at a price below the then-applicable exercise price (subject to certain exceptions). The Series D Warrant
is immediately exercisable, and will expire on December 15, 2026. The Company will have the right to force the Buyer to exercise the Series
D Warrant in the event the volume weighted average closing price of the Common Stock is at or above $5.00 per share for a period of three
consecutive trading days, subject to certain conditions, including equity conditions.
The Series A Preferred was convertible into Common
Stock at the election of the holder at any time at an initial conversion price of $1.60 (the “Conversion Price”). The Conversion
Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based
adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible, exercisable
or exchangeable for, Common Stock at a price below the then-applicable Conversion Price (subject to certain exceptions). No dividends
will be payable on the Series A Preferred, except that holders of Series A Preferred would be entitled to receive any dividends paid on
account of the Common Stock, on an as-converted basis. The holders of Series A Preferred have no voting rights on account of the Series
A Preferred, other than with respect to certain matters affecting the rights of the Series A Preferred.
Also at the December Closing, the Company entered
into a registration rights agreement (the “December Registration Rights Agreement”) with the Buyer. Pursuant to the terms
of the December Registration Rights Agreement, the Company agreed to prepare and file with the SEC within 30 days following the December
Closing a registration statement covering the resale of the shares of Common Stock issuable upon exercise of the Series D Warrants, and
to use reasonable best efforts to cause such registration statement to be declared effective under the Securities Act as soon as practicable.
If the registration statement is not filed within 30 days after the December Closing or is not declared effective by the applicable
deadline set forth in the December Registration Rights Agreement, or under certain other circumstances described in the December Registration
Rights Agreement, then the Company was obligated to pay to the Buyer an amount in cash equal to 1% of the Buyer’s “Effective
Purchase Price” (as defined in the December Registration Rights Agreement) until the applicable event giving rise to such payments
was cured, subject to a cap of 10% of the Buyer’s Effective Purchase Price. The December Registration Rights Agreement also provides
that the Company is obligated to file additional registration statements under certain circumstances, and provides the Buyer with customary
“piggyback” registration rights.
On December 28, 2021, the Company entered into
a waiver (the “Waiver”) with the Buyer. Pursuant to the terms of the Waiver, the Buyer waived any downward adjustment to the
exercise price, and any corresponding increase in the number of shares of Common Stock issuable upon exercise, of the Series A Warrant
and the Series B Warrant, to the extent such adjustments would otherwise arise from any issuances of securities to the Buyer pursuant
to the December Purchase Agreement. In addition, the Buyer waived, until the close of business on December 29, 2021, the Company’s
obligation to file an additional registration statement with respect to certain securities held by the Buyer by the date set forth in
the Registration Rights Agreement. Also pursuant to the Waiver, the Buyer agreed to exercise 700,000 shares of Common Stock underlying
the Series B Warrant, for an aggregate exercise price of $1,050,000, the Company agreed to pay the Buyer a waiver fee of $2,000,000 (against
which the exercise price of the Series B Warrant was offset), and the Company and the Buyer agreed to execute and deliver a side letter
(the “Exchange Cap Side Letter”), confirming that the Company will not issue shares of its Common Stock upon exercise of the
Series A Warrant, Series B Warrant and the Series C Warrant if such issuance, together with any other shares issued pursuant to the Purchase
Agreement or any such warrants, would exceed 19.99% of the number of shares of Common Stock outstanding immediately prior to the Purchase
Agreement, subject to certain exceptions, including receipt of the approval of the Company’s stockholders contemplated by the Amendment.
The Exchange Cap Side Letter also provides for certain potential penalty payments by the Company to the Buyer if such stockholder approval
has not been obtained by March 31, 2022.
Effective as of January 6, 2022, the Board increased
the size of the Board to eleven members, and appointed Michael Tessler to fill the newly-created vacancy on the Board. The Board also
elected Mr. Tessler as non-executive Chairman of the Board, replacing Lawrence E. Mock, Jr. in that role.
