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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 2, 1999
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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FAXSAV INCORPORATED
(Exact name of Registrant as specified in its Charter)
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DELAWARE 11-3025769
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
399 THORNALL STREET, EDISON, NEW JERSEY 08837
(732) 906-2000
(Address, including zip code, and telephone number,
Including Area Code, Of Registrant's Principal Executive Offices)
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THOMAS F. MURAWSKI
PRESIDENT AND CHIEF EXECUTIVE OFFICER
FAXSAV INCORPORATED
399 THORNALL STREET
EDISON, NEW JERSEY 08837
(732) 906-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service of process)
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COPIES TO:
RICHARD R. PLUMRIDGE, ESQ.
BRUCE E. CUNNINGHAM, ESQ.
BROBECK, PHLEGER & HARRISON LLP
1125 SEVENTEENTH STREET
SUITE 2500
DENVER, COLORADO 80030
(303) 293-0760
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable on or after this Registration Statement is declared effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. /_/
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration 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(c)
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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /_/
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SHARES TO BE AGGREGATE PRICE PER AGGREGATE OFFERING AMOUNT OF REGISTRATION
REGISTERED AMOUNT TO BE REGISTERED UNIT(1) PRICE(2) FEE
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Common Stock, $.01 par
value...................... 2,499,000 $5.969 $14,916,531 $5,143.22
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(1) Based on the average high and low trading prices of the Common Stock, as
reported on the Nasdaq National Market, on May 26, 1999.
(2) Estimated pursuant to Rule 457(c) solely for the purpose of computing the
registration fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
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<PAGE>
PROSPECTUS
2,499,000 SHARES
FAXSAV INCORPORATED
COMMON STOCK
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This prospectus relates to the resale of up to 2,499,000 shares of our
common stock held by certain of our current stockholders. The prices at which
such stockholders may sell the shares will be determined by the prevailing
market price for the shares or in negotiated transactions.
Our common stock is quoted on the Nasdaq National Market under the symbol
FAXX. On May 26, 1999, the last reported sales price of our common stock was
$5 3/4.
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THE SHARES OF COMMON STOCK OF FAXSAV OFFERED OR SOLD UNDER THIS PROSPECTUS
INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 3.
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Neither the Securities and Exchange Commission nor any state commission has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is June 2, 1999
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TABLE OF CONTENTS
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PAGE
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THE COMPANY......................................................2
RISK FACTORS.....................................................3
FORWARD-LOOKING INFORMATION.....................................10
USE OF PROCEEDS.................................................11
PLAN OF DISTRIBUTION............................................12
SELLING STOCKHOLDERS............................................15
WHERE YOU CAN FIND MORE INFORMATION.............................17
LEGAL MATTERS...................................................17
EXPERTS.........................................................17
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THE COMPANY
FaxSav was incorporated in Delaware in November 1989 under the name Digitran
Corporation and changed its name to FaxSav Incorporated in February 1996. We
plan to change our name to NetMoves Corporation in the near future. Our
principal executive offices are located at 399 Thornall Street, Edison, New
Jersey 08837. Our telephone number is (732) 906-2000.
<PAGE>
RISK FACTORS
RISKS RELATED TO OUR BUSINESS
WE HAVE A HISTORY OF NET LOSSES AND EXPECT FUTURE LOSSES.
From our inception in 1989 through the year ending December 31, 1998, we
have experienced significant net losses. We incurred net losses of $7.5 million
in the year ended December 31, 1996, $7.1 million in the year ended December 31,
1997 and $8.1 million in the year ended December 31, 1998. We currently
anticipate that we will have additional net losses as we attempt to expand our
business and we may not have positive operating or net income in the future. As
of December 31, 1998, we had an accumulated deficit of $40.3 million.
Since inception, we have incurred substantial costs to develop and enhance
our technology and to create, introduce and enhance our service and product
offerings. We intend to continue these efforts and, in addition, to increase our
marketing spending. In early 1999, we announced a new marketing campaign which
will involve significant expenditures by us, including hiring an outside
advertising agency. As a result of these expenditures, we expect to continue to
experience operating losses. There can be no assurance that these expenditures
will result in any increase in revenues.
WE HAVE MANY COMPETITORS AND WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY AGAINST
THEM.
The market for facsimile transmission services is intensely competitive and
the industry is characterized by low barriers to entry. We expect that
competition will intensify in the future. Our failure to compete successfully
could have a material adverse affect on our business, financial condition and
results of operations. We believe that our ability to compete successfully will
depend upon a number of factors, including market presence, the capacity,
reliability and security of our network infrastructure, the pricing policies of
our competitors and suppliers, the timing of introductions of new services and
service enhancements by us and our competitors, and industry and general
economic trends.
