<PAGE>
As filed with the Securities and Exchange Commission on January 10, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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INSIGNIA SOLUTIONS PLC
(Exact name of Registrant as specified in its charter)
ENGLAND AND WALES 7372 NOT APPLICABLE
(State or other jurisdiction of (Primary Standard (I.R.S. employer
incorporation or organization) Industrial Classification identification no.)
Code Number)
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41300 CHRISTY STREET THE MERCURY CENTRE, WYCOMBE LANE
FREMONT, CALIFORNIA 94538 WOOBURN GREEN
UNITED STATES OF AMERICA HIGH WYCOMBE, BUCKS HP10 0HH
(510) 360-3700 UNITED KINGDOM
(44) 1628-539500
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
STEPHEN M. AMBLER
SENIOR VICE PRESIDENT, FINANCE AND CHIEF FINANCIAL OFFICER
INSIGNIA SOLUTIONS PLC
41300 CHRISTY STREET
FREMONT, CALIFORNIA 94538
(510) 360-3700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
KATHERINE TALLMAN SCHUDA, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
(650) 494-0600
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
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If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, 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, please 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, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / __________
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / __________
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED(1) REGISTERED(2) PRICE PER SHARE(4) AGGREGATE OFFERING PRICE(4) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Ordinary Shares, 0.20 pounds 1,063,515 shares $4.7187 $5,018,408 $1,325
par value represented by
American Depositary
Shares (1)
Ordinary Shares, 0.20 pounds 1,701,623 shares (3) $4.7187 $8,029,448 $2,120
par value represented by
American Depositary
Shares (1)
TOTAL 2,765,138 shares $13,047,856 $3,445
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</TABLE>
(1) A separate Registration Statement on Form F-6 is effective with respect to
the American Depositary Shares represented by American Depositary Receipts
issuable on a one-for-one basis with the Ordinary Shares being registered
hereby upon deposit of such Ordinary Shares.
(2) The shares in the Calculation of Registration Fee Table, and which may be
offered pursuant to this Registration Statement, include, pursuant to rule
416 of the Securities Act of 1933, as amended, such additional number of
shares that may become issuable as a result of any share split, share
dividend or similar event.
(3) Ordinary Shares is issuable upon exercise of ADSs Purchase Warrants held by
existing shareholders of Insignia Solutions plc who are the selling
shareholders under this Registration Statement. An indeterminate number of
additional Ordinary Shares is registered under this Registration Statement
that may be issued, as provided in the ADSs Purchase Warrants, to prevent
dilution resulting from stock splits, stock dividends or similar
transactions.
<PAGE>
(4) Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to Rule 457(c) under the Securities Act, based
on the average of the high and low prices of the common stock on the Nasdaq
National Market on January 6, 2000.
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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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We 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.
SUBJECT TO COMPLETION DATED JANUARY 10, 1999
INSIGNIA SOLUTIONS PLC
2,765,138 AMERICAN DEPOSITARY SHARES
EACH REPRESENTING ONE ORDINARY SHARE
-------------------
All of the 2,765,138 American Depositary Shares of Insignia Solutions plc
are being sold by shareholders of Insignia. Insignia will not receive any
proceeds from the sale of shares offered by the selling shareholders. See
"Selling Shareholders" and "Plan of Distribution."
The shares are listed on the Nasdaq National Market under the symbol
"INSGY." The shares offered will be sold as described under "Plan of
Distribution."
On January 6, 2000, the closing price per share of the ADSs on the Nasdaq
National Market was $4.81.
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THE SHARES OFFERED INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING
ON PAGE 2.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION, NOR ANY STATE SECURITIES
COMMISSION, HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS ________ __, 2000.
<PAGE>
INSIGNIA SOLUTIONS PLC
Insignia, which commenced operations in 1986, develops, markets and
supports virtual machine technology that enables software applications and
operating systems to be run on various computer platforms. In late 1997, we
began a strategic review of our business and explored new markets that would
leverage our 10 years of emulation software development experience. In January
1998, we announced our intention to launch a new product line. This product
line, called Jeode -TM-, is based on Insignia's Embedded Virtual Machine, or
EVM-TM-, technology. Jeode is our implementation of Sun Microsystems, Inc.'s
Java-Registered Trademark- technology developed specifically for embedded
systems. The Jeode platform is enabled by our EVM and is designed to enable
software developers to create reliable, efficient and predictable embedded
products.
Jeode became available in March 1999 and generated 14% of our total
revenues for the nine months ended September 30, 1999 and 43% of our total
revenues for the third quarter of 1999. Jeode is our principal product line for
the foreseeable future. The Jeode product line revenue model is based on
original equipment manufacturer's customer transactions. We expect to derive
revenue from the Jeode product line from four main sources: the sale of a
development license, the sale of annual maintenance and support, a commercial
use royalty based on shipments of products that include Jeode technology, and
customer-funded engineering activities.
Our principal executive offices in the United States are located at 41300
Christy Street, Fremont, California 94538. Our telephone number at that
location is (510) 360-3700. Our principal executive offices in the United
Kingdom are located at The Mercury Centre, Wycombe Lane, Wooburn Green, High
Wycombe, Bucks HP10 0HH. Our telephone number at that location is (44)
1628-539500.
RISK FACTORS
THIS OFFERING IS RISKY. ANYONE WHO PURCHASES SHARES UNDER THIS PROSPECTUS
SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN ADDITION TO THE OTHER
INFORMATION PRESENTED IN OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS AND
ANY PROSPECTUS SUPPLEMENT.
WE MUST SELL PRODUCTS IN OUR JEODE PRODUCT LINE TO PRODUCE REVENUES
Our future performance depends upon sales of products within our Jeode
product line, which is a new product line. During the third quarter of 1999,
sales of products in the Jeode product line were $0.76 million, which was 43% of
our total revenue. Jeode may not achieve or sustain market acceptance or
provide the desired revenue levels. The Jeode product line is our sole product
line and we rely and will continue to rely upon sales of Jeode products for our
revenue for the foreseeable future.
THE LONG AND COMPLEX PROCESS OF LICENSING OUR JEODE PRODUCT MAKES OUR REVENUE
UNPREDICTABLE
Licensing our Jeode product is a long and complex process. Before
committing to license our product, potential customers must generally consider a
wide range of issues including product benefits, infrastructure requirements,
ability to work with existing systems, functionality and reliability. The
process of entering into a development license with a company typically involves
lengthy negotiations. As a result of our sales cycle, it is difficult for us to
predict when, or if, a particular prospect might sign a license agreement.
Development license fees may be delayed or reduced as a result of this process.
OUR LICENSEES MUST INTEGRATE OUR JEODE TECHNOLOGY INTO THEIR PRODUCTS, WHICH
DELAYS OUR RECEIPT OF REVENUES FROM COMMERCIAL LICENSES
Our success depends upon the use of our technology by our licensees in
their embedded systems. Our licensees undertake a lengthy process of developing
systems that use our technology. Until a licensee sells systems incorporating
our technology, we do not receive commercial use royalties from that licensee.
We expect that the time between entering into a development license and the time
we begin to recognize commercial royalties will be lengthy and will vary, which
makes it difficult for us to predict when we will recognize royalties from
commercial use licenses.
