As filed with the Securities and Exchange Commission on September 15, 2000
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INTERNET COMMERCE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3645702
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
805 Third Avenue
New York, New York 10022
(212) 271-7640
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive office)
DR. GEOFFREY S. CARROLL
President and Chief Executive Officer
INTERNET COMMERCE CORPORATION
805 Third Avenue
New York, New York 10022
(212) 271-7640
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copy to:
PETER S. KOLEVZON, ESQ.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022-3903
(212) 715-9100
--------------------
Approximate date of commencement of proposed sale to the public: at such
time or times after the effective date of this Registration Statement as the
selling stockholders may determine.
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 reimbursement plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Proposed Proposed
Title of each class Amount maximum maximum Amount of
of securities to be offering price aggregate registration
to be registered registered per share (1) offering price(1) fee (1)
- --------------------------------------------------------------------------------
Class A Common
Stock, par value 238,579 $15.06 $3,593,596 $948.71
$.01 per share
- --------------------------------------------------------------------------------
(1) The proposed maximum aggregate offering price has been estimated solely to
calculate the registration fee under Rule 457(c) of the Securities Act of 1933,
as amended, based upon the average of the highest and lowest prices per share of
the class A common stock on The Nasdaq Small Cap Market reported on September
11, 2000.
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 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to Section 8(a), may determine.
SUBJECT TO COMPLETION DATED SEPTEMBER 15, 2000
PROSPECTUS
INTERNET COMMERCE CORPORATION
o This prospectus relates to the public offering from time to time by the
persons listed on page 18 below, referred to in this prospectus as selling
stockholders, of up to 238,579 shares of our class A common stock.
o Our class A common stock is traded on The Nasdaq SmallCap Market under the
symbol ICCSA. On September 11, 2000, the last sale price for the class A
common stock was $15.00.
o Any selling stockholder may sell the class A common stock on The Nasdaq
SmallCap Market or in privately negotiated transactions, whenever he
decides and at the price he sets. The price at which any of the shares of
class A common stock are sold and the commissions paid, if any, may vary
from transaction to transaction.
o We filed a registration statement on form S-3 (file no. 333-80043) which
became effective on October 18, 1999 covering the resale of up to
5,476,280 shares of our class A common stock, of which 967,199 shares have
not been sold as of the date of this prospectus.
o We filed a registration statement on form S-3 (file no. 333-93301) which
became effective on March 1, 2000 covering the resale of up to 955,289
shares of our class A common stock, of which 438,865 shares have not been
sold as of the date of this prospectus.
o We filed a registration statement on form S-3 (file no. 333-32674) which
became effective on April 6, 2000 covering the resale of up to 434,184
shares of our class A common stock.
o This investment involves a high degree of risk. You should carefully
consider the risk factors beginning on page 6 of this prospectus before
you decide to invest.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is September __, 2000
TABLE OF CONTENTS
Page
----
Prospectus Summary......................................................... 3
Risk Factors............................................................... 6
Risks Relating to ICC................................................ 6
Risks Relating to the Internet and Online Commerce Aspects of our
Business ........................................................... 11
Risks Relating to this Offering..................................... 12
Forward-Looking Statements................................................ 14
Use of Proceeds............................................................ 14
Business....................................................................15
Selling Stockholders....................................................... 19
Plan of Distribution....................................................... 19
Description of Securities...................................................21
Legal Matters.............................................................. 28
Experts.................................................................... 28
Where You Can Find More Information........................................ 28
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this
prospectus. This summary may not contain all of the information that you should
consider before purchasing shares of our class A common stock. You should read
the entire prospectus carefully, including Risk Factors commencing on page 6,
before making an investment decision.
Internet Commerce Corporation, or ICC
Business Description
Our ICC.NET (formerly named CommerceSense) service uses the Internet and
our proprietary technology to deliver our customers' documents and data files to
members of their trading communities, many of which may have incompatible
systems, by translating the documents and data files into any format required by
the receiver. We believe that our ICC.NET service has significant advantages
over traditional value added networks, or VANs, and email-based and other
Internet-based systems, including lower cost, higher level of service, greater
transmission speed and more features.
We use ICC.NET to provide the following services:
o Traditional VAN services -- our ICC.NET service provides the full
suite of traditional VAN services, but uses the Internet to provide
cost savings and increased capabilities for our customers;
o EDI for web-based retailers -- our ICC.NET service provides an
electronic document and data file delivery link between web-based
retailers and their vendors that require that documents and data
files be transmitted using electronic data interchange, or EDI,
format;
o EDI to fax service -- our ICC.NET service can translate electronic
documents into fax format and send the documents by fax to our
customers' trading partners that cannot receive electronically
transmitted documents; and
o Large-scale electronic document management and delivery -- our
ICC.NET service can transmit large-scale non-EDI electronic
documents and data files and provides real-time delivery, archiving,
security, authentication and audit services.
Business Strategy
We believe that our ICC.NET service provides a platform with many
applications that will allow our customers to integrate a substantial portion of
their document and data file delivery methods into a single, seamless process
with significantly less administrative effort and cost. We intend to continue to
market ICC.NET as a one-stop electronic document and data delivery service to
the 2,500 largest companies in the United States and abroad that use EDI to
communicate with their vendors. We believe that the cost and ease of use of our
ICC.NET
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service will allow these companies to request or encourage their smaller trading
partners to conduct electronic commerce using our ICC.NET service.
The address of our principle executive office is 805 Third Avenue, New
York, New York 10022. Our telephone number at that address is (212) 271-7640.
Recent Developments
Research Triangle Commerce, Inc. On June 14, 2000, ICC entered into an Agreement
and Plan of Merger, referred to as the RTCI Merger Agreement, among ICC, ICC
Acquisition Corporation, Inc., a newly-formed wholly-owned subsidiary of ICC,
Research Triangle Commerce, Inc., or RTCI, Jeffrey LeRose and Blue Water Venture
Fund II, L.L.C., or the Selling Shareholders, and, in connection with the RTCI
Merger Agreement, loaned $5,000,000 to RTCI against receipt of a Promissory Note
from RTCI. RTCI is an e-frastructure solutions company serving the B2B
e-commerce market. RTCI helps its clients conduct business electronically
through a continuum of services including eConsulting, data transformation
mapping (EDI, EAI, XML) and internetworking.
Under the RTCI Merger Agreement, ICC Acquisition Corporation, Inc. will
merge with and into Research Triangle Commerce, Inc. (the RTCI Merger), with
RTCI surviving the RTCI Merger as a wholly-owned subsidiary of ICC. ICC will pay
aggregate consideration of $42,000,000 to the RTCI shareholders and option and
warrant holders, consisting of (i) RTCI's cash on hand at the effective time of
the RTCI Merger, up to a maximum of $4,000,000, referred to as the Cash at
Closing, and (ii) shares of ICC Class A Common Stock, or the ICC Shares, equal
to the number of shares obtained by dividing (x) $42,000,000 minus the Cash at
Closing by (y) the average closing price of ICC's Class A Common Stock for the
ten days ending three days prior to the effective time of the RTCI Merger (the
Market Price). The Market Price is subject to a maximum of $21.111111 and a
minimum of $12.666667, so that a maximum of 3,315,790 ICC Shares and a minimum
of 1,800,000 ICC Shares are issuable in connection with the RTCI Merger. Options
and warrants to purchase RTCI stock will be converted into the right to receive
upon exercise of these options and warrants the amount of cash and shares of ICC
common stock which the holders of these options and warrants would have received
if such options and warrants had been exercised immediately prior to the
effective time of the RTCI Merger.
On August 15, 2000, the principle of and all accrued and unpaid interest
on the $5,000,000 loan converted into shares of RTCI common stock at a pre-money
valuation for RTCI of $42,000,000. ICC is not entitled to receive any
consideration under the RTCI Merger Agreement with respect to these shares. If
the RTCI Merger is not effective by November 30, 2000, RTCI shall cause one
person nominated by ICC to be elected to RTCI's Board of Directors for so long
as ICC holds any shares of RTCI common stock.
In connection with the completion of the RTCI Merger, the Selling
Stockholders will have the right to appoint two members to the ICC Board of
Directors, one of whom will be Jeffrey LeRose, the president and chief executive
officer of RTCI, and the other of whom will be an independent individual with
recognized experience and reputation in the industry, which individual will be
reasonable acceptable to ICC. If such second individual is not identified at the
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effective time of the RTCI Merger, the Selling Stockholders will nominate a
current member of RTCI's Board of Directors to be a director of the ICC Board of
Directors, which member shall be reasonably acceptable to the ICC Board of
Directors.
The RTCI Merger Agreement and the RTCI Merger are subject to shareholder
approval of RTCI and other customary closing conditions. The Selling
Stockholders have agreed to vote all of their shares for such approval. The
issuance of the ICC Shares is subject to ICC stockholder approval, which will be
solicited at a special meeting of the ICC stockholders.
Pro forma financial statements for ICC and RTCI are contained in our
current report on form 8-K filed with the Securities and Exchange Commission, or
SEC, on August 11, 2000, which is incorporated by reference in this prospectus.
Historical financial statements of RTCI at June 30, 2000 and June 30, 1999 and
for the two years ended December 31, 1999 and December 31, 1998 are contained in
our current report on form 8-K filed with the SEC on September 7, 2000, which is
incorporated by reference in this prospectus.