WE MAY NOT BE ABLE TO DELIVER OUR SERVICES IF LONG DISTANCE CARRIERS REFUSE TO
CARRY OUR TRAFFIC.
The foundation of our telephony network infrastructure consists of the right
to use the telecommunications lines of several long distance carriers, including
MCI WorldCom. As many of these companies are current or potential competitors of
ours, we cannot assure you that they will continue to handle our traffic. If
these companies discontinue or otherwise change their relationships with us we
may be unable to deliver our services which would have a material adverse effect
upon our business, financial condition and results of operations.
GOVERNMENT REGULATIONS COULD INCREASE COMPETITION FOR OUR SERVICES.
On August 7, 1997, the Federal Communications Commission issued new rules
which may significantly reduce the cost of international calls originating in
the United States. The five-year phase-in period began on January 1, 1998. To
the extent that these new regulations are implemented and result in reductions
in the cost of international calls originating in the United States, we will
face increased competition for our international fax services which may have a
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material adverse effect on our business, financial condition and results of
operations.
WE MAY NEED FUNDS WHICH MAY NOT BE AVAILABLE.
Our cash requirements may vary materially from those now planned as a result
of unforeseen changes that could consume a significant portion of our available
resources before this time.
If adequate funds are not available, we may be required to delay or to
eliminate certain expenditures or to license to third parties the rights to
commercialize technologies that we would otherwise seek to develop ourselves. To
the extent that funds expected to be generated from our operations are
insufficient to meet current or planned operating requirements or to maintain a
Nasdaq listing, we will seek to obtain additional funds through bank facilities,
equity or debt financing, collaborative or other arrangements with corporate
partners and from other sources. See "--We may be delisted from Nasdaq which
would affect your ability to sell our stock." Additional funding may not be
available when needed or on terms acceptable to us, which could have a material
adverse effect on our business, financial condition and results of operations.
In addition, if we obtain any additional funding, these financings may have a
dilutive effect on the holders of our securities.
UNAUTHORIZED USE OF OUR INTELLECTUAL PROPERTY BY THIRD PARTIES MAY DAMAGE OUR
BRAND.
We regard our copyrights, service marks, trademarks, trade secrets and other
intellectual property as critical to our success. Unauthorized use of our
intellectual property by third parties may damage our brand and our reputation.
We rely on trademark and copyright law, trade secret protection and
confidentiality and/or license agreements with our employees, customers,
partners and others to protect our intellectual property rights. We were granted
patents related to our FaxSAV Connector and our "e-mail Stamps" security
technology incorporated into our fax mailer service. Despite our precautions, it
may be possible for third parties to obtain and use our intellectual property
without authorization. Furthermore, the validity, enforceability and scope of
protection of intellectual property in Internet-related industries is uncertain
and still evolving. The laws of some foreign countries are uncertain or do not
protect intellectual property rights to the same extent as the laws of the
United States.
DEFENDING AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS COULD BE EXPENSIVE,
AND IF WE ARE NOT SUCCESSFUL, COULD DISRUPT OUR BUSINESS.
We cannot be certain that our services and the finished products that we
deliver do not or will not infringe valid patents, copyrights or other
intellectual property rights held by third parties. We may be subject to legal
proceedings and claims from time to time relating to the intellectual property
of others in the ordinary course of our business. We may incur substantial
expenses in defending against these third-party infringement claims, regardless
of their merit. Successful infringement claims against us may result in
substantial monetary liability or may materially disrupt the conduct of our
business.
WE ARE DEPENDENT ON THE RELIABILITY AND EXPANSION OF OUR NETWORK INFRASTRUCTURE.
Our future success will depend in part upon the capacity, reliability and
security of our network infrastructure and in part upon our ability to expand
the deployment of an international network of Internet-capable facsimile nodes.
We must continue to expand and adapt our network infrastructure as the number of
customers and the volume of traffic they wish to transmit increases. The
expansion and adaptation of our network
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infrastructure will require substantial financial, operational and management
resources.
There can be no assurance that we will be able to expand or adapt our
network infrastructure to meet any additional demand or to deploy additional
contemplated Internet-capable facsimile nodes on a timely basis, at a
commercially reasonable cost, or at all. Any failure to expand our network or
Internet-capable facsimile infrastructures or to adapt them to changing customer
requirements or evolving industry standards on a timely basis would have a
material adverse effect on our business, financial condition and results of
operations.
OUR FAILURE TO MANAGE GROWTH COULD ADVERSELY AFFECT US.
We have rapidly and significantly expanded our operations and anticipate
that significant expansion will continue to be required to address potential
market opportunities. There can be no assurance that this expansion will be
successfully completed or that it will generate sufficient revenues to cover our
expenses. Our inability to promptly address and respond to these circumstances
could have a material adverse effect on our business, financial condition and
results of operations.