IF WE LOSE THIRD-PARTY LICENSE RIGHTS, WE MAY NOT BE ABLE TO SELL OUR JEODE
PRODUCTS
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In the first quarter of 1999, we signed a five-year agreement with Sun
Microsystems, Inc., under which Sun established Insignia as a Sun authorized
virtual machine provider. The agreement also grants us immediate access to the
Java compatibility test suite and the Java technology source code. The
agreement includes technology sharing and compatibility verification. Under the
agreement, we will pay Sun a per unit royalty on each Jeode-enabled embedded
product shipped by our customers, plus a royalty on all development licenses
between us and our customers. If the agreement with Sun terminates or expires
without renewal, we would not be able to market our Jeode product line. Any
disruption in our relationship with Sun would likely impair our sales of Jeode.
We also license software development tool products from other companies to
distribute with some of our products. These third parties may not be able to
provide competitive products with adequate features and high quality on a timely
basis or to provide sales and marketing cooperation. In addition, our products
compete with products produced by some of our licensors. When these licenses
terminate or expire, continued license rights might not be available to us on
reasonable terms. In addition, we might not be able to obtain similar products
to substitute into our tool suites.
IF ADDITIONAL FUNDS ARE NOT AVAILABLE AS NEEDED, WE MAY NOT BE ABLE TO TAKE
ADVANTAGE OF MARKET OPPORTUNITIES OR OTHERWISE GROW OUR BUSINESS.
We may need to raise additional funds in the future, and additional
financing may not be available on favorable terms, if at all. Further, if we
issue additional equity securities, shareholders may experience dilution, and
the new equity securities may have rights, preferences or privileges senior to
those of our ordinary shares. If we cannot raise funds on acceptable terms, we
may not have sufficient net assets to maintain the listing of our shares on the
Nasdaq National Market. Further, we may not be able to develop new products or
enhance our existing products, take advantage of future opportunities or respond
to competitive pressures or unanticipated requirements.
WE HAVE A HISTORY OF LOSSES AND WE MUST GENERATE SIGNIFICANTLY GREATER REVENUE
IF WE ARE TO ACHIEVE PROFITABILITY
We have experienced operating losses in each quarter since the second
quarter of 1996. To achieve profitability, we will have to increase our revenue
significantly. Our ability to increase revenues depends upon the success of our
Jeode product line. Jeode is a relatively new product and it may not achieve
market acceptance. If we are unable to generate revenues from Jeode in the form
of development license fees, maintenance and support fees, commercial use
royalties and customer-funded engineering services, our current revenues will be
insufficient to sustain our business.
WE EXPECT OUR SALES AND MARKETING EXPENSES TO CONTINUE AT HIGH LEVELS
We expect to continue to incur disproportionately high sales and marketing
expenses for the foreseeable future. To market Jeode effectively, we must
further develop direct sales channels in the embedded systems market. We must
continue to incur the expenses for a sales and marketing infrastructure before
we recognize significant revenue from sales of the product. Because customers
in the embedded systems market tend to remain with the same vendor over time, we
believe that we must devote significant resources to each potential sale. To
the extent potential customers do not design our products into their systems,
the resources we have devoted to the sales prospect would be lost. If we fail
to achieve and sustain significant increases in our quarterly sales, we may not
be able to continue to increase our investment in these areas. In addition,
with increased expenses, we must significantly increase our revenues if we are
to become profitable.
IF OUR NEW PRODUCTS OR PRODUCT ENHANCEMENTS FAIL TO ACHIEVE CUSTOMER ACCEPTANCE,
OR IF WE FAIL TO MANAGE PRODUCT TRANSITIONS, OUR BUSINESS REPUTATION AND
FINANCIAL PERFORMANCE WOULD SUFFER
The market for embedded applications is fragmented and is characterized by
technological change, evolving industry standards and rapid changes in customer
requirements. Our existing products will be rendered less competitive or
obsolete if we fail to introduce new products or product enhancements that
anticipate the features and functionality that customers demand. The success of
our new product introductions will depend on our ability to:
- accurately anticipate industry trends and changes in technology
standards;
- timely complete and introduce new product designs and features;
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- continue to enhance our existing product lines;
- offer our products across a spectrum of microprocessor families
used in the embedded systems market; and
- respond promptly to customers' requirements and preferences.
In addition, the introduction of new or enhanced products also requires
that we manage the transition from older products to minimize disruption in
customer ordering patterns.
Development delays are commonplace in the software industry. We have
experienced delays in the development of new products and the enhancement of
existing products in the past and are likely to experience delays in the future.
We may not be successful in developing and marketing, on a timely basis or at
all, competitive products, product enhancements and new products that respond to
technological change, changes in customer requirements and emerging industry
standards.
COMPETITION CAN LEAD TO PRICING PRESSURES AND REDUCED MARKET SHARE
The market for commercially available embedded operating systems is
fragmented and highly competitive. The Jeode product line is targeted to the
emerging Java-based embedded products marketplace, which is rapidly changing and
is characterized by an increasing number of new entrants whose products compete
with Jeode. As the industry continues to develop, we expect competition to
increase in the future from existing competitors and from other companies that
may enter our existing or future markets with similar or substitute solutions
that may be less costly or provide better performance or functionality than our
products. Many of our current competitors, as well as potential competitors,
have substantially greater financial, technical, marketing and sales resources
than we do, and we might not be able to compete successfully against these
companies. If price competition increases significantly, competitive pressures
could cause us to reduce the prices of our products, which would result in
reduced profit margins and could harm our ability to provide adequate service to
our customers. Our pricing model for our embedded software products is based on
a range of mid-priced development license packages, combined with low-priced
per-unit production, or commercial use, licenses. Commercial use licenses,
which provide for per-unit royalty payments for each embedded system that
incorporates our technology, may be subject to significant pricing pressures,
including buy-out arrangements. Also, the market may demand alternative pricing
models in the future. A variety of other potential actions by our competitors,
including increased promotion and accelerated introduction of new or enhanced
products, could also harm our competitive position.
FLUCTUATIONS IN OUR QUARTERLY RESULTS COULD CAUSE THE MARKET PRICE OF OUR ADSs
TO DECLINE
Our quarterly operating results can vary significantly depending on a
number of factors. These factors include:
- the volume and timing of orders received during the quarter;
- the mix of and changes in customers to whom our products are
sold;
- the mix of product and service revenue received during the
quarter;
- the mix of development license fees and commercial use royalties
received;
- the timing and acceptance of new products and product
enhancements by us or by our competitors;
- changes in pricing;
- buyouts of commercial use licenses;
- product life cycles;
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- the level of our sales of third party products;
- variances in costs associated with fixed price contracts;
- purchasing patterns of customers;
- competitive conditions in the industry;
- foreign currency exchange rate fluctuations;
- business cycles and economic conditions that affect the markets
for our products; and
- extraordinary events, such as litigation, including related
charges.
All of these factors are difficult to forecast. Our future operating
results may fluctuate as a result of these and other factors, including our
ability to continue to develop innovative and competitive products. An
increasing amount of our sales orders involve products and services that yield
revenue over multiple quarters or upon completion of performance. If license
agreements entered into during a quarter do not meet our revenue recognition
criteria, even if we meet or exceed our forecast of aggregate licensing and
other contracting activity, it is possible that our revenues would not meet
expectations.
