As filed with the Securities and Exchange Commission on May 15, 1996
Registration No. 33-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AW COMPUTER SYSTEMS, INC.
-------------------------
(Exact name of Registrant as specified in its charter)
New Jersey 22-1991981
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9000A Commerce Parkway
Mount Laurel, New Jersey 08054
(609) 234-3939
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(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
Charles Welch
Chief Executive Officer and President
9000A Commerce Parkway
Mount Laurel, New Jersey 08054
(609) 234-3939
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Gary Kaufman, Esq.
Law Offices of Gary Kaufman
1370 Avenue of the Americas
Suite 3200
New York, New York 10019
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------
Title of Each Class Amount To Be Proposed Maximum Proposed Amount of
of Securities Registered Offering Price Maximum Registration Fee
To Be Registered Per Security Aggregate
Offering Price(1)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Class A Common Shares, 1,274,773 $3.56 $4,538,191.88 $1,316.08
$.01 par value Shares(2)(3)
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[FN]
(1) Estimated solely for the purpose of calculating the registration fee under
Rule 457 based upon the last sales price of the Company's Class A Common
Shares quoted on the Nasdaq National Market on May 13, 1996. Pursuant to
Rule 457(g), the registration fee for the Class A Common Shares issuable
upon exercise of the Warrants (see footnote 2 below) is calculated on the
same basis as the Class A Common Shares included in this Registration
Statement.
(2) Includes 394,000 Class A Common Shares issuable upon exercise of 394,000
warrants issued in connection with a private placement in May 1995 (the
"1995 Warrants") and 236,773 Class A Common Shares (taking into account
certain adjustments) issuable upon exercise of 200,000 warrants originally
issued in connection with a development contract in October 1993 (the "1993
Warrants"). The 1993 Warrants and 1995 Warrants are collectively referred
to herein as the "Warrants".
(3) Pursuant to Rule 416, additional securities are being registered as may be
required for issuance pursuant to the anti-dilution provisions of the
Warrants.
[/FN]
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
[S] [C]
SUBJECT TO COMPLETION dated May 15, 1996
PRELIMINARY PROSPECTUS
1,274,773 Shares
AW COMPUTER SYSTEMS, INC.
Class A Common Shares
This Prospectus relates to an aggregate of 1,274,773 Class A Common Shares,
$.01 par value (the "Common filed Shares"), of AW Computer Systems, Inc., a New
Jersey company, with the (the "Company"), being offered by certain selling
shareholders. Of the Common Shares being offered hereby, 644,000 shares are and
held directly by the selling shareholders and 630,773 shares are issuable upon
the exercise of outstanding warrants to purchase Common Shares (the "Warrants").
See "Selling Shareholders", "Plan of Distribution" and "Description of
Securities".
In May 1995, certain officers and directors of the Company and other
individuals purchased a total of 394,000 units, each consisting of one Common
Share and a warrant to purchase an additional Common Share at an exercise price
of $2.00 per share (the "1995 Warrant"). The 1995 Warrants are exercisable for
five years from the date of grant. The purchase price per unit was sell or the
$0.55. The total proceeds to the Company, net of expenses, was approximately
$206,000, which proceeds were used for product development and ongoing
operations.
In October 1993, in connection with a development contract entered into
between the Company and Winn-Dixie Stores, Inc. ("Winn-Dixie"), the Company
issued warrants to acquire 200,000 securities Common Shares (the "1993
Warrants"), subject to adjustment in the case of certain anti-dilution events.
As a result of the issuance in which of the aforesaid units in May 1995, the
number of Class A Common Shares issuable upon the exercise of the 1993 Warrants
was adjusted from 200,000 to 236,773 and the price per share was adjusted from
$3.625 to $3.062. Each 1993 Warrant is exercisable for the purchase of one
Common Share at a current exercise price of $2.00 per share. In addition, in
March 1996, the Company issued 250,000 Common Shares to Winn-Dixie at a price of
$2.00 per share, or an aggregate consideration of $500,000. As additional
consideration for the purchase of the Common Shares, the Company modified the
exercise price of the 1993 Warrants from the previously adjusted price of $3.062
per share to $2.00 per share.
1
Common Shares acquired upon exercise of the Warrants will be "restricted
securities" and the other Common Shares being offered hereby are "restricted
securities" under the Securities Act of 1933, as amended ("Securities Act").
This Prospectus has been prepared for the purpose of registering the Common
Shares underlying the Warrants and the other Common Shares to allow for future
sales by the selling shareholders to the public without restriction. To the
knowledge of the Company, the selling shareholders have made no arrangement with
any brokerage firm for the sale of the Common Shares. The selling shareholders
may be deemed to be "underwriters" within the meaning of the Securities Act. Any
commissions received by a broker or dealer in connection with resales of the
shares may be deemed to be underwriting commissions or discounts under the Act.
See "Plan of Distribution". The Common Shares offered hereby may be sold from
time-to-time by the selling shareholders described herein in transactions on one
or more exchanges, in the over-the-counter market or otherwise at prices
prevailing at the time or in negotiated transactions, or in a combination of
such methods of sale. The Company will receive proceeds from the exercise of the
Warrants but will not receive any of the proceeds from the sale of the Common
Shares. The expenses incurred in registering the Common Shares, including legal
and accounting fees and printing costs, will be paid by the Company, other than
discounts, concessions and commissions on the sale of the Common Shares. See
"Plan of Distribution".
The Company's Class A Common Shares are quoted on the NASDAQ National
Market under the symbol "AWCSA". On May 13, 1996, the last reported sales price
of the Class A Common Shares was $3.56.
The Common Shares have not been registered for sale under the securities
laws of any state or other jurisdiction as of the date of this Prospectus.
Brokers or dealers effecting transactions in the Common Shares should confirm
the registration of such shares under the securities laws of the states in which
such transactions occur or the existence of an exemption from such registration
or should cause such registration to occur in connection with any offer or sales
of the Common Shares.
AN INVESTMENT IN THE COMMON SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. INVESTORS SHOULD BE PREPARED TO LOSE THEIR ENTIRE INVESTMENT. SEE "RISK
FACTORS."
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 date of this Prospectus is June ___, 1996.
2
TABLE OF CONTENTS
Page
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Available Information...........................................4
Incorporation of Certain Documents by Reference.................5
Risk Factors....................................................6
The Company....................................................10
Use of Proceeds................................................18
Selling Shareholders...........................................19
Plan of Distribution...........................................21
Description of Securities......................................22
Legal Matters..................................................25
Experts........................................................26
Indemnification for Securities Act Liabilities.................27
Until July ____, 1996, all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and, in accordance therewith,
files reports and other information with the Securities and Exchange Commission
("Commission"). Such reports and other information filed by the Company with the
Commission pursuant to the informational requirements of the Exchange Act may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, as well
as at the following regional offices of the Commission: Northeast (New York)
Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048; and
Midwest (Chicago) Regional Office, Northwest Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may be
obtained from the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C. 20549 at prescribed
rates.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the Common Shares offered
hereby. This Prospectus omits certain of the information contained in the
Registration Statement pursuant to the rules and regulations of the Commission.
The information so omitted may be obtained from the principal offices of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 upon payment of the
fee prescribed or may be examined there without charge. Statements contained in
this Prospectus as to the contents of any contract or other document referred to
are not necessarily complete, and in each instance reference is made to the copy
of such document or other document filed as an exhibit to the Registration
Statement and each such statement is qualified in all respects by such
reference.
4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's (i) Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1995, (ii) Quarterly report on Form 10-QSB for the quarter ended
March 31, 1996, and (iii) the description of the Company's Class A Common Shares
contained in the Company's Registration Statement on Form 8-A filed with the
Commission on April 5, 1982, in each case as filed with the Commission pursuant
to the Exchange Act, are hereby incorporated by reference in this Prospectus and
shall be deemed to be a part hereof.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus, prior to
the termination of the offering, shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the respective dates of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any statements modified or superseded shall not be deemed, except as
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on written or oral request of such person, a copy of
any or all documents which have been incorporated by reference in this
Prospectus, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that the Prospectus
incorporates. Requests for such copies should be directed to Robert O'Connor,
Controller and Treasurer of the Company, at 9000A Commerce Parkway, Mount
Laurel, New Jersey 08054, telephone (609) 234-3939.