BECAUSE WE ARE DEPENDENT ON COMPUTER SYSTEMS, A SYSTEMS FAILURE COULD CAUSE A
SIGNIFICANT DISRUPTION TO OUR BUSINESS.
Our business depends upon the efficient and uninterrupted operation of our
computer and communications hardware systems and infrastructure. We currently
maintain our computer hardware and switching equipment, including our processing
equipment, at three sites. While we have taken precautions against systems
failure, interruptions could result from natural disasters as well as power
loss, telecommunications failure and similar events. Any damage or failure that
disrupts or delays our operations could have a material adverse effect on our
business, financial condition and results of operations.
IF OUR SECURITY MEASURES ARE INADEQUATE, OUR BUSINESS WILL BE ADVERSELY
AFFECTED.
We have taken measures to protect the integrity of our infrastructure and
the privacy of confidential information. Nonetheless, our infrastructure is
potentially vulnerable to physical or electronic break-ins, viruses or similar
problems. If a person circumvents our security measures, he could jeopardize the
security of confidential information stored in and transmitted through the
computer systems of the individuals, businesses and financial institutions
utilizing our services. This may result in significant liability to us and may
also deter potential customers from using our services. Any security breach that
causes interruptions or data loss in our operations or in the computer systems
of our customers could have a material adverse effect on our business, financial
condition and results of operations.
WE ARE DEPENDENT UPON OUR CURRENT SUPPLIERS, AND MAY NOT BE ABLE TO OBTAIN SOME
PRODUCTS OR SERVICES FROM OTHER SUPPLIERS.
We rely on third parties to supply key components of our network
infrastructure, including long distance telecommunications services and
telecommunications node equipment, many of which are available only from sole or
limited sources. MCI WorldCom is our primary provider of long distance
telecommunications services. We have from time-to-time experienced
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partial interruptions of service from our telecommunications carriers which
have temporarily prevented customers in limited geographical areas from
reaching the FaxSav network. There can be no assurance that we will not
experience partial or complete service interruptions in the future. There can
be no assurance that MCI WorldCom and our other telecommunications providers
will continue to provide long distance services to us at attractive rates, or
at all, or that we will be able to obtain these services in the future from
these or other long distance providers on the scale and within the time
frames we require. Any failure to obtain these services on a timely basis at
an affordable cost, or any significant delays or interruptions of service
from these carriers, would have a material adverse effect on our business,
financial condition and results of operations.
All of the faxboards used in our telecommunications nodes are supplied by
Brooktrout Technology, Inc. We purchase Brooktrout faxboards on a non-exclusive
basis through purchase orders placed from time-to-time, carry a limited
inventory of faxboards and have no guaranteed supply arrangement with
Brooktrout. In addition to faxboards, many of the routers, switches and other
hardware components used in our network infrastructure are supplied by sole or
limited sources on a non-exclusive, purchase order basis. There can be no
assurance that Brooktrout or our other suppliers will not enter into exclusive
arrangements with our competitors, or cease selling these components to us at
commercially reasonable prices, or at all.
The anticipated expansion of our network infrastructure is expected to place
a significant demand on our suppliers, some of which may have limited resources
and production capacity. In addition, certain of our suppliers, in turn, may
rely on sole or limited sources of supply for components included in their
products. Should our suppliers fail to adjust to meet this increasing demand,
they may be unable to continue to supply components and products in the
quantities and quality and at the times required by us, or at all. Our inability
to obtain sufficient quantities of sole or limited source components or to
develop alternative sources if required could result in delays and increased
costs in the expansion of our network infrastructure or in our inability to
properly maintain the existing network infrastructure, which would have a
material adverse effect on our business, financial condition and results of
operations.
WE MAY EXPERIENCE DEVELOPMENT DELAYS OR HAVE SOFTWARE DEFECTS WHICH COULD
ADVERSELY AFFECT OUR BUSINESS.
Software-based services and equipment, such as our faxSAV for Internet suite
of services and the faxSAV Connector, may contain undetected errors or failures
when introduced or when new versions are released. There can be no assurance
that, despite testing by us and by current and potential customers, errors will
not be found in this software or other releases after commencement of commercial
shipments, or that we will not experience development delays, resulting in
delays in the shipment of software and a loss of or delay in market acceptance,
any of which could have a material adverse effect on our business, financial
condition and results of operations.
WE MAY NOT BE ABLE TO RETAIN THE KEY PERSONNEL WE NEED TO SUCCEED.
Our future performance depends in significant part upon the continued
service of our key technical, sales and senior management personnel, none of
whom is bound by an employment agreement. Competition for this personnel is
intense, and there can be no assurance that we can retain our key technical,
sales and managerial employees or that we can attract, assimilate or
<PAGE>
retain other highly qualified technical, sales and managerial personnel in the
future.