Due to all of these factors, we believe that period-to-period comparisons
of our results of operations are not necessarily meaningful and should not be
viewed as an indication of our future performance. In the past, we have
experienced actual performance that did not meet financial market expectations.
It is likely that, in some future quarters, our operating results will again be
below the expectations of stock market analysts and investors.
INTERNATIONAL SALES OF OUR PRODUCTS, WHICH WE EXPECT TO ACCOUNT FOR A
SIGNIFICANT PORTION OF OUR TOTAL REVENUE IN THE FUTURE, EXPOSE US TO THE
BUSINESS AND ECONOMIC RISKS OF INTERNATIONAL OPERATIONS
Sales from outside of the United States accounted for approximately 24% of
our total revenue in 1998 and 18% of our total revenue in the first nine months
of 1999 and are expected to increase over time. We plan to market Jeode to
embedded systems manufacturers in Japan. Economic conditions in Japan
generally, as well as fluctuations in the value of the Japanese yen against the
U.S. dollar and British pound sterling, could impair our revenues and results of
operations. International operations are subject to a number of other special
risks. These risks include:
- foreign government regulation;
- reduced protection of intellectual property rights in some
countries where we do business;
- longer receivable collection periods and greater difficulty in
accounts receivable collection;
- unexpected changes in, or imposition of, regulatory requirements,
tariffs, import and export restrictions and other barriers and
restrictions;
- potentially adverse tax consequences;
- the burdens of complying with a variety of foreign laws and
staffing and managing foreign operations;
- general geopolitical risks, such as political and economic
instability, hostilities with neighboring countries and changes
in diplomatic and trade relationships; and
- possible recessionary environments in economies outside the
United States.
PRODUCT DEFECTS CAN BE EXPENSIVE TO FIX AND CAN CAUSE US TO LOSE CUSTOMERS
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As a result of their complexity, software products may contain undetected
errors or compatibility issues, particularly when first introduced or as new
versions are released. Despite testing by us and testing and use by current and
potential customers, errors might be found in new products after commencement of
commercial shipments. The occurrence of errors could result in loss of or delay
in market acceptance of our products. The increasing use of our products for
applications in systems that interact directly with the general public,
particularly applications in transportation, medical systems and other markets
where the failure of the embedded system could cause substantial property damage
or personal injury, could expose us to significant product liability claims. In
addition, our products are used for applications in business systems where the
failure of the embedded system could be linked to substantial economic loss.
Our license and other agreements with our customers typically contain provisions
designed to limit our exposure to potential product liability and other claims.
It is likely, however, that the limitation of liability provisions contained in
our agreements are not effective in all circumstances and in all jurisdictions.
We may not have adequate insurance against product liability risks and renewal
of our insurance may not be available to us on commercially reasonable terms.
Our errors and omissions insurance may not be adequate to cover claims. A
product liability claim or claim for economic loss brought against us, or a
product recall involving our software, could lead to significant unexpected
expenses and lost sales.
Our operations depend on our ability to protect our computer equipment and
the information stored in our databases against damage by fire, natural
disaster, power loss, telecommunications failure, unauthorized intrusion and
other catastrophic events. We believe we have taken prudent measures to reduce
the risk of interruption in our operations. However, these measures might not
be sufficient.
IF WE LOSE KEY PERSONNEL OR ARE UNABLE TO HIRE ADDITIONAL QUALIFIED PERSONNEL AS
NECESSARY, WE MAY NOT BE ABLE TO SUCCESSFULLY MANAGE OUR BUSINESS OR SELL OUR
PRODUCTS
Our future performance depends to a significant degree upon the continued
contributions of our key management, product development, sales, marketing and
operations personnel. We do not have agreements with any of our key personnel
that require them to work for us for a specific term, and we do not maintain any
key person life insurance policies. In addition, we believe our future success
will also depend in large part upon our ability to attract and retain highly
skilled managerial, engineering, sales, marketing and operations personnel, many
of whom are in great demand. Competition for qualified personnel is intense in
the San Francisco Bay area, where our United States operations are
headquartered, and we may not be able to attract and retain personnel.
OUR INABILITY TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS FROM THIRD-PARTY
CHALLENGES MAY SIGNIFICANTLY IMPAIR OUR COMPETITIVE POSITION
We depend on our proprietary technology. Despite our efforts to protect
our proprietary rights, it may be possible for unauthorized third parties to
copy our products or to reverse engineer or obtain and use information that we
regard as proprietary. Our competitors could independently develop technologies
that are substantially equivalent or superior to our technologies. Policing
unauthorized use of our products is difficult, and while we are unable to
determine the extent to which software piracy of our products exists, software
piracy can be expected to be a persistent problem. In addition, effective
protection of intellectual property rights may be unavailable or limited in
foreign countries. The status of United States patent protection in the
software industry is not well defined and will evolve as the United States
Patent and Trademark Office grants additional patents. Patents have been
granted on fundamental technologies in software, and patents may issue that
relate to fundamental technologies incorporated into our products.
OUR PRODUCTS MAY INFRINGE ON THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES,
WHICH MAY RESULT IN LAWSUITS AND PREVENT US FROM SELLING OUR PRODUCTS
As the number of patents, copyrights, trademarks and other intellectual
property rights in our industry increases, products based on our technology may
increasingly become the subject of infringement claims. Third parties could
assert infringement claims against us in the future. Infringement claims with
or without merit could be time consuming, result in costly litigation, cause
product shipment delays or require us to enter into royalty or licensing
agreements. Royalty or licensing agreements, if required, might not be
available on terms acceptable to us. In addition, we may initiate claims or
litigation against third parties for infringement of our proprietary rights or
to establish the validity of our proprietary rights. Litigation to determine
the validity of any claims, whether or not the litigation is resolved in our
favor, could result in significant expense to us and divert the efforts of our
technical and management personnel from productive tasks. In the event of an
adverse ruling in any litigation, we may be required to pay
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substantial damages, discontinue the use and sale of infringing products, expend
significant resources to develop non-infringing technology or obtain licenses to
infringing technology. Our failure to develop or license a substitute
technology could prevent us from selling our products.
THE SELLING SHAREHOLDERS HAVE RIGHTS UNDER THEIR WARRANTS TO PURCHASE
SIGNIFICANT NUMBERS OF ADSs AT LOW OR NOMINAL PRICES, WHICH WOULD, IF TRIGGERED,
DILUTE THE OWNERSHIP INTERESTS OF EXISTING SHAREHOLDERS.
The selling shareholders, who hold a total of 1,063,515 ADSs and warrants
to purchase an additional 319,054 ADSs, also have rights under their
warrants to purchase additional ADSs if our share price on the Nasdaq National
Market falls below specified levels. In some of these circumstances, the
purchase price the selling shareholders will pay per ADS is the par value, or
L0.20 per ADS, which is a nominal amount. If we issue additional ADSs under
these obligations, the ownership interest of existing shareholders will be
substantially diluted.
