As filed with the Securities and Exchange Commission on June 4, 1999
Registration No. _________
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 Identification Number)
incorporation or organization)
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)
RICHARD J. BERMAN
Chairman 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
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Title of each class Amount Proposed Proposed maximum Amount
of securities to be to be maximum offering aggregate offering of
registered registered(1) price per share price per share(2) registration fee(2)
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Class A Common Stock,
par value $.01 per share 3,213,334 $ 12.06 $ 38,760,841 $ 10,776
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(1) Issuable upon conversion of Series A Convertible Redeemable Preferred Stock.
Also includes such indeterminate number of shares of Class A Common Stock that
may be issuable upon conversion of the Series A Convertible Redeemable Preferred
Stock pursuant to the anti-dilution provisions thereof.
(2) The proposed maximum aggregate offering price has been estimated solely to
calculate the registration fee under Rule 457(c) of the Securities Act, based
upon the average of the highest and lowest price per share of common stock on
The Nasdaq SmallCap Market reported on June 1, 1999.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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The information in this prospectus is not complete and may be
changed. The selling stockholders may not sell these securities until
the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
- --------------------------------------------------------------------------------
PROSPECTUS
INTERNET COMMERCE CORPORATION
3,213,334 Shares of Class A Common Stock
par value $.01 per Share
o This Prospectus relates to the public offering from time to time of up
to 3,213,334 shares of our Class A Common Stock by the persons listed in
"Selling Stockholders" below or their pledgees, donees, transferees and
other successors in-interest, referred to in this Prospectus as the
"selling stockholders," after the selling stockholders convert all or
part of their shares of Series A Convertible Redeemable Preferred Stock
(the "Series A Preferred Stock"). We issued the Series A Preferred Stock
to the selling shareholders in a private placement that was completed in
April 1999. This Prospectus also relates to the sale by the selling
stockholders of an indeterminate number of additional shares of our
common stock that is issuable upon conversion of the Series A Preferred
Stock if the conversion price is adjusted as required by the Series A
Preferred Stock.
o Our common stock is traded on The Nasdaq SmallCap Market under the
symbol "ICCSA". On June 3, 1999, the last sale price for the common
stock was $11.625.
o The shares of common stock offered by this Prospectus are being sold by
the selling stockholders. Any selling stockholder may sell the 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 common stock are sold and the commissions
paid, if any, may be privately negotiated, may be based on the
prevailing market prices and may vary from transaction to transaction.
o We will not receive any proceeds from the sale of these shares. We will
pay all expenses of registration incurred in connection with this
offering. The selling stockholders will pay all selling and other
expenses that they incur.
o This investment involves a high degree of risk. You should carefully
consider the risk factors beginning on page 7 of this Prospectus before
you decide to invest.
Neither the Securities and Exchange Commission (the "SEC") 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.
We have not authorized anyone to provide you with, and you should not
rely on, information other than that which is in this Prospectus.
The date of this Prospectus is June _, 1999
TABLE OF CONTENTS
Page
----
Forward-Looking Statements................................................... 3
Summary of Our Business...................................................... 3
Risk Factors................................................................. 7
Risks Relating to our Company................................................ 7
Risks Relating to the Internet and Online Commerce Aspects of our Business... 14
Risks Relating to our Class A Common Stock................................... 16
Use of Proceeds.............................................................. 18
Selling Stockholders......................................................... 18
Plan of Distribution......................................................... 21
Description of Securities.................................................... 22
Legal Matters................................................................ 30
Experts...................................................................... 30
Where You Can Find More Information.......................................... 30
FORWARD-LOOKING STATEMENTS
This Prospectus contains a number of "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). 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" and "intend," 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 with respect
to future events and are subject to risks, uncertainties and assumptions related
to various factors including, without limitation, those listed under the heading
"Risk Factors" 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 or intended. 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.
SUMMARY OF OUR BUSINESS
Internet Commerce Corporation
We have developed, and own and operate, an Internet-based value-added
network ("VAN") with which we provide Electronic Data Interchange ("EDI")
services to large organizations and their trading partners under the trade name
CommerceSense. We have developed our CommerceSense service as an alternative to
the EDI services that are currently provided by traditional VANs that offer
their services primarily using dedicated telecommunications links. Our
CommerceSense service translates and transmits electronic documents, such as
purchase orders, requests for proposals and receipts, as well as images and
other data over the Internet through an "in" and "out" mailbox system. We began
the development of our CommerceSense service in 1997, introduced CommerceSense
for beta testing in November 1997 and launched the current version of
CommerceSense commercially in April 1999.
We believe that our CommerceSense service offers the following services
typically provided by traditional VANs:
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o Document management, acknowledgment and tracking;
o Archiving and reporting services;
o Third-party non-repudiation (we act as an independent third party
to verify document transmission, receipt and content);
o Technical support; and
o Security and encryption as required by application.
In addition to providing many of the features of the services provided
by traditional VANs, we believe that CommerceSense offers advantages over the
services provided by traditional VANs, such as:
Lower Costs. Our CommerceSense service uses the Internet to offer
customers services at a lower cost than traditional VANs.
o CommerceSense does not require the customer to purchase software or
an EDI translator to access the network, thus lowering the upfront
costs required to subscribe to our CommerceSense service compared to
subscribing to a traditional VAN service;
o Using the Internet rather than the traditional VAN
telecommunications infrastructure reduces the costs associated with
EDI transmissions and enables us to offer our CommerceSense service
at lower prices than those currently charged by traditional VANs;
o CommerceSense does not require customers to make ongoing software
modifications or maintain a technical staff to manage EDI
transmissions; and
o The lower setup and operating costs allow a larger percentage of an
organization's smaller trading partners to become EDI-enabled,
thereby facilitating the exchange of documents and other data and
reducing costs for both the organization and its trading partners.
Improved Quality of Service and Additional Features. Our CommerceSense
service uses the Internet to deliver a higher level of service and more
features than traditional VANs.
o Documents are delivered significantly faster, depending upon the
speed of the customer's ISP connection;
o Customers may more effectively track, monitor and process business
documents and other data;
o Documents can be delivered either in real time or retrieved when
convenient for the customer, rather than in batches, which in some
cases can take several hours to be delivered. Real-time delivery
reduces the potential for
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document corruption, bottlenecks and other problems associated with
batch delivery modes;
o Our CommerceSense service can handle transmissions of data other
than standard business documents, such as images, engineering
drawings, architectural blueprints, audio and video clips; and
o The customer can create different document types and formats for
various business applications. For example, the customer can add its
business logo to its documents and can use its own format for each
document type.