WE DEPEND ON OUR INTERNATIONAL STRATEGIC ALLIANCES TO EXPAND OUR INTERNATIONAL
CUSTOMER BASE.
We have established and intend to expand an international customer base by
forming strategic sales and marketing alliances with foreign Internet service
providers, telecommunications companies and resellers. There can be no assurance
that we will be able to establish additional strategic alliances or to maintain
these strategic alliances. Our success in expanding our international customer
base depends not only on the formation of additional strategic alliances but
also on the success of these partners and their ability to market our services.
The failure to maintain these strategic alliances or the failure of these
partners to successfully develop and sustain a market for our services will have
a material adverse effect on our ability to expand our international customer
base, which could have a material adverse effect on our business, financial
condition and results of operations.
WE FACE RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS WHICH COULD MATERIALLY
AND ADVERSELY AFFECT OUR BUSINESS.
In 1998, we derived approximately $5.9 million, or 27.9% of our total
revenues from customers outside of the United States. We expect that these
revenues will represent an increasing percentage of our total revenues in the
future. Risks inherent in our international business activities generally
include unexpected changes in regulatory requirements, tariffs and other trade
barriers, costs of localizing products for foreign countries, lack of acceptance
of localized products in foreign markets, longer accounts receivable payment
cycles, difficulties in managing international operations, potentially adverse
tax consequences, and the burdens of complying with a wide variety of foreign
laws. There can be no assurance that these factors will not have a material
adverse effect on our future international revenues and, consequently, on our
business, financial condition and results of operations.
PROBLEMS RELATING TO THE "YEAR 2000 ISSUE" COULD ADVERSELY AFFECT OUR BUSINESS.
Many currently installed computer systems and software products are coded to
accept only two digit entries in the date code field. These date code fields
will need to accept four digit entries to distinguish 21st century dates from
20th century dates. As a result, in less than a year, computer systems and/or
software used by many companies may need to be upgraded to comply with these
"Year 2000" requirements or risk system failure or miscalculations causing
disruptions of normal business activities.
We have conducted a study of the Year 2000 readiness of our information
technology systems, including our computing and networking systems, and our
non-information technology systems and believe that they are currently Year 2000
compliant. Additionally, we have been informed by many of our vendors of
material hardware and software components of our information technology systems
that the products that we use are currently Year 2000 compliant. Despite our
efforts, there can be no assurance that our software contains all necessary date
code changes or that all Year 2000 problems were identified by our study and
subsequent testing. Compliance with Year 2000 requirements may disrupt our
ability to continue developing and marketing facsimile transmission products and
services. The failure to adequately address Year 2000 compliance issues in our
products and services, and in our information technology and non-information
<PAGE>
technology systems could result in claims of mismanagement, misrepresentation or
breach of contract and related litigation, which could be costly and
time-consuming to defend. In addition, there can be no assurance that
governmental agencies, utility companies, Internet access companies, third-party
service providers and others outside of our control will be Year 2000 compliant.
The failure by these entities to be Year 2000 compliant could result in a
systemic failure beyond our control, such as a prolonged Internet,
telecommunications or electrical failure, which could also prevent us from
delivering services to our customers, which could have a material adverse effect
on our business, financial condition and results of operations.
RISKS RELATED TO OUR INDUSTRY
OUR FUTURE GROWTH DEPENDS UPON AN INCREASE IN THE USE OF THE INTERNET AS A
MEDIUM FOR FACSIMILE TRANSMISSIONS.
We believe that our future success will depend in part upon our ability to
significantly expand our base of Internet-capable nodes and route more of our
customers' traffic through the Internet. Our success is therefore largely
dependent upon the viability of the Internet as a medium for the transmission of
documents. There can be no assurance that document transmission over the
Internet will continue to be reliable or that Internet capacity constraints will
not develop which inhibit efficient document transmission.
We access the Internet from our Internet-capable nodes by dedicated
connection to third party internet service providers. We pay fixed monthly fees
for this Internet access, regardless of our usage or the volume of our
customers' traffic. There can be no assurance that the current pricing structure
for access to and use of the Internet will not change unfavorably. If material
capacity constraints develop on the Internet or the current Internet pricing
structure changes unfavorably, our business, financial condition and results of
operations would be materially and adversely affected. In addition, our future
success is dependent upon the increased acceptance by potential customers of the
Internet as the preferred medium for transmission of documents. There can be no
assurance that this market acceptance shall continue to increase. Lack of
increased market acceptance would materially and adversely affect our business,
financial condition and results of operations.
IF WE DO NOT KEEP PACE WITH TECHNOLOGICAL CHANGES, OUR SERVICES MAY BECOME
OBSOLETE AND OUR BUSINESS WILL SUFFER.