5
RISK FACTORS
The Common Shares offered hereby involve a high degree of risk. Investors
should be prepared to lose their entire investment. Each prospective investor
should carefully consider the following risk factors inherent in, and applicable
to the business of, the Company.
Decrease in Net Revenues; Limited Revenues. The Company's revenues have
decreased significantly over the last two fiscal years. The Company's revenues
in 1995 were $3,424,341, compared to $4,721,168 in 1994 and $8,324,427 in 1993.
For the quarter ended March 31, 1996, the Company's revenues were $354,873,
compared with $974,095 in the same period last year. These decreases in revenues
are primarily due to the fact the Company's products did not achieve expected
levels of commercial success, and to product development delays. There can be no
assurance that the Company's revenues will not continue to decrease and/or be
sufficient to cover operating costs, support product development or ensure the
Company achieves profitability.
History of Operating Losses. In 1995 and 1994, the Company sustained net
losses of $2,314,018 and $1,318,377, respectively. The Company's net loss for
the quarter ended March 31, 1996 was $895,518, compared with a net loss of
$564,075 in the same period last year. The Company anticipates that losses will
continue until such time, if ever, that it can generate sufficient revenues from
the sales of its products to cover operating costs. There can be no assurance
that the Company's operations will become profitable or that the Company will
ever be able to generate cash flows sufficient to sustain its operations. In the
report of independent accountants for 1995, it is noted that recurring losses
from operations and negative cash flows raise substantial doubt about the
Company's ability to continue as a going concern.
Product Development Delays; Cost Overruns; Uncertainty of Commercial
Acceptance; Competing Products. The Company's products are custom-designed,
high-performance, computer-based systems to upgrade retailer's point-of-sale
("POS") operations, which require in many cases the development of new software
programs and hardware components. The Company has experienced delays in the
development of new programs and components, difficulty in meeting customer
specifications and cost overruns on fixed price contracts. There can be no
assurance that the Company will not continue to incur delays, difficulties and
cost overruns in developing its products.
6
Although development of the Company's computer vision based CPA product is
substantially complete, it has only recently commenced testing of the product in
an actual supermarket environment, which tests are likely to take three months
or more. There can be no assurance that the tests will be successful or that the
CPA product will achieve commercial acceptance. In addition, the Company is in
the process of introducing a new pilot product (WIZARD) that has recently
completed the development and testing phases. Acceptance of either or both of
these products would generate future revenues, however, there can be no
assurance that the Company will not experience production delays or problems
with these products or that the Company's marketing efforts will be successful.
The Company or its competitors may announce new products or technologies
that have the potential to replace the Company's products. The introduction of
products embodying new technologies or changes in industry standards or customer
requirements could render existing products obsolete and unmarketable. There can
be no assurance that the announcement of new product offerings by the Company or
its competitors will not cause customers to defer purchases of existing Company
products, which could have a material adverse effect on the Company's business,
financial condition and results of operations.
Credit Limitations and Restrictions; Capital Constraints. The Company
failed to meet the net profit debt covenant under its credit arrangements as of
December 31, 1994. On July 21, 1995, the Company and its lender entered into a
debt restructuring agreement. In connection with this agreement, the balance of
$125,000 remaining on a $400,000 fixed term note was paid in full. The term of
the $500,000 note was accelerated from June 1999 to July 1996 and the monthly
payments increased from $8,333 to $33,333. Payment of the $550,000 balance on
the line of credit, originally scheduled for May 1995, was extended until
December 31, 1996. No further advances, however, are available under the line of
credit. The reduced amount of credit and increased payments have materially and
adversely affected the Company's ability to fund product development and
maintain its ongoing operations. In addition, there can be no assurance that the
Company will be able to generate sufficient revenues to make the principal
payment due in December 1996.
The Company expects that its existing capital resources will enable it to
maintain its current and planned operations through at least the second quarter
of 1996. Even if all of the Warrants to purchase Common Shares are exercised,
the proceeds from such exercise would only be sufficient to fund the Company's
operations and support limited product development through the third quarter of
1996. Thereafter, the Company will need to raise substantial additional capital
to fund its operations. The Company intends to seek such additional funding
through collaborative or partnering arrangements, the extension of existing
arrangements or through public or private equity or debt financings. There can
be no assurance that additional financing will be available on acceptable terms
or at all. If additional funds are raised by issuing equity securities, further
dilution to
7
shareholders will result. If adequate funds are not available, the Company may
be required to delay, reduce the scope of or eliminate one or more of its
research or development programs, curtail its marketing and sales efforts or to
obtain funds through arrangements with strategic partners or others that may
require the Company to relinquish rights to certain of its technologies, product
candidates or products that the Company would otherwise seek to develop or
commercialize. Any such actions could have a material adverse effect on the
Company's business, financial condition and results of operations.
Concentration of Revenues from Large Customers. In each of the years ending
December 31, 1995, 1994 and 1993, fewer than four customers accounted for more
than 50% of the Company's revenues. In 1995, approximately 58% of the Company's
revenues were to three customers. The Company anticipates that a substantial
amount of its revenues will continue to be concentrated in a limited number of
customers. There can be no assurance that the number of customers will increase
or that the Company will retain its existing customers.
Dependence on the Retail Sector. All of the Company's products are designed
for customers in the retail sector. The retail sector is highly cyclical, and
many retailers have gone bankrupt or experienced financial difficulty. There can
be no assurance that continued difficult economic conditions in the retail
sector could not have a material adverse effect on the Company's business,
financial condition and results of operations.
The Company is Dependent Upon Proprietary Technology. The Company's future
success will depend in large part on its proprietary technology. The Company
relies principally upon copyright, trade secret and contract law to protect its
proprietary technology. There can be no assurance that such measures are
adequate to protect the Company's proprietary technology.
No Anticipated Dividends. The Company has never paid dividends in the past,
and the Company does not anticipate paying cash dividends in the foreseeable
future. The Company's debt restructuring agreement also prohibits the payment of
dividends.
Effect of Outstanding Warrants and Options; Negative Effect of Substantial
Sales. The Company presently has outstanding options and warrants to purchase an
aggregate of 1,070,623 Class A Common Shares. All of the foregoing securities
represent the right to acquire Class A Common Shares of the Company during
various periods of time and at various prices. Holders of these securities are
given the opportunity to profit from a rise in the market price of the Class A
Common Shares and are likely to exercise its securities at a time when the
Company would be able to obtain additional equity capital on more favorable
terms. Substantial sales of Common Shares pursuant to this Prospectus could have
a negative effect on the market price for Class A Common Shares.
8
Current Registration Statement and Blue Sky Qualification or Exemption
Required for Exercise of Warrants. No Warrants may be exercised unless at the
time of exercise the Company has filed with the Commission a current prospectus
covering Common Shares upon exercise of such Warrant, and such shares have been
registered or qualified or deemed to be exempt under the securities laws of the
state of residence of the holder of such Warrant.
9
THE COMPANY
Business
Since its inception in 1973, AW Computer Systems, Inc. (the "Company" or
"AW") has provided retailers with custom-designed, high-performance,
computer-based systems to upgrade their Point-of-Sale ("POS") operations. AW's
products integrate a wide variety of POS terminals into the current store's
computer systems offered by the three largest POS system manufacturers in the
United States. AW has established relationships with the IBM Corporation
("IBM"), NCR Corporation ("NCR"), and Fujitsu-ICL Systems, Inc. ("FJ-ICL") to
provide interfaces with their new POS systems, known as the 4690 Store System
for IBM, UNITY for NCR, ISS400 for FJ-ICL, and existing popular cash registers.
The ability of the Company's personnel to produce de novo interface hardware and
software, customized to retailers' requirements, is a critical factor in
successful operations.
The Company's target market includes nation-wide chains of retail stores
and supermarkets. Because of the large size of these customers relative to the
Company, many of the Company's contracts for sale of its proprietary hardware
and licensing of its proprietary software comprise a significant portion of the
Company's revenues in any given year. For example, in 1995, revenue from three
customers accounted for 58% of total revenue.
Products
The Company's main product, known as AWare, enables the use of existing
popular, but older, cash registers with the POS systems manufactured by IBM,
NCR, and FJ-ICL. If AWare is used, a retail chain can upgrade its POS system
while postponing the replacement of cash registers, a major cost of upgrading to
current on-line POS operations, and mix older and newer models and different
makes of cash registers. AW has developed AWare for use in supermarket chains,
mass merchandising stores, and department stores.