Intercoastal Data Corporation. On August 2, 2000, ICC entered into an Agreement
and Plan of Merger with Intercoastal Data Corporation, or IDC, and the IDC
shareholders, pursuant to which IDC merged with and into ICC, referred to below
as the IDC Merger, on August 3, 2000 and is being operated as a division of ICC.
In connection with the IDC Merger, the IDC shareholders received a total of
______ shares of ICC class A common stock. ICC has agreed to register the resale
of these shares and is doing so by filing this registration statement.
IDC is engaged in the development, sale, marketing or other exploitation
of business-to-business electronic data interchange standards-based applications
for standard-based EDI exchange over value-added networks, private networks
intranets, extranets or the Internet. For the twelve months ended January 31,
2000, IDC had total revenues of $1,528,412 and net income of $71,247. IDC also
owned a portfolio of cash and marketable securities that had a value of
approximately $1.3 million at the effective time of the IDC Merger. IDC was
founded in 1972 and is headquartered in Carrollton, Georgia. Historical
financial statements of IDC as of and for the three month periods ended April
30, 2000 and April 30, 1999 and as of and for the years ended January 31, 2000
and January 31, 1999 and pro forma financial statements for ICC and IDC are
contained in our current report on form 8-K filed with SEC on August 11, 2000,
which is incorporated by reference in this prospectus. Historical financial
statements of IDC as of and for the three and six month periods ended July 31,
2000 and July 31, 1999 are contained in our current report on form 8-K filed
with the SEC on September 11, 2000, which is incorporated by reference on this
prospectus.
ThyssenKrupp Information Services Group. ICC has announced a five-year agreement
with ThyssenKrupp Information Services Group, or ThyssenKrupp, which provides
ThyssenKrupp with Principal Partner status in the form of European hosting
rights for ICC services. The agreement includes an $8,000,000 minimum revenue
guarantee to ICC over the first 24 months of the agreement.
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ThyssenKrupp will package and integrate ICC services into ThyssenKrupp's
product and service offerings and will establish its own co-branding of the
services. In addition, ICC and ThyssenKrupp intend to establish an ICC.NET data
platform for operation by ThyssenKrupp in Europe which will be connected with
ICC's network. ThyssenKrupp will initially focus its sales and marketing efforts
on the major continental European markets and will provide international
language support, initially German with French and other primary European
languages to follow.
The Offering
Class A common stock offered
by the selling stockholders.....................................238,579 shares
Class A common stock to be
outstanding after the offering............................6,656,557 shares (1)
Nasdaq SmallCap Market symbol............................................ICCSA
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(1) This information is based on the number of shares of class A common stock
outstanding on September 11, 2000. It includes all of the shares of class
A common stock being offered by this prospectus by the selling
stockholders. It excludes (a) 2,151,962 shares of class A common stock
issuable upon exercise of warrants or upon conversion of series A
convertible redeemable preferred stock, series C convertible redeemable
preferred stock and class B common stock outstanding on that date and (b)
4,289,535 shares then issuable under outstanding options or reserved for
issuance under our amended and restated stock option plan.
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RISK FACTORS
You should carefully consider each of the following risk factors in
addition to the other information contained in this prospectus before purchasing
shares of our class A common stock. Investing in our class A common stock
involves a high degree of risk. Any of the following risks could materially and
adversely affect our business, operating results, financial condition and the
market price of our class A common stock and could result in the complete loss
of your investment.
Risks Relating to ICC
We have a limited operating history and there is insufficient historical
information to determine whether we will successfully implement any of our
business strategies. We were founded as Infosafe Systems, Inc. in November 1991
and from 1991 to 1997 we conducted limited operations and developed products
that we were unable to exploit commercially and consequently discontinued. In
1998, we shifted our business emphasis to focus exclusively on the development
and marketing of our ICC.NET service and launched the current version of our
ICC.NET service commercially in April 1999. As a result, we have only a limited
operating history and there is little historical information on which to
evaluate our business and prospects. We may not be successful in implementing
any of our business strategies.
We have never earned a profit and expect to incur significant losses. We
have incurred significant losses since we were founded in 1991. We have never
earned a profit in any fiscal quarter and, as of April 30, 2000, we had an
accumulated deficit of approximately $34 million. We expect our cost of revenue
and operating expenses to increase significantly, especially in the areas of
marketing, customer installation and customer service. As a result, we expect to
incur additional losses in the future.
We may not achieve profitability. The profit potential of our business
model is unproven. Our revenue is dependent on the number of customers who
subscribe to our ICC.NET service and the volume of the data, documents or other
information they send or retrieve utilizing this service. The success of our
ICC.NET service and our other proposed services depends to a large extent on the
future business-to-business electronic commerce using the Internet, which is
uncertain. If we experience a shortfall in our estimated revenue, we may be
unable to adjust spending in a timely manner and may not achieve profitability.
We currently depend primarily on our ICC.NET service and may not be able
to continue to expand into new business areas. We are currently focusing on our
ICC.NET service. As a result, our financial condition will depend heavily on the
success or failure of this service. It is difficult to predict demand and market
acceptance for this service in the new and rapidly evolving business-to-business
electronic commerce market. If our ICC.NET service is not successful, our
revenue may not increase sufficiently for us to become profitable.
We are expanding our operations by developing and marketing new and
complementary services using our ICC.NET service as a platform to provide these
additional services or systems. We cannot assure you that we will be able to
continue to do so effectively.
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If we are unable to manage our growth, our financial results will suffer.
Our ability to implement our business plan successfully in a new and
rapidly-evolving market requires effective planning and growth management. If we
cannot manage our anticipated growth effectively, our business and financial
results will suffer. We plan to expand our existing operations substantially,
particularly those relating to sales and marketing, customer installation and
technical support. We expect that we will need to continue to manage and to
expand multiple relationships with customers, Internet service providers and
other third parties. We also expect that we will need to continue to improve our
financial systems, procedures and controls and will need to expand, train and
manage our workforce, particularly our information technology staff. We also
intend to expand our services, which may require additional resources and
employees.
We may face capacity constraints which impede our revenue growth and
business profitability. The satisfactory performance, reliability and
availability of our network infrastructure, customer support and document
delivery systems and our web site are critical to our reputation and our ability
to attract customers and maintain adequate customer service levels. Any
significant or prolonged capacity constraints could prevent customers from
sending or gaining access to their documents or other data or accessing our
customer support services for extended periods of time. This would decrease our
ability to acquire and retain customers and prevent us from achieving the
necessary growth in revenue to achieve profitability. If the amount of traffic
increases substantially and we experience capacity constraints, we will need to
expand further and upgrade our technology and network infrastructure. We may be
unable to predict the rate or timing of increases in the use of our services to
enable us to upgrade our operating systems in a timely manner.
If we do not keep pace with rapid technological changes, customer demands
and intense competition, we will not be successful. Our market is characterized
by rapidly changing technology, customer demands and intense competition. If we
cannot keep pace with these changes, our ICC.NET service could become
uncompetitive and our business will suffer. The Internet's recent growth and the
intense competition in our industry require us to continue to develop strategic
business and Internet solutions that enhance and improve the customer service
features, functions and responsiveness of our ICC.NET service and other proposed
services and that keep pace with continuing changes in information technology
and customer requirements. If we are not successful in developing and marketing
enhancements to our ICC.NET service or other proposed services that respond to
technological change or customer demands, our business will suffer.
If we are unable to obtain necessary future capital, our business will
suffer. As of April 30, 2000, we had cash and marketable securities in the
amount of approximately $22 million. These resources may not be sufficient and
if we are unable to obtain necessary additional financing, our business will
suffer. We cannot assure you that any additional financing will be available on
reasonable terms or at all. In addition, we may need to raise additional funds
sooner if we attempt to expand more rapidly or if competitive pressures or
technological changes are greater than anticipated. Even if we are able to
obtain additional financing, we will subsequently need to raise additional funds
if we do not become profitable or if achieving profitability takes longer than
we anticipate.
8
Raising additional funds in the future by issuing securities could
adversely affect our stockholders and negatively impact our operating results.
If we raise additional funds through the issuance of debt securities, the
holders of the debt securities will have a claim to our assets that will have
priority over any claim of our stockholders. The interest on these debt
securities would increase our costs and negatively impact our operating results.
If we raise additional funds through the issuance of class A common stock or
securities convertible into or exchangeable for class A common stock, the
percentage ownership of our then-existing stockholders will decrease and they
may experience additional dilution. In addition, any convertible or exchangeable
securities may have rights, preferences and privileges more favorable to the
holders than those of the class A common stock.
We may not be able to compete effectively in the business-to-business
electronic commerce market, which could limit our market share and harm our
financial performance. The business-to-business electronic commerce industry is
evolving rapidly and is intensely competitive. If we are not able to compete
effectively against our current and future competitors, we may lose customers,
may need to lower our prices, may experience reductions in gross margins,
increases in marketing costs or losses in market share, or may experience a
combination of these problems and, as a result, our business will suffer.
Many of our current and potential competitors have significant existing
customer relationships and vastly larger financial, marketing, customer support,
technical and other resources than we do. As a result, they may be able to
respond more quickly to changes in customer requirements or be able to undertake
more extensive marketing campaigns, adopt more aggressive pricing policies and
make more attractive offers to potential customers and employees, or be able to
devote greater resources to the development, promotion and sale of their
services than we can. As a result, we may not be successful in competing against
our competitors.
