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Filed Pursuant to Rule 424B3
Registration No. 333-37141
1,849,871 SHARES
IDT CORPORATION
COMMON STOCK
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This Prospectus relates to the offer and sale from time to time by the
Selling Stockholders (as defined below) of up to 1,849,871 shares (the "Shares")
of Common Stock, par value $.01 per share (the "Common Stock"), of IDT
Corporation (the "Company"). The Company is registering the Shares pursuant to
(i) a Securities Purchase Agreement, dated as of September 5, 1997, among the
Company, RGC International Investors, LDC, Pangaea Fund Ltd., Special Situations
Private Equity Fund, L.P. and Halifax Fund L.P. (the "Debenture Investors");
(ii) Warrants for the Purchase of Common Stock, dated September 5, 1997, between
the Company, Tanner Unman & Co. ("Tanner Unman") and certain affiliates of
Tanner Unman (collectively, the "Tanner Unman Warrantholders"); (iii) a Stock
Purchase Agreement, dated September 8, 1997, between the Company and Mr. David
Turock and (iv) two Warrants for the Purchase of Common Stock, dated July 2,
1997, between the Company and Prime Leasing, Inc. ("Prime Leasing," and together
with the Debenture, the Tanner Unman Warrantholders and Mr. Turock, the "Selling
Stockholders"). The registration of the Shares does not necessarily mean that
any of the Shares will be offered and sold by the holder thereof. See "Use of
Proceeds."
The Common Stock is listed on the Nasdaq National Market under the symbol
"IDTC." On December 8, 1997, the last reported sales price as reported by the
Nasdaq National Market was $22 22/32 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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The Selling Stockholders or their respective pledgees, donees, transferees
or other successors in interest from time to time may offer and sell the Shares
held by them directly or through agents or broker-dealers on terms to be
determined at the time of sale. To the extent required, the names of any agent
or broker-dealer and applicable commissions or discounts and any other required
information with respect to any particular offer will be set forth in an
accompanying Prospectus Supplement. See "Plan of Distribution." The Selling
Stockholders reserve the right to accept or reject, in whole or in part, any
proposed purchase of the Shares to be made directly or through agents.
The Selling Stockholders and any agents or broker-dealers that participate
with the Selling Stockholders in the distribution of Shares may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), and any commissions received by them and any profit on the
resale of the Shares may be deemed to be underwriting commissions or discounts
under the Securities Act.
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The Company will not receive any of the proceeds from the sale of Shares by
the Selling Stockholders, but has agreed to bear certain expenses of
registration of the Shares under federal and state securities laws.
THE DATE OF THIS PROSPECTUS IS DECEMBER 9, 1997
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AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files annual and quarterly reports, proxy and information statements
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at its office at Room 1034, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's regional offices at Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such materials can be
obtained from the public reference section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a
website (http://www.sec.gov) containing reports, proxy statements and other
information of registrants, including the Company, that file electronically with
the Commission. In addition, the Company's Common Stock is quoted on the Nasdaq
National Market and reports, proxy statements and other information concerning
the Company can be inspected at the National Association of Securities Dealers,
Inc., 9513 Key West Avenue, Rockville, Maryland 20850.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments, schedules and exhibits, referred to as
the "Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement and certain parts are omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock offered hereby, reference is made to
such Registration Statement. Statements contained in this Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete, and in each instance, reference is made to the copy of such contract
or other document filed as an exhibit or incorporated by reference into the
Registration Statement of which this Prospectus forms a part, each such
statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
(File No. 0-27898) pursuant to the Exchange Act are incorporated herein by
reference:
(1) the Company's Annual Report on Form 10-K/A for the fiscal year ended July
31, 1997; and
(2) the description of the Company's Common Stock contained in the Company's
Certificate of Incorporation, filed as Exhibit 3.01 to the Company
Registration Statement on Form S-1 filed February 21, 1996 (no. 333-00204).
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Common Stock
hereunder shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of the filing of such reports and documents. The
Company hereby undertakes to provide without charge to each person, including
any beneficial owner, to whom a copy of this Prospectus is delivered, upon
written or oral request of such person a copy of any or all of the foregoing
documents incorporated herein by reference (exclusive of exhibits, unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such documents should be submitted in writing to the Corporate
Secretary at the corporate headquarters of the Company at 294 State Street,
Hackensack, New Jersey 07601 or by telephone at (201) 928-1000.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or
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superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
As used in this Prospectus, unless the context otherwise requires, the terms
the "Company" and "IDT" refer to IDT Corporation, a Delaware corporation, its
predecessor, International Discount Telecommunications, Corp., a New York
corporation, and their subsidiaries, collectively.