AW has developed a family of programmable microprocessor adapter boards for
the IBM, the NCR, and the FJ-ICL computers that serve as cash register
controller units. They allow various NCR, Datachecker, and older IBM cash
registers to operate effectively with IBM's 4680 Store Controller, the NCR, and
the FJ-ICL POS systems (the "Major Store Systems").
Because of the rapid pace of technological change in the POS business, AW
is constantly developing new products to provide additional functionality to POS
systems. Products currently being developed include:
10
The Checker Productivity Analyzer (CPA) Project, being developed under
contract with a large supermarket chain, which does not include any guaranteed
minimum purchase, is designed to enhance the economic efficiency in the handling
of goods by supermarket operators. CPA has been installed at a Pilot Store and
is scheduled to begin live testing shortly.
The Wizard brings the familiarity of Microsoft's graphical Windows
environment to the retail POS operation. Unlike existing graphical POS systems
that demand total replacement of a retailers hardware and software, the Wizard
adds graphical capability to existing environments. The Tutor version of the
Wizard is installed at two Pilot Stores and is being tested.
The Company also presently derives additional revenue from contract
programming to provide system enhancements and maintenance agreements covering
all of AW's POS systems.
The Company's Computer Systems
Each computer system marketed by the Company is an integrated, customized
package of computer hardware and software components.
AW typically licenses only the use of its software and sells the
microprocessor controller units which are proprietary products. The computers
and terminal equipment, which the Company's systems enhance, are typically
manufactured and sold to AW's clients by IBM, NCR, FJ-ICL, and other computer
hardware manufacturers (See - "Suppliers" and "Marketing").
The software directs the system's computers to perform data processing and
communications functions desired by AW's customers. Most of the software used in
the Company's systems is designed and developed by the Company, the most
important of which is an operating system software package called the AW Kernal.
This highly efficient multi-user, prioritized transaction processor operates in
the AW microprocessor controller units. By performing the data processing and
communications tasks, which older cash registers are unable to execute but which
are required by the Major Store Systems, the Company's microprocessors and
software enable various POS terminals to operate with new efficiency in a
coordinated network of equipment, consisting of computers and such terminal
equipment as cash registers, scanners, and debit or credit card readers.
11
POS Market
Major retailers upgrade POS systems to achieve more efficient operations
through the use of accurate sales reporting and analysis direct from the cash
register, automated credit and debit card authorization initiated by the cash
register clerk, computerized price look-up, and electronic marketing in
supermarkets. This development in retail operations has been given impetus by an
increasingly competitive and promotional retail environment. While the Company
believes that the IBM 4680 Retail Store System is presently the leading POS
system available, the Company also believes that other POS system vendors, such
as NCR and FJ-ICL, will be successful in gaining a significant share of the POS
system business. Accordingly, AW has broadened its AWare product to support
these new systems.
The retailers' principal economic barrier to implementing the new POS
systems is the cost of providing stores with suitable cash registers which can
communicate interactively with the Major Store Systems. At approximately $3,500
to $6,500 per checkout station, rewiring stores and installing new POS terminals
can be disruptive, costly, and time consuming. The Company prices AWare so that
the cost to the retailer for upgrading sixteen cash registers is approximately
equal to the cost of one new cash register installation.
Since the POS system is a retailer's primary method of servicing customers
as well as capturing sales and inventory data, most store operators adopt new
systems and technology only after careful study and evaluation of a working
product. Consequently, the length of time between initial contact by an AW sales
representative and large-scale implementation by a retail chain often exceeds a
year. Furthermore, as competitive pressures continue to squeeze retail profit
margins, chain operators are increasingly reluctant to pay for pilot system
development, customization, and installation.
Customers and Markets
The Company presently offers its POS systems to three kinds of target
market retailers: 1) large general merchandise retailers, 2) large discount
retail operators, and 3) supermarket grocery stores. In general, the Company's
POS systems are attractive to any retailer with a large number of stores. In
1995, as in 1994, the demand for the new POS systems offered by AT&T and ICL
remained soft, thereby limiting the need for AWare. Over the past three years,
AW's revenues from its main product AWare have decreased as follows, $7.7
million in 1993, $3.3 million in 1994, and $2.8 million in 1995.
The Company's business tends to center on a small number of large clients
in any given year. 1995 revenues include a concentration of 58% attributed to
three customers. The Company has derived substantially all of its revenues from
North America during the last three years.
12
Customer Backlog
Because nearly all customer system installations are contingent upon
successful test store or "Pilot" implementations (see "Contractual Arrangements
with Customers"), the total revenues from a customer cannot be considered firm
until after acceptance of the Pilot system. At March 25, 1996, the total amount
of the Company's firm orders for delivery within one year for maintenance
services, hardware, and software was approximately $800 thousand, compared to a
total of approximately $3.3 million at March 25, 1995. Because of the size of
the backlog and the length of the selling cycle, frequently over a year, the
Company believes that the volume of operations will remain at the relatively low
level until the successful completion of either or both of its new products, CPA
and Wizard.
Competition
The market for the type of computer systems offered by the Company is
increasingly competitive. One of the principal effects of the increase in
competition, most noticeable in AW's attempt to penetrate the highly competitive
supermarket arena, has been the need for the Company to develop and install
demonstration systems for prospective clients without commitment or
compensation. This marketing structure increases selling expense and creates a
substantial financial burden during the period in which the system is being
prepared for Pilot use by the prospective customer.
Important considerations for potential purchasers of the type of computer
systems marketed by the Company include system performance, compatibility of the
system with other software and hardware already in use, software capability,
systems reliability and maintainability, capability of the systems packager to
continue to develop new products which integrate new POS equipment with existing
POS equipment and, to a somewhat lesser degree, the price of the system.
Several systems integrators offer POS systems which allow retailers to
connect cash registers made by various manufacturers to NCR and IBM PS/2
computers. The Company believes that several of these companies presently offer
such systems. The economic barriers to entry into this market are not high for
these companies; therefore, they are potential competitors of AW. The Company
believes that its products are competitive with these systems integrators
because AW's proprietary devices allow a wider variety of cash registers to
interact with the IBM 4680 Store System and the NCR UNITY system than the
products offered by its competitors. In addition, AW's expanding base of
respected retail chains accelerates acceptance of AWare by retail managers.
13
IBM, FJ-ICL, and NCR also compete with the Company. Each of these companies
offers retailers POS systems that utilize in-store processors and new cash
registers that they manufacture. The Company believes that there will continue
to be a demand for its systems, notwithstanding the competition from these much
larger and well-established companies, because some retailers that presently
utilize older IBM, Datachecker, or NCR cash registers will not wish to incur the
heavy capital costs associated with an immediate conversion to an entirely IBM,
FJ-ICL, or NCR-based system.
Marketing
The Company markets its computer systems through its own personnel in
cooperation with IBM, NCR, and FJ-ICL representatives from its offices in Mount
Laurel, New Jersey to its customers and prospects. The Company does not offer
financing or leasing for its systems, nor is such a program contemplated.
AW has had a complementary marketing agreement with IBM for the sale of
retail store systems. This type of agreement calls for mutual identification of
prospects and for AW to provide specified marketing assistance. Under the
agreement, AW would provide computer software and communications hardware to
retailers while IBM would supply the computer equipment and network software.
The Company has a similar arrangement with NCR. Under this arrangement, NCR
and AW mutually designate prospective customers for the NCR UNITY POS system. If
a sale is made, AW receives a commission payment based on the NCR equipment
which is sold to the customer. Additionally, AW is a Reseller of the UNITY POS
system software.
In 1995, as in 1994, AW's marketing efforts were hampered by the immaturity
of the POS systems offered by NCR and FJ-ICL. Frequent version changes to
correct early product deficiencies caused delays in implementing the systems
that AW was able to sell. As in prior years, marketing of the Company's systems
was also affected by competition and the reluctance of some potential customers
to purchase sophisticated computer systems which are critical to store
operations from a small company such as AW. Financial turmoil among certain of
AW's prospective clients is also a marketing barrier. The Company has dealt with
three major customers which have been under court protection in Chapter 11 of
the Bankruptcy Code.