In addition, we believe our CommerceSense service offers advantages over
e-mail and other Internet-based electronic commerce systems, such as:
o Our CommerceSense service can handle a wide variety of business
documents and data, including purchase orders, invoices, statements,
inventory tracking and shipping documents, images, engineering
drawings, architectural blueprints, audio and video clips; and
o We believe that CommerceSense is the only Internet-based data
transmission service that is approved to interconnect with the six
largest traditional VANs, which we believe currently account for 90%
of EDI revenue. Thus, we can handle EDI traffic between our customers
and any of their trading partners that choose to continue to use a
traditional VAN.
A large company that uses EDI to communicate with its vendors is
referred to as a "hub"; the vendors are referred to as "spokes". We intend to
continue to market our CommerceSense service to the 2,500 largest hub companies
in the United States. Due to the cost to the spoke companies of using VANs,
large hub companies using EDI are currently connected to only a small percentage
of their potential spoke companies. We believe that a significant number of
these hub companies intend to expand the use of electronic commerce to more of
their spoke companies. Since small spoke companies using our CommerceSense
service require only an Internet connection or a Web browser to receive and
transmit documents electronically, 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 CommerceSense service.
We believe that if we are able to sell our CommerceSense service to a
significant percentage of a hub company's spokes, we may be able to offer to
such a trading community ancillary messaging services in addition to
CommerceSense. It is our intention to attempt to develop and introduce a variety
of messaging products and services with a focus on the needs of large-scale
enterprises, particularly those enterprises that are in vertical markets in the
25 largest commercial industries. We believe that a large-scale CommerceSense
trading community within an individual vertical market could make available to
third parties
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desirable access to a group of buyers and sellers that share applications and
circumstances unique to their industry.
The address of our principal executive office is 805 Third Avenue, New
York, New York 10022. Our telephone number at that address is (212) 271-7640.
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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 common stock. Investing in our 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
common stock and could result in the complete loss of your investment.
The risks and uncertainties described below are not the only ones we
face. Additional risks and uncertainties that we do not currently recognize or
that we currently believe are immaterial may also adversely impact our business,
operating results, financial condition and the market price of our common stock.
RISKS RELATING TO OUR COMPANY
We have a limited operating history.
We were founded in November 1991 and from 1991 to 1997 we conducted
limited operations and developed certain products that we were unable to exploit
commercially and consequently discontinued. In 1997, we shifted our business
emphasis to focus exclusively on the development and marketing of our
CommerceSense service and launched the current version of our CommerceSense
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. An investor in our common stock must
consider the substantial risks, expenses and difficulties frequently encountered
by companies that depend solely on the success of a recently-introduced new
product or service and that compete in new and rapidly evolving markets. Such
risks for us include:
o our evolving business model;
o our ability to achieve market acceptance of our services;
o our ability to manage growth and expanding operations;
o our competitors, many of which have more established electronic
document delivery systems and customer relationships and vastly
greater financial and other resources than we do; and
o the rapid evolution of technology in electronic commerce.
We may not be successful in implementing any of our business strategies
or in addressing these risks. Even if we accomplish these objectives, we may not
be profitable in the near future, or ever.
We have incurred significant losses, expect future losses and we may never
become profitable.
We have incurred significant losses since our company was founded in
1991. We have never earned a profit in any fiscal quarter and, as of January 31,
1999, we had an
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accumulated deficit of approximately $16.5 million. In their audit report on our
July 31, 1998 financial statements, Richard A. Eisner & Company, LLP questioned
our ability to continue as a going concern. However, this occurred prior to the
consummation of our April 1999 private placement of Series A Preferred Stock in
which we raised approximately $7 million of cash proceeds and converted into
equity approximately $2,595,000 million of debt. We are currently focusing on
our CommerceSense service, which we introduced for beta testing in November
1997. We launched the current version of CommerceSense commercially in April
1999. As a result, our revenue for the foreseeable future is almost entirely
dependent on the success of this service, including, but not limited to, the
number of customers who subscribe to the service and the volume (in
kilocharacters) of the data, documents or other information they send or
retrieve utilizing our service. We expect our cost of revenue and operating
expenses to increase significantly, especially in the areas of marketing,
customer installation and customer service. We will need to generate significant
revenue to achieve and maintain profitability. If we do not increase our revenue
significantly, we will continue to be unprofitable.
We expect to base our expenditures on our plans and estimates of future
revenue. We may be unable to adjust spending in a timely manner if we experience
an unexpected shortfall in our revenue. As a result, we may not achieve
profitability.
Our prospects depend to a large extent on the future of business-to-business
electronic commence conducted on the Internet, which is uncertain.
The market for Internet-based electronic commence has only recently
begun to develop and is evolving rapidly. This makes it difficult to predict
demand and market acceptance for our CommerceSense service. We are not sure that
this market will grow. If the market does not develop as quickly as we expect,
our business, operating results and financial condition will be materially and
adversely affected. We cannot assure you that widespread acceptance of
business-to-business Internet-based electronic commence will occur.
We may not be able to manage our growth.
Our ability to implement our business plan successfully in a new and
rapidly-evolving market requires effective planning and growth management. 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. Our management and
operating systems may be strained by our growth and we may be unable to complete
in a timely manner necessary improvements to our operating systems, procedures
and controls to support our future operations. If we cannot manage our
anticipated growth effectively, our business, operating results and financial
condition will be materially and adversely affected.
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We may face capacity constraints.
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. 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 and
decrease our ability to acquire and retain customers. 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. Any significant
or prolonged capacity constraints would likely have a material and adverse
effect on our business, operating results and financial condition.
We face risks relating to rapid technological changes.
Our market is characterized by rapidly changing technologies, customer
demands and intense competition. If we cannot keep pace with these changes, our
CommerceSense service could become uncompetitive and our business will suffer.
The Internet's recent growth and the intense competition in our industry
exacerbate these characteristics. We need to continue to develop strategic
business and Internet solutions that enhance and improve the customer service
features, functions and responsiveness of our CommerceSense service 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 CommerceSense service or new services that respond to technological
change or customer demands, our business will suffer.
We may have future capital needs.