Our principal competitors include: Peregrine Systems, Inc., GE Global
eXchange Services, a subsidiary of GE Information Services, Inc., International
Business Machines Corporation Global Services, Sterling Commerce, Inc., a
subsidiary of SBC Communications Inc., AT&T Corp. and WorldCom, Inc. Each of
these competitors has an established VAN that has provided EDI for at least
several years and has long-established relationships with the users of EDI,
including many of our prospective customers.
If we are successful in utilizing our ICC.NET platform to provide new
services, we may enter into different markets and may face the same or
additional competitors, most of which will have substantially greater financial
and other resources than we do.
If we cannot successfully expand our business outside of the United
States, our revenues and operating results will be adversely affected. Our
current and future customers are conducting their businesses internationally. As
a result, an important component of our business strategy is to expand our
international marketing and sales efforts. We have limited experience in
expanding our business outside the United States and if we do not successfully
expand our business in this way, we may lose current and future customers. In
addition, our potential new service offerings may involve delivery of data and
use of the Internet in other countries which
9
may currently have or enact laws or regulations that restrict our ability to
deliver data or use the Internet or that impose significant taxes for doing so.
Loss of customers and restrictions on delivery of data and use of the Internet
will adversely affect our revenues and operating results.
Losing any of our key personnel could cause our revenues to decline. We
are substantially dependent on the continued services and performance of our
executive officers and other key employees. The loss of the services of any of
our executive officers or other key employees could impede the operation and
growth of our business and cause our revenues to decline. Although all of our
executive officers and some key employees have entered into employment
agreements, none of these agreements prevents any of them from leaving us.
If we cannot hire and retain highly qualified employees, our business and
financial results will suffer. We believe we will need to expand significantly
our information technology, marketing and customer service staffs. Competition
for employees in our industry is intense. If we are unable to attract,
assimilate or retain highly qualified employees, our management may not be able
to effectively manage our business, exploit opportunities and respond to
competitive challenges and our business and financial results will suffer. Many
of our competitors may be able to offer more lucrative compensation packages
which include stock options and other stock-based compensation and
higher-profile employment opportunities than we can.
We depend on our intellectual property, which may be difficult and costly
to protect. Other than our decryption/logging/branding patent, our intellectual
property consists of proprietary or confidential information that is not
currently subject to patent or similar protection. CommerceSense and ICC.NET
have been registered as trademarks. The applications to register AUDINET,
B2B4B2C and B to B for B to C have now been allowed as trademarks and await
registration. We intend to apply for additional name and logo marks in the
United States and in foreign jurisdictions. No assurance can be given that
registrations will issue on the non-allowed applications or that interested
third parties will not petition the United States Patent and Trademark Office to
cancel our registration. We may not be able to protect these trademarks. If our
competitors or others adopt product or service names similar to ICC.NET, it may
impede our ability to build brand identity and customer loyalty. We may need to
file lawsuits to defend the validity of our intellectual property rights and
trade secrets, or to determine the validity and scope of the proprietary rights
of others. Litigation is expensive and time-consuming and could divert
management's attention away from running our business.
The validity, enforceability and scope of protection of some types of
proprietary rights in Internet-related businesses are uncertain and still
evolving. If unauthorized third parties try to copy our service or our business
model or use our confidential information to develop competing services, we may
lose customers and our business could suffer. We may not be able to effectively
police unauthorized use of our technology because policing is difficult and
expensive. In particular, the global nature of the Internet makes it difficult
to control the ultimate destination or security of software or other data
transmitted. The laws of other countries may not adequately protect our
intellectual property.
Intellectual property infringement claims against us could harm our
business. Our business activities and our ICC.NET service may infringe upon the
proprietary rights of others
10
and other parties may assert infringement claims against us. Any such claims and
any resulting litigation could subject us to significant liability for damages
and could result in invalidation of our proprietary rights. We could be required
to enter into costly and burdensome royalty and licensing agreements, which may
not be available on terms acceptable to us, or may not be available at all.
We may suffer systems failures and business interruptions which would harm
our business. Our success depends in part on the efficient and uninterrupted
operation of our service that is required to accommodate a high volume of
traffic. Almost all of our network operating systems are located at a single
leased facility in New York, New York. Our systems are vulnerable to events such
as damage from fire, power loss, telecommunications failures, break-ins and
earthquakes. This could lead to interruptions or delays in our service, loss of
data or the inability to accept, transmit and confirm customer documents and
data. Our business may suffer if our service is interrupted. Although we have
implemented network security measures, our servers may be vulnerable to computer
viruses, electronic break-ins, attempts by third parties deliberately to exceed
the capacity of our systems and similar disruptions.
Risks Relating to the Internet and Online Commerce Aspects of Our Business
If Internet usage does not continue to grow or its infrastructure fails,
our business will suffer. If the Internet does not gain increased acceptance for
business-to-business electronic commerce, our business will not grow or become
profitable. We cannot be certain that the infrastructure or complementary
services necessary to maintain the Internet as a useful and easy means of
transferring documents and data will continue to develop. The Internet
infrastructure may not support the demands that growth may place on it and the
performance and reliability of the Internet may decline.
Privacy concerns may prevent customers from using our services. Concerns
about the security of online transactions and the privacy of users may inhibit
the growth of the Internet as a means of delivering business documents and data.
We may need to incur significant expenses and use significant resources to
protect against the threat of security breaches or to alleviate problems caused
by security breaches. We rely upon encryption and authentication technology to
provide secure transmission of confidential information. If our security
measures do not prevent security breaches, we could suffer operating losses,
damage to our reputation, litigation and possible liability. Advances in
computer capabilities, new discoveries in the field of cryptography or other
developments that render current encryption technology outdated may result in a
breach of our encryption and authentication technology and could enable an
outside party to steal proprietary information or interrupt our operations.
Failure of our third-party providers to provide adequate Internet and
telecommunications service could result in significant losses of revenue. Our
operations depend upon third parties for Internet access and telecommunications
service. Frequent or prolonged interruptions of these services could result in
significant losses of revenues. Each of them has experienced outages in the past
and could experience outages, delays and other difficulties due to system
failures unrelated to our on-line architecture. These types of occurrences could
also cause users to perceive our services as not functioning properly and
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therefore cause them to use other methods to deliver and receive information. We
have limited control over these third parties and cannot assure you that we will
be able to maintain satisfactory relationships with any of them on acceptable
commercial terms or that the quality of services that they provide will remain
at the levels needed to enable us to conduct our business effectively.
Government regulation and legal uncertainties relating to the Internet
could harm our business. Changes in the regulatory environment in the United
States and other countries could decrease our revenues and increase our costs.
The Internet is largely unregulated and the laws governing the Internet remain
unsettled, even in areas where there has been some legislative action. It may
take years to determine whether and how existing laws such as those governing
intellectual property, privacy and taxation apply to the Internet. In addition,
because of increasing popularity and use of the Internet, any number of laws and
regulations may be adopted in the United States and other countries relating to
the Internet or other online services covering issues such as:
o user privacy;
o security;
o pricing and taxation;
o content; and
o distribution.
Costs of transmitting documents and data could increase, which would harm
our business and operating results. The cost of transmitting documents and data
over the Internet could increase. We may not be able to increase our prices to
cover these rising costs. Several telecommunications companies have petitioned
the Federal Communications Commission to regulate Internet and on-line service
providers in a manner similar to long distance telephone carriers and to impose
access fees on these providers. Also, foreign and state laws and regulations
relating to the provision of services over the Internet are still developing. If
individual states or foreign countries impose taxes or laws that negatively
impact services provided over the Internet, our cost of providing our ICC.NET
and other services may increase.
Risks Relating to this Offering
Shares eligible for future sale by our existing stockholders may adversely
affect our stock price and may render it difficult to sell class A common stock.
The average weekly trading volume of our class A common stock on The Nasdaq
SmallCap Market was, approximately, 116,500 shares during the quarter ended June
30, 1999, 75,800 shares during the quarter ended September 30, 1999, 576,600
shares during the quarter ended December 31, 1999, 1,127,400 shares during the
quarter ended March 31, 2000, 809,100 shares during the quarter ended June 30,
2000 and 270,400 shares for the period from July 1, 2000 to September 1, 2000.
On October 18, 1999, our registration statement on form S-3 became effective.
This registration statement covers the sale of up to 5,476,280 shares of class A
common stock by holders of our class A common stock and holders of our series A
preferred stock, class B common stock and warrants that may be converted into or
exchanged for class A common stock, of which 967,199 shares have not been sold
as of the date of this prospectus. On March 1, 2000, another
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registration statement on form S-3 became effective. This registration statement
covers the sale of up to 955,289 shares of class A common stock by holders of
our class A common stock and by holders of our series A preferred stock and
warrants that may be converted into or exchanged for class A common stock, of
which 438,865 shares have not been sold as of the date of this prospectus. The
market price of our class A common stock could be materially and adversely
affected by sales of even a small percentage of these shares or the perception
that these sales could occur.
Our stock price may be extremely volatile and this volatility could affect
your ability to sell your shares of class A common stock at a favorable price.
From January 1, 2000 through September 11, 2000, the price of our class A common
stock has fluctuated from a low of $8.25 to a high of $96.00. The market price
of our class A common stock is likely to fluctuate substantially in the future.
In the past, companies that have experienced volatility in the market price of
their stock have been subject to securities class action litigation. If we were
subject to a securities class action lawsuit, it could result in substantial
costs and a significant diversion of resources, including management time and
attention.