14
Contractual Arrangements with Customers
The Company's contracts with retailers normally obligate the Company to
design a system which meets the customer's specifications as set forth in the
contract and to complete the installation of that system in a limited number of
the customer's stores (the "Pilot"). Failure to timely complete the design and
development of a system, in some cases, gives the customer the right to
terminate the agreement. If the Pilot is successful, the customer may elect to
proceed to full-scale implementation of the system in all of its stores (the
"Rollout").
The Company normally contracts with its customers on a fixed-fee basis in
three stages. At the end of each stage, the client has the option to terminate
the project or proceed to the next stage.
In the first stage, typically pursuant to a letter agreement, the technical
staffs of the customer and AW jointly write a system description and develop
operating and acceptance specifications. Simultaneously, a fixed-fee contract
for the remaining stages is negotiated. Upon acceptance of this work, the second
stage begins.
At the beginning of the second stage, the contract for installation of a
Pilot system, and later delivery of production versions, is executed. AW is
typically obligated to deliver and install the AW hardware and software in
sufficient quantities for the client to test the use of the system in a limited
number of Pilot stores. AW also provides customized alterations to meet the
client's specific needs. The client is responsible for acquiring the appropriate
non-AW equipment and establishing the necessary communications network to link
the stores to headquarters and establish or provide an on-line clearing house
link from client headquarters for credit authorization and appropriate POS
terminal equipment for use in the system. Upon completion of the Pilot system,
AW grants the client a restricted non-exclusive license to use the Pilot system
in only the stores under test. During the Pilot, AW also provides training and
close operational support to the client. Upon acceptance of the Pilot, the
client has the option to proceed to the third stage.
In the third stage or Rollout, AW delivers production versions of the
system for use in the client's stores. The client is responsible for purchasing
the store computers and ensuring that the store communications network
functions, as jointly agreed with AW.
Effective upon the installation of a system, the customer ordinarily pays
AW for a non-exclusive, non-transferable, perpetual license to use the system in
its business. Under the contract, the customer also purchases the AW-designed
computer hardware used in the system for a specified price.
15
The price which the Company charges for a particular system depends upon
the type and amount of hardware used in the system and the complexity of the
system. Prices for the Company's systems range from $10,000 for a simple
"add-on" software feature for an existing system to $3 to $6 million for a major
system installation.
The computers and terminal equipment used in the Company's systems are
serviced by their respective manufacturers or other persons. AW warrants its
data communications equipment and proprietary software and firmware programs
against design defects for a specified period, normally not in excess of twelve
months. Warranty liabilities have been nominal. Upon the expiration of the
warranty period, AW services its proprietary data communication devices for its
customers at its regular rates for such services then in effect.
After the warranty period, AW typically provides software maintenance
service to its clients for a fee depending on the number of stores using the AW
system. Under these agreements, the Company usually provides telephone
"hot-line" support, updated versions of the AW system as they are released and,
if necessary, on-line programming changes to maintain system performance.
Suppliers
Manufacture of the Company's hardware products principally involves circuit
design, selection, and the assembly of purchased electronic, electrical and
peripheral components (such as custom-made printed circuit boards,
custom-manufactured enclosures, custom-manufactured application specific
integrated circuits, standard integrated circuits, components and power
supplies). The Company also makes use of programmable array logic chips in order
to minimize physical size and to protect against reverse engineering by
competitors. Agreements exist with the Company's suppliers to restrict them from
selling to others any custom components supplied to the Company. Most of the
components of the Company's hardware products are commonly available,
industry-standard material.
From time-to-time, the electronics industry has experienced periodic
shortages in the supply of certain standard semiconductor devices. It is the
Company's policy to maintain alternate sources for all important components, as
well as to adjust inventories, in anticipation of delayed delivery times.
Currently, however, some components utilized in the Company's products are
available only from a single source. No assurance can be given that future
shortages would not have an adverse effect on the Company's business. Thus far,
the Company's profit margins and delivery commitments have not been affected by
these market fluctuations.
16
Research and Development
The Company operates in an industry which is subject to rapid technological
change. The Company's ability to compete depends upon, among other things, its
ability to offer its customers state-of-the-art computer systems. Accordingly,
AW's expenditures for the development of new data communications equipment,
software, and firmware are expected to continue at existing or higher levels in
the future.
The Company protects its investment in software through use of unregistered
copyrights and by reliance on trade secrecy laws. The Company's use of custom
application specific integrated circuits ("ASIC") and programmable array logic
chips ("PAL") presents economic barriers to unauthorized copying of the
Company's products. The Company requires all technical personnel to sign
nondisclosure agreements with respect to the Company's products. There can be no
assurance that others will not unlawfully copy the Company's products despite
these protective devices. The Company believes that the most effective
protection of its trade secrets is rapid development of improved hardware and
software which makes use of the latest technology.
Employees
On March 22, 1996, the Company employed 42 full-time persons: 8 in sales,
management, and administration: 27 in software development and production; and 7
in hardware development and production; compared to the 59 full-time persons
employed at March 22, 1995 (15 in sales, management, and administration; 8 in
hardware design and production; and 36 in software development and production).
From time-to-time, AW employs computer design consultants and technicians on a
temporary basis. None of the Company's employees is represented by a labor
union.
The Company believes that its future success is dependent in part on its
continued ability to recruit and retain highly competent management, marketing
and technical personnel.
Properties
The Company leases its administrative offices and sales and programming
facilities (containing approximately 30,000 square feet of space) in Mount
Laurel, New Jersey. The Company pays approximately $24,000 per month, including
its share of taxes, insurance and other expenses customarily borne by a tenant
under a "net" lease, which has been extended to March 15, 1999. The Company does
not own, and leases no other, real property. The Company believes that its
facilities are satisfactorily maintained.
17
USE OF PROCEEDS
If all of the outstanding Warrants are exercised, based upon an exercise
price of $2.00 per Common Share, the Company would receive $1,261,546 in
proceeds. The Company will use the proceeds for general working capital and
general corporate purposes. The Company will not receive any proceeds from the
sale of the Common Shares.
18
SELLING SHAREHOLDERS
The following table sets forth certain information with respect to the
Selling Shareholders as of May 15, 1996, and as adjusted to reflect the sale of
Common Shares offered hereby.
NUMBER OF
SHARES TO BE
SOLD PURSUANT
POSITION WITH THE SHARES OWNED TO THIS SHARES TO BE OWNED
NAME COMPANY PRIOR TO OFFERING(8) OFFERING AFTER OFFERING(8)(9)
---- ------- -------------------- -------- --------------------
Number Percent Number Percent
------ ------- ------ -------
Winn-Dixie Stores, Inc. -- 486,773(1) 9.6% 486,773 0 ---%*
Nicholas Ambrus Chairman and 364,200(2) 7.4% 92,000 272,200 5.6%
Director
Charles J. McMullin Chief Operating 257,000(3) 5.2% 192,000 65,000 1.3%
Officer since
April 1995 and
Director since
October 1994
Richard A. Schroeter Director 195,850(4) 4.0% 110,000 85,850 1.8%
Charles Welch Chief Executive 777,360(5) 15.7% 182,000 595,360 12.3%
Officer,
President and
Director
Peter DeAngelis -- 229,000(6) 4.6% 192,000 37,000 ---%*
Ira Cotler -- 20,000(7) ---%* 20,000 0 ---%*
All officers and 1,707,510(2) 32.3% 576,000 1,131,510 22.7%
directors as a group (3)(4)(5)
(7 persons)
- --------------
[FN]
* Less than one percent.
(1) Includes 236,773 shares which Winn-Dixie has the right to acquire within 60
days pursuant to the 1993 Warrants.
(2) Includes 76,000 shares which Mr. Ambrus has the right to acquire within 60
days pursuant to options and the 1995 Warrants, and 8,000 shares
beneficially owned pursuant to a letter agreement with P. Michael Lutze, a
director of the Company.
(3) Includes 161,000 shares which Mr. McMullin has the right to acquire within
60 days pursuant to options and the 1995 Warrants.
(4) Includes 55,000 shares which Mr. Schroeter has the right to acquire within
60 days pursuant to the 1995 Warrants.
(5) Includes 121,000 shares which Mr. Welch has the right to acquire within 60
days pursuant to options and the 1995 Warrants.