If we do not become profitable, or if achieving profitability takes
longer than we anticipate, we will need to raise additional funds. 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. If additional financing is needed, we cannot assure you that it
will be available on reasonable terms or at all. Our business, operating results
and financial condition could be materially and adversely affected by any
failure to obtain necessary additional financing.
If additional funds are raised through the issuance of debt securities,
the holders of the debt securities will have a claim to our assets that will be
prior to any claim of our stockholders. The interest on these debt securities
could have a material and adverse effect on our operating results and financial
condition. If additional funds are raised through the issuance of common stock
or securities convertible into or exchangeable for 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 common stock.
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The business-to-business electronic commerce market is intensely competitive.
The business-to-business electronic commerce industry is evolving
rapidly and is intensely competitive. Our principal competitors include: GE
Information Services, Inc., Harbinger Corporation, AT&T Corp., MCI
Communications Corporation, Sterling Commerce, Inc. and Advantis, a
joint-venture of International Business Machines Corporation and Sears Roebuck &
Co. 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. Current and potential
competitors may establish cooperative relationships among themselves.
Many of our current and potential competitors, especially those named
above, 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. New competitors
or alliances or other cooperative relationships among current and potential
competitors and suppliers may emerge and rapidly acquire market share.
We may not be successful in competing against our current and future
competitors. Increased competition or our failure to compete successfully is
likely to result in fewer customers, price reductions, reduced gross margins,
increased marketing costs or loss of market share, or a combination of these
problems, any of which could have a material and adverse effect on our business,
operating results and financial condition.
We currently depend on our CommerceSense service and face the risks of expanding
into new business areas.
We are currently focusing exclusively on our CommerceSense service. As a
result, our financial condition for the foreseeable future will depend heavily
on the success or failure of our CommerceSense service. We introduced the
current version of our CommerceSense service commercially in April 1999 and it
is difficult to predict demand and market acceptance for this service in the new
and rapidly evolving business-to-business electronic commerce market.
It is our intention to attempt to expand our operations by developing
and marketing new or complementary services or systems or by expanding the
breadth and depth of our offerings. We cannot assure you that we will be able to
do so effectively. Furthermore, although we believe that we will be able to use
our CommerceSense service as a platform to provide these additional services or
systems, we cannot assure you that we will be able to do so.
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We may pursue acquisitions which will require substantial funding and divert our
management and may involve substantial risk.
We may 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. If an acquisition candidate is identified, we cannot
assure you that we will be able to successfully negotiate and finance the
acquisition. In addition, we cannot assure you that we will be able to integrate
the acquisition into our existing business and successfully operate the
acquisition. The negotiation of potential acquisitions could cause diversion of
management's time and resources and require significant resources to consummate.
If we consummate one or more significant acquisitions through the issuance of
shares of 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.
We depend on our key personnel and certain third-party providers and we will
need to attract and retain additional personnel.
We are substantially dependent on the continued services and performance
of our executive officers and other key employees. In addition, we believe we
will need to expand significantly our information technology, marketing and
customer service staffs in the near future by hiring employees who are highly
skilled in the Internet and its rapidly-changing technology. Individuals who
have Internet expertise and can manage, service or market the services we offer
and propose to offer are in high demand. Many of our competitors have
significantly greater financial and other resources than we do and may be able
to offer more lucrative compensation packages and higher-profile employment
opportunities than we can. Although all of our executive officers and certain
key employees have entered into employment agreements, none of these agreements
prevents any of them from leaving us. The loss of the services of any of our
executive officers or other key employees or our inability to hire needed
additional personnel could materially and adversely affect our business,
operating results and financial condition.
We intend that an important part of the compensation of our key
employees will be stock options and other stock-based compensation. If our stock
price declines for any significant period of time, we may not be compensating
our employees in a competitive manner. In that case, it could become difficult
to retain key employees and our business would suffer.
In addition, we are substantially dependent on the services of
independent contractors to train customers in the use of CommerceSense. We have
entered into one such relationship and are seeking to retain several other
providers of such services. We do not control or supervise these service
providers and if they fail to perform satisfactorily or if we cannot retain
additional service providers, our business will be materially and adversely
affected.
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We are dependent on our intellectual property.
Other than our branding patent, our intellectual property consists of
proprietary or confidential information that is not currently subject to patent,
trademark or similar protection. Although we have applied for trademark
protection for the CommerceSense name, this name is not currently a registered
trademark in the United States.
Legal standards relating to the validity, enforceability and scope of
protection of certain proprietary rights in Internet-related businesses are
uncertain and still evolving. As a result, we cannot assure you that
unauthorized third parties will not try to copy our service or our business
model or use our confidential information to develop competing services. It is
possible that our competitors or others will adopt product or service names
similar to CommerceSense, thereby impeding our ability to build brand identity
and possibly confusing customers. We cannot assure you that we will be able to
secure significant protection for this trademark. Policing unauthorized use of
our technology is difficult and expensive, particularly because 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.
We also cannot assure you that our business activities and our
CommerceSense service will not infringe upon the proprietary rights of others,
or that other parties will not assert infringement claims against us. Any such
claims and any resulting litigation, should it occur, could subject us to
significant liability for damages and could result in invalidation of our
proprietary rights and a requirement that we enter into costly and burdensome
royalty and licensing agreements. If a license or royalty agreement is required,
it may not be available on terms acceptable to us, or may not be available at
all. In the future, we may also 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. These litigations, whether
successful or unsuccessful, could result in substantial costs and diversion of
resources, including management time and attention.
Our operating results may fluctuate significantly due to seasonality.
Our limited operating history with respect to our CommerceSense service,
together with our expanded business strategy, make it difficult to assess fully
the impact of seasonal factors on our business. However, 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.
International expansion could result in financial losses.
We intend to expand our international marketing and sales efforts.
International operations are subject to a number of inherent risks, including
the following:
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o political, economic and legal instability;
o fluctuations in currency exchange rates;
o potentially adverse tax consequences;
o the burdens of complying with a wide variety of foreign laws and
changing regulatory requirements; and
o tariffs and other trade barriers.
We may suffer systems failures and business interruptions.
Our success will depend 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 damage from fire, power loss,
telecommunications failures, break-ins, earthquakes and other events. 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. Any of these
events could lead to interruptions or delays in service, loss of data or the
inability to accept, transmit and confirm customer documents and data. These
events could have a material adverse effect on our business, operating results
and financial condition.