The market for our class A common stock may be illiquid, which would
restrict your ability to sell your shares of class A common stock. Our class A
common stock is currently trading on The Nasdaq SmallCap Market. A purchaser of
the shares of class A common stock covered by this prospectus may not be able to
find a buyer for the portion of the shares of class A common stock the purchaser
wishes to sell at an acceptable price. It is possible that the trading market
for the class A common stock in the future will be thin and illiquid, which
could result in increased volatility in the trading prices for our class A
common stock. The price at which our class A common stock will trade in the
future cannot be predicted and will be determined by the market. The price may
be influenced by investors' perceptions of our business, financial condition and
prospects, the use of the Internet for business purposes and general economic
and market conditions.
If we lose our $20 million net operating loss carryforward, our financial
results will suffer. Section 382 of the Internal Revenue Code contains rules
designed to discourage persons from buying and selling the net operating losses
of companies. These rules generally operate by focusing on ownership changes
among stockholders owning directly or indirectly 5% or more of the common stock
of a company or any change in ownership arising from a new issuance of stock by
a company. In general, the rules limit the ability of a company to utilize net
operating losses after a change of ownership of more than 50% of its class A
common stock over a three-year period. Purchases of our class A common stock in
amounts greater than specified levels could inadvertently create a limitation on
our ability to utilize our net operating losses for tax purposes in the future.
We are currently subject to a limitation on the utilization of our net operating
loss carryforward and we may suffer further limitation as a result of sales of
class A common stock covered by this prospectus.
Our board of directors can issue preferred stock with rights adverse to
the holders of class A common stock. Our board of directors is authorized,
without further stockholder approval, to determine the provisions of and to
issue up to 4,979,825 shares of preferred stock. Issuance of preferred shares
with rights to dividends and other distributions, voting rights or
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other rights superior to the class A common stock could be adverse to the
holders of class A common stock.
We may have to spend significant resources indemnifying our officers and
directors or paying for damages caused by their conduct. The Delaware General
Corporation Law provides for broad indemnification by corporations of their
officers and directors and permits a corporation to exculpate its directors from
liability for their actions. Our bylaws and certificate of incorporation
implement this indemnification and exculpation to the fullest extent permitted
under this law as it currently exists or as it may be amended in the future.
Consequently, subject to this law and to some limited exceptions in our
certificate of incorporation, none of our directors will be liable to us or to
our stockholders for monetary damages resulting from conduct as a director.
FORWARD-LOOKING STATEMENTS
This prospectus contains a number of forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Specifically, all statements other than
statements of historical facts included in this prospectus, or incorporated by
reference in this prospectus, regarding our financial position, business
strategy and plans and objectives of management for future operations are
forward-looking statements. These forward-looking statements are based on the
beliefs of management, as well as assumptions made by and information currently
available to management. When used in this prospectus, including the information
incorporated by reference, the words anticipate, believe, estimate, expect, may,
will, continue, intend and plan and words or phrases of similar import, as they
relate to our financial position, business strategy and plans, or objectives of
management, are intended to identify forward-looking statements. These
cautionary statements reflect our current view regarding future events and are
subject to risks, uncertainties and assumptions related to various factors which
include but may not be limited to those listed under the heading Risk Factors
starting on page 6 and other cautionary statements in this prospectus and in the
information incorporated in this prospectus by reference.
Although we believe that our expectations are reasonable, we cannot assure
you that our expectations will prove to be correct. Based upon changing
conditions, should any one or more of these risks or uncertainties materialize,
or should any underlying assumptions prove incorrect, actual results may vary
materially from those described in this prospectus as anticipated, believed,
estimated, expected, intended or planned. All subsequent written and oral
forward-looking statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by these cautionary statements.
USE OF PROCEEDS
The selling stockholders are selling all the shares of class A common
stock covered by this prospectus for their own account. We will not receive any
proceeds from the sale of these shares of class A common stock.
14
BUSINESS
Internet Commerce Corporation
Industry Background
We believe that although the Internet has become an important new sales
channel, its real value will be in achieving business efficiencies and cost
savings by expanding global business-to-business interconnectedness.
We believe that in an increasingly global economy, improvements in speed
and efficiency in the supply chain between businesses are important and
improvements in the capacity of a business to buy and sell goods and services or
raw materials within its business community becomes an important factor in its
ability to compete. Thus, for example, in a just-in-time economy, timeliness,
and not price, may be the most important component in creating competitive
advantage.
The speed and efficiency of the supply chain are hindered by
incompatibilities in technologies and methodologies used to communicate business
information among trading communities, which slow down the flow of information
and create bottlenecks. These incompatibilities stem from the diversity of
trading partners, which may range from members of the Fortune 1000 to sole
proprietors providing niche products. Trading partners may therefore have
different communications capabilities and requirements. Some trading partners
may rely on paper or fax to communicate, others exchange data in proprietary
file formats through direct dial-up connections or over the Internet, while the
largest trading partners use electronic methods such as electronic data
interchange, or EDI, over value added networks, or VANs.
The ICC.NET Solution
We believe that our ICC.NET service provides a solution to the
communication difficulties caused by the differences in data formats, networks
and communications methods used by the members of trading communities, and thus
bridges the incompatibility gap and enables seamless electronic business
communication. Our ICC.NET service can translate incompatible files into a
format any user is capable of receiving and uses the Internet to transmit the
data file by EDI, fax or other format. We believe that users of our ICC.NET
service can thus improve their productivity and reduce their costs by enabling
electronic business-to-business transactions between parties with different
systems.
We believe that our ICC.NET service improves the basic infrastructure of
business-to-business electronic communications by providing intelligent
messaging and routing using the Internet, which, we believe, improves the
security, reliability, ease of use and acceptability of using the Internet for
business-to-business electronic commerce. Our ICC.NET service performs these
functions without requiring that the user purchase any software and at prices
that are, we believe, less than half of the prices currently charged by
traditional VANs.
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We designed our ICC.NET service to avoid what we believe are
inefficiencies in traditional VAN services, software products and phone and
manual fax processes, which we believe are more expensive, slower and more
difficult to use than our ICC.NET service. Our ICC.NET service incorporates
proprietary technology and is immediately accessible using a standard Internet
connection and a web browser.
Our ICC.NET service uses the Internet to deliver a higher level of service
and more features than traditional VANs:
o Documents are delivered up to 100 times faster, depending upon
the speed of the customer's Internet connections;
o Our customers may more effectively track, monitor and process
business documents and other data files using our real-time document
management browser screen displays;
o Our ICC.NET service allows us to consistently provide confirmed
delivery of documents and other data files;
o Documents can be delivered either in real-time or retrieved when
convenient for the customer. Real-time delivery reduces the
potential for document corruption, bottlenecks and other problems
associated with batch delivery modes, which are traditionally
store-and-forward and in some cases can take several hours to be
delivered;
o Our ICC.NET service can handle transmissions of data other than
standard business documents, such as images, engineering drawings,
architectural blueprints, audio and some types of video; and
o Our customers enjoy flexibility in creating different document types
and formats for various business applications. For example, our
customers can add their business logo to their documents and can use
their own format for each document type.
In addition, we believe our ICC.NET service offers advantages over e-mail
and other Internet-based electronic commerce systems, such as a full range of
VAN services, translation of a wide variety of data into customer-specified
formats, management of business documents or data files of virtually any size
and of a wide variety, including purchase orders, invoices, statements,
inventory tracking and shipping documents, images, engineering drawings,
architectural blueprints, audio and some types of video. Our ICC.NET service
also provides a complete audit trail of content delivery and customer selection
from a variety of security methods.
We believe that ICC.NET is one of the only Internet-based data
transmission services that is approved to interconnect with the fifteen largest
traditional VANs, which we believe currently provide EDI services for 90% of
companies capable of using EDI. As a result, we can handle EDI traffic between
our customers and any of their trading partners that choose to continue to use a
traditional VAN and between a customer that uses a traditional VAN and its
trading partners that do not. This provides our customers with the possibility
of maximum penetration into their trading partner community.
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EDI for web-based retailers. We provide an electronic document and data file
delivery link between web-based retailers and their vendors. We believe that
many larger vendors require that product orders and other documents be
transmitted using EDI. Web retailers can use our ICC.NET service to comply with
this requirement and thus can reduce their costs and improve their ability to
locate, order, track and deliver products. Our ICC.NET service can process
purchase orders, invoices, order status reports and other files transmitted
between web-based shopping portals of electronic retailers and their vendors,
distributors, and manufacturers and can also manage critical logistics delivery
files. Due to the special requirements and rapid growth of these new web-based
retail companies, we have a dedicated web retailer sales and support team that
offers the retail companies the option to outsource to us all of their
electronic document and data file delivery requirements.
EDI to fax service. Traditional EDI users convert electronic documents into a
faxable format and fax the documents manually to their trading partners that can
not receive documents transmitted electronically in EDI. Our ICC.NET fax service
allows our customers to send a document electronically, which we will then
electronically convert and fax to any of our customer's trading partners that
cannot receive electronically transmitted documents and specify that they want
to receive the document by fax. We believe that our ICC.NET fax service will
result in lower fax costs for our customers as well as reduced human involvement
in the document delivery process and fewer errors. Recently, several other VANs
began offering similar EDI-fax services; however, we believe that these services
cost 3 to 5 times more per page and are currently only offered domestically. Our
customers currently send documents using our ICC.NET fax service to
approximately 700 trading partners.
Large-scale electronic document management and delivery. Our ICC.NET service can
transmit large-scale non-EDI electronic documents and other large files, which
may include catalogs, engineering drawings, graphics and some types of video.