(6) Includes 45,500 shares which Mr. DeAngelis has the right to acquire within
60 days pursuant to options and the 1995 Warrants. Also includes 50,500
shares which Mr. DeAngelis' spouse, Margaret DeAngelis, has the right to
acquire within 60 days pursuant to options and the 1995 Warrants, as to
which shares Mr. DeAngelis disclaims beneficial ownership.
[/FN]
(Footnotes continued on next page)
19
[FN]
(7) Includes 10,000 shares which Mr. Cotler has the right to acquire within 60
days pursuant to the 1995 Warrants.
(8) Based on 4,816,694 Class A Common Shares outstanding as of April 30, 1996.
(9) Assumes the exercise of all Warrants presently held and the sale of all
Common Shares issuable upon exercise thereof. Also assumes the sale of all
of the 250,000 Common Shares held directly by Winn-Dixie and an aggregate
of 394,000 Common Shares held directly by the other selling shareholders.
[/FN]
20
PLAN OF DISTRIBUTION
The Company will cause the issuance of the Common Shares to Warrant holders
upon exercise of the Warrants. The Common Shares issuable on exercise of the
Warrants, when issued, will be included in the outstanding shares of the Company
quoted on the Nasdaq National Market. The Company does not intend to enter into
any arrangement with any securities dealer or broker concerning solicitation of
the exercise of the Warrants.
The Common Shares offered hereby may be sold from time-to-time by the
selling shareholders described herein, or by pledgees, donees, transferees or
other successors in interest. Such sales may be made on one or more exchanges or
in the over-the-counter market, or otherwise at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The Common Shares may be sold by one or more of the
following: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the Common Shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction; (b) purchases by a
broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) an exchange distribution in accordance
with the rules of such exchange; and (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the selling shareholders may arrange for other
brokers or dealers to participate. Brokers or dealers will receive commissions
or discounts from selling shareholders in amounts to be negotiated immediately
prior to the sale. Such brokers or dealers and any other participating brokers
or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. In addition, any securities
covered by this Prospectus which qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this Prospectus.
Upon the Company being notified by a selling shareholder that any material
arrangement has been entered into with a broker-dealer for the sale of Common
Shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplemented
prospectus will be filed, if required, pursuant to Rule 424(c) under the
Securities Act, disclosing (i) the name of each such selling shareholder and of
the participating broker-dealer(s), (ii) the number of Common Shares involved,
(iii) the price at which such Common Shares were sold, (iv) the commissions paid
or discounts or concessions allowed to such broker-dealer(s), where applicable,
(v) that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this Prospectus and (vi)
other facts material to the transaction.
21
DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue 10,000,000 Class A Common Shares, $.01
par value, of which 4,816,694 were issued and outstanding as of March 31, 1996,
and 100,000 Class B Common Shares, $.20 par value, none of which are issued and
outstanding. The Board of Directors of the Company may authorize the issuance of
additional Class A Common Shares and Class B Common Shares up to the total
amount of Class A Common Shares and Class B Common Shares authorized without
obtaining the prior approval of the shareholders.
The issued and outstanding Class A Common Shares are fully paid and
non-assessable. Holders of Class A Common Shares and Class B Common Shares are
entitled to one vote for each share held of record on all matters submitted to a
vote of shareholders and may not cumulate their votes for the election of
directors. If any Class B Common Shares are outstanding, majority approval of
that class is required for any merger or consolidation of the Company with or
into another entity, or the sale, lease, exchange or other disposition of all or
substantially all of its assets to a third person.
Class A Common Shares are not redeemable, do not have any conversion or
preemptive rights and are not subject to further calls or assessments. Either
the Corporation or the holders of Class B Common Shares may convert Class B
Common Shares into Class A Common Shares at the rate of one Class A Common Share
multiplied by 20, subject to adjustment (the "Conversion Number").
Holders of Class A Common Shares will be entitled to participate pari passu
with the holders of Class B Common Shares in such dividends and other
distributions as may be declared from time to time by the Board of Directors out
of funds legally available therefor and the amount of dividends payable on each
Class B Common Share shall be the amount paid on each Class A Common Share
multiplied by the Conversion Number. Upon liquidation or dissolution of the
Company, holders of Class A Common Shares will be entitled to participate pari
passu with the holders of Class B Common Shares in all assets available for
distribution to holders of Class A and Class B Common Shares and the amount of
assets distributed on each Class B Common Share shall be the amount distributed
on each Class A Common Share multiplied by the Conversion Number.
22
1993 Warrants
As additional consideration for the grant by Winn-Dixie of an exclusive
marketing license for a product under development contained in the marketing and
royalty agreement, dated October 28, 1993, the Company issued warrants to
Winn-Dixie to purchase 200,000 Common Shares. The following is a brief summary
of the material provisions of the 1993 Warrants and is subject to the provisions
of the related warrant agreement. A copy of the warrant agreement has been filed
as an exhibit to the Registration Statement of which this Prospectus is a part
and reference should be made to such exhibit for a detailed description of the
provisions thereto which are summarized herein. See "Available Information." A
copy of the warrant agreement may be obtained from the Company.
Each 1993 Warrant evidences the right to purchase one Class A Common Share
at a price of $3.625 per share, subject to adjustment. The 1993 Warrants are
entitled to the benefit of adjustments in the exercise price and in the number
of Class A Common Shares deliverable upon exercise thereof upon the issuance of
Class A Common Shares or securities convertible into Class A Common Shares at a
price below the then exercise price of the 1993 Warrants, other than pursuant to
the Company's stock option plans. The 1993 Warrants are exercisable up until the
close of business on October 23, 1998.
In May 1995, the Company issued an aggregate of 394,000 units, each unit
consisting of one Class A Common Share and a warrant to purchase an additional
Class A Common Share, at a per unit price of $0.55. See "-- 1995 Warrants"
below. The issuance of the units at that price resulted in an adjustment to the
exercise price of the 1993 Warrants from $3.625 per share to $3.062 and to the
number of shares from 200,000 to 236,773. In March 1996, the Company issued
250,000 Class A Common Shares to Winn-Dixie at a price of $2.00 per share, or an
aggregate consideration of $500,000. As additional consideration for the
purchase of the Common Shares, the Company modified the exercise price of the
1993 Warrants from $3.062 per share to $2.00.
The warrant agreement provides for a single demand registration under the
Securities Act with respect to the Common Shares purchasable under the warrant
agreement. The Company is responsible for all expenses of such registration,
except for underwriting discounts and commissions, and fees and expenses of
holder's counsel. The registration of Common Shares being offered by Winn-Dixie
hereunder constitutes the demand registration under the warrant agreement.
The 1993 Warrants do not confer upon the holders any voting or other rights
as shareholders of the Company.
23
1995 Warrants
In May 1995, certain officers and directors of the Company and other
individuals purchased a total of 394,000 units, including warrants to purchase
394,000 Class A Common Shares (the "1995 Warrants"). The total proceeds to the
Company, net of expenses was $206,000, which proceeds were used for product
development and ongoing operations. The following is a brief summary of the
material provisions of the 1995 Warrants and is subject to the provisions of the
related warrant agreement. A copy of the warrant agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part and
reference should be made to such exhibit for a detailed description of the
provisions thereto which are summarized herein. See "Available Information." A
copy of the warrant agreement may be obtained from the Company.
Each 1995 Warrant evidences the right of the holder to purchase one Class A
Common Share at a price of $2.00 per share, subject to adjustment in the case of
a subdivision or combination of Class A Common Shares, certain stock dividends
and a consolidation or merger of the Company with or into another entity.
Additionally, the Board of Directors may, in its good faith, make adjustments to
protect fairly the purchase rights of the holders in accordance with the
essential intent and principles of the adjustment provisions. No adjustments
will be made until the cumulative adjustments of the exercise price per Class A
Common Share amount to $.05 or more.
The 1995 Warrants are exercisable up until the close of business on May 14,
2000. The minimum number of Class A Common Shares purchasable upon exercise of a
1995 Warrant is 1,000.
The 1995 Warrants are not redeemable by the Company and the Company has no
rights to purchase or otherwise acquire the 1995 Warrants. The 1995 Warrants do
not confer upon holders any voting or other rights as shareholders of the
Company.
Transfer Agent
The transfer agent and registrar of the Company's Class A Common Shares is
StockTrans, Inc., 7 E. Lancaster Avenue, Ardmore, Pennsylvania 19003.