The telecommunications industry in general, and the facsimile transmission
business in particular, are characterized by rapid and continuous technological
change. Future technological advances in the telecommunications industry may
result in the availability of new services or products that could compete with
the facsimile transmission services we provide or reduce the cost of existing
products or services, any of which could enable our existing or potential
customers to fulfill their fax communications needs more cost efficiently. There
can be no assurance that we will be successful in developing and introducing new
services that meet changing customer needs and respond to technological changes
or evolving industry standards in a timely manner, if at all, or that services
or technologies developed by others will not render our services noncompetitive.
Our inability to respond to changing market conditions, technological
<PAGE>
developments, evolving industry standards or changing customer requirements, or
the development of competing technology or products that render our services
noncompetitive would have a material adverse effect on our business, financial
condition and results of operations.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION WHICH COULD NEGATIVELY IMPACT
OUR BUSINESS.
We are subject to regulation by the FCC and other federal, state and
international communications regulatory agencies. We are licensed by the FCC as
an authorized telecommunications company and are classified as a "non-dominant
interexchange carrier." The FCC has the power to impose more stringent
regulatory requirements on us and to change our regulatory classification. There
can be no assurance that the FCC will not change our regulatory classification
or otherwise subject us to more burdensome regulatory requirements.
Our nodes and FaxLauncher service utilize encryption technology in
connection with the routing of customer documents through the Internet. The
export of this encryption technology is regulated by the United States
government. While we are currently allowed to export this encryption technology
to most countries, any change in these regulations could limit our ability to
distribute our services outside of the United States or electronically which
could have a material adverse effect on our business, financial condition and
results of operations.
WE MAY BE SUBJECT TO CLAIMS REGARDING FOREIGN LAWS AND REGULATIONS.
In connection with the deployment of Internet-capable nodes in countries
throughout the world, we are required to satisfy a variety of foreign regulatory
requirements. While we intend to comply with these requirements on a
country-by-country basis as the deployment of Internet-capable facsimile nodes
continues, we cannot assure you we will be able to do so. The failure to satisfy
these requirements may prevent us from installing Internet-capable facsimile
nodes in these countries. Should we fail to deploy a number of these nodes, our
business, operating results and financial condition could be materially and
adversely affected.
RISKS RELATED TO OUR COMMON STOCK
WE MAY BE DELISTED FROM NASDAQ WHICH WOULD AFFECT YOUR ABILITY TO SELL OUR
STOCK.
Our common stock is currently traded on the Nasdaq National Market. To
continue to trade on Nasdaq, we need to maintain at least $4.0 million in net
tangible assets. In the past, we have not been in compliance with this
requirement. We believe that we are currently in compliance with Nasdaq's
requirements. However, if in the future we are unable to satisfy Nasdaq's
requirements, our securities may be delisted from Nasdaq. There can be no
assurance that our common stock will not be delisted, which would materially
affect your ability to buy or sell shares of our common stock.
FLUCTUATIONS IN OUR QUARTERLY RESULTS MAY NEGATIVELY IMPACT OUR STOCK PRICE.
We may experience significant quarter to quarter fluctuations in our results
of operations, which may result in volatility in the price of our common stock.
Quarterly results of operations may fluctuate due to a combination of factors.
Our revenues are difficult to forecast. Shortfalls in revenues may adversely
and disproportionately affect our results of operations because a high
percentage of our operating
<PAGE>
expenses are relatively fixed, and planned expenditures, such as the anticipated
expansion of our Internet infrastructure, are based primarily on sales
forecasts. In addition, the stock market in general has experienced extreme
price and volume fluctuations which have affected the market price of securities
of many companies in the telecommunications and technology industries and which
may have been unrelated to the operating performance of these companies. These
market fluctuations may adversely affect the market price of our common stock.
Accordingly, we believe that period to period comparisons of results of
operations are not necessarily meaningful and should not be relied upon as an
indication of future results of operations. There can be no assurance that we
will be profitable in any future quarter. Due to the foregoing factors, it is
likely that in one or more future quarters our operating results will be below
the expectations of public market analysts and investors. This would have a
material adverse effect on the price of our common stock.
FUTURE SALES OF OUR COMMON STOCK COULD CAUSE THE PRICE OF OUR SHARES TO DECLINE
AND AFFECT OUR ABILITY TO RAISE CAPITAL.
The market price of our common stock could drop as a result of sales of
substantial amounts of common stock in the public market or the perception that
these sales could occur. Registration statements are in effect covering the sale
of up to 2,709,677 shares of our common stock, including the shares offered by
this prospectus. A price drop may make it more difficult for us to raise the
capital necessary to fund our future operations by selling common stock. As of
March 24, 1999, without taking into account shares of common stock issued upon
exercise of stock options, warrants or other rights to acquire common stock
after this date, we had outstanding 14,067,105 shares of common stock.