Certain of our existing stockholders will exercise significant control.
Certain of our stockholders currently, in the aggregate, beneficially
own shares having approximately 28.4% of the combined voting power of our voting
securities. These shares have been deposited into a voting trust and will be
voted at the direction of a majority of the non-management directors of the
Company and Richard J. Berman, our Chairman and Chief Executive Officer. See
"Description of Securities". As a result, these stockholders will be able to
take any of the following actions without your approval:
o elect all of our directors;
o amend our charter or approve a merger, sale of assets or other major
corporate transaction;
o defeat any takeover attempt that you may believe is beneficial; and
o otherwise control the outcome of all matters submitted for a
stockholder vote.
The interests of these stockholders could conflict with your interests. In
addition, this concentration of ownership could delay or prevent another person
from acquiring control or causing a change in control of ICC, which may affect
your ability to resell your shares at a favorable price.
Problems related to the year 2000 issue could require us to incur unanticipated
delays and expenses.
As a company engaged in business-to-business electronic commence over
the Internet, we rely on computer programs and systems in connection with our
internal and external communication networks and systems (including
transmissions of information over the
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Internet), order processing and fulfillment, accounting and financial systems,
customer access to our Web site and other business functions. Based on our
design process and assessment to date, we believe the current versions of our
service and our various systems are year 2000 compliant. However, we cannot
assure you that our programs designed to minimize the impact of the transition
to the year 2000 on our electronic date-sensitive equipment, including the
terminal operations software at our facilities, will be completely successful
(or that the costs of implementing them will not exceed our current estimates).
If these programs are not successful (or if their costs exceed our estimates),
the date change from 1999 to 2000 could have a material and adverse effect on
our business, operating results and financial condition. The full extent of any
adverse impact on our business is impossible to determine.
It is possible that our customers may not become year 2000 compliant in
a timely fashion. While the failure of a customer to become year 2000 compliant
will not affect our ability to receive or transmit that customer's documents or
data, the ability of that customer's trading partners to receive or utilize the
document or data transmitted may be adversely affected. As a result, customers
that are not year 2000 compliant may cease using our CommerceSense service and
that may have a material and adverse effect on our business, operating results
and financial condition.
RISKS RELATING TO THE INTERNET AND ONLINE COMMERCE
ASPECTS OF OUR BUSINESS
We depend on the continued existence of the Internet infrastructure.
The increased acceptance of the Internet for business-to-business
electronic commerce is essential for our business to grow. 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. The Internet could lose its viability or its usage could decline
due to many factors, including:
o cost and ease of Internet access;
o delays in the development of the Internet infrastructure;
o inconsistent service quality;
o the adoption of new standards or protocols for the Internet;
o changes or increases in governmental regulation;
o the development and adoption of new technologies which do not use the
Internet;
o intellectual property ownership; and
o privacy concerns.
In addition, concerns over 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 rely upon encryption and authentication
technology to provide secure transmission of
- 14 -
confidential information. However, we cannot assure you that our security
measures will prevent security breaches, and such breaches could expose us to
operating losses, damage to our reputation, litigation and possible liability.
Advances in computer capabilities, new discoveries in the field of cryptography
or other developments may result in a compromise or breach of our encryption and
authentication technology and could enable an outside party to steal proprietary
information or interrupt our operations. 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 such breaches.
We depend on third-party providers of Internet and telecommunications service.
Our operations also depend upon third parties for Internet access and
telecommunications. Frequent or prolonged interruptions of these services could
result in significant losses of revenues. 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. Nor
can we assure you that the quality of services that they provide will remain at
the levels needed to enable us to conduct our business effectively. 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 cause users to perceive our products as not
functioning properly and therefore cause them to use other methods to deliver
and receive information.
Government regulation and legal uncertainties relating to the Internet could
hurt our business.
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, due to the increasing popularity and use of the Internet, it is
possible that a number of laws and regulations may be adopted with respect to
the Internet or other online services covering issues such as:
o user privacy;
o security;
o pricing;
o content;
o copyrights;
o distribution;
o taxation; and
o characteristics and quality of services.
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 such providers. This could increase the cost of transmitting documents and
data over the Internet. Finally, foreign laws and state tax laws and regulations
relating to the provision of services over the Internet are still
- 15 -
developing. If individual states impose taxes on services provided over the
Internet, our cost of providing our CommerceSense and other services may
increase and we may not be able to increase the prices we charge to cover these
costs. Any new domestic or foreign laws or regulations or new interpretations of
existing laws and regulations relating to the Internet could have a material and
adverse effect on our business, operating results and financial condition.
RISKS RELATING TO OUR CLASS A COMMON STOCK
Our stock price may be extremely volatile.
The market price of our common stock is likely to fluctuate
substantially in the future. In addition, the securities markets have
experienced significant price and volume fluctuations and the market prices of
the securities of Internet-related companies have been especially volatile.
Fluctuations in the market price of our common stock may affect our visibility
and credibility in the Internet commerce market. In addition, in the past,
companies that have experienced volatility in the market price of their stock
have been subject to securities class action litigation. A securities class
action lawsuit against us could result in substantial costs and a significant
diversion of resources, including management time and attention.
If you decide to purchase our shares, you may not be able to resell them
at or above the price you paid due to a number of factors, including, in
addition to those described above:
o changes in earnings estimates by analysts;
o actual or anticipated variations in quarterly operating results,
including actual results below analysts' expectations;
o the loss of customers;
o market conditions in the industry or generally;
o general domestic and international economic conditions;
o announcements of technological innovations by our competitors; and
o significant sales of our common stock by one or more of our principal
stockholders.
As a result, you could suffer a loss if the future market price remains less
than the price you paid per share.
The market for our common stock may be illiquid.
Our common stock is currently trading on the Nasdaq SmallCap Market.
There can be no assurance that an active trading market will be sustained. It is
possible that the trading market for the common stock in the future will be
"thin" and "illiquid", which could result in increased volatility in the trading
prices for our common stock. The price at which the common stock will trade in
the future cannot be predicted and will be determined
- 16 -
by the market. The price may be influenced by many factors, including, but not
limited to, investors' perceptions of us, the use of the Internet for business
purposes and general economic and market conditions.