THE COMPANY
IDT is an international telecommunications company that offers a broad range
of integrated and competitively priced long-distance telephone and Internet
access services in the U.S. and abroad, and recently began offering Internet
telephony services.
The Company was incorporated in Delaware in December 1995. Its principal
executive offices are located at 294 State Street, Hackensack, New Jersey,
07601, and its telephone number is (201) 928-1000.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the Shares
by the Selling Stockholders.
SELLING STOCKHOLDERS
Of the 1,849,871 shares of Common Stock that may be offered pursuant to this
Prospectus, 312,500 shares may be offered by Mr. David Turock, who acquired his
shares pursuant to a Stock Purchase Agreement, dated September 8, 1997, with the
Company (the "Stock Purchase Agreement"), 99,004 shares (subject to
anti-dilution adjustments) may be offered by Prime Leasing, Inc. upon exercise
of Warrants, dated July 2, 1997, issued to Prime Leasing, Inc. by the Company
("the Warrants") and 75,000 shares (subject to anti-dilution adjustments) may be
offered by the Tanner Unman Warrantholders upon exercise of warrants issued by
the Company.
In addition, on September 5, 1997, the Company entered into a Securities
Purchase Agreement (the "Securities Purchase Agreement") with RGC International
Investors, LDC, Pangaea Funds Ltd., Special Situations Private Equity Fund, L.P.
and Halifax Fund L.P. (collectively the "Debenture Investors") pursuant to which
it issued Convertible Debentures with an aggregate principal amount of
$7,500,000 (the "Debentures"). The Debentures, including the principal amount
and all unpaid accrued interest, are convertible into Common Stock at the option
of each Debenture Investor at a conversion price (the "Conversion Price") equal
to the lower of $15.16 per share or the lowest closing price on any one trading
day during the twelve consecutive trading day period preceding the date that
notice of conversion is given to the Company. Any principal amount or unpaid
accrued interest outstanding on September 5, 2000 will be automatically
converted into shares of Common Stock.
The number of shares set forth in the table below with respect to each of
the Debenture Investors represents an estimate of the number of shares of Common
Stock that will be offered by each of them. The actual number of shares of
Common Stock issuable upon conversion of the Debentures is indeterminate, is
subject to adjustment, and could be materially less or more than such estimated
number, depending on factors that cannot be predicted by the Company at this
time, including, among other factors, the future market price of the Common
Stock. The actual number of shares of Common Stock offered hereby, and included
in the Registration Statement of which this Prospectus is a part, includes such
additional number of shares of Common Stock as may be issued or issuable upon
conversion of the Debentures by reason of the floating rate conversion price
mechanism or the other adjustment mechanisms described therein, or by reason of
any stock split, stock dividend or similar transaction involving the Common
Stock, in order to prevent dilution, in accordance with Rule 416 under the
Securities Act. Pursuant to the terms of the Debentures, if the Debentures had
actually been converted on September 5, 1997 the conversion price
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would have been $8.25 (the lowest closing bid price of the Common Stock for the
twelve consecutive trading days immediately preceding such date) at which price
the Debentures would have been converted into approximately 909,090 shares of
Common Stock. Pursuant to the terms of the Debentures, the Debentures are
convertible by any holder only to the extent that the number of shares of Common
Stock thereby issuable, together with the number of shares of Common Stock owned
by such holder and its affiliates (but not including shares of Common Stock
underlying unconverted portions of the Debentures) would not exceed 4.9% of the
then outstanding Common Stock as determined in accordance with Section 13(a) of
the Exchange Act.
Subject to the preceding paragraph, the following table sets forth certain
information known to the Company with respect to the beneficial ownership of
each Selling Stockholder as of September 5, 1997, as to (i) the number of shares
of Common Stock beneficially held by the Selling Stockholder, (ii) the maximum
number of Shares that may be offered pursuant to the Prospectus, (iii) the
number of shares of Common Stock and percentage of outstanding shares of Common
Stock that will be held by each Selling Stockholder after the sale of the
Shares, assuming all shares are sold by the Selling Stockholder. The
registration of the Shares does not necessarily mean that any of the Shares will
be offered and sold by the holder thereof.