24
LEGAL MATTERS
The legality of the Common Shares offered hereby will be passed upon for
the Company and the selling shareholders by the Law Offices of Gary Kaufman,
1370 Avenue of the Americas, Suite 3200, New York, New York 10019.
25
EXPERTS
The consolidated balance sheets as of December 31, 1995 and 1994 and the
consolidated statements of operations, changes in shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1995, have
been incorporated by reference in this Prospectus and in the Registration
Statement on Form S-3 in reliance on the report, which includes an explanatory
paragraph regarding the Company's ability to continue as a going concern, of
Coopers & Lybrand L.L.P., independent accounts, given on the authority of said
firm as experts in auditing and accounting.
26
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The Amended and Restated By-laws of the Company provide that the Company
shall indemnify to the fullest extent permitted by New Jersey law any person
whom it may indemnify thereunder, including directors, officers, employees and
agents of the Company. Such indemnification (other than as ordered by a court)
shall be made by the Company only upon a determination that indemnification is
proper in the circumstances because the individual met the applicable standard
of conduct i.e., such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interest of the Company. Advances
for such indemnification may be made pending such determination. Such
determination shall be made by a majority vote of a quorum consisting of
disinterested directors, or by independent legal counsel or by the shareholders.
In addition, the Restated Certificate of Incorporation provides for the
elimination, to the extent permitted by New Jersey law, of personal liability of
directors to the Company and its shareholders for monetary damages for breach of
fiduciary duty as directors.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director, officer
or controlling person of the Company in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
27
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the issuance and distribution of the
securities being registered, all of which will be paid by the Registrant, are as
follows:
Securities and Exchange Commission $ 1,316.08
Registration Fee
Accountants' Fees and Expenses 5,000.00
Legal Fees and Expenses 15,000.00
Miscellaneous Expenses 1,000.00
--------
Total $22,316.08
==========
Item 15. Indemnification of Directors and Officers.
The Amended and Restated By-laws of the Company provide that the
Company shall indemnify to the fullest extent permitted by New Jersey law any
person whom it may indemnify thereunder, including directors, officers,
employees and agents of the Company. Such indemnification (other than as ordered
by a court) shall be made by the Company only upon a determination that
indemnification is proper in the circumstances because the individual met the
applicable standard of conduct. Advances for such indemnification may be made
pending such determination. Such determination shall be made by a majority vote
of a quorum consisting of disinterested directors, or by independent legal
counsel or by the stockholders. In addition, the Restated Certificate of
Incorporation provides for the elimination, to the extent permitted by New
Jersey law, of personal liability of directors to the Company and its
stockholders for monetary damages for breach of fiduciary duty as directors.
Item 16. Exhibits.
3A The Company's Restated Certificate of Incorporation. Exhibit 3A to the
Company's Registration Statement No. 2-68939 is incorporated herein by
reference.
3A-1 Amendment to the Company's Restated Certificate of Incorporation dated
June 30, 1987. Exhibit 3A-1 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1987 is incorporated herein by
reference.
II-1
3B The Company's Amended and Restated By-Laws. Exhibit 3B to the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1994 is incorporated herein by reference.
3C The Company's Post-Effective Amendment No. 1 to Form S-8 (Registration
Statement No. 33-64686). Exhibit 3C to the Company's Quarterly Report
on Form 10Q-SB for the quarter ended September 30, 1995 is
incorporated herein by reference.
3C-1 The Company's Registration Statement on Form S-8. Exhibit 3C-1 to the
Company's Quarterly Report on Form 10Q-SB for the quarter ended
September 30, 1995 is incorporated herein by reference.
4F Specimen Certificate for Class A Common Shares. Exhibit 4F to the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1994 is incorporated herein by reference.
4H-1 Note and Warrant Purchase Agreement 15% Promissory Notes With
Warrants. Exhibit 4H-1 to the Company's Quarterly Report on Form 10-Q
for September 30, 1990 is incorporated herein by reference.
4I-1 Term Note between AW Computer Systems, Inc. and National Westminster
Bank, NJ in the amount of $400,000, and Letter, Grid Note and
Continuing General Security Agreement dated August 28, 1992 between
the Company and National Westminster Bank, NJ approving a line of
credit in the amount of $250,000. Exhibit 4I-1 to the Company's
Quarterly Report on Form 10-Q for September 30, 1992 is incorporated
herein by reference.
4I-2 $600,000 Grid Note payable to National Westminster Bank New Jersey
dated June 1, 1994. Exhibit 4I-2 to the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1994 is incorporated
herein by reference.
4I-3 Term Note in the amount of $500,000 and Continuing General Security
Agreement, both dated May 13, 1994, between the Company and National
Westminster Bank, NJ. Exhibit 4I-3 to the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1994 is incorporated
herein by reference.
11-2
4I-4 Guarantee between the Company's subsidiary and National Westminster
Bank, NJ dated on May 31, 1994. Exhibit 4I-4 to the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1994 is
incorporated herein by reference.
4I-5 Letter Agreement between the Company and NatWest Bank N.A. dated July
25, 1995. Exhibit 4I-5 to the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1995 is incorporated herein by
reference.
10D Employment Agreement dated October 1, 1985 between Nicholas Ambrus and
the Company. Exhibit 28B to the Company's Registration Statement No.
33-1898 is incorporated herein by reference.
10D-1 Amendment to Employment Agreement between the Company and Nicholas
Ambrus. Exhibit 10D-1 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1990 is incorporated herein by reference.
10D-4 Supplemental Employment and Retirement Agreement dated March 1, 1993
between Nicholas Ambrus and the Company . Exhibit 10D-4 to the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1993 is incorporated herein by reference.
10E Employment Agreement dated October 1, 1985 between Charles Welch and
the Company. Exhibit 28C to the Company's Registration Statement No.
33-1898 is incorporated herein by reference.
10E-1 Amendment Number Two to the Employment Agreement between the Company
and Charles Welch dated August 31, 1995. Exhibit 10E-1 to the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1995 is incorporated herein by reference.
II-3
10F Employment Agreement between the Company and Charles J. McMullin dated
April 25, 1994. Exhibit 10F to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1994 is incorporated herein by
reference.
10G Employment Agreement between the Company and P. Michael Lutze dated
February 15, 1996. Exhibit 10G to the Company's Annual Report on Form
10-KSB is incorporated herein by reference.
10H Lease between Linpro Industrial Limited and the Company dated August
12, 1983. Exhibit 10H to the Company's Annual Report on Form 10-K for
the year ended December 31, 1983 is incorporated herein by reference.
10H-1 Amendment dated August 1, 1986 to the Lease between Linpro Industrial
Limited and the Company. Exhibit 10H-1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1986 is incorporated
herein by reference.
10H-2 Amendment dated December 2, 1986 to the Lease between Linpro
Industrial Limited and the Company. Exhibit 10H-2 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1986 is
incorporated herein by reference.
10H-3 Sixth Amendment dated November 27, 1991 to Lease between Linpro South
Jersey, Inc. and the Company. Exhibit 10H-3 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1991 is
incorporated here in by reference.
10H-4 Seventh Amendment dated June 7, 1992 to lease between Linpro Greentree
Business Centre Partnership and the Company. Exhibit 10H-4 to the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1992 is incorporated herein by reference.
10H-5 Eighth Amendment dated February 15, 1994 to lease between Linpro
Greentree Business Centre Partnership and the Company. Exhibit 10H-5
to the Company's Annual Report on Form 10-KSB for year ended December
31, 1994 is incorporated herein by reference.
II-4
10J Summary of Bonus Plan. Exhibit 10J to the Company's Annual Report on
Form 10-K for the year ended December 31, 1987 is incorporated herein
by reference.
10L Letter Agreement between the Company and the Wall Street Group.
Exhibit 10L of the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1992 is incorporated herein by reference.
10M-1 IBM Business Partner Agreement Application Specialist dated January
12, 1992. Exhibit 10M-1 to the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1994 is incorporated herein by
reference.
10M-12 Development Agreement between Fujitsu-ICL and the Company dated June
29, 1993. Exhibit 10M-12 to the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1994 is incorporated herein by
reference.
10M-13 Amendment #1 to the Development Agreement between Fujitsu-ICL and the
Company dated January 21, 1994. Exhibit 10M-13 to the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1994 is
incorporated herein by reference.