Our common stock was delisted from the Nasdaq SmallCap Market on
February 22, 1999 because we did not satisfy the listing criteria. We have since
then been relisted on the Nasdaq SmallCap Market. We believe that we are
significantly better positioned to maintain our listing on the Nasdaq SmallCap
Market as a result of the funds we raised in our private placement of Series A
Preferred Stock.
Our board of directors can issue preferred stock with rights adverse to the
holders of common stock.
Our board of directors is authorized, without further stockholder
approval, to determine the provisions of and to issue up to 4,989,825 shares of
preferred stock. Issuance of preferred shares with rights to dividends and other
distributions, voting rights or other rights superior to the common stock could
be adverse to the holders of common stock.
Our certificate of incorporation and bylaws provide director and officer
indemnification and limit their liability.
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 certain 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.
Our anti-takeover provisions and Delaware law may have adverse effects on our
stock price.
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, which could
depress our stock price. These provisions include: (a) authority to divide the
Board of Directors into three classes so that only one-third of our directors
are elected each year and are elected for terms of three years; (b) requiring a
request by stockholders holding not less than 20% of our outstanding stock to
compel the Board of Directors to call a special meeting of the stockholders,
which request must state the object of the proposed meeting; and (c) permitting
the Board of Directors to amend or repeal our bylaws without stockholder consent
or vote.
- 17 -
USE OF PROCEEDS
The selling stockholders are selling all the common stock covered by
this Prospectus for their own account. Accordingly, we will not receive any
proceeds from the sale of such common stock. We will pay all expenses of
registration incurred in connection with this offering. The selling stockholders
will pay all selling and other expenses that they incur.
SELLING STOCKHOLDERS
We raised $7 million of cash proceeds and converted into equity
$2,595,000 of debt through the sale and exchange of Series A Preferred Stock in
our private placement that was completed in April 1999. We issued a total of
9,595 shares of Series A Preferred Stock in connection with this private
placement to the selling stockholders named below. In May 1999 we issued 45
shares of Series A Preferred Stock to Summerwind Restructuring, Inc. for
financial consulting and advisory services rendered from January 1, 1999 through
April 30, 1999. This Prospectus relates to 3,213,334 shares of common stock that
may be offered and sold from time to time by the selling stockholders after they
convert their shares of Series A Preferred Stock. It also relates to the sale by
the selling stockholders of an indeterminate number of additional shares of our
common stock that is issuable upon conversion of the Series A Preferred Stock if
the conversion price is adjusted as required by the Series A Preferred Stock.
Set forth below is information, as of the date of this Prospectus,
regarding the beneficial ownership of the shares by the selling stockholders.
The number of shares shown as beneficially owned by the selling stockholders
represents all of the shares of Common Stock to be issued upon conversion in
full of all of the outstanding shares of Series A Preferred Stock. The
information regarding the selling stockholders' beneficial ownership after this
offering assumes that all shares of common stock offered by the selling
stockholders through this Prospectus are actually sold. The presentation is
based on __________ shares of our common stock outstanding as of _____, 1999.
- 18 -
- ----------------------------------------------------------------------------------------------------------
Number of Shares Number of Common Stock
of Common Stock Shares of Beneficially Owned
Beneficially Owned Common Stock After Offering
- ----------------------------------------------------------------------------------------------------------
Selling Stockholders Prior to Offering Offered Number Percent
- ----------------------------------------------------------------------------------------------------------
DOUG SCHMIDT
AGR HALIFAX FUND, LTD
ALBA LTD
ALEXANDER MITCHELL
ALTA WEHNERT
ANTHONY G. ORPHANOS
ARAB COMMERCE BANK LTD
ARCHIBALD M. BROWN, JR.
ASHISIE DRUVE
AUSTOST ANSTALT SCHAAN
BANCA FINNAT
EURAMERICA, S.p.A
BEAR STEARNS SECURITIES
CORP CUSTODIAN FOR
STEVEN MIZEL IR
BENNY SHABTAI
B.R. FRIES & ASSOCIATES
CANADIAN ADVANTAGE
CFC GROUP
CHARLES TRAVERS
CLAUDE P. LEMIEUX
ROBERT GEROTH
STEVEN ABLAMSKY
JOHN ABLAMSKY
JODI KURST
RENEE CASADONTE
DONALD CASADONTE
CYRILLE PLACE
DAVID C. LYLE
DAVID HANDLER
DAVID JAN MITCHELL
DAVID MITCHELL
DAVID MORLEY
DIETER WITTRIN
DOMINIC BASSANI
DOMINIC CHANG
DOMINICK D'ALLEVA
DRS. AJ SCHACHTER
E & G GLASBRENNER
ELISE G. KLEIN
ELLIS AG
EMERSON CAPITAL
MANAGEMENT LTD.
FALCON SECURITIES
FIDUCIARIA OREFICI, S.p.A
FINANCIAL INSTITUTION
RETIREMENT FUND
GARY S. GLUCK
GARY WRUBLE
GERALD WILLIAM CRABBE
GORDON SCHAEFFER
GUILLAUME ZOLA PLACE
HARVEY BLITZ
HERBERT BORK
HERIOT HOLDINGS LIMITED
ICN CAPITAL LIMITED
INGO SCHNELLE
- 19 -
- ----------------------------------------------------------------------------------------------------------
Number of Shares Number of Common Stock
of Common Stock Shares of Beneficially Owned
Beneficially Owned Common Stock After Offering
- ----------------------------------------------------------------------------------------------------------
Selling Stockholders Prior to Offering Offered Number Percent
- ----------------------------------------------------------------------------------------------------------
JAMES A. ORTENZIO
JAMES BURZOTTA
JAMES J. MCANDREWS IRA
JAMES SCIBELLI
JAN MITCHELL
JEAN A. FRISA
JEFFREY S. MARKOWITZ
JIMMY C.M. HSU
JOERG LANGLITZ
JOHN D. LANE
JOSEPH A. FOGLIA
JOSEPH FUSCO
JOSEPH M. RAITI
JOSEPH M. IDY
JOSEPH P. BASILICE
J. DOUGLAS SCHMIDT
KATHLEEN MEDICI
KENNETH A. JOHNSON
KENSINGTON CAPITAL LTD
KERRY M. FLEMING
KEVIN STEELE
KLAUS KAPOSI
KURT GUBLER, C/O
INVESTARIT AG
LADNER INVESTMENTS LTD
LONDON VENTURE CAPITAL
CORP
LONG ISLAND TITLE
AGENCY, INC.