Principal Offices
Our principal executive offices are located at
1720 Peachtree Street, Suite 629, Atlanta, GA 30309, and the telephone number is (404) 239-2863. Information about us is available on
our website https://www.avctechnologies.com/. The information contained on our website or that can be accessed through our website does
not constitute part of this prospectus and is not incorporated in any manner into this prospectus.
The Offering
The selling stockholders named in this prospectus
may offer and sell up to an aggregate of 3,778,635 shares of Common Stock, representing 150% of the maximum number of shares of Common
Stock initially issuable upon exercise of the Monroe Warrants (without taking into account any limitations on the exercise of the Monroe
Warrants set forth in the Monroe Warrants).
Our Common Stock is currently
listed on Nasdaq under the symbol “AVCT.” We will not receive any of the proceeds of sales by the selling stockholders of
any of the shares covered by this prospectus.
When we refer to the
“selling stockholders” in this prospectus, we are referring to the holders of the foregoing securities, and their transferees,
pledgees or donees, or their respective successors-in-interest that may be identified in a supplement to this prospectus or, if required,
a post-effective amendment to the registration statement of which this prospectus is a part.
THE OFFERING
Common stock offered by the selling stockholders herein:
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3,778,635 shares
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Common stock outstanding:
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89,007,439 shares
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Use of Proceeds:
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We will not receive any proceeds from the sale of the common stock by the selling stockholders.
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The Offering Price:
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The selling stockholders may sell all or a portion of their shares through public or private transactions at prevailing market prices or at privately negotiated prices.
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The Nasdaq Capital Market Symbol:
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AVCT
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Risk Factors:
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An investment in our company is highly speculative and involves a significant degree of risk. See “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in shares of our common stock.
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Unless we indicate otherwise, all information
in this prospectus is based on 89,007,439 shares of Common Stock outstanding as of January 31, 2022, and excludes, as of that date:
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Approximately 5,510,675 shares of our common stock issuable
upon the exercise of outstanding penny warrants;
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Approximately 26,712,500 shares of our common stock
issuable upon the exercise of outstanding warrants with an exercise price of $11.50 per share;
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6,666,666 shares of our common stock underlying Series A
Warrant with an exercise price of $1.50 per share;
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2,519,089 shares of our common stock underlying warrants
issued on December 2, 2021 to certain funds affiliated with Monroe Capital with an exercise price of $0.0001 per share;
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15,625,000 shares of our common stock underlying the
Series D Warrant with an exercise price of $2.00 per share; and
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Approximately 3,695,000 shares of our common stock issuable
upon the vesting of restricted stock units.
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USE OF PROCEEDS
We will not receive any proceeds from the sale
of the common stock by the selling stockholders.
The holders of the Monroe Warrants are not obligated
to exercise the Monroe Warrants, and we cannot predict whether the holders of the Monroe Warrants will choose to exercise the Monroe Warrants.
In light of the exercise price of the Monroe Warrants of $0.0001 per share, any proceeds we may receive upon the exercise of the Monroe
Warrants would be nominal.
DETERMINATION OF OFFERING PRICE
The selling stockholders will offer common stock
at the prevailing market prices or a privately negotiated price as it may determine from time to time.
The offering price of our common stock to be sold
by the selling stockholder does not necessarily bear any relationship to our book value, assets, past operating results, financial condition
or any other established criteria of value. The facts considered in determining the offering price were our financial condition and prospects,
our limited operating history and the general condition of the securities market.
In addition, there is no assurance that our common
stock will trade at market prices in excess of the offering price as prices for common stock in any public market will be determined in
the marketplace and may be influenced by many factors, including the liquidity of our common stock.
SELLING STOCKHOLDERS
The shares of Common Stock being offered by the
selling stockholders are those issuable to the selling stockholders upon exercise of the Monroe Warrants. For additional information regarding
the issuance of those warrants, see “Recent Developments” above. We are registering the shares of Common Stock in order to
permit the selling stockholders to offer the shares for resale from time to time. Except for the ownership of the Monroe Warrants and
being party to the Credit Agreement as lenders, the selling stockholders have not had any material relationship with us within the past
three years.