Our ICC.NET service allows customers to manage and distribute these large files
in real-time and provides archiving, security, authentication and audit
services. Our ICC.NET service will support both a publish/subscribe
configuration, in which a customer can publish any number of files for
subscribers authorized by the customer to view and/or download, and a
point-to-point-delivery configuration that operates like our ICC.NET service.
Business Strategy
We believe that our ICC.NET service provides a platform with many
applications that will allow our customers to fulfill a substantial portion of
their electronic document and data delivery requirements with significantly less
administrative effort and cost. We believe that our ICC.NET service will allow
our customers to send us the majority of their important documents and data
files which we will then be able to transmit to each of the intended recipients
in any form requested by the recipient. Our customers will thus be able to
integrate a substantial portion of their document and data file delivery methods
into a single, seamless process.
A large company that uses EDI to communicate with its vendors is referred
to as a hub; its trading partners, vendors or customers, are referred to as
spokes. We intend to continue to market ICC.NET as a one-stop electronic
document and data delivery service to the 2,500 largest
17
hub companies in the United States. Due to the cost to the spoke companies of
implementing EDI and using VANs and other electronic document delivery methods,
large hub companies are currently connected electronically to only a small
percentage of their potential spoke companies.
Our current customers conduct their business internationally, and we
intend to service these customers and pursue new international customers by
expanding our marketing and operation to Europe and other places outside the
United States.
We believe that a significant number of these hub companies intend to
expand the use of electronic commerce to more of their spoke companies. Small
spoke companies using our ICC.NET service require only an Internet connection or
a web browser to receive and transmit documents electronically and, we believe,
will also be able to receive electronic documents using our ICC.NET fax service.
As a result, large hub companies may now be able to request or encourage
electronic commerce with their small hub companies. In turn, many of these spoke
companies may become the hub companies for their suppliers, which should further
broaden the reach of our ICC.NET service.
We intend to encourage the use of our ICC.NET service through exceptional
customer service. We currently offer technical support to our customers
twenty-four hours a day, seven days a week. Due to the multiple redundancies of
all of our systems and the stability of the Securities Industry Automation
Corporation, or SIAC, which is the location of our data center, our ICC.NET
service has been fully operational more than 99% of the time. SIAC runs all
computing operations for the New York Stock Exchange and the American Stock
Exchange.
We intend to seek acquisitions of services, products or companies, joint
ventures or other arrangements which complement or expand our business. However,
we cannot assure you that we will be able to identify appropriate acquisition
candidates in the future or that we will be able to successfully negotiate and
finance the acquisition if an acquisition candidate is identified. If we make
other types of acquisitions, it will be necessary to assimilate the acquired
services, technologies or customers into our operations. If we consummate one or
more significant acquisitions through the issuance of shares of class A common
stock, you could suffer significant dilution of your ownership interests in ICC.
Finally, expanding our business through acquisitions may expose us to new and
different competitors, which will likely have greater financial and other
resources than we do. See "Recent Developments" on page 5 of this prospectus.
We expect to experience seasonality in our business that reflects the
seasonality of the businesses of our customers. We believe that period-to-period
comparisons of our operating results may not be meaningful and that our
operating results for any particular period will not necessarily be a good
indicator of our future performance.
Year 2000 Compliance
We implemented and completed a Year 2000 program designed to address the
Year 2000 issue. We have experienced no significant disruptions in our
information technology and non-information technology systems and we believe
those systems successfully responded to the
18
Year 2000 date change. In addition, we have not experienced any adverse effects
with any of our third party vendors, suppliers or customers. While we are not
aware of, and do not expect that we will experience, any material problems
related to this issue, we will continue to monitor our computer applications and
those of our suppliers, vendors and customers throughout the year 2000 to ensure
that any latent Year 2000 matters that may arise are addressed promptly.
SELLING STOCKHOLDERS
On August 3, 2000, we acquired IDC by merger. The selling stockholders
received their shares of class A common stock in exchange for their ownership
interests in IDC. See "Recent Developments" on page 6 of this prospectus.
The table below sets forth information, as of September 11, 2000,
regarding the beneficial ownership of the shares of class A common stock by the
selling stockholders. The information regarding the selling stockholders'
beneficial ownership after this offering assumes that all the shares of class A
common stock offered by this prospectus are sold. The presentation is based on
6,656,557 shares of our class A common stock outstanding as of September 11,
2000, which includes all of the shares of class A common stock being offered by
this prospectus.
- --------------------------------------------------------------------------------
Number of Shares
Of Class A Class A Common Stock
Common Stock Number of Beneficially Owned
Beneficially Shares of Class A After Offering
Owned Common Stock
Selling Stockholders Before Offering Offered Number Percent
- --------------------------------------------------------------------------------
Vernon Zander ** 95,264 ** *
Marilyn Zander ** 95,264 ** *
Stanley Parkman ** 20,208 ** *
Bill Loftin ** 13,647 ** *
Hollis Johnson ** 10,927 ** *
Byrl Pointer ** 3,269 ** *
- -----------------
* Less than 1%
** To be provided by amendment
PLAN OF DISTRIBUTION
ICC is registering the shares of class A common stock on behalf of the
selling stockholders. As used herein, "selling stockholders" includes donees and
pledgees selling shares of class A common stock received from a named selling
stockholder after the date of this
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prospectus. We anticipate that the selling stockholders may sell all or a
portion of the shares of class A common stock offered by this prospectus from
time to time on The Nasdaq SmallCap Market, on other securities exchanges or in
private transactions, at fixed prices, at market prices prevailing at the time
of sale or at prices reasonably related to the market price, at negotiated
prices, or by a combination of these methods of sale through:
o ordinary brokerage transactions and transactions in which the broker
solicits purchases;
o sales to one or more brokers or dealers as principal, and the resale by
those brokers or dealers for their account, including resales to other
brokers and dealers;
o block trades in which a broker or dealer will attempt to sell the shares
of class A common stock as agent but may position and resell a portion of
the block as principal to facilitate the transaction; or
o privately negotiated transactions with purchasers.
We are not aware as of the date of this prospectus of any agreements
between the selling stockholders and any broker-dealers regarding the sale of
the shares of class A common stock offered by this prospectus, although we have
made no inquiry in that regard. In connection with distributions of the shares
of class A common stock, the selling stockholders may enter into hedging
transactions with broker-dealers. In connection with these transactions:
o broker-dealers may engage in short sales of the shares of class A common
stock covered by this prospectus in the course of hedging the positions
they assume with selling stockholders;
o the selling stockholders may sell shares of class A common stock short and
deliver the shares of class A common stock offered by this prospectus to
close out their short positions;
o the selling stockholders may enter into option or other transactions with
broker-dealers that require the delivery to the broker-dealer of the
shares of class A common stock offered by this prospectus, which the
broker-dealer may resell according to this prospectus; and
o the selling stockholders may pledge the shares of class A common stock
offered by this prospectus to a broker or dealer and upon a default, the
broker or dealer may effect sales of the pledged shares of class A common
stock according to this prospectus.
The selling stockholders and any broker, dealer or other agent executing
sell orders on behalf of the selling stockholders may be considered to be
underwriters within the meaning of the Securities Act. If so, commissions
received by any of these brokers, dealers or agents and profit on any resale of
the shares of class A common stock may be considered to be underwriting
commissions under the Securities Act. These commissions received by a broker,
dealer or agent may be in excess of customary compensation.
20
All costs, fees and expenses of registration incurred in connection with
the offering will be borne by us. All selling and other expenses incurred by the
selling stockholders will be borne by the selling stockholders.
The selling stockholders also may resell all or a portion of the shares of
class A common stock offered by this prospectus in reliance upon Rule 144 under
the Securities Act of 1933, provided that they meet the criteria and conform to
the requirements of that Rule.
We have notified the selling stockholders that they will be subject to
applicable provisions of the Securities Exchange Act of 1934 and its rules and
regulations, including, among others, Rule 102 under Regulation M. These
provisions may limit the timing of purchases and sales of any of the shares of
class A common stock by the selling stockholders. Rule 102 under Regulation M
provides, with some exceptions, that it is unlawful for the selling stockholders
or their affiliated purchasers to, directly or indirectly, bid for or purchase,
or attempt to induce any person to bid for or purchase, for an account in which
the selling stockholders or affiliated purchasers have a beneficial interest,
any securities that are the subject of the distribution during the applicable
restricted period under Regulation M. All of the above may affect the
marketability of the shares of class A common stock. To the extent required by
law, we may require the selling stockholders, and their brokers if applicable,
to provide a letter that acknowledges compliance with Regulation M under the
Exchange Act before authorizing the transfer of the selling stockholders' shares
of class A common stock.
DESCRIPTION OF SECURITIES
The following summary description of the material terms of our capital
stock and warrants is not intended to be complete. Since the terms of our
capital stock must comply with the provisions of our certificate of
incorporation and bylaws, which are included as exhibits to the registration
statement, and the Delaware General Corporation Law, you should read our
certificate of incorporation and bylaws very carefully. The relevant provisions
of our certificate of incorporation and bylaws and the Delaware General
Corporation Law are discussed under the heading Delaware Law and Certificate of
Incorporation and Bylaw Provisions on page 26 of this prospectus.