MAKOTO SASAKI
MARKUS WALLNEY
NIKO DIMITROV
ORHAN SADIK-KHAN
OTATO LIMITED
PARTNERSHIP
PASQUALE M. LAVECCHIA
PICTET & CIE
RANDALL McCATHREN
RBB BANK AG
RICHARD BLUME
RICHARD FELDMAN
RICHARD FRIEDMAN
RICHARD J. BERMAN
ROLAND MUELLER
ROLF ALBRECHT
RONALD C. FROMM
RONALD LOSHIN
ROSS DWORMAN
SALVATORE J. ZIZZA
SHOU-CHUNG WANG
SONEM PARTNERS LTD
STEVEN J. POSNER
STEVEN SLAWSON
SUMMERWIND
RESTRUCTURING, INC.
THOMAS ENRIGHT
THOMAS R. ULIE
THOMAS W. PEW, JR.
- 20 -
- ----------------------------------------------------------------------------------------------------------
Number of Shares Number of Common Stock
of Common Stock Shares of Beneficially Owned
Beneficially Owned Common Stock After Offering
- ----------------------------------------------------------------------------------------------------------
Selling Stockholders Prior to Offering Offered Number Percent
- ----------------------------------------------------------------------------------------------------------
TIMOTHY VON FUELLING
STRAUS
TOMMY C. HSU
VINCENT FERRARA
WILLIAM PATTERSON
- --------------------
PLAN OF DISTRIBUTION
We anticipate that the selling stockholders may sell all or a portion of
the shares offered by this Prospectus from time to time on The Nasdaq SmallCap
Market or otherwise, 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 the broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal in order 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 with respect to the sale
of the shares offered by this Prospectus, although we have made no inquiry in
that regard. In connection with distributions of the shares or otherwise, 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 covered by this
Prospectus in the course of hedging the positions they assume with
selling stockholders;
o the selling stockholders may sell shares of our common stock short and
deliver the shares to close out their short positions;
- 21 -
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 covered by this Prospectus, which the broker-dealer may
resell according to this Prospectus; and
o the selling stockholders may pledge the shares covered by this
Prospectus to a broker or dealer and upon a default, the broker or
dealer may effect sales of the pledged shares 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, in which event
commissions received by any such broker, dealer or agent and profit on any
resale of the shares may be considered to be underwriting commissions under the
Securities Act. Such commissions received by a broker, dealer or agent may be in
excess of customary compensation.
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.
We have notified the selling stockholders that they will be subject to
applicable provisions of the Exchange Act and its rules and regulations,
including without limitation, Rule 102 under Regulation M. These provisions may
limit the timing of purchases and sales of any of the 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, an account in which the selling stockholders
or affiliated purchasers have a beneficial interest in 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 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.
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
- 22 -
read our certificate of incorporation and bylaws very carefully. See "Delaware
Law and Certificate of Incorporation and Bylaw Provisions" in this Section for a
discussion of certain relevant provisions of our certificate of incorporation
and bylaws and the Delaware General Corporation Law.
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 and
175 shares of Series S Preferred Stock ("Series S Preferred Stock"). Each class
and series of our capital stock has a par value of $.01 per share.
Common Stock
Class A Common Stock
- --------------------
As of May 31, 1999, there were 1,383,437 shares of Class A Common Stock
outstanding, held of record by approximately 160 stockholders. Class A Common
Stock is currently traded on the Nasdaq SmallCap Market under the symbol
"ICCSA".
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 or any other series of preferred stock that ICC may
designate and issue in the future.
Class B Common Stock
- --------------------
As of May 31, 1999, there were 114,954 shares of Class B Common Stock
outstanding, held of record by 24 stockholders.
- 23 -
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 prior to 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.
Class E-1 and E-2 Common Stock
- ------------------------------
As of May 31, 1999, there were 276,851 shares each of Class E-1 Common
Stock and Class E-2 Common Stock outstanding. On May 28, 1999, we called for
redemption on June 11, 1999 all outstanding shares of Class E-1 and Class E-2
Common Stock for a total redemption price of $276.85.
Preferred Stock
The certificate of incorporation authorizes the 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 and 175 shares of preferred stock
as Series S 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 May 31, 1999, ICC had 9,640 shares of Series A Preferred Stock
outstanding, held by approximately 110 stockholders.
Series A Preferred Stock is convertible, at the option of the holder,
into the number of shares of Class A Common Stock equal to $1,000 divided by 75%
of the average closing price of the Class A Common Stock on the Nasdaq SmallCap
Market or, if not then traded on the Nasdaq SmallCap Market, in the
over-the-counter market for the ten trading days immediately prior to the
conversion date, at a conversion rate of $5.00 per share until December 31, 1999
with respect to 6,940 shares of Series A Preferred Stock and a minimum
- 24 -
conversion rate of $3.00 per share and a maximum conversion rate of $5.00 per
share with respect to 2,700 shares of Series A Preferred Stock. As of January 1,
2000, all outstanding shares of Series A Preferred Stock will have a minimum
conversion rate of $3.00 per share and a maximum conversion rate of $5.00 per
share. No fewer than 25 shares may be converted at one time unless the holder
then holds fewer than 25 shares and converts all such shares at that time.
Series A Preferred Stock is redeemable, in whole or in part, by ICC at
$1,000 per share, plus any accrued and unpaid dividends, upon thirty-days'
written notice, commencing on the third anniversary of the date of issuance.
Subject to the rights of stockholders holding any series of ICC
preferred stock that is senior to the Series A Preferred, in the event of 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. If upon a liquidation, dissolution or winding up of ICC the
assets remaining after liabilities and amounts due to holders of senior
preferred stock have been paid in full or set aside are not sufficient to pay
such amount and the amount also due to holders of other preferred stock ranking
on a parity with the Series A Preferred Stock, the holders of the Series A
Preferred Stock share ratably with the holders of the parity preferred stock in
the assets remaining.
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, each July 1 commencing July 1, 1999.
Series A Preferred Stock has no voting rights except as expressly
required by law.
Series S Preferred Stock
- ------------------------
As of May 31, 1999, ICC had 175 shares of Series S Preferred Stock
outstanding, held by one stockholder.