The table below lists the selling stockholders
and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder) of the shares of common stock by each of the selling stockholders. The second column
lists the number of shares of common stock beneficially owned by each selling stockholder, based on its ownership of the common stock
and the warrants, as of January 31, 2022, assuming exercise of all warrants held by the selling stockholders on that date, without regard
to any limitations on exercise set forth therein.
The third column lists the shares of Common Stock
being offered by this prospectus by the selling stockholders.
In accordance with the terms of the Monroe Registration
Rights Agreement, this prospectus generally covers the resale of 150% of the maximum number of shares of Common Stock issued or issuable
upon exercise of the Monroe Warrants as of the trading day immediately preceding the date the registration statement is initially filed
with the SEC. Because the number of shares of Common Stock issuable upon exercise of the Monroe Warrants may be adjusted, the number of
shares that will actually be issued may be more or less than the number of shares being offered by this prospectus. The fourth column
assumes the sale of all of the shares offered by the selling stockholders pursuant to this prospectus.
Under the terms of the Monroe Warrants, a selling
stockholder may not exercise the Monroe Warrants to the extent such exercise would cause such selling stockholder, together with its affiliates,
to beneficially own a number of shares of our common stock which would exceed 4.99% of our then outstanding shares of Common Stock following
such exercise, excluding for purposes of such determination shares of Common Stock issuable upon exercise of the Monroe Warrants which
have not been exercised. The number of shares in the second column does not reflect these limitations. The selling stockholders may sell
all, some or none of their shares in this offering. See “Plan of Distribution.”
Name of Selling Stockholders
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Shares Beneficially
Owned Prior to the
Offering(1)
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Maximum Number of Shares Being Offered Pursuant to this Prospectus
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Shares Beneficially
Owned After Offering
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Number
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Number
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Percent
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Entities managed by Monroe Capital Management Advisors(2)
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2,519,089
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(3)
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3,778,635
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(4)
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0
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(1)
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Applicable percentage ownership is based on 89,007,439 shares of our common stock outstanding as of January 31, 2022 and based on 92,786,074 shares of our common stock outstanding after the offering.
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(2)
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Monroe Capital Management Advisors LLC acts as the investment manager of Monroe Capital Income Plus Corporation, Monroe Capital Private Credit Master Fund IV SCSp, Monroe Capital Private Credit Master Fund IV (Unleveraged) SCSp, Monroe Private Credit Fund A LP, Monroe Capital Private Credit Fund 559 LP and Monroe Capital Opportunistic Private Credit Master Fund SCSp, which hold the Monroe Warrants. Theodore Koenig serves as the Chief Executive Officer of Monroe Capital Management Advisors LLC. The Selling Stockholder’s address is c/o Monroe Capital LLC, 311 S. Wacker Drive, 64th Floor, Chicago, IL 60606.
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(3)
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Represents (i) 503,818
shares of Common Stock issuable upon exercise of the Monroe Warrants held by Monroe Capital Income Plus Corporation, (ii) 303,298
shares of Common Stock issuable upon exercise of the Monroe Warrants held by Monroe Capital Private Credit Master Fund IV SCSp,
(iii) 205,306 shares of Common Stock issuable upon exercise of the Monroe Warrants held by Monroe Capital Private Credit Master Fund
IV (Unleveraged) SCSp, (iv) 401,291 shares of Common Stock issuable upon exercise of the Monroe Warrants held by Monroe Private
Credit Fund A LP, (v) 195,985 shares of Common Stock issuable upon exercise of the Monroe Warrants held by Monroe Capital Private
Credit Fund 559 LP and (vi) 909,391 shares of Common Stock issuable upon exercise of the Monroe Warrants held by Monroe Capital
Opportunistic Private Credit Master Fund SCSp.