OUR CERTIFICATE OF INCORPORATION AND BYLAWS, AND DELAWARE LAWS MAKE IT MORE
DIFFICULT FOR A THIRD PARTY TO ACQUIRE US.
Our sixth amended and restated certificate of incorporation authorizes the
board of directors to issue, without stockholder approval, up to 1,000,000
shares of preferred stock with voting, conversion and other rights and
preferences that could adversely affect the voting power or other rights of the
holders of common stock. Our certificate of incorporation also provides for
staggered terms for the members of the board of directors. In addition, we will
be subject to the provisions of Section 203 of the Delaware General Corporation
Law, which will generally prohibit us from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. The foregoing and other
provisions of our certificate of incorporation and our by-laws, as amended and
the application of Section 203 of the Delaware General Corporation Law could
have the effect of deterring certain takeovers or delaying or preventing certain
changes in our control or management, including transactions in which
stockholders might otherwise receive a premium for their shares over then
current market prices.
WE DO NOT INTEND TO PAY CASH DIVIDENDS AND, AS A RESULT, STOCKHOLDERS WILL NEED
TO SELL SHARES TO REALIZE A RETURN ON THEIR INVESTMENT.
We have never paid any cash dividends on our common stock and do not intend
to pay any cash dividends in the foreseeable future.
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FORWARD-LOOKING INFORMATION
This prospectus includes "forward-looking statements" regarding future
events or our future performance within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. All statements other than
statements of historical facts included in this prospectus or incorporated by
reference regarding our financial position and business strategy may constitute
forward-looking statements. Although we believe that the expectations reflected
in these forward-looking statements are reasonable, we can not guarantee that
these expectations will prove to be correct. Important factors that could cause
actual results to differ materially from our expectations are listed in this
prospectus, and they include the forward-looking statements under "risk
factors." All subsequent written and oral forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by these statements.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares. All proceeds
will be received by the selling stockholders. See "Selling Stockholders."
<PAGE>
PLAN OF DISTRIBUTION
FaxSav is registering all 2,499,000 shares on behalf of the selling
stockholders. All of the shares originally were issued by us in connection with
the recent purchase by certain investors of 2,499,000 shares of our common stock
by means of a Purchase Agreement.
FaxSav will receive no proceeds from this offering. The selling stockholders
named in the table below or pledgees, donees, transferees or other
successors-in-interest selling shares received from the selling stockholders as
a gift, partnership distribution or other non-sale related transfer after the
date of this prospectus may sell the shares from time to time. The selling
stockholders will act independently of FaxSav in making decisions with respect
to the timing, manner and size of each sale. The sales may be made on one or
more exchanges or in the over-the-counter market or otherwise, at prices and at
terms then prevailing or at prices related to the then current market price, or
in negotiated transactions. The selling stockholders may effect these
transactions by selling the shares to or through broker-dealers.
The shares may be sold by one or more of, or a combination of, the
following:
o a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by this
broker-dealer for its account through this prospectus;
o an exchange distribution that complies with the rules of the exchange;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o in privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In effecting sales,
broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in the resales.
The selling stockholders may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
these transactions, broker-dealers may engage in short sales of the shares in
the course of hedging the positions they assume with the selling stockholder.
The selling stockholders also may sell shares short and redeliver the shares to
close out these short positions. The selling stockholders may enter into option
or other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer these shares through this prospectus. The selling stockholders each may
also loan or pledge the shares to a broker-dealer. The broker-dealer may sell
the shares so loaned, or upon a default the broker-dealer may sell the pledged
shares by use of this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the selling stockholder.
Broker-dealers or agents may also receive compensation from the purchasers of
the shares for whom they act as agents or to whom they sell
<PAGE>
as principals, or both. Compensation as to a particular broker-dealer might be
in excess of customary commissions and will be in amounts to be negotiated in
connection with the sale. Broker-dealers or agents and any other participating
broker-dealers or the selling stockholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act in connection with
sales of the shares. Accordingly, any commission, discount or concession
received by them and any profit on the resale of the shares purchased by them
may be deemed to be underwriting discounts or commissions under the Securities
Act. Because the selling stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the selling stockholders
will be subject to the prospectus delivery requirements of the Securities Act.
In addition, any securities covered by this prospectus which qualify for sale
through Rule 144 promulgated under the Securities Act may be sold under Rule 144
rather than through this prospectus. The selling stockholders have advised
FaxSav that they have not entered into any agreements, understandings or
arrangements with any underwriters or broker-dealers regarding the sale of the
securities. There is no underwriter or coordinating broker acting in connection
with the proposed sale of shares by the selling stockholder.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares may not engage in market making
activities with respect to our common stock for a period of one business day
before the commencement of this distribution. In addition, the selling
stockholders will be subject to applicable provisions of the Exchange Act and
the associated rules and regulations under the Exchange Act, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the selling stockholder. FaxSav will make copies
of this prospectus available to the selling stockholders and has informed each
of them of the need for delivery of copies of this prospectus to purchasers at
or before the time of any sale of the shares.