IF WE OR OUR SIGNIFICANT SUPPLIERS OR SERVICE PROVIDERS FAILS TO BE YEAR 2000
COMPLIANT, OUR BUSINESS MAY BE DISRUPTED AND OUR REVENUES MAY DECLINE
We believe that all of our most current product releases will not cease to
perform nor generate incorrect or ambiguous data or results solely due to a
change in date to or after January 1, 2000, and will calculate any information
dependent on these dates in the same manner, and with the same functionality,
data integrity and performance, as these products did on or before December 31,
1999. However, all of our customers may not implement the Year 2000 compliant
release of our products in a timely manner, which could lead to failure of
customer systems and product liability claims against us. Even if our products
are Year 2000 compliant, we may, in the future, be subject to claims based on
Year 2000 issues in the products of other companies or issues arising from the
integration of multiple products within a system. The costs of defending and
resolving Year 2000-related disputes, and any liability for Year 2000-related
damages, including consequential damages, could be significant. In addition,
Year 2000 failures could have a negative effect on our competitive position. If
any of our critical suppliers do not successfully and timely achieve Year 2000
compliance, and we are unable to replace them with new or alternate suppliers,
our business would be disrupted.
WE ARE AT RISK OF SECURITIES CLASS ACTION LITIGATION DUE TO OUR SHARE PRICE
VOLATILITY
The prices for our ADSs have fluctuated widely in the past. During the 12
months ended December 23, 1999, the closing price of a share of our common stock
ranged from a high of $10.25 to a low of $1.19. Under the rules of The Nasdaq
Stock Market, our stock price must remain above $1.00 per share for continued
quotation of our shares on the Nasdaq National Market. Stock price volatility
has had a substantial effect on the market prices of securities issued by us and
other high technology companies, often for reasons unrelated to the operating
performance of the specific companies. In the past, following periods of
volatility in the market price of a company's securities, securities class
action litigation has often been instituted against the company. We may in the
future be the target of similar litigation. Regardless of the outcome,
securities litigation may result in substantial costs and divert management
attention and resources.
IT MAY BE DIFFICULT TO ENFORCE JUDGMENTS AGAINST US IN U.S. COURTS
Insignia is incorporated under the laws of England and Wales. One of our
executive officers and one of our directors reside in England. One of our
directors resides in France. All or a substantial portion of the assets of
these persons, and a significant portion of our assets, are located outside of
the United States. As a result, it may not be possible for investors to effect
service of process within the United States upon these persons or to enforce
against them or against us, in United States courts, judgments obtained in
United States courts predicated upon the civil liability provisions of United
States securities laws. There is doubt as to the enforceability outside of the
United States, in original actions or in actions for enforcement of judgments of
United States courts, of civil liabilities predicated solely upon United States
securities laws. In addition, the rights of holders of our shares and,
therefore, of the ADS holders, are governed by English law, including the
Companies Act 1985, and by our Memorandum and Articles of Association. These
rights differ from the rights of shareholders in typical United States
corporations.
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CAUTIONARY NOTE ON FORWARD LOOKING STATEMENTS
This prospectus (including the documents incorporated by reference)
contains forward-looking statements regarding Insignia's plans, expectations,
estimates and beliefs. These statements involve risks and uncertainties, and
actual results could differ materially from those reflected in the
forward-looking statements. Forward-looking statements in this prospectus are
typically identified by words such as "believes," "anticipates," "expects,"
"intends," "will" and "may" and other similar expressions. In addition, any
statements that refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements. Insignia will
not necessarily update the information in this prospectus if and when any
forward-looking statement later turns out to be inaccurate. Some of the
important risks and uncertainties that may affect our future results and
performance are described in "Risk Factors," above. Additional information
about factors that could affect our future results and events is included in our
reports filed with the SEC and incorporated by reference in this prospectus.
USE OF PROCEEDS
Insignia will not receive any of the proceeds from the sale of shares by
the selling shareholders.
PRIVATE PLACEMENT TO SELLING SHAREHOLDERS
On December 9 and 10, 1999, the selling shareholders purchased from us a
total of 1,063,515 ADSs at a price of $4.23 per ADS. Along with the ADSs, we
also issued to the selling shareholders ADSs purchase warrants that entitle
the selling shareholders to purchase a total of 319,054 ADSs at an exercise
price of $5.29 per ADS. As described below, the exercise price and the
number of ADSs issuable under the warrants are subject to various
adjustments. In addition, we issued to the selling shareholders additional
warrants that entitle the selling shareholders to purchase ADSs at par value
at designated adjustment dates in the future.
THE WARRANTS
The selling shareholders received warrants to purchase three ADSs for every
10 ADSs they purchased. The exercise price of the warrants was set at 125% of
the original per ADS purchase price. That calculates to an exercise price of
$5.29, based on a $4.23 per ADS purchase price.
The warrants contain standard weighted average anti-dilution provisions
designed to protect the selling shareholders if we sell or are deemed to sell
any ADSs or ordinary shares at below market price during the term of the
warrant, which ends on December 9, 2004.
8
<PAGE>
In addition, under the warrants, if at least $4.75 million of the funds
that are currently held in escrow by Citrix Systems, Inc. are not released to
us by July 10, 2000, the exercise price of the warrants will be adjusted to
the market price on that date, if that market price is lower than $5.29.
THE ADDITIONAL WARRANTS
The additional warrants entitle the selling shareholders to purchase
ADSs at par value if the average of the closing bid price of the ADSs over
ten days before an adjustment date is less than $4.23. The adjustment dates
are:
- the effective date of the registration statement of which this
prospectus is a part
- 4 months after the effective date of the registration statement
- 8 months after the effective date of the registration statement
If we complete an underwritten public offering with net proceeds to us of at
least $25 million and a per ADS price of at least $7.02 before either 4
months or 8 months after the effective date of the registration statement,
then the right to the related adjustment date terminates. If the
registration statement is not effective by May 10, 2000, then the first
adjustment date will be May 10, 2000 and there will be an adjustment date
each month after that until the registration statement is effective, at which
time the schedule above will apply. In addition, if at least $4.75 million
of the funds that are currently held in escrow by Citrix Systems, Inc. are
not released to us by March 10, 2000, the selling shareholders will have an
adjustment date on that date and each month after that, until the earlier of
the date the funds are released from the escrow or December 10, 2000.
On any adjustment date the selling shareholders will be entitled to
purchase additional ADSs at par value. The number of additional ADSs will be
determined by the following formula:
P-M
[ ------------- ] *O
M
N = -------------------
V
[1 - -----]
M
Where:
P is the Market Price (as defined in the additional warrants) on the issuing
date
M is the Market Price on the applicable adjustment date
O is the number of ADSs purchased on the closing date
V is 20 pence
Under a registration rights agreement reached between the selling
shareholders and Insignia in connection with the private placement, we are
obligated to register all the ADSs issued to the selling shareholders in the
private placement and the ADSs issuable to the selling shareholders upon full
exercise of the warrants and the additional warrants. However, the
securities purchase agreement, the warrants and the additional warrants
contain the restriction that we may not issue and a selling shareholder may
not purchase, and the warrants and additional warrants may not be exercised
for, any ADSs if that would cause the selling shareholder to beneficially own
more than 9.9% of the total ordinary shares in issue as determined in
accordance with section 13(d) of the Securities Exchange Act of 1934. Under
the additional warrants, to the extent a selling shareholder is prohibited
from exercising the additional warrant as a result of the 9.9% restriction,
the selling shareholder may, at its option and in addition to its other
rights under the securities purchase agreement and the warrant, retain the
warrant or demand payment, in cash, from us in an amount equal to the
Black-Scholes amount times the number of ADSs for which the additional
warrant was exercisable, without regard to any limits on exercise.