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(4)
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Represents (i) 150% of the 503,818 shares of Common Stock issuable upon exercise of the Monroe Warrants held by Monroe Capital Income Plus Corporation, (ii) 150% of the 303,298 shares of Common Stock issuable upon exercise of the Monroe Warrants held by Monroe Capital Private Credit Master Fund IV SCSp, (iii) 150% of the 205,306 shares of Common Stock issuable upon exercise of the Monroe Warrants held by Monroe Capital Private Credit Master Fund IV (Unleveraged) SCSp, (iv) 150% of the 401,291 shares of Common Stock issuable upon exercise of the Monroe Warrants held by Monroe Private Credit Fund A LP, (v) 150% of the 195,985 shares of Common Stock issuable upon exercise of the Monroe Warrants held by Monroe Capital Private Credit Fund 559 LP and (vi) 150% of the 909,391 shares of Common Stock issuable upon exercise of the Monroe Warrants held by Monroe Capital Opportunistic Private Credit Master Fund SCSp.
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PLAN OF DISTRIBUTION
We are registering the shares of Common Stock
issuable upon exercise of the Monroe Warrants to permit the resale of these shares of Common Stock by the holders of the Monroe Warrants
from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders
of the shares of Common Stock. We will bear all fees and expenses incident to our obligation to register the shares of Common Stock.
The selling stockholders may sell all or a portion
of the shares of Common Stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of Common Stock are sold through underwriters or broker-dealers, the selling stockholders will
be responsible for underwriting discounts or commissions or agent’s commissions. The shares of Common Stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or
at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions,
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on any national securities exchange or quotation service
on which the securities may be listed or quoted at the time of sale;
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in the over-the-counter market;
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in transactions otherwise than on these exchanges or systems
or in the over-the-counter market;
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through the writing of options, whether such options are
listed on an options exchange or otherwise;
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ordinary brokerage transactions and transactions in which
the broker-dealer solicits purchasers;
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block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
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an exchange distribution in accordance with the rules of
the applicable exchange;
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privately negotiated transactions;
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sales pursuant to Rule 144;
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broker-dealers may agree with the selling securityholders
to sell a specified number of such shares at a stipulated price per share;
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a combination of any such methods of sale; and
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any other method permitted pursuant to applicable law.
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In addition, a selling stockholder that is an
entity may elect to make an in-kind distribution of securities to its members, partners or stockholders pursuant to the registration statement
of which this prospectus is a part by delivering a prospectus with a plan of distribution. Such members, partners or stockholders would
thereby receive freely tradeable securities pursuant to the distribution through a registration statement. To the extent a distributee
is an affiliate of ours (or to the extent otherwise required by law), we may file a prospectus supplement in order to permit the distributees
to use the prospectus to resell the securities acquired in the distribution.
If the selling stockholders effect such transactions
by selling shares of Common Stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers
of the shares of Common Stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions
as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In
connection with sales of the shares of Common Stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers,
which may in turn engage in short sales of the shares of Common Stock in the course of hedging in positions they assume. The selling stockholders
may also sell shares of Common Stock short and deliver shares of Common Stock covered by this prospectus to close out short positions
and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of Common Stock
to broker-dealers that in turn may sell such shares.
The selling stockholders may pledge or grant a
security interest in some or all of the Monroe Warrants or shares of Common Stock owned by them and, if they default in the performance
of their secured obligations, the pledgees or secured parties may offer and sell the shares of Common Stock from time to time pursuant
to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the 1933 Act, amending, if
necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders
under this prospectus. The selling stockholders also may transfer and donate the shares of Common Stock in other circumstances in which
case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The selling stockholders and any broker-dealer
participating in the distribution of the shares of Common Stock may be deemed to be “underwriters” within the meaning of the
1933 Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the 1933 Act. At the time a particular offering of the shares of Common Stock is made, a prospectus supplement,
if required, will be distributed which will set forth the aggregate amount of shares of Common Stock being offered and the terms of the
offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation
from the selling stockholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.
Under the securities laws of some states, the
shares of Common Stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states
the shares of Common Stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.
There can be no assurance that any selling stockholder
will sell any or all of the shares of Common Stock registered pursuant to the registration statement, of which this prospectus forms a
part.
The selling stockholders and any other person
participating in such distribution will be subject to applicable provisions of the 1934 Act, and the rules and regulations thereunder,
including, without limitation, Regulation M of the 1934 Act, which may limit the timing of purchases and sales of any of the shares of
Common Stock by the selling stockholders and any other participating person. Regulation M may also restrict the ability of any person
engaged in the distribution of the shares of Common Stock to engage in market-making activities with respect to the shares of Common Stock.