FaxSav will file a supplement to this prospectus, if required, under Rule
424(b) under the Securities Act upon being notified by the selling stockholders
that any material arrangement has been entered into with a broker-dealer for the
sale of shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer. This supplement will
disclose:
o the name of the selling stockholders and of the participating
broker-dealer(s);
o the number of shares involved;
o the price at which these shares were sold;
o the commissions paid or discounts or concessions allowed to the
broker-dealer(s), where applicable;
o that the broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus; and
o other facts material to the transaction.
<PAGE>
In addition, upon being notified by any selling stockholder that a donee or
pledgee intends to sell more than 500 shares, FaxSav will file a supplement to
this prospectus.
FaxSav will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholders will bear all commissions
and discounts, if any, attributable to their respective sales of the shares. The
selling stockholders may agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the shares against some
liabilities, including liabilities arising under the Securities Act. FaxSav and
the selling stockholders have agreed to indemnify each other against some
liabilities in connection with the offering of the shares, including liabilities
arising under the Securities Act.
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth information with respect to the number of shares
beneficially owned by each selling stockholder as of May 20, 1999. Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission. In computing the number of shares beneficially owned by a
person and the percentage of ownership of that person, shares of common stock
subject to options or warrants held by that person that are currently
exercisable within 60 days of May 20, 1999 are deemed outstanding. None of the
Selling Stockholders has had a material relationship with the Company within the
past three years other than as a result of the ownership of the Shares or other
securities of the Company. The shares offered by this prospectus may be offered
from time to time by the selling stockholders named below. The percent of
beneficial ownership for each stockholder is based on 16,460,892 shares of
common stock outstanding as of May 20, 1999. An "*" indicates beneficial
ownership of less than 1%. See "Plan of Distribution."
<TABLE>
<CAPTION>
Name of Selling Stockholder Number of Shares Number of Shares Beneficial Ownership After Offering(1)
Beneficially Owned Registered
Prior to Offering for Sale Hereby
Number of Shares Percent
<S> <C> <C> <C> <C>
Watershed Partners, LP............... 1,131,500 300,000 831,500 5.1%
Capital Trust Management............. 300,000 300,000 0 *
Veritas SG Investment Trust GMBH..... 280,000 280,000 0 *
Lancaster Investment Partners........ 200,000 200,000 0 *
The Tailwind Fund Ltd.(2)............ 909,677 200,000 709,677 4.3%
Cascade Capital Partners L.P......... 184,500 184,500 0 *
Prism Partners I..................... 175,000 105,000 70,000 *
Worthington Growth L.P............... 100,000 100,000 0 *
Foxhound Fund........................ 80,000 80,000 0 *
Zeke L.P............................. 80,000 80,000 0 *
Banque Julius Baer & Co.............. 60,000 60,000 0 *
Haussmann Holding.................... 391,150 50,000 341,150 *
Marcaurd Cook & Cie S.A.............. 50,000 50,000 0 *
Fidelity National Title Company...... 50,000 50,000 0 *
Apex Limited Partners, LP............ 50,000 50,000 0 *
Filly, Inc........................... 40,000 40,000 0 *
Porter Partners, L.P................. 40,000 40,000 0 *
Clarion Partners, L.P................ 39,000 39,000 0 *
Prism Partners II Offshore Fund...... 50,000 30,000 20,000 *
William W. Bryant, Jr................ 88,000 27,000 61,000 *
Gryphon Offshore..................... 26,100 26,100 0 *
Alan R. Davidson..................... 25,000 25,000 0 *
Robert F. Raco....................... 25,000 25,000 0 *
EDJ Limited.......................... 20,000 20,000 0 *
Security Trend Partners.............. 20,000 20,000 0 *
Kensington Partners.................. 15,694 15,694 0 *
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Diamond Capital...................... 15,000 15,000 0 *
Fredrik C. Schreuder................. 15,000 15,000 0 *
Prism Partners I Offshore Fund....... 25,000 15,000 10,000 *
Job & Co............................. 14,400 14,400 0 *
Clarion Offshore Fund Ltd............ 11,000 11,000 0 *
Anthony Kamin........................ 10,000 10,000 0 *
Alexander Paluch..................... 5,000 5,000 0 *
Walter A. Carozza.................... 5,000 5,000 0 *
Barrant V. Merrill................... 4,000 4,000 0 *
Bald Eagle........................... 3,330 3,330 0 *
William W. Bryant, III............... 8,100 3,000 5,100 *
Kensington II........................ 976 976 0 *
---------- --------- --------- ------
TOTAL....................... 4,547,427 2,499,000 2,048,427 12.40%
---------- --------- --------- ------
---------- --------- --------- ------
</TABLE>
- ----------
(1) The number of shares of Common Stock and the percentage of shares of Common
Stock beneficially owned by each Selling Stockholder after the offering are
based on the assumption that all of the Selling Stockholders will sell all of
the shares registered for sale hereby. Because the Selling Stockholders may
offer all, some or none of the Shares pursuant to this Prospectus, and because
there are currently no agreements, arrangements or understandings with respect
to the sale of any of the Shares, no estimate can be given as to the number of
Shares that will be held by the Selling Stockholders after completion of the
sale of Shares hereunder. See "Plan of Distribution."