9
<PAGE>
SELLING SHAREHOLDERS
The ADSs covered by this prospectus consist of ADSs currently held and ADSs
issuable upon exercise of warrants and additional warrants.
The number of ADSs that may actually be sold by each selling shareholder
will be determined by the selling shareholder. Because each selling shareholder
may sell all, some or none of the ADSs that it holds, and because the offering
contemplated by this prospectus is not currently being underwritten, no estimate
can be given as to the number of ADSs that will be held by the selling
shareholders at the termination of the offering.
The following table presents information regarding the selling
shareholders. The information is based on the price as of the date of this
prospectus of $4.23 per ADS warrant exercise price. The actual number of
ADSs issuable upon exercise of the warrants and additional warrants is
subject to adjustment and could be materially less or more than the amount
shown as shares being offered in the table below, depending upon whether the
anti-dilution and/or adjustment provision of the warrants and the additional
warrants applies.
The ADSs included in the table below represent the ADSs beneficially
owned by each selling shareholder as of the date of this prospectus plus a
good faith estimate of the number of ADSs that will become issuable upon
exercise of the warrants and the additional warrants. Under the registration
rights agreement, we are required to register for resale all of the ADSs
issued to the selling shareholders in the private placement and the ADSs
issuable to the selling shareholders upon full exercise of the warrants and
the additional warrants. There is no limit on this number of ADSs.
If the warrants and additional warrants were exercised in full at the
exercise price of $4.23, only 1,382,569 ADSs would be issued and available
for resale under this prospectus.
Under their terms, the warrants and the additional warrants are
exercisable by any shareholder only to the extent that the number of ordinary
shares and ADSs issuable, together with the number of ordinary shares and
ADSs beneficially owned by the holder, would not be more than 9.9% of the
total ordinary shares in issue. This beneficial ownership is determined
under section 13(d) of the Securities Exchange Act of 1934.
The percentages shown in the table are based upon 14,039,602 ordinary
shares in issue as of the date of this prospectus. The numbers shown in the
column "Shares Being Offered" include additional ADSs that may be issuable to
the selling shareholders upon exercise of the warrants and additional warrants.
At our election, but subject to specific conditions, the warrants and
additional warrants are not exercisable for ADSs if, upon exercise, the
number of ADSs to be received would be more than 20% of the total number of
ordinary shares in issue.
The selling shareholders have advised us that they are the beneficial
owners of the shares being offered.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Before Offering Owned After Offering
--------------------- Shares Being --------------------
Name Number Percent Offered(2) Number Percent
- ---- ------ ------- ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Castle Creek Technology Partners LLC 1,075,333 (1) 7.5% 2,150,666 -- --
Robert Waley-Cohen 173,379 (3) 1.2% 153,618 96,570 *
Richard Zehner 490,318 (4) 3.5% 153,618 413,509 2.9%
Vincent Pino 108,559 (5) * 153,618 31,750 *
Avalon Panama S.A. 76,809 (3) -- 153,618 -- --
</TABLE>
- ---------------
* Less than 1%
10
<PAGE>
(1) Includes 248,154 shares that are subject to a warrant that is exercisable
in full.
(2) The number of ordinary shares that will ultimately be issued upon
exercise of the warrants and additional warrants held by the selling
shareholders depends upon the application of the anti-dilution and
adjustment provisions described under the heading "Private Placement to
Selling Shareholders" on page 8. By their terms, the warrants and the
additional warrants cannot be exercised at any time to the extent that
exercise would result in any selling shareholder having beneficial
ownership of more than 9.9% of the total number of ordinary shares in
issue at the time of exercise. For example, while Castle Creek Technology
Partners LLC may exercise the warrant and additional warrant for and sell
2,150,666 or more ordinary shares over the life of the warrant and the
additional warrant, it may not currently exercise the warrant or the
additional warrant to the extent that it would at the time of exercise
beneficially own more than 1,542,642 ordinary shares, based upon
14,039,602 ordinary shares in issue as of the date of this prospectus,
and assuming that at the time of exercise, it does not beneficially own
any other shares. If the total number of ordinary shares in issue
increases, including as a result of issuance of ordinary shares upon
exercise of the warrants, then the number of shares that a selling
shareholder can own at any one time would also increase.
(3) Includes 17,725 shares that are subject to a warrant that is exercisable in
full.
(4) Includes 17,725 shares that are subject to a warrant that is exercisable in
full. Also includes 104,200 shares held by trusts for the benefit of Mr.
Zehner's children, as to which Mr. Zehner disclaims beneficial ownership.
(5) Includes 17,725 shares that are subject to a warrant that is exercisable in
full and 8,750 shares subject to options that are exercisable in full on or
before March 1, 2000. Mr. Pino is a director of Insignia.
11
<PAGE>
PLAN OF DISTRIBUTION
We are registering the shares on behalf of the selling shareholders.
The selling shareholders acquired their shares and warrants from Insignia on
December 9 and 10, 1999. This prospectus covers the shares they purchased on
December 9 and 10, 1999 and the shares that we issue if and when they
exercise the warrants. The selling shareholders are bound by a registration
rights agreement with us. To our knowledge, the selling shareholders have not
entered into any agreement, arrangement or understanding with any particular
broker or market maker with respect to the sale of the shares covered by this
prospectus.
The selling shareholders may offer and sell shares from time to time. In
addition, a selling shareholder's donees, pledgees, transferees and other
successors in interest may sell shares received from a named selling shareholder
after the date of this prospectus. The selling shareholders will act
independently of Insignia in making decisions with respect to the timing, manner
and size of each sale. Sales may be made over the Nasdaq National Market or
otherwise, at then prevailing market prices, at prices related to prevailing
market prices or at negotiated prices. The shares may be sold by one or more of
the following:
- a block trade in which the broker-dealer engaged by a selling
shareholder will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the
transaction;
- purchases by the broker-dealer as principal and resale by the broker
or dealer for its account pursuant to this prospectus; and
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers.
The selling shareholders have advised Insignia that they have not, as of
the date of this prospectus, entered into any agreements, understandings or
arrangements with any underwriters or broker-dealers for the sale of shares, nor
is there an underwriter or coordinating broker acting in connection with the
proposed sale of shares by the selling shareholders.
In connection with distributions of the shares or otherwise, the selling
shareholders may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with these transactions, broker-dealers
or financial institutions may engage in short sales of the shares in the course
of hedging the positions they assume with selling shareholders. The selling
shareholders may also sell shares short and redeliver the shares to close out
these short positions. The selling shareholders may also enter into option or
other transactions with broker-dealers or other financial institutions that
require the delivery to the broker-dealer or financial institution of the
shares, which the broker-dealer or financial institution may resell or otherwise
transfer under this prospectus. The selling shareholders may also loan or
pledge the shares to a broker-dealer or other financial institution and the
broker-dealer or financial institution may sell the shares so loaned or, upon a
default, the broker-dealer may sell the pledged shares under this prospectus.