All of the foregoing may affect the marketability of the shares of Common Stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of Common Stock.
We will pay all expenses of the registration of
the shares of Common Stock pursuant to the Monroe Registration Rights Agreement, estimated to be $413.33 in total, including, without
limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws;
provided, however, that a selling stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the
selling stockholders against liabilities, including some liabilities under the 1933 Act, in accordance with the Monroe Registration Rights
Agreements, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against civil
liabilities, including liabilities under the 1933 Act, that may arise from any written information furnished to us by the selling stockholder
specifically for use in this prospectus, in accordance with the Monroe Registration Rights Agreement, or we may be entitled to contribution.
Once sold under the registration statement, of which this prospectus
forms a part, the shares of Common Stock will be freely tradable in the hands of persons other than our affiliates.
DESCRIPTION OF SECURITIES TO BE REGISTERED
General
The total number of shares of all classes of capital
stock which the Corporation shall have authority to issue is 505,000,000, of which 500,000,000 shares shall be Common Stock of the par
value of $0.0001 per share and 5,000,000 shares shall be Preferred Stock of the par value of $0.0001 per share.
Common Stock
Holders of Common Stock are entitled to one vote
per share. AVCT’s certificate of incorporation, as amended and restated, does not provide for cumulative voting. Holders of Common
Stock are entitled to receive ratably such dividends, if any, as may be declared by the board of directors out of legally available funds.
Upon liquidation, dissolution or winding-up, the holders of Common Stock are entitled to share ratably in all of AVCT’s assets which
are legally available for distribution, after payment of or provision for all liabilities and the liquidation preference of any outstanding
preferred stock. The holders of Common Stock have no preemptive, subscription, redemption or conversion rights.
Transfer Agent and Registrar for Common Stock
The current transfer agent and registrar for AVCT
is Continental Stock Transfer & Trust Company, located at 1 State Street, 30th Floor, New York, NY 10004.
Listing
AVCT Common Stock is listed on Nasdaq under the
symbol “AVCT”.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 145 of the Delaware General Corporation
Law, or Delaware law, inter alia, empowers a Delaware corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another corporation or other enterprise, against expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Similar indemnity is authorized for such persons against expenses (including attorneys’ fees) actually and reasonably incurred in
connection with the defense or settlement of any such threatened, pending or completed action or suit if such person acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and provided further that (unless
a court of competent jurisdiction otherwise provides) such person shall not have been adjudged liable to the corporation. Any such indemnification
may be made only as authorized in each specific case upon a determination by the stockholders or disinterested directors or by independent
legal counsel in a written opinion that indemnification is proper because the indemnitee has met the applicable standard of conduct.
Section 145 further authorizes a corporation to
purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against
any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the
corporation would otherwise have the power to indemnify him under Section 145. We maintain policies insuring our officers and directors
against certain liabilities for actions taken in such capacities, including liabilities under the Securities Act.
Our certificate of incorporation and bylaws require
us to indemnify our directors to the fullest extent permitted under Delaware law or any other applicable law in effect, but if such statute
or law is amended, we may change the standard of indemnification only to the extent that such amended statute or law permits us to provide
broader indemnification rights to our directors. We must indemnify such officers and employees in the same manner and to the same extent
that we are required to indemnify our directors under our certificate of incorporation and bylaws. Our certificate of incorporation limits
the personal liability of a director to us or our stockholders to damages for breach of the director’s fiduciary duty. Pursuant
to indemnification agreements we entered into with each of our directors, we are further required to indemnify our directors to the fullest
extent permitted under Delaware law and our bylaws; provided that each such director shall enjoy the greater of (i) the advancement and
indemnification rights permitted under our certificate of incorporation and bylaws for directors and officers as of the date of such indemnification
agreement or (ii) the benefits so afforded by amendments thereto.
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, or otherwise, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable.
LEGAL MATTERS
The validity of the securities offered by this
prospectus were passed upon for us by Greenberg Traurig, LLP.