We have the authority to issue up to 40,000,000 shares of class A common
stock, 2,000,000 shares of class B common stock, 2,000,000 shares of class E-1
common stock, 2,000,000 shares of class E-2 common stock and 5,000,000 shares of
preferred stock, which includes 10,000 shares of series A preferred stock, 175
shares of series S preferred stock and 10,000 shares of series C preferred
stock.
Common Stock
Class A common stock
As of September 11, 2000, there were 6,608,839 shares of class A common
stock outstanding, held of record by approximately 155 stockholders. Class A
common stock is currently traded on The Nasdaq SmallCap Market under the symbol
ICCSA.
21
Holders of class A common stock are entitled to one vote per share on all
matters to be voted on by our common stockholders. Subject to the preferences of
the preferred stock, the holders of class A common stock are entitled to a
proportional distribution of any dividends that may be declared by the board of
directors, provided that if any distributions are made to the holders of class A
common stock, identical per-share distributions must be made to the holders of
the class B common stock, even if the distributions are in class A common stock.
In the event of a liquidation, dissolution or winding up of ICC, the holders of
class A common stock are entitled to share equally with holders of the class B
common stock in all assets remaining after liabilities and amounts due to
holders of preferred stock have been paid in full or set aside. Class A common
stock has no preemptive, redemption or conversion rights. The rights of holders
of common stock are subject to, and may be adversely affected by, the rights of
the holders of shares of series A preferred stock, series S preferred stock,
series C preferred stock or any other series of preferred stock that ICC may
designate and issue in the future.
Class B common stock
As of September 11, 2000, there were 2,574 shares of class B common stock
outstanding, held of record by four stockholders.
Class B common stock is convertible into class A common stock on a
one-for-one basis both upon request of the holder of the class B common stock or
automatically upon transfer of the class B common stock to a stockholder that
does not hold any class B common stock before the transfer. Class B common stock
is entitled to six votes per share rather than one vote per share, but in all
other respects each share of class B common stock is identical to one share of
class A common stock.
Preferred Stock
Our certificate of incorporation authorizes our board of directors,
without any approval of our stockholders, to issue up to 5,000,000 shares of
preferred stock from time to time and in one or more series and to fix the
number of shares of any series and the designation, conversion, dividend and
other rights of the series. The board of directors has designated 10,000 shares
of preferred stock as series A preferred stock, 175 shares of preferred stock as
series S preferred stock and 10,000 shares of preferred stock as series C
preferred stock.
Future issuances of preferred stock may have the effect of delaying or
preventing a change in control of ICC. The issuance of preferred stock could
decrease the amount of earnings and assets available for distribution to the
holders of common stock or could adversely affect the rights and powers,
including voting rights, of the holders of our common stock. In some
circumstances, the issuance of preferred stock could have the effect of
decreasing the market price of our common stock.
Series A preferred stock
As of September 11, 2000, ICC had 568 shares of series A preferred stock
outstanding, held by eleven stockholders.
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Series A preferred stock is convertible, at the option of the holder, into
class A common stock. Each share of series A preferred stock is convertible into
a number of shares of class A common stock determined by dividing $1,000 by 75%
of the average market price of the class A common stock for the ten trading days
before the conversion date. However,
o if 75% of the average market price is less than $3 per share, the
series A preferred stock provides that 75% of the average market
price will be considered to be $3 per share, which results in a
maximum of 333 shares which may be issued upon conversion of one
share of series A preferred stock; and
o if 75% of the average market price is greater than $5 per share, the
series A preferred stock provides that 75% of the average market
price will be considered to be $5 per share, which results in a
minimum of 200 shares which may be issued upon conversion of one
share of series A preferred stock.
If all of the series A preferred stock were converted on January 31, 2000, a
maximum of 561,000 shares of class A common stock would be issued in this
conversion. The minimum and maximum conversion rates apply even if at the time
of conversion the class A common stock is not traded on The Nasdaq SmallCap
Market. No fewer than 25 shares may be converted at one time unless the holder
then holds fewer than 25 shares and converts all of the holder's shares at that
time.
Series A preferred stock is redeemable, in whole or in part, by ICC,
commencing on the third anniversary of the date of issuance. The redemption
price for each share of series A preferred stock is $1,000 plus unpaid
dividends. Notice of redemption must be given 30 days before the redemption
date.
Subject to the rights of stockholders holding any series of ICC preferred
stock that is senior to the series A preferred stock, upon a liquidation,
dissolution or winding up of ICC, the holders of series A preferred stock are
entitled to receive an amount equal to $1,000 per share of series A preferred
stock before any distribution is made to holders of common stock.
The holders of the outstanding shares of series A preferred stock are
entitled to a 4% annual dividend payable in cash or in shares of class A common
stock, at the option of ICC. These dividends are payable on each July 1
commencing on July 1, 1999. ICC elected to issue 14,641 shares of class A common
stock in payment of the dividend due on July 1, 1999 and a total of $181,773 in
cash in payment of the dividend due on July 1, 2000.
Series A preferred stock has no voting rights except as expressly required
by law.
Series S preferred stock
As of July 1, 1999, ICC had no outstanding shares of series S preferred
stock. ICC does not intend to issue any shares of series S preferred stock in
the future.
23
Series C preferred stock
As of September 11, 2000, ICC had 10,000 shares of series C preferred
stock outstanding, held by one stockholder.
Series C preferred stock is convertible, at the option of the holder, into
class A common stock. Each share of series C preferred stock is convertible into
a number of shares of class A common stock determined by dividing $1,000 by the
conversion price at the date of conversion. The initial conversion price for the
series C preferred stock is $22.34 per share, which is subject to adjustment in
the case of a reclassification, subdivision or combination of ICC's common stock
and upon a consolidation, merger or sale of substantially all of the assets of
ICC.
Series C preferred stock is redeemable, in whole or in part, by ICC,
commencing on the fifth anniversary of the date of issuance. The redemption
price for each share of series C preferred stock is $1,000 plus unpaid
dividends. Notice of redemption must be given not less than fifteen days nor
more than 45 days before the redemption date.
Upon a liquidation, dissolution or winding up of ICC, the holders of
series C preferred stock are entitled to receive an amount equal to $1,000 per
share of series C preferred stock plus unpaid dividends before any distribution
is made to holders of series A preferred stock or common stock.
The holders of the outstanding shares of series C preferred stock are
entitled to a 4% annual dividend payable in cash or in shares of class A common
stock, at the option of ICC. These dividends are payable on each January 1,
commencing on January 1, 2001.
Each share of series C preferred stock is entitled to a number of votes
equal to the number of whole shares of common stock into which each share of
series C preferred is convertible as of the record date for the determination of
stockholders entitled to vote on any matter submitted to stockholders.
Warrants
As of June 30, 1999, there were 1,184,715 class A warrants outstanding and
950,490 class B warrants outstanding. On June 30, 1999, we commenced an offer to
exchange one share of class A common stock for each 8 outstanding class A
warrants and one share of class A common stock for each 16 outstanding class B
warrants. The exchange offer was completed on July 30, 1999 and, as a result,
ICC issued a total of 148,651 shares of class A common stock in exchange for
868,500 class A warrants and 639,002 class B warrants.
As of September 11, 2000, there were 234,140 class A warrants outstanding.
Each class A warrant entitles the holder upon exercise to purchase one class B
warrant, which is described below, and one share of class A common stock. Each
class A warrant is exercisable for $23.20 and expires in February 2002.
24
As of September 11, 2000, there were 263,835 class B warrants outstanding.
Each class B warrant entitles the holder upon exercise to purchase one share of
class A common stock. Each class B warrant is exercisable for $31.22 and expires
in February 2002.
The class A and class B warrants are traded in the over-the-counter market
on the OTC Bulletin Board. The number of class A and class B warrants and the
exercise prices of the class A and class B warrants are subject to adjustment in
the event of any subdivision or combination of the outstanding class A common
stock, any stock dividend payable in shares of class A common stock paid to
holders of class A common stock, or any sale of any shares of class A common
stock, or of any rights, warrants, options or securities convertible into or
exercisable for class A common stock, for consideration valued at less than the
market price of the class A common stock at that time.
The class A and class B warrants are subject to redemption by ICC, at
$0.25 per class A or class B warrant, on not less than 30 days notice in the
event that the average closing bid price for the class A common stock, if the
class A common stock is then traded on The Nasdaq SmallCap Market, or the last
reported sales price, if the class A common stock is then traded on a national
securities exchange, exceeds $44.50 in the case of the redemption of the class A
warrants and $61.25 in the case of the redemption of the class B warrants, for
the thirty consecutive business days ending within 15 days of the date of the
notice of redemption. All warrants of a class must be redeemed if any of that
class are redeemed. The date set for redemption of the class B warrants may not
be earlier than 31 days after the date set for redemption of the class A
warrants. The rights of holders of class A and class B warrants to exercise the
warrants terminate at 5:00 p.m., New York time, on the business day immediately
preceding the date set for redemption.
In connection with our initial public offering, unit purchase options were
issued to D.H. Blair and its designees to purchase 31,000 units for $33.75 per
unit. Upon exercise of these options, the holders are entitled to receive one
share of class A common stock, one class A warrant and one class B warrant. In
connection with our 1997 private placement, unit purchase options were issued to
D.H. Blair and its designees to purchase 112,229 of the same units for $15.75
per unit. The unit purchase options issued in connection with our 1997 private
placement are subject to an anti-dilution adjustment as a result of the private
placement of series A preferred stock and this adjustment would be substantial.
On June 30, 1999, D.H. Blair and its designees exchanged all of these unit
purchase options for a total of 105,000 shares of class A common stock.