In addition, any securities covered by this prospectus that qualify for sale
under Rule 144 of the Securities Act may be sold under Rule 144 rather than
under this prospectus.
Transactions under this prospectus may or may not involve brokers or
dealers. The selling shareholders may sell shares directly to purchasers or to
or through broker-dealers, who may act as agents or principals. Broker-dealers
engaged by the selling shareholders may arrange for other broker-dealers to
participate in selling shares. Broker-dealers or agents may receive
compensation in the form of commissions, discounts or concessions from the
selling shareholders in amounts to be negotiated in connection with the sale.
Broker-dealers or agents may also receive compensation in the form of discounts,
concessions or commissions from the purchasers of shares for whom the
broker-dealers may act as agents or to whom they sell as principal, or both.
This compensation as to a particular broker-dealer might exceed customary
commissions.
The selling shareholders and any participating broker-dealers may be deemed
to be "underwriters" within the meaning of the Securities Act in connection with
sales of shares covered by this prospectus. Any commission, discount or
concession received by a broker-dealer and any profit on the resale of shares
sold by them while acting as principals might be deemed to be underwriting
discounts or commissions under the Securities Act. Because selling shareholders
may be deemed to be underwriters within the meaning of the Securities Act, the
selling shareholders will be subject to the prospectus delivery requirements of
the Securities Act.
12
<PAGE>
Insignia has informed the selling shareholders that the anti-manipulation
rules under the Exchange Act apply to sales of shares in the market and to the
activities of the selling shareholders and their affiliates. The selling
shareholders have advised Insignia that during the time they may be engaged in
the attempt to sell registered shares, they will:
- not engage in any stabilization activity in connection with any of
Insignia's securities;
- not bid for or purchase any of Insignia's securities or any rights to
acquire Insignia's securities, or attempt to induce any person to
purchase any of Insignia's securities or rights to acquire Insignia's
securities, other than, in each case, as permitted under the Exchange
Act;
- not sell or distribute the shares until after the prospectus has been
appropriately amended or supplemented, if required, to set forth the
terms of sale or distribution; and
- make all sales of shares in broker's transactions through
broker-dealers acting as agents, in transactions directly with market
makers or in privately negotiated transactions where no broker or
other third party (other than the purchaser) is involved.
Insignia has the ability to suspend the use of this prospectus twice in any
12 month period for a total of 15 business days if, in the good faith judgment
of the Insignia board of directors, it would be seriously detrimental to
Insignia and its shareholders for resales of shares to be made.
This offering will terminate on the earlier of:
- the date on which all shares held by all selling shareholders can be
sold in a three-month period under Rule 144 or otherwise; or
- the date on which all shares offered have been sold by the selling
shareholders.
Insignia has agreed to pay the expenses of registering the shares under the
Securities Act, including registration and filing fees, printing expenses,
administrative expenses and certain legal and accounting fees. The selling
shareholders will bear all discounts, commissions or other amounts payable to
underwriters, dealers or agents as well as fees and disbursements for legal
counsel retained by any selling shareholder.
Insignia and the selling shareholders have agreed to indemnify each other
and other related parties against specified liabilities, including liabilities
arising under the Securities Act. The selling shareholders may agree to
indemnify any agent, dealer or broker-dealer that participates in transactions
involving sales of shares against liabilities, including liabilities arising
under the Securities Act.
Upon the occurrence of any of the following events, a supplement to this
prospectus will be filed, if required, under Rule 424(b) under the Securities
Act to include additional disclosure before offers and sales of the securities
in question are made:
- to the extent the securities are sold at a fixed price or at a price
other than the prevailing market price, such price would be set forth
in the prospectus,
- if the securities are sold in block transactions and the purchaser
acting in the capacity of an underwriter wishes to resell, such
arrangements would be described in the prospectus,
- if the selling shareholders sell to a broker-dealer acting in the
capacity as an underwriter, such broker-dealer will be identified in
the prospectus
- if the compensation paid to broker-dealers is other than usual and
customary discounts, concessions or commissions, disclosure of the
terms of the transaction would be included in the prospectus; and
- if a selling shareholder notifies Insignia that a donee or pledgee
intends to sell more than 500 shares.
13
<PAGE>
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for Insignia
by Macfarlanes, London.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to our Annual Report on Form 10-K for the year ended December 31,
1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
DOCUMENTS INCORPORATED BY REFERENCE IN THIS
PROSPECTUS
The SEC allows Insignia to "incorporate by reference" the information that
Insignia files with the SEC. This means that Insignia can disclose important
information by referring the reader to those SEC filings. The information
incorporated by reference is considered to be part of this prospectus, and later
information Insignia files with the SEC will update and supersede this
information. Insignia incorporates by reference the documents listed below and
any future filings made with the SEC under Section 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act of 1934 until termination of the offering:
- Annual report on Form 10-K for the year ended December 31, 1998.
- Quarterly report on Form 10-Q for the quarter ended March 31, 1999.
- Quarterly report on Form 10-Q for the quarter ended June 30, 1999.
- Quarterly report on Form 10-Q for the quarter ended September 30,
1999.
- Current report on Form 8-K dated December 10, 1999, as amended.
- The description of Insignia's ordinary shares contained in Insignia's
registration statement on Form 8-A, and any amendment or report filed
for the purpose of updating such description.
SOME OF THE INFORMATION ABOUT INSIGNIA THAT MAY BE IMPORTANT TO AN
INVESTMENT DECISION IS NOT PHYSICALLY INCLUDED IN THIS PROSPECTUS. INSTEAD, THE
INFORMATION IS "INCORPORATED" INTO THIS PROSPECTUS BY REFERENCE TO ONE OR MORE
DOCUMENTS THAT INSIGNIA FILED WITH THE SEC. THESE DOCUMENTS (INCLUDING ANY
EXHIBITS THAT ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO THE INFORMATION
THAT THIS PROSPECTUS INCORPORATES) ARE AVAILABLE UPON REQUEST WITHOUT CHARGE
FROM INVESTOR RELATIONS, INSIGNIA SOLUTIONS PLC, 41300 CHRISTY STREET, FREMONT,
CALIFORNIA 94538 (TELEPHONE NUMBER (510) 360-3700). RECIPIENTS SHOULD MAKE ALL
REQUESTS FOR DOCUMENTS BY THE FIFTH BUSINESS DAY BEFORE THEY MAKE THEIR FINAL
INVESTMENT DECISION, TO BE SURE THE DOCUMENTS ARRIVE ON TIME. INFORMATION THAT
HAS BEEN INCORPORATED BY REFERENCE IS CONSIDERED PART OF THIS PROSPECTUS AND
DISCLOSED TO INVESTORS, WHETHER OR NOT INVESTORS OBTAIN A COPY OF THE DOCUMENT
CONTAINING THE INFORMATION.