EXPERTS
The consolidated financial statements of AVCT
as of December 31, 2020, and for each of the periods in the two-year period ended December 31, 2020, have been incorporated by reference
herein in reliance upon the report of UHY LLP (“UHY”), an independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and periodic reports,
proxy statements and other information with the Securities and Exchange Commission using the Commission’s EDGAR system. The Commission
maintains a web site that contains reports, proxy and information statements and other information regarding registrants that file electronically
with the Commission. The address of such site is http//www.sec.gov.
We have filed a registration statement with the
Commission relating to the offering of the shares. The registration statement contains information which is not included in this prospectus.
You may inspect or copy the registration statement at the Commission’s public reference facilities or its website.
You should rely only on the information contained
in this prospectus. We have not authorized any person to provide you with any information that is different.
INCORPORATION OF DOCUMENTS BY REFERENCE
We are “incorporating by reference”
in this prospectus certain documents we file with the SEC, which means that we can disclose important information to you by referring
you to those documents. The information in the documents incorporated by reference is considered to be part of this prospectus.
Statements contained in documents that we file with the SEC and that are incorporated by reference in this prospectus will automatically
update and supersede information contained in this prospectus, including information in previously filed documents or reports that have
been incorporated by reference in this prospectus, to the extent the new information differs from or is inconsistent with the old information.
We have filed or may file the following documents with the SEC and they are incorporated herein by reference as of their respective dates
of filing.
1. our Annual Report
on Form 10-K/A for the fiscal year ended December 31, 2020, filed with the SEC on May 14, 2021;
2. our Quarterly Report
on Form 10-Q for the nine months ended September 30, 2021, filed with the SEC on November 12, 2021;
3. our Current Reports
on Form 8-K filed with the SEC on January 21, 2021; January 27, 2021; February 12, 2021; March 5, 2021; April 7, 2021; April 9, 2021;
May 12, 2021; June 25, 2021; July 22, 2021; September 3, 2021; September 17, 2021; October 6, 2021; November 3, 2021; November 8, 2021;
December 3, 2021; December 7, 2021; December 9, 2021; December 13, 2021; December 16, 2021; December 29, 2021; January 10, 2022 and February 1, 2022.
4. the description
of our Common Stock set forth in the registration statement on Form 8-A registering our Common Stock under Section 12 of the Exchange
Act, which was filed with the SEC on July 26, 2017, including any amendments or reports filed for purposes of updating such description.
All documents that we filed with the SEC pursuant
to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act subsequent to the date of this registration statement and prior to the filing
of a post-effective amendment to this registration statement that indicates that all securities offered under this prospectus have been
sold, or that deregisters all securities then remaining unsold, will be deemed to be incorporated in this registration statement by reference
and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated
or deemed to be incorporated by reference in this prospectus shall be deemed modified, superseded or replaced for purposes of this prospectus
to the extent that a statement contained in this prospectus, or in any subsequently filed document that also is deemed to be incorporated
by reference in this prospectus, modifies, supersedes or replaces such statement. Any statement so modified, superseded or replaced shall
not be deemed, except as so modified, superseded or replaced, to constitute a part of this prospectus. None of the information that we
disclose under Items 2.02 or 7.01 of any Current Report on Form 8-K or any corresponding information, either furnished under Item 9.01
or included as an exhibit therein, that we may from time to time furnish to the SEC will be incorporated by reference into, or otherwise
included in, this prospectus, except as otherwise expressly set forth in the relevant document. Subject to the foregoing, all information
appearing in this prospectus is qualified in its entirety by the information appearing in the documents incorporated by reference.
You may request, orally or in writing, a copy
of these documents, which will be provided to you at no cost (other than exhibits, unless such exhibits are specifically incorporate by
reference), by contacting our Controller, at American Virtual Cloud Technologies, Inc., 1720 Peachtree Street, Suite 629, Atlanta, GA
30309, or by telephone at (404) 239-2863. Information about us is also available at our website at www.avctechnologies.com. However, the
information in our website is not a part of this prospectus and is not incorporated by reference.
American Virtual Cloud Technologies, Inc.
3,778,635 Shares of Common Stock
PROSPECTUS
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