Commencing July 1, 1999, and on the first day of each calendar month
thereafter, twelve shares of Series S Preferred Stock shall be mandatorily
redeemed by ICC at a price of $1,000 per share. If ICC is unable to redeem the
twelve shares, the twelve shares will be automatically converted into Class A
Common Stock at a conversion rate per share of Series S Preferred Stock equal to
$1,000 divided by the average closing price of the Class A Common Stock on the
Nasdaq SmallCap Market or, if not then traded on the Nasdaq SmallCap Market, in
the over-the-counter market for the five trading days immediately prior to the
conversion date.
- 25 -
Subject to the rights of stockholders holding any series of preferred
stock of ICC that is senior to the Series S Preferred, in the event of a
liquidation, dissolution or winding up of ICC, the holders of Series S Preferred
Stock are entitled to receive an amount equal to $1,000 per share of Series S
Preferred Stock. If upon a liquidation, dissolution or winding up of ICC the
assets remaining after liabilities and amounts due to holders of senior
preferred stock have been paid in full or set aside are not sufficient to pay
such amount and the amount also due to holders of other preferred stock ranking
on a parity with the Series S Preferred Stock, the holders of the Series S
Preferred Stock shall share ratably with the holders of the parity preferred
stock in the remaining assets.
Holders of the outstanding Series S Preferred Stock are not entitled to
receive any dividend payments and have no voting rights except as expressly
required by law.
Voting Trust. Thomas H. Lipscomb (former Chairman of the Board and President of
the Company), and Alan N. Alpern (former Chief Financial Officer of the Company)
have deposited substantially all the shares of common stock beneficially owned
by them and other members of their families, which includes Class B Common
Stock, into a voting trust (the "Voting Trust") until February 18, 2000. As of
May 1, 1998, 123,739 shares of Class B Common Stock were forfeited pursuant to
an Escrow Agreement dated as of September 11, 1992, as amended September 20,
1994 (the "Escrow Agreement"), and such shares were delivered by the Escrow
Agent to the Company which holds the shares in treasury. Accordingly, as of May
31, 1999, the shares in the Voting Trust represent 28.4% of the total voting
power of the Company. The shares of Common Stock held in the Voting Trust will
be voted at the direction of a majority of the non-management directors of the
Company and Richard J. Berman, the Chief Executive Officer of the Company and
Arthur R. Medici, former President and a current Director of the Company.
Warrants
As of May 31, 1999 there were 1,227,573 Class A Warrants outstanding.
Each Class A Warrant entitles the holder upon exercise to purchase one Class B
Warrant (described below) and one share of Class A Common Stock. Each Class A
Warrant is exercisable for $22.39 and expires in February 2002.
As of May 31, 1999 there were 2,212,439 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 $30.13 and expires
in February 2002.
- 26 -
The Class A and Class B Warrants are traded in the over-the-counter
market on the NASD's "OTC Electronic Bulletin Board". The number of Class A and
Class B Warrants and the exercise prices thereof 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
then market price (as defined the Class A and Class B Warrants) of the Class A
Common Stock. In the event that all the Series A Preferred Stock remains
outstanding on January 1, 2000 and the minimum price at which it may be
converted changes to $3.00 per share, the number of Class A Warrants and Class B
Warrants outstanding as of May 31, 1999 would increase to 1,519,683 and
2,738,906, respectively, and the exercise prices of the Class A Warrants and
Class B Warrants would decrease to $18.08 and $24.34, respectively.
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 is substantial. The
unit purchase options issued in connection with our initial public offering
expire in January 2000. The unit purchase options issued in connection with our
1997 private placement expire in February 2002.
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.
Two placement agents provided services in connection with our 1998
bridge financing and are entitled to receive a total of 59,850 warrants for
these services. 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 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 158,250 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.
- 27 -
The warrants issued in our 1998 bridge financing to investors and
placement agents are redeemable by ICC for $2.50 per warrant within 10 days of
mailing an acceleration notice at any time from June 1999 to January 2000 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.
Summerwind Restructuring, Inc. received 500,000 warrants (the
"Summerwind Warrants") as consideration for various consulting services under a
consulting agreement with our predecessor, Infosafe Systems, Inc. ("Infosafe"),
dated as of June 12, 1998. Each of these warrants entitles the holder upon
exercise to purchase one share of Class A Common Stock for $2.50 and expires in
June 2003. The number and exercise price of the Summerwind Warrants are subject
to adjustment in the event of any sale or distribution of debt or other
securities of ICC or of cash, property or other assets to holders of Class A
Common Stock, any stock dividend payable in shares of Class A Common Stock paid
to holders of Class A Common Stock, any subdivision or combination of the
outstanding Class A Common Stock, or any sale of any shares of Class A Common
Stock, or of any rights, options, warrants, or securities convertible into or
exercisable for Class A Common Stock, for consideration valued at less than the
then exercise price of the Summerwind Warrants.
Delaware Law and Certificate of Incorporation and Bylaw Provisions
The following summary description of provisions of the Delaware General
Corporation Law and our certificate of incorporation and bylaws is not intended
to be complete. You should read our certificate of incorporation and bylaws very
carefully.
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.
- 28 -
The provisions of our certificate of incorporation and bylaws could also
have anti-takeover effects. These provisions enhance the likelihood of
continuity and stability in the composition of the policies formulated 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. See "Risk Factors--Risks relating to our Class
A Common Stock--Our anti-takeover provisions and Delaware law may have adverse
effects on our stock price."
Classified Board of Directors
We received stockholder authorization on June 26, 1998 to amend our
certificate of incorporation to provide for the board of directors to be divided
into three classes of directors, with each class as nearly equal in number as
possible, serving staggered three-year terms. We intend to elect directors for
each class at our next annual meeting of stockholders. As a result,
approximately one-third of the board of directors will be elected each year. 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 its directors for monetary
damages resulting from breaches of their fiduciary duty to the extent permitted
by the Delaware General Corporation Law and (2) indemnify its 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.
- 29 -
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 being offered 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
consolidated financial statements as of July 31, 1998 and for each of the two
years then ended and for the period from November 18, 1991 (inception) through
July 31, 1998, as set forth in their report, included in our Annual Report on
Form 10-KSB for the year ended July 31, 1998 which is incorporated in this
Prospectus by reference. Such report contained an explanatory paragraph which
indicated that substantial doubt existed with respect to the Company's ability
to continue as a going concern. Our consolidated 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 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 with respect to us and our 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
- 30 -
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 common stock are traded on The Nasdaq
SmallCap Market. Materials that are filed can be inspected at the
offices of the National Association of Securities Dealers, Inc., Reports
Section, 1735 K Street, N.W., Washington, D.C. 20006.