This prospectus may contain information that updates, modifies or is
contrary to information in one or more of the documents incorporated by
reference in this prospectus. Reports Insignia files with the SEC after the
date of this prospectus may also contain information that updates, modifies or
is contrary to information in this prospectus or in documents incorporated by
reference in this prospectus. Investors should review these reports as they may
disclose a change in the business, prospects, financial condition or other
affairs of Insignia after the date of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
The documents incorporated by reference into this prospectus are available
from us upon request. We will provide a copy of any and all of the information
that is incorporated by reference in this prospectus, not including exhibits to
the information unless those exhibits are specifically incorporated by reference
into this proxy statement prospectus, to any person, without charge, upon
written or oral request.
14
<PAGE>
Requests for documents should be directed to Investor Relations, Insignia
Solutions plc, 41300 Christy Street, Fremont, California 94538 (telephone number
(510) 360-3700).
We file reports, proxy statements and other information with the Securities
and Exchange Commission. Copies of our reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the SEC:
Judiciary Plaza Citicorp Center Seven World Trade Center
Room 1024 5000 West Madison Street 13th Floor
450 Fifth Street, N.W. Suite 1400 New York, New York 10048
Washington, D.C. 20549 Chicago, Illinois 60661
Copies of these materials can also be obtained by mail at prescribed rates
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549 or by calling the SEC at 1-800-SEC-0330. The SEC
maintains a Website that contains reports, proxy statements and other
information regarding each of us. The address of the SEC Website is
http://www.sec.gov.
Insignia has filed a registration statement under the Securities Act with
the Securities and Exchange Commission with respect to the shares to be sold by
the selling shareholders. This prospectus has been filed as part of the
registration statement. This prospectus does not contain all of the information
set forth in the registration statement because certain parts of the
registration statement are omitted in accordance with the rules and regulations
of the SEC. The registration statement is available for inspection and copying
as set forth above.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO PURCHASE, THE SECURITIES OFFERED BY THIS PROSPECTUS IN ANY
JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER, SOLICITATION OF AN OFFER OR PROXY SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES
PURSUANT TO THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH OR
INCORPORATED HEREIN BY REFERENCE OR IN OUR AFFAIRS SINCE THE DATE OF THIS
PROSPECTUS.
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The aggregate estimated expenses to be paid by the Registrant in connection
with this offering are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee..... $ 3,445
Accounting fees and expenses*........................... 10,000
Legal fees and expenses*................................ 10,000
Miscellaneous*.......................................... 6,555
------
Total.............................................. $30,000
-------
-------
</TABLE>
- ----------------
* Estimate
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Insignia's Articles of Association contain a provision to the effect that,
so far as permitted by the statutory provisions of English law, Insignia shall
indemnify the directors and secretary against liabilities incurred by them in
relation to the affairs of Insignia. However, the Companies Act 1985 renders
any such indemnity ineffective to the extent it applies to neglect or breach of
duty in relation to Insignia, except to the extent that it covers costs incurred
by the director or secretary in respect of court proceedings in which judgment
is given in his favor.
Insignia's policy is to enter into indemnity agreements with each of its
directors and executive officers. In addition, Insignia Solutions, Inc., a
Delaware corporation and a wholly owned subsidiary of Insignia, enters into
indemnity agreements with each of Insignia's directors and executive officers.
The indemnity agreements provide that directors and executive officers will be
indemnified and held harmless to the fullest possible extent permitted by law
including against all expenses (including attorneys' fees), judgments, fines and
settlement amounts paid or reasonably incurred by them in any action, suit or
proceeding, including any derivative action by or in the right of Insignia, on
account of their services as directors, officers, employees or agents of
Insignia or as directors, officers, employees or agents of any other company or
enterprise when they are serving in such capacities at the request of Insignia.
Neither Insignia nor Insignia Solutions, Inc. will be obligated pursuant to the
agreements to indemnify or advance expenses to an indemnified party with respect
to proceedings or claims:
- initiated by the indemnified party and not by way of defense,
except with respect to a proceeding authorized by the board of
directors and successful proceedings brought to enforce a right
to indemnification under the indemnity agreements;
- for any amounts paid in settlement of a proceeding unless
Insignia consents to the settlement;
- on account of any suit in which judgment is rendered against the
indemnified party for an accounting of profits made from the
purchase or sale by the indemnified party of securities of
Insignia under Section 16(b) of the Exchange Act and related
laws;
- on account of conduct by an indemnified party that is finally
adjudged to have been in bad faith or conduct that the
indemnified party did not reasonably believe to be in, or not
opposed to, the best interests of Insignia;
- on account of any criminal action or proceeding arising out of
conduct that the indemnified party had reasonable cause to
believe was unlawful; or
- if a final decision by a court having jurisdiction in the matter
shall determine that such indemnification is not lawful.
The indemnity agreements are not exclusive of any rights a director or
executive officer may have under the Articles of Association, other agreements,
any majority-in-interest vote of the shareholders or vote of disinterested
directors, applicable law or otherwise.
II-1
<PAGE>
The indemnification provision in the Articles of Association, and the
indemnity agreements, may be sufficiently broad to permit indemnification of
Insignia's directors and executive officers for liabilities arising under the
Securities Act. In addition, Insignia has director and officer liability
insurance.
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference herein:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C>
3.01 Registrant's Articles of Association (incorporated herein by
reference to Exhibit 3.02 of the Registrant's Registration
Statement on Form F-1 (No. 33-98230) declared effective by the
Commission on November 13, 1995 (the "Form F-1").
3.02 Registrant's Memorandum of Association (incorporated herein by
reference to Exhibit 3.04 of the Form F-1).
4.01 Registration Rights Agreement, dated as of June 5, 1992, as
amended (incorporated herein by reference to Exhibit 4.02 of the
Form F-1).
4.02 Deposit Agreement between Registrant and The Bank of New York
(incorporated herein by reference to Exhibit 4.03 of the
Registrant's Annual Report on Form 10-K (File No. 0-27012) for the
year ended December 31, 1995 (the "1995 10-K").
4.03 Form of American Depositary Receipt (included in Exhibit 4.02)
(incorporated herein by reference to Exhibit 4.03 of the 1995 10-
K).
4.04 Securities Purchase Agreement dated as of December 9, 1999,
between Insignia Solutions plc and Castle Creek Technology
Partners LLC (incorporated herein by reference to Exhibit 10.50 to
the Registrant's Current Report on Form 8-K filed on December 15,
1999 (the "1999 8-K").
4.05 Securities Purchase Agreement dated as of December 9, 1999,
between Insignia Solutions plc and the Purchasers named therein
(incorporated herein by reference to Exhibit 10.51 to the 1999 8-
K).
4.06 Registration Rights Agreement dated as of December 9, 1999,
between Insignia Solutions plc and Castle Creek Technology
Partners LLC (incorporated herein by reference to Exhibit 4.05 to
the 1999 8-K).
4.07 Registration Rights Agreement dated as of December 9, 1999,
between Insignia Solutions plc and the Purchasers named therein
(incorporated herein by reference to Exhibit 4.08 to the 1999 8-
K).
4.08 ADSs Purchase Warrant issued to Castle Creek Technology Partners
LLC dated December 9, 1999 (incorporated herein by reference to
Exhibit 4.06 to the 1999 8-K).
4.09 ADSs Purchase Reset Warrant issued to Castle Creek Technology
Partners LLC dated December 9, 1999 (incorporated herein by
reference to Exhibit 4.07 to the 1999 8-K).