Investors in our 1998 bridge financing purchased 10% notes with warrants
attached. For each $1 of notes, a purchaser was entitled to 0.3 warrants and we
issued a total of 778,500 warrants in this transaction. Each of these warrants
entitles the holder upon exercise to purchase one share of class A common stock
for $2.50. These warrants expire between December 2001 and July 2002.
Three finders introduced us to investors in our 1998 bridge financing and
have received a total of 66,600 warrants for these services. Each of these
warrants entitles the holder upon
25
exercise to purchase one share of class A common stock for $2.50. These warrants
expire between July 2001 and January 2002.
Several NASD registered broker/dealers provided services in connection
with our April 1999 private placement of series A preferred stock and are
entitled to receive a total of 173,250 warrants for these services. Each of
these warrants entitles the holder upon exercise to purchase one share of class
A common stock for $5.00 and expires in April 2002.
The warrants issued in our 1998 bridge financing to investors and finders
are redeemable by ICC for $2.50 per warrant within 10 days of mailing an
acceleration notice at any time after one year from issuance if the bid price of
the class A common stock exceeds $7.50 subject to adjustment for stock splits,
dividends or combinations for 10 consecutive trading days.
The number and exercise price of the warrants issued to financial advisors
in connection with our 1998 bridge financing and our April 1999 private
placement are subject to adjustment in the event of any stock dividend payable
in shares of class A common stock paid to holders of class A common stock or any
subdivision or combination of the outstanding class A common stock.
In connection with our strategic global alliance with Cable & Wireless, we
issued to Cable & Wireless 400,000 warrants to purchase shares of our class A
common stock. Each of these warrants entitles the holder upon exercise to
purchase one share of class A common stock for $22.21 per share and expires in
January 2005. The number and exercise price of these warrants are subject to
adjustment in the event of any stock dividend payable in shares of class A
common stock paid to holders of class A common stock or any subdivision or
combination of the outstanding class A common stock.
Delaware Law and Certificate of Incorporation and Bylaw Provisions
The following is a summary description of material provisions of the
Delaware General Corporation Law and our certificate of incorporation and
bylaws. For further information you should refer to our certificate of
incorporation and bylaws.
We must comply with the provisions of Section 203 of the Delaware General
Corporation Law. Section 203 prohibits a publicly-held Delaware corporation from
engaging in a business combination with an interested stockholder for three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
A business combination includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested stockholder. An interested
stockholder is generally a person who, together with affiliates and associates,
owns, or within the past three years did own, 15% of the corporation's voting
stock.
There are provisions in our certificate of incorporation, our bylaws and
Delaware law that make it more difficult for a third party to obtain control of
ICC, even if doing so would be beneficial to our stockholders. This could
depress our stock price. However, these provisions enhance the likelihood of
continuity and stability in the composition of the policies formulated
26
by the board of directors. In addition, these provisions are intended to ensure
that the board of directors will have sufficient time to act in what it believes
to be in the best interests of ICC and its stockholders. These provisions also
are designed to reduce the vulnerability of ICC to an unsolicited proposal for a
takeover of ICC that does not contemplate the acquisition of all of its
outstanding shares or an unsolicited proposal for the restructuring or sale of
all or part of ICC. The provisions are also intended to discourage some tactics
that may be used in proxy fights.
Classified Board of Directors
Our board of directors is divided into three classes of directors. The
classes are as nearly equal in number as possible and serve staggered three-year
terms. One class of directors is elected each year to serve a three-year term.
The classified board provision will help to assure the continuity and stability
of the board of directors and the business strategies and policies of ICC as
determined by the board of directors. The classified board provision could have
the effect of discouraging a third party from making a tender offer for our
shares or attempting to obtain control of ICC. In addition, the classified board
provision could delay stockholders who do not agree with the policies of the
board of directors from removing a majority of the board of directors for two
years.
Indemnification
We have included in our certificate of incorporation and bylaws provisions
to (1) eliminate the personal liability of our directors for monetary damages
resulting from breaches of their fiduciary duty to the extent permitted by the
Delaware General Corporation Law and (2) indemnify our directors and officers to
the fullest extent permitted by the Delaware General Corporation Law, including
circumstances in which indemnification is discretionary.
We believe that these provisions are necessary to attract and retain
qualified persons as directors and officers.
Transfer Agent and Registrar
The transfer agent and registrar for our class A common stock is American
Stock Transfer and Trust Company.
LEGAL MATTERS
The legality of the shares of class A common stock being offered by this
prospectus will be passed upon by Kramer Levin Naftalis & Frankel LLP, New York,
New York.
EXPERTS
Richard A. Eisner & Company, LLP, independent auditors, have audited our
financial statements as of July 31, 1999, as stated in their report, included in
our annual report on Form 10-KSB for the year ended July 31, 1999 which is
incorporated in this prospectus by reference.
The financial statements of Research Triangle Commerce, Inc. for the two years
ended December 31, 1999, incorporated in this Registration Statement on Form S-3
by reference to the Internet Commerce Corporation's Current Report on Form 8-K
dated September 7, 2000, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The financial statements of Intercoastal Data Corporation for the two years
ended January 31, 2000 and the three months ended April 30, 2000 and April 30,
1999, incorporated in this Registration Statement on Form S-3 by reference to
the Internet Commerce Corporation's Current Report on Form 8-K dated August 11,
2000, have been so incorporated in reliance on the report of Habif, Arogeti &
Wynne, LLP, independent accountants, given upon the authority of said firm as
experts in auditing and accounting.
27
Our financial statements are incorporated by reference in reliance on Richard A.
Eisner & Company, LLP's report, given on their authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
o Government Filings. We file annual, quarterly and special reports,
proxy statements and other information with the SEC. Our SEC filings
are available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at
the SEC's public reference room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You may obtain information on the operation of the SEC's
public reference room in Washington, D.C. by calling the SEC at
1-800-SEC-0330.
We have filed with the SEC a registration statement on form S-3 to
register the shares of class A common stock to be offered. This prospectus is
part of that registration statement and, as permitted by the SEC's rules, does
not contain all the information included in the registration statement. For
further information about us and our class A common stock, you should refer to
that registration statement and to the exhibits and schedules filed as part of
that registration statement, as well as the documents we have incorporated by
reference which are discussed below. You can review and copy the registration
statement, its exhibits and schedules, as well as the documents we have
incorporated by reference, at the public reference facilities maintained by the
SEC as described above. The registration statement, including its exhibits and
schedules, are also available on the SEC's web site, given above.
o Stock Market. Shares of our class A common stock are traded on The
Nasdaq SmallCap Market.
o Information Incorporated by Reference. The SEC allows us to incorporate
by reference the information we file with it, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is an important
part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any further
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act, until this offering has been completed:
o Our proxy statement for the annual meeting of stockholders for
the year ended July 31, 1999;
o Our proxy statement for a special meeting of stockholders
initially filed on August 11, 2000;
o Our annual report on form 10-KSB for the year ended July 31, 1999;
o Our quarterly reports on form 10-QSB for the quarters ended October
31, 1999, January 31, 2000 and April 30, 2000;
28
o Our current reports on form 8-K dated December 1, 1999, December 13,
1999, February 15, 2000, March 28, 2000, April 26, 2000, May 4,
2000, May 18, 2000, June 15, 2000, August 11, 2000, September 7,
2000 and September 11, 2000;
o Our amended current report on form 8-K/A dated February 15, 2000;
and
o The description of our class A common stock contained in our Rule
424 prospectus filed with the SEC on June 18, 1995, including any
amendments or reports filed for the purpose of updating the
description. See also Description of Securities on pages 21 to 27 of
this prospectus.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Internet Commerce Corporation
805 Third Avenue
New York, New York 10022
(212) 271-7640
Attn: Victor Bjorge
We are not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of those documents. We have not authorized anyone to
provide you with, and you should not rely on, information other than that which
is in this prospectus, any prospectus supplement or which is incorporated in
this prospectus by reference.
29
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection with
the distribution of the securities covered by this Registration Statement. All
of the expenses will be borne by ICC except as otherwise indicated.
SEC Registration Fee (actual)....................................$ 948.71
Nasdaq SmallCap Market listing fee (actual)......................$2,385.79
Blue Sky fees and expenses.......................................$ 500
Printing and engraving fees and expenses.........................$ 3,000
Legal fees and expenses..........................................$ 5,000
Accounting fees and expenses.....................................$ 500
Miscellaneous....................................................$ 665.50
Total............................................................$ 13,000
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware,
referred to as the DGCL, provides that a corporation may indemnify directors and
officers as well as other employees and individuals against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement in connection
with specified actions, suits, proceedings whether civil, criminal,
administrative, or investigative, other than action by or in the right of the
corporation, known as a derivative action, if they acted in good faith and in a
manner they 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 their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses, including attorneys' fees, incurred in connection with the
defense or settlement of the action, and the statute requires court approval
before there can be any indemnification where the person seeking indemnification
has been found liable to the corporation. The statue provides that it is not
exclusive of other indemnification that may be granted by a corporation's
charter, by-laws, disinterested director vote, stockholder vote, agreement, or
otherwise. Section 145 thus makes provision for indemnification in terms
sufficiently broad to cover officers and directors, under certain circumstances,
for liabilities arising under the Securities Act of 1933, as it may be amended
from time to time.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability for (i) any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) payment of unlawful dividends or unlawful
stock purchases or redemptions, or (iv) any transaction from which the director
derived an improper personal benefit.