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 Annual Report on Form 10-KSB for the year ended July 31, 1998;
o Our Quarterly Reports on Form 10-QSB for the quarters ended October 31,
1998 and January 31, 1999;
o Our Quarterly Reports on Form 10-QSB/A for the quarters ended October
31, 1998 and January 31, 1999;
o Our proxy statement for the 1999 Annual Meeting of Stockholders;
o Our Current Report on Form 8-K, filed with the SEC on April 20, 1999 and
our amendment on Form 8K/A filed with the SEC on April 28, 1999; and
o The description of our Class A Common Stock contained in our Rule 424
Prospectus filed with the SEC on June 18, 1997, including any amendments
or reports filed for the purpose of updating such description. See also
"Description of Securities" in this Prospectus.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
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Internet Commerce Corporation
805 Third Avenue
New York, New York 10022
(212) 271-7640
Attn: Victor Bjorge
You should rely only on the information incorporated by reference or
provided in this Prospectus or any Prospectus supplement. We have not authorized
anyone else to provide you with different information. 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.
- 32 -
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 the Company except as otherwise indicated.
SEC Registration Fee (actual)....................................$10,776
Nasdaq SmallCap Market Listing Fee (actual)..................... $ 7,500
Blue Sky Fees and Expenses...................................... $ 5,000
Printing and Engraving Fees and Expenses.........................$ *
Legal Fees and Expenses..........................................$ *
Accounting Fees and Expenses.....................................$ *
Miscellaneous....................................................$ *
Total............................................................$ *
- ----------
* To be completed by amendment.
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware (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 -- 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 such action, and the statue 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.
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.
Article Seventh of our Amended and Restated Certificate of
Incorporation, as further amended, further provides 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 Seventh of our Amended and
Restated Certificate of Incorporation, as further amended, provides that no
director shall be liable to ICC 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.
Article V of our by-laws provides that we shall, to the fullest extent
permitted by the laws of the State of Delaware, indemnify any and all persons
whom we shall have power to indemnify against any and all of the costs,
expenses, liabilities or other matters incurred by them by reason of having been
officers or directors of ICC, any subsidiary of ICC or of any other corporation
for which the person acted as officer or director at the request of the
corporation.
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. In the event that 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 the Company under the Securities Act or the
Exchange Act as indicated in parenthesis:
- 2 -
Exhibit
Number Description
- ------ -----------
3(i).1 Amended and Restated Certificate of Incorporation
3(i).2 Certificate of Merger merging Infosafe Systems, Inc. and
Internet Commerce Corporation
3(i).3 Certificate of Amendment to the Amended and Restated
Articles of Incorporation (1)
3(i).4 Certificate of Designations -- Series A Convertible
Redeemable Preferred Stock
3(i).5 Certificate of Designations -- Series S Preferred Stock
3(ii).1 * By-laws
4.1 Specimen Certificate for Class A Common Stock (2)
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
4.3 Form of Underwriter's Option (2)
4.4 Form of Warrant Agreement (2)
4.5 Escrow agreement, as amended (2)
4.6 Form of warrant expiring February 18, 2002 (2)
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. (3)
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. (3)
4.9 Form of Unit Purchase Option for D.H. Blair Investment
Banking Corp. dated February 18, 1997 (3)
- 3 -
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 (3)
4.11 Form of Class A Bridge Warrant issued in the 1998 bridge
financing
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 (2)
9.2 Amendments to the Voting Trust Agreement
10.1 1992 Stock Option Plan (2)
10.2 1994 Stock Option Plan (2)
10.3 Formation and Stock Purchase Agreement, dated as of April
16, 1997 among ICC, Michele Golden and Michael
Cassidy (4)
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 (5)
10.5 Consulting Agreement, dated as of June 12, 1998, between
Summerwind Restructuring, Inc. and ICC
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
10.7 * Lease Agreement, dated as of December 23, 1998, between
ICC and Data General Corporation relating to computer
hardware and software.
10.8 * Lease Agreement, entered into in May 1999, between ICC
and Data General Corporation relating to computer hardware
and software
10.9 Employment Agreement for Richard J. Berman dated as of
September 15, 1998
10.10 Employment Agreement for G. Michael Cassidy dated as of
April 16, 1997
10.11 Employment Agreement for Michele Golden dated as of April
16, 1997
10.12 Employment Agreement for Donald R. Gordon dated as of
December 18, 1998
- 4 -
10.13 Employment Agreement for David Hubbard dated as of April
16, 1997
10.14 Employment Agreement for Walter M. Psztur dated as of
August 21, 1998
23(ii).1 Consent of Richard A. Eisner & Company, LLP
(b) Financial Statement Schedules:
Not Applicable.
* To be filed by amendment
(1) Incorporated by reference to the Company's Annual Report on Form 10-KSB
for the year ended July 31, 1998.
(2) Incorporated by reference to the Company's Registration Statement on
Form SB-2 (File no. 33-83940)
(3) Incorporated by reference to the Company's Report on Form 10-QSB dated
January 31, 1997
(4) Incorporated by reference to the Company's Report on Form 10-QSB dated
April 30, 1997
(5) Incorporated by reference to the Company's Report on Form 10-QSB dated
October 31, 1997
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.
- 5 -
(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.
(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
4th day of June, 1999.
INTERNET COMMERCE CORPORATION
By: /s/ Richard J. Berman
------------------------------------
Richard J. Berman
Chief Executive Officer and
Chairman of the Board
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/ Richard J. Berman Chairman of the Board June 4, 1999
- ----------------------- and Chief Executive Officer
Richard J. Berman (principal executive officer)
/s/ Walter M. Psztur Vice President, June 4, 1999
- ----------------------- Finance & Administration
Walter M. Psztur (principal financial
and accounting officer)
/s/ G. Michael Cassidy Director June 4, 1999
- -----------------------
G. Michael Cassidy
/s/ Michele Golden Director June 4, 1999
- -----------------------
Michele Golden
/s/ Charles C. Johnston Director June 4, 1999
- -----------------------
Charles C. Johnston
Director
- -----------------------
Arthur R. Medici
Director
- -----------------------
James Ortenzio
/s/ Peter Ruel Director June 4, 1999
- -----------------------
Peter Ruel