10M-14 Reseller Agreement between NCR Corporation and the Company dated
August 17, 1992. Exhibit 10M-14 to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1994 is incorporated herein by
reference.
10M-15 Referral Agreement between NCR Corporation and the Company dated
August 17, 1992. Exhibit 10M-15 to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1994 is incorporated herein by
reference.
10M-16 Addendum to the Referral Agreement between NCR Corporation and the
Company dated December 10, 1993. Exhibit 10M-16 to the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1994 is
incorporated herein by reference.
10M-17 Letter Agreement between NCR Corporation and the Company extending
repayment of the Referral Agreement dated February 23, 1995. Exhibit
10M-17 to the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1994 is incorporated herein by reference.
II-5
10M-18 Solution Provider Agreement between Microsoft Corporation and the
Company dated August 1995. Exhibit 10M-18 to the Company's Annual
Report on Form 10-KSB is incorporated herein by reference.
10N 1984 Stock Option and Stock Grant Plan of the Company. Exhibit 10N to
the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1988 is incorporated herein by reference.
10N-1 Amendment to the 1984 Stock Option and Stock Grant Plan. Exhibit 10O
to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1989 is incorporated herein by reference.
10N-2 The Company's October 1992 Stock Option and Stock Grant Plan (as
amended). Exhibit 10N-2 of the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1992 is incorporated herein by
reference.
10P Subscription Agreement between the Company and Winn-Dixie Stores, Inc.
dated March 8, 1996. Exhibit 10P to the Company's Annual Report on
Form 10-KSB is incorporated herein by reference.
10P-1 Addendum to Warrant Agreement between the Company and Winn-Dixie
Stores, Inc. dated March 8, 1996. Exhibit 10P-1 to the Company's
Annual Report on Form 10-KSB is incorporated herein by reference.
10P-2 SEC Report on Form 10-C dated March 12, 1996.
10T-1 POS Purchase Agreement dated April 18, 1991 between Wal-Mart, Inc. and
the Company. Exhibit 10T-1 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1991 is incorporated herein by
reference.
10U Letter Agreement between the Company and Janney Montgomery Scott Inc.
dated October 4, 1995. Exhibit 10U to the Company's Annual Report on
Form 10-KSB is incorporated herein by reference.
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10U-1 Letter Agreement between the Company and Janney Montgomery Scott Inc.
dated January 30, 1996. Exhibit 10U-1 to the Company's Annual Report
on Form 10-KSB is incorporated herein by reference.
10U-2 Letter Agreement between the Company and Janney Montgomery Scott Inc.
dated March 5, 1996. Exhibit 10U-2 to the Company's Annual Report on
Form 10-KSB is incorporated herein by reference.
10V Agreement for the Procurement of Life Insurance dated May 13, 1986
between the Company and Nicholas Ambrus. Exhibit 10V o the Company's
Annual Report on Form 10-K for the year ended December 31, 1986 is
incorporated herein by reference.
10W Agreement for the Procurement of Life Insurance dated May 13, 1986
between the Company and Charles Welch. Exhibit 10W to the Company's
Annual Report on Form 10-K for the year ended December 31, 1986 is
incorporated herein by reference.
10Y IBM Subcontractor Agreement dated February 11, 1992 between the IBM
Corporation and the Company with Pricing Amendment Letter dated
February 25, 1992. Exhibit 10-Y to the Company's Quarterly Report on
Form 10-Q for September 30, 1992 is incorporated herein by reference.
5 Opinion of Law Offices of Gary Kaufman regarding legality of
securities.
23.1 Consent of Law Offices of Gary Kaufman (included in Exhibit 5).
23.2 Consent of Coopers & Lybrand L.L.P.
II-7
Item 17. Undertakings.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information set forth in the registration statement;
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provided, however, that paragraphs (1)(i) and (1)(ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
this offering.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Mount Laurel, State of New Jersey, on May 7, 1996.
AW COMPUTER SYSTEMS, INC.
By:/s/Charles Welch
Charles Welch
Chief Executive Officer and President
By:/s/Robert O'Connor
Robert O'Connor
Controller and Treasurer
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Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/Nicholas Ambrus Date:5/6/96
Nicholas Ambrus
Chairman of the Board
/s/Charles Welch Date:5/7/96
Charles Welch
Chief Executive Officer, President and Director
(Principal Executive Officer)
/s/Charles McMullin Date:5/6/96
Charles McMullin
Chief Operating Officer and Director
/s/P. Michael Lutze Date:5/7/96
P. Michael Lutze
Senior Vice President and Director
/s/Richard Schroeter Date:5/7/96
Richard A. Schroeter
Director
/s/Robert J. Hannon Date:5/7/96
Robert J. Hannon
Director
/s/Robert O'Connor Date:5/6/96
Robert O'Connor
Controller and Treasurer
(Principal Accounting Officer)
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EXHIBIT INDEX
3A The Company's Restated Certificate of Incorporation. Exhibit 3A to the
Company's Registration Statement No. 2-68939 is incorporated herein by
reference.
3A-1 Amendment to the Company's Restated Certificate of Incorporation dated
June 30, 1987. Exhibit 3A-1 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1987 is incorporated herein by
reference.
3B The Company's Amended and Restated By-Laws. Exhibit 3B to the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1994 is incorporated herein by reference.
3C The Company's Post-Effective Amendment No. 1 to Form S-8 (Registration
Statement No. 33-64686). Exhibit 3C to the Company's Quarterly Report
on Form 10Q-SB for the quarter ended September 30, 1995 is
incorporated herein by reference.
3C-1 The Company's Registration Statement on Form S-8. Exhibit 3C-1 to the
Company's Quarterly Report on Form 10Q-SB for the quarter ended
September 30, 1995 is incorporated herein by reference.
4F Specimen Certificate for Class A Common Shares. Exhibit 4F to the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1994 is incorporated herein by reference.
4H-1 Note and Warrant Purchase Agreement 15% Promissory Notes With
Warrants. Exhibit 4H-1 to the Company's Quarterly Report on Form 10-Q
for September 30, 1990 is incorporated herein by reference.
4I-1 Term Note between AW Computer Systems, Inc. and National Westminster
Bank, NJ in the amount of $400,000, and Letter, Grid Note and
Continuing General Security Agreement dated August 28, 1992 between
the Company and National Westminster Bank, NJ approving a line of
credit in the amount of $250,000. Exhibit 4I-1 to the Company's
Quarterly Report on Form 10-Q for September 30, 1992 is incorporated
herein by reference.
4I-2 $600,000 Grid Note payable to National Westminster Bank New Jersey
dated June 1, 1994. Exhibit 4I-2 to the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1994 is incorporated
herein by reference.
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4I-3 Term Note in the amount of $500,000 and Continuing General Security
Agreement, both dated May 13, 1994, between the Company and National
Westminster Bank, NJ. Exhibit 4I-3 to the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1994 is incorporated
herein by reference.
4I-4 Guarantee between the Company's subsidiary and National Westminster
Bank, NJ dated on May 31, 1994. Exhibit 4I-4 to the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1994 is
incorporated herein by reference.
4I-5 Letter Agreement between the Company and NatWest Bank N.A. dated July
25, 1995. Exhibit 4I- to the Company's Annual Report is Form 10-KSB
for the year ended December 31, 1995 is incorporated herein by
reference.
10D Employment Agreement dated October 1, 1985 between Nicholas Ambrus and
the Company. Exhibit 28B to the Company's Registration Statement No.
33-1898 is incorporated herein by reference.
10D-1 Amendment to Employment Agreement between the Company and Nicholas
Ambrus. Exhibit 10D-1 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1990 is incorporated herein by reference.
10D-4 Supplemental Employment and Retirement Agreement dated March 1, 1993
between Nicholas Ambrus and the Company . Exhibit 10D-4 to the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1993 is incorporated herein by reference.
10E Employment Agreement dated October 1, 1985 between Charles Welch and
the Company. Exhibit 28C to the Company's Registration Statement No.
33-1898 is incorporated herein by reference.
10E-1 Amendment Number Two to the Employment Agreement between the Company
and Charles Welch dated August 31, 1995. Exhibit 10E-1 to the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1995 is incorporated herein by reference.
10F Employment Agreement between the Company and Charles J. McMullin dated
April 25, 1994. Exhibit 10F to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1994 is incorporated herein by
reference.