30
Article VII of our by-laws and Article Seventh of our Amended and Restated
Certificate of Incorporation, as further amended, both provide that we shall
indemnify, to the fullest extent permitted by Section 145 of the DGCL, each
person that Section 145 grants us power to indemnify. Article VIII of our
by-laws and Article Seventh of our Amended and Restated Certificate of
Incorporation, as further amended, both provide that no director shall be liable
to us or any of our stockholders for monetary damages for breach of fiduciary
duty as a director, except with respect to (1) a breach of the director's duty
of loyalty to the corporation or its stockholders, (2) acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (3) liability under Section 174 of the DGCL or (4) a transaction from which
the director derived an improper personal benefit, and that it is the intention
of the foregoing provisions to eliminate the liability of our directors to ICC
or our stockholders to the fullest extent permitted by Section 102(b)(7) of the
DGCL.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to our directors, officers
and controlling persons pursuant to the foregoing provisions, or otherwise, we
have been advised that in the opinion of the securities and exchange commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. If a claim for indemnification against such
liabilities (other than the payment by ICC of expenses incurred or paid by a
director, officer or controlling person of ICC 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, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by ICC is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
Item 16. Exhibits.
The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated in this registration statement
by reference to a prior filing of ICC under the Securities Act or the Exchange
Act as indicated in parenthesis:
Exhibit
Number Description
- ------ -----------
2.1 Agreement and Plan of Merger among ICC, ICC Acquisition
Corporation, Inc., a wholly-owned subsidiary of ICC, Research
Triangle Commerce, Inc., or RTCI, and the selling shareholders
of RTCI (13)
2.2 Agreement and Plan of Merger among ICC, IDC, and the
selling shareholders of IDC (14)
3(i).1 Amended and Restated Certificate of Incorporation (1)
3(i).2 Certificate of Merger merging Infosafe Systems, Inc. and
Internet Commerce Corporation (1)
3(i).3 Certificate of Amendment to the Amended and Restated Articles
of Incorporation (2)
3(i).4 Certificate of Designations -- Series A Convertible Redeemable
Preferred Stock (1)
2
3(i).5 Certificate of Designations -- Series S Preferred Stock (1)
3(i).6 Certificate of Designations -- Series C Preferred Stock (10)
4.1 Specimen Certificate for Class A Common Stock (3)
4.2 Form of Revised Subscription Agreement, dated March 31,
1999, relating to the shares of Series A Convertible
Redeemable Preferred Stock sold in the 1999 private placement
(1)
4.3 Form of Underwriter's Option (3)
4.4 Form of Warrant Agreement (3)
4.5 Escrow agreement, as amended (3)
4.6 Form of warrant expiring February 18, 2002 (3)
4.7 Warrant Agreement, dated February 10, 1997, by and among
ICC, American Stock Transfer and Trust Company as warrant
agent and D.H. Blair Investment Banking Corp. (4)
4.8 Amendment Agreement, dated February 10, 1997, to Warrant
Agreement dated January 25, 1995 by and among ICC, American
Stock Transfer and Trust Company as warrant agent and D.H.
Blair Investment Banking Corp. (4)
4.9 Form of Unit Purchase Option for D.H. Blair Investment
Banking Corp. dated February 18, 1997 (4)
4.10 Agreement, dated February 18, 1997, between ICC and D. H.
Blair Investment Banking Corp. to extend an agreement dated
January 25, 1995 regarding mergers, acquisitions and
similar transactions (4)
4.11 Form of Class A Bridge Warrant issued in the 1998 bridge
financing (1)
4.12 Warrant Agreement dated January 12, 2000, by and among ICC
and Cable and Wireless USA, Inc. (10)
4.13 Master Agreement dated November 23, 1999 by and among ICC and
Cable and Wireless PLC Corporation (10)
5.1** Opinion of Kramer Levin Naftalis & Frankel LLP regarding
legality of the shares of class A common stock being
registered pursuant to this Registration Statement
9.1 Voting Trust Agreement between the trustees of the voting
trust and various stockholders of ICC (3)
9.2 Amendments to the Voting Trust Agreement (1)
10.1 1992 Stock Option Plan (3)
10.2 1994 Stock Option Plan (3)
10.3 Formation and Stock Purchase Agreement, dated as of April
16, 1997 among ICC, Michele Golden and Michael Cassidy (5)
10.4 Lease Agreement between 805 Third Ave. Co. as landlord and
ICC as tenant relating to the rental of ICC's current
principal executive office (6)
10.5 Consulting Agreement, dated as of June 12, 1998, between
Summerwind Restructuring, Inc. and ICC (1)
10.6 Lease Agreement, dated as of May 21, 1999, between JB Squared
LLC and ICC relating to the rental of approximately 4,000
square feet at the Lakeview Executive Center, 45 Research Way,
East Setauket, New York, 11733 (7)
10.7 Employment Agreement for Richard J. Berman dated as of
September 15, 1998 (1)
3
10.8 Employment Agreement for G. Michael Cassidy dated as of
April 16, 1997 (1)
10.9 Employment Agreement for Michele Golden dated as of April
16, 1997 (1)
10.10 Employment Agreement for Donald R. Gordon dated as of
December 18, 1998 (1)
10.11 Employment Agreement for David Hubbard dated as of April
16, 1997 (1)
10.12 Employment Agreement for Walter M. Psztur dated as of
August 21, 1998 (1)
10.13 Settlement Agreement between ICC, Arthur R. Medici and Dr.
Robert H. Nagel (8)
10.14 Revised Settlement Agreement between ICC, Arthur R. Medici
and Dr. Robert H. Nagel (8)
10.15 Amendment to the Revised Settlement Agreement between ICC,
Arthur R. Medici and Dr. Robert H. Nagel (8)
10.16 Second Amendment to the Revised Settlement Agreement
between ICC, Arthur R. Medici and Dr. Robert H. Nagel (8)
10.17 Master Agreement between Cable & Wireless PLC and ICC executed
on November 24, 1999 (9)
10.18 Consulting Agreement, dated as of March 15, 2000, between
Michele Golden and ICC (11)
10.19 Amended and restated stock option plan (12)
23(ii).1* Consent of Richard A. Eisner & Company, LLP
23(ii).2* Consent of PricewaterhouseCoopers LLP
23(ii).3* Consent of Habif, Arogeti & Wynne, LLP
23(ii).4** Consent of Kramer Levin Naftalis & Frankel LLP (to be
contained in Exhibit 5.1 hereto)
(b) Financial Statement Schedules:
Not Applicable.
* Filed herewith
** To be filed by amendment
(1) Incorporated by reference to the Company's Registration Statement
on Form S-3 (File no. 333-80043)
(2) Incorporated by reference to the Company's Annual Report on Form
10-KSB for the year ended July 31, 1998
(3) Incorporated by reference to the Company's Registration Statement
on Form SB-2 (File no. 33-83940)
(4) Incorporated by reference to the Company's Report on Form 10-QSB
dated January 31, 1997
(5) Incorporated by reference to the Company's Report on Form 10-QSB
dated April 30, 1997
(6) Incorporated by reference to the Company's Report on Form 10-QSB
dated October 31, 1997
(7) Incorporated by reference to Amendment No. 3 to the Company's
Registration Statement on Form S-3 (File no. 333-80043)
4
(8) Incorporated by reference to the Company's Registration Statement on
Form S-3 (File no. 333-91885)
(9) Incorporated by reference to the Company's Current Report on Form
8-K dated December 1, 1999
(10) Incorporated by reference to Amendment No. 1 to the Company's
Registration Statement on Form S-3 (File no. 333-93301)
(11) Incorporated by reference to the Company's Current Report on Form
8-K dated March 28, 2000.
(12) Incorporated by reference to the Company's Proxy Statement for the
annual meeting of stockholders for the year ended July 31, 1999.
(13) Incorporated by reference to the Company's Current Report on Form
8-K dated June 15, 2000.
(14) Incorporated by reference to the Company's Current Report on Form
8-K dated August 11, 2000.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of 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; and
(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 in the registration
statement.
provided, however, that clauses (i) and (ii) do not apply if the Registration
Statement is on Form S-3, Form S-8 or Form F-3, and the information required to
be included in a post-effective amendment by such clauses is contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at 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 the
offering.
5
(4) 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.
6
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on the
13th day of September, 2000.
Internet Commerce Corporation
by: /s/ Dr. Geoffrey S. Carroll
----------------------------------------
Dr. Geoffrey S. Carroll
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this registration
statement or amendment thereto has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Dr. Geoffrey S. Carroll
- ----------------------- President and Chief September 13, 2000
Dr. Geoffrey S. Carroll Executive Officer
(Principal Executive
Officer) Director
/s/ Walter M. Psztur
- ----------------------- Chief Financial Officer September 13, 2000
Walter M. Psztur (Principal Financial
and Accounting Officer)
/s/ Richard J. Berman
- ----------------------- Director September 13, 2000
Richard J. Berman
/s/ G. Michael Cassidy
- ----------------------- Director September 13, 2000
G. Michael Cassidy
- ----------------------- Director September __, 2000
Charles C. Johnston
/s/ Arthur R. Medici
- ----------------------- Director September 13, 2000
Arthur R. Medici
/s/ James A. Ortenzio
- ----------------------- Director September 13, 2000
James A. Ortenzio
- ----------------------- Director September __, 2000
Matthew Wolk