<TABLE>
<CAPTION>
SHARES
SHARES NUMBER OF BENEFICIALLY OWNED
BENEFICIALLY OWNED SHARES AFTER THE OFFERING
PRIOR TO THE OFFERED --------------------------
OFFERING HEREBY NUMBER PERCENTAGE
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<S> <C> <C> <C> <C>
Selling Stockholder
RGC International Investors, LDC................... 727,129 727,129 0 0
Pangaea Funds Ltd.................................. 181,782 181,782 0 0
Special Situations Private Equity Fund, L.P........ 272,674 272,674 0 0
Halifax Fund L.P................................... 181,782 181,782 0 0
Tanner Unman & Co.................................. 35,766 35,766 0 0
Mr. Lucas Tanner................................... 15,000 15,000 0 0
Unman Investments, Inc............................. 12,376 12,376 0 0
Coffin & Sons, Inc................................. 11,858 11,858 0 0
Mr. David Turock................................... 312,500 312,500 0 0
Prime Leasing, Inc................................. 99,004 99,004 0 0
</TABLE>
PLAN OF DISTRIBUTION
The Shares offered for sale hereby may be sold from time to time by the
Selling Stockholders or their respective pledgees, donees, transferees or other
successors in interest in one or more transactions (which may involve block
transactions) on the Nasdaq National Market, or such other market on which the
Common Stock may from time to time be trading in the over-the-counter market in
negotiated transactions, through the writing of options on the shares, short
sales or in a combination of such methods of sale, at fixed prices, at market
prices prevailing at the time of sale, at prices relating to prevailing market
prices or at negotiated prices. The Selling Stockholders may effect such
transactions directly to purchasers or to or through broker-dealers which may
act as agents or principals. Such broker-dealers may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Stockholders (which compensation as to a particular broker-dealer may be less
than or in excess of customary commissions). In addition, any Shares covered by
this Prospectus that qualify for sale pursuant to Rule 144 of the Securities Act
may be sold under Rule 144 rather than pursuant to this Prospectus.
To comply with the securities laws of certain states, if applicable, the
Shares will be sold therein only through brokers or dealers. In addition, in
certain states, the Shares may not be sold unless they have been registered or
qualified for sale in such states or an exemption from registration or
qualification is available and is complied with. The Company is obligated
pursuant to the Securities Purchase Agreement, the Stock
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Purchase Agreement and the Warrants described herein to register or qualify the
Shares under the securities or blue sky laws of such jurisdictions, as
applicable.
Any broker-dealers who participate in a sale of the Shares may be deemed to
be "underwriters" within the meaning of Sections 11 and 12 of the Securities Act
and Rule 10b-5 of the Exchange Act, and any commissions received by them, and
proceeds of any such sales as principals, may be deemed to be underwriting
discounts and commissions under the Securities Act. To the extent any of the
Selling Stockholders may be deemed to be acting as an underwriter, such Selling
Stockholder may be subject to certain statutory liabilities of the Securities
Act.
In addition, the Selling Stockholders and any other person participating in
the sale or distribution of the Common Stock will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including without limitation Rules 10b-5 and Regulation M (and Rules 100 to 105
thereof), which provisions may limit the timing of purchases and sales of any of
the Common Stock by the Selling Stockholders and any other such person.
Furthermore, pursuant to such regulations, any person engaged in a distribution
of Common Stock may not simultaneously engage in market-making activities with
respect thereto during the period beginning when such person becomes a
distribution participant and ending upon such person's completion of
participation in a distribution, including stabilization activities to effect
syndicate covering transactions, to impose penalty bids, or to effect passive
market making bids. All of the foregoing may affect the marketability of the
Common Stock and the ability of any person or entity to engage in market-making
activities with respect to the Common Stock.
LEGAL MATTERS
Certain legal matters with respect to this offering will be passed upon for
the Company by Joyce Mason, Esq., General Counsel.
EXPERTS
The consolidated financial statements of IDT Corporation at July 31, 1997
and 1996, and for each of the three years in the period ended July 31, 1997
incorporated by reference in this Prospectus and the related Registration
Statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon incorporated herein by reference, and are included
in reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
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NO DEALER, SALES REPRESENTATIVE, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES OTHER THAN THE SHARES OF
COMMON STOCK TO WHICH IT RELATES OR AN OFFER TO, OR A SOLICITATION OF, ANY
PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
The Company............................................................... 3
Use of Proceeds........................................................... 3
Selling Stockholders...................................................... 3
Plan of Distribution...................................................... 4
Legal Matters............................................................. 5
Experts................................................................... 5
</TABLE>
1,849,871 SHARES
IDT CORPORATION
COMMON STOCK
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PROSPECTUS
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DECEMBER 9, 1997
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