4.10 Form of ADSs Purchase Warrant issued December 9, 1999
(incorporated by reference to Exhibit 4.09 to the 1999 8-K).
4.11 Form of ADSs Purchase Reset Warrant issued December 9, 1999
(incorporated by reference to Exhibit 4.10 to the 1999 8-K).
5.01 Opinion of Macfarlanes.
23.01 Consent of Macfarlanes (included in Exhibit 5.01).
23.02 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
24.01 Power of Attorney (see Page II-4).
</TABLE>
ITEM 17. UNDERTAKINGS.
II-2
<PAGE>
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made pursuant to this Registration Statement, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933 (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 (notwithstanding the foregoing, any
increase or decrease in volume or securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement); and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement; PROVIDED, HOWEVER, that paragraphs (1)(i) and
(1)(ii) do not apply if the information required to be included in a
post-effective amendment by paragraphs (1)(i) or (1)(ii) is contained
in any periodic report filed with or furnished to the Securities and
Exchange Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 (the "EXCHANGE
ACT") that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed 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, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fremont, State of California, on January 10, 2000.
INSIGNIA SOLUTIONS PLC
By:/s/ Stephen M. Ambler
----------------------------------------
Stephen M. Ambler
Senior Vice President and Chief
Financial Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints Richard M. Noling and Stephen M. Ambler, and each
of them, his attorneys-in-fact and agents, each with the power of substitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this registration
statement, and to sign any registration statement for the same offering covered
by this registration statement that is to be effective upon filing pursuant to
Rule 462(b) promulgated under the Securities Act of 1933, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or his or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
- ---- ----- ----
PRINCIPAL EXECUTIVE OFFICER:
/s/ Richard M. Noling President, Chief January 10, 2000
- ------------------------------- Executive Officer
Richard M. Noling and Director
PRINCIPAL FINANCIAL OFFICER AND
PRINCIPAL ACCOUNTING OFFICER:
/s/ Stephen M. Ambler Senior Vice President and January 10, 2000
- ------------------------------- Chief Financial Officer
Stephen M. Ambler
ADDITIONAL DIRECTORS:
Chairman of the Board of January , 2000
- ------------------------------- Directors
Nicholas, Viscount Bearsted
/s/ Albert E. Sisto Director January 10, 2000
- -------------------------------
Albert E. Sisto
/s/ Vincent S. Pino Director January 10, 2000
- -------------------------------
Vincent S. Pino
/s/ David G. Frodsham Director January 10, 2000
- -------------------------------
David G. Frodsham
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C>
5.01 Opinion of Macfarlanes.
23.01 Consent of Macfarlanes (included in Exhibit 5.01).
23.02 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
24.01 Power of Attorney (see Page II-4 of this Registration Statement).
</TABLE>
<PAGE>
EXHIBIT 5.01
Insignia Solutions plc 10 Norwich Street, London EC4A 1BD
The Mercury Centre, Wycombe Lane Telephone 020 7831 9222
Wooburn Green Facsimile 020 7931 9607 DX 138 Chancery Lane
High Wycombe
Buckinghamshire
HP10 0HH Our Ref: NR/PXM/554042
6 January 2000
Dear Sirs
Insigna Solutions plc, Form S-3
Registration Statement under the Securities Act of 1933
1 This Opinion is given in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of
1.1 1,063,515 Ordinary Shares of 20p nominal value each (each a "SHARE") in
Insignia Solutions plc ("the Company") issued to selling shareholders
(as defined in the Registration Statement referred to below) ("the
Selling Shareholders") on December 9, 1999 pursuant to a Securities
Purchase Agreement dated December 9, 1999 and made between the Company
and Castle Creek Technology Partners LLC ("Castle Creek") and a
Securities Purchase Agreement dated December 9, 1999 and made between
the Company and the Selling Shareholders (other than Castle Creek)
(together "the Securities Purchase Agreements");
1.2 an additional 319,054 Shares which may be issued to the Selling
Shareholders pursuant to an ADSs Purchase Warrant dated December 9, 1999
issued to Castle Creek and an ADSs Purchase Warrant dated December 10, 1999
issued to the Selling Shareholders (other than Castle Creek) (together "the
ADSs Purchase Warrants"); and
1.3 an additional 1,382,569 Shares which may be issued to the Selling
Shareholders pursuant to an ADSs Purchase Warrant dated December 9, 1999
issued to Castle Creek and an ADSs Purchase Warrant dated December 10, 1999
issued to the Selling Shareholders (other than Castle Creek) (together "the
Reset Warrants").
under the terms of a form S3 Registration Statement a copy of which has
been provided to us (the "Registration Statement").
<PAGE>
2 We have acted as English legal advisers to the Company in connection with
the foregoing. In so acting, we have examined such certificates of the
Company and directors and/or officers thereof and originals or copies of
all such corporate documents and records of the Company and all such other
documents as we have deemed relevant and necessary as a basis for our
Opinion hereinafter set forth. We have relied upon such certificates of
directors and/or officers of the Company and upon statements and
information furnished by directors and/or officers of the Company with
respect to the accuracy of material factual matters contained therein. We
have also assumed the genuineness of all signatures thereon or on the
originals of documents referred to therein.
3 This Opinion is limited to English law as currently applied by the English
Courts and is given on the basis that it will be governed by and be
construed in accordance with current English law.
4 It is our opinion that:
4.1 The 1,063,515 Shares issued pursuant to the Securities Purchase Agreements,
assuming the same were issued in accordance with such Agreements and the
Company's Memorandum and Articles of Association have been legally
issued and are fully paid and non-assessable;
4.2 the additional 319,054 Shares that may be issued upon exercise of the Reset
Warrants, when issued in accordance with the Reset Warrants and the
Company's Memorandum and Articles of Association, will be legally issued,
fully paid and non-assessable.
4.3 the additional 1,382,569 Shares that may be issued upon exercise of the
Reset Warrants, when issued in accordance with the Reset Warrants and the
Company's Memorandum and Articles of Association, will be legally issued,
fully paid and non-assessable.
5 For the purpose of this Opinion we have assumed that the term
"non-assessable" in relation to the Shares means under English law that
holders of such Shares having fully paid up all amounts due on such Shares
as to the nominal amount and premium thereon, are under no further personal
liability to contribute to the assets or liabilities of the Company in
their capacities purely as holders of such Shares.
This Opinion is given to you solely for your benefit and for the purpose of the
Registration Statement. It is not to be transmitted to any other person nor is
to be relied upon by any other person or for any purpose or ADSs Purchase
Warrants quoted or referred to in any public document without our prior written
consent except that we consent to the use of this Opinion as an exhibit to the
Registration Statement and further consent to the references to us in the
Registration Statement. In giving this consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the
Securities Act or the Rules and Regulations thereunder.
Yours faithfully
/s/ Macfarlanes
<PAGE>
EXHIBIT 23.02
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated March 30, 1999 relating to the
financial statements and financial statement schedule, which appears in Insignia
Solutions plc's Annual Report on Form 10-K for the year ended December 31, 1998.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/PricewaterhouseCoopers LLP
San Jose, California
January 10, 2000