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10G Employment Agreement between the Company and P. Michael Lutze dated
February 15, 1996. Exhibit 10G to the Company's Annual Report on Form
10-KSB is incorporated herein by reference.
10H Lease between Linpro Industrial Limited and the Company dated August
12, 1983. Exhibit 10H to the Company's Annual Report on Form 10-K for
the year ended December 31, 1983 is incorporated herein by reference.
10H-1 Amendment dated August 1, 1986 to the Lease between Linpro Industrial
Limited and the Company. Exhibit 10H-1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1986 is incorporated
herein by reference.
10H-2 Amendment dated December 2, 1986 to the Lease between Linpro
Industrial Limited and the Company. Exhibit 10H-2 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1986 is
incorporated herein by reference.
10H-3 Sixth Amendment dated November 27, 1991 to Lease between Linpro South
Jersey, Inc. and the Company. Exhibit 10H-3 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1991 is
incorporated here in by reference.
10H-4 Seventh Amendment dated June 7, 1992 to lease between Linpro Greentree
Business Centre Partnership and the Company. Exhibit 10H-4 to the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1992 is incorporated herein by reference.
10H-5 Eighth Amendment dated February 15, 1994 to lease between Linpro
Greentree Business Centre Partnership and the Company. Exhibit 10H-5
to the Company's Annual Report on Form 10-KSB for year ended December
31, 1994 is incorporated herein by reference.
10J Summary of Bonus Plan. Exhibit 10J to the Company's Annual Report on
Form 10-K for the year ended December 31, 1987 is incorporated herein
by reference.
10L Letter Agreement between the Company and the Wall Street Group.
Exhibit 10L of the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1992 is incorporated herein by reference.
10M-1 IBM Business Partner Agreement Application Specialist dated January
12, 1992. Exhibit 10M-1 to the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1994 is incorporated herein by
reference.
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10M-12 Development Agreement between Fujitsu-ICL and the Company dated June
29, 1993. Exhibit 10M-12 to the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1994 is incorporated herein by
reference.
10M-13 Amendment #1 to the Development Agreement between Fujitsu-ICL and the
Company dated January 21, 1994. Exhibit 10M-13 to the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1994 is
incorporated herein by reference.
10M-14 Reseller Agreement between NCR Corporation and the Company dated
August 17, 1992. Exhibit 10M-14 to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1994 is incorporated herein by
reference.
10M-15 Referral Agreement between NCR Corporation and the Company dated
August 17, 1992. Exhibit 10M-15 to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1994 is incorporated herein by
reference.
10M-16 Addendum to the Referral Agreement between NCR Corporation and the
Company dated December 10, 1993. Exhibit 10M-16 to the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1994 is
incorporated herein by reference.
10M-17 Letter Agreement between NCR Corporation and the Company extending
repayment of the Referral Agreement dated February 23, 1995. Exhibit
10M-17 to the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1994 is incorporated herein by reference.
10M-18 Solution Provider Agreement between Microsoft Corporation and the
Company dated August 1995. Exhibit 10M-18 to the Company's Annual
Report on Form 10-KSB is incorporated herein by reference.
10N 1984 Stock Option and Stock Grant Plan of the Company. Exhibit 10N to
the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1988 is incorporated herein by reference.
10N-1 Amendment to the 1984 Stock Option and Stock Grant Plan. Exhibit 10O
to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1989 is incorporated herein by reference.
10N-2 The Company's October 1992 Stock Option and Stock Grant Plan (as
amended). Exhibit 10N-2 of the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1992 is incorporated herein by
reference.
II-15
10P Subscription Agreement between the Company and Winn-Dixie Stores, Inc.
dated March 8, 1996. Exhibit 10P to the Company's Annual Report on
Form 10-KSB is incorporated herein by reference.
10P-1 Addendum to Warrant Agreement between the Company and Winn-Dixie
Stores, Inc. dated March 8, 1996. Exhibit 10P-1 to the Company's
Annual Report on Form 10-KSB is incorporated herein by reference.
10P-2 SEC Report on Form 10-C dated March 12, 1996.
10T-1 POS Purchase Agreement dated April 18, 1991 between Wal-Mart, Inc. and
the Company. Exhibit 10T-1 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1991 is incorporated herein by
reference.
10U Letter Agreement between the Company and Janney Montgomery Scott Inc.
dated October 4, 1995. Exhibit 10U to the Company's Annual Report on
Form 10-KSB is incorporated herein by reference.
10U-1 Letter Agreement between the Company and Janney Montgomery Scott Inc.
dated January 30, 1996. Exhibit 10U-1 to the Company's Annual Report
on Form 10-KSB is incorporated herein by reference.
10U-2 Letter Agreement between the Company and Janney Montgomery Scott Inc.
dated March 5, 1996. Exhibit 10U-2 to the Company's Annual Report on
Form 10-KSB is incorporated herein by reference.
10V Agreement for the Procurement of Life Insurance dated May 13, 1986
between the Company and Nicholas Ambrus. Exhibit 10V to the Company's
Annual Report on Form 10-K for the year ended December 31, 1986 is
incorporated herein by reference.
10W Agreement for the Procurement of Life Insurance dated May 13, 1986
between the Company and Charles Welch. Exhibit 10W to the Company's
Annual Report on Form 10-K for the year ended December 31, 1986 is
incorporated herein by reference.
10Y IBM Subcontractor Agreement dated February 11, 1992 between the IBM
Corporation and the Company with Pricing Amendment Letter dated
February 25, 1992. Exhibit 10-Y to the Company's Quarterly Report on
Form 10-Q for September 30, 1992 is incorporated herein by reference.
5 Opinion of Law Offices of Gary Kaufman regarding legality of
securities incorporated herein at page II-17.
23.1 Consent of Law Offices of Gary Kaufman (included in Exhibit 5)
incorporated herein at page II-17.
23.2 Consent of Coopers & Lybrand L.L.P. incorporated herein at page II-19.
II-16
EXHIBIT 5
May 15, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: AW Computer Systems, Inc.
Registration Statement on Form S-3
Gentlemen:
Reference is made to the Registration Statement on Form S-3, dated May 15,
1996 (the "Registration Statement"), filed with the Securities and Exchange
Commission by AW Computer Systems, Inc., a New Jersey corporation (the
"Company"). The Registration Statement relates to an aggregate of 1,274,773
Class A Common Shares, $.01 par value (the "Common Shares"), being offered by
certain selling shareholders. Of the Common Shares being registered, 644,000
shares are held directly by the selling shareholders and 630,773 shares are
issuable upon the exercise of Warrants (the "Warrant Shares"). All capitalized
terms not defined herein shall have the meanings accorded them in the
Registration Statement.
We advise you that we have examined originals or copies certified or
otherwise identified to our satisfaction of the Restated Certificate of
Incorporation, as amended, and the Amended and Restated By-Laws of the Company,
minutes of meetings of the Board of Directors and shareholders of the Company,
the Registration Statement and such other documents, instruments and
certificates of officers and representatives of the Company and public
officials, and we have made such examination of law as we have deemed
appropriate as the basis for the opinion hereinafter expressed. In making such
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted as originals, and the conformity to original
documents of documents submitted to us as certified or photostatic copies.
II-17
Based on the foregoing, we are of the opinion that:
(a) 644,000 of the Common Shares being offered by the selling shareholders
are presently outstanding, and when sold pursuant to the terms of the
Registration Statement, will be legally issued, fully paid and non-assessable;
and
(b) the Warrant Shares have been duly authorized and reserved for and, when
issued upon exercise of the Warrants, will be legally issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and we further consent to the reference to this firm
under the caption "Legal Matters" in the Registration Statement and the
Prospectus forming a part thereof.
Very truly yours,
/s/Gary Kaufman
LAW OFFICES OF GARY KAUFMAN
II-19
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of our report dated March 15, 1996, which includes an explanatory
paragraph regarding the Company's ability to continue as a going concern, on our
audits of the consolidated financial statements of AW Computer Systems, Inc. as
of December 31, 1995 and 1994, and for each of the three years in the period
ended December 31, 1995, which report is included or incorporated by reference
in the AW Computer Systems, Inc.'s Annual Report on Form 10-KSB for the year
ended December 31, 1995.
We also consent to the references to our firm set forth under the caption
"Experts" in this Registration Statement.
/s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
May 14 1996
II-20