(2) Includes 64,516 shares of our common stock issuable upon exercise of
warrants.
The Shares registered for sale hereby were acquired by the Selling
Stockholders from the Company in a private placement transaction (the "Private
Placement") in May 1999 for an aggregate purchase price of approximately $14.4
million, which proceeds were to be used for general corporate purposes. We have
agreed to bear certain expenses (other than selling discounts and commissions)
in connection with the registration of the Shares.
We have agreed to prepare and file amendments and supplements to the
registration statement necessary to keep this registration statement effective
so long as the selling stockholders desire to dispose of the securities covered
by this registration statement, or if earlier, at the time when the selling
stockholders could sell all of these securities under Rule 144(k).
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and later information filed with the SEC will
update and supersede this information. We incorporate by reference our Annual
Report on Form 10-K for the fiscal year ended December 31, 1998 and any further
filings made with the SEC under Section 13a, 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until this offering is completed.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Peter S. Macaluso
Vice President and Chief Financial Officer
FaxSav Incorporated
399 Thornall Street
Edison, N.J. 08837
732-906-2000
You should rely only on the information incorporated by reference or
provided in this prospectus or the prospectus supplement. We have authorized no
one to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus or the prospectus supplement is
accurate as of any date other than on the front of this document.
LEGAL MATTERS
The validity of the securities offered under this registration statement
will be passed upon for FaxSav by Brobeck, Phleger & Harrison LLP, Denver,
Colorado.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K for the year ended December 31, 1998 have been so
incorporated in reliance on the reports of PricewaterhouseCoopers LLP,
independent accounts, given on the authority of said firm as experts in auditing
and accounting.
<PAGE>
2,499,000 SHARES
FAXSAV INCORPORATED
COMMON STOCK
PROSPECTUS
June 2, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth an estimate of the expenses to be incurred by
FaxSav Incorporated in connection with the issuance and distribution of the
securities being registered hereby. All such expenses will be borne by FaxSav
Incorporated:
<TABLE>
<CAPTION>
Amount to
Be Paid
<S> <C>
Nasdaq Listing Application................................. $17,500
SEC Registration Fee....................................... 5,143
Legal Fees and Expenses.................................... 10,000
Accounting Fees and Expenses............................... 10,000
Miscellaneous.............................................. 7,357
-------
Total...................................................... $50,000
-------
-------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Act"). Article IX of the Registrant's Sixth Amended and
Restated Certificate of Incorporation provides for indemnification of its
directors and officers and permissible indemnification of employees and other
agents to the maximum extent permitted by the Delaware General Corporation Law.
FaxSav Incorporated has purchased liability insurance on behalf of its
directors and officers for liabilities arising out of their capacities as such.
ITEM 16. EXHIBITS
The following is a list of Exhibits filed as part of the Registration
Statement:
<TABLE>
<S> <C>
3.1 Registrant's Sixth Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.3 to the Registrant's
Registration Statement on Form S-1, Registration No. 333-09613
("Registrant's Registration Statement")).
3.2 By-laws of the Registrant (incorporated by reference to Exhibits 3.4
and 3.5 to the Registrant's Registration Statement).
4.1 Specimen certificate for shares of the Registrant's Common Stock
(incorporated herein by reference to Exhibit 4.1 to the Registrant's
Registration Statement).
4.2 Provisions of the Articles of Incorporation and By-laws of the
Registrant defining rights of holders of Common Stock of the Registrant
(incorporated herein by reference to Exhibits 3.1, 3.2, 3.3, 3.4 and
3.5 to the Registrant's Registration Statement).
5.1 Opinion of Brobeck, Phleger & Harrison LLP.*
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C>
10.1 Purchase Agreement, dated May 14, 1999, between the Registrant and the
investors listed on Schedule A thereto.
*23.1 Consent of Brobeck, Phleger & Harrison LLP (included in the opinion
filed as Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP, independent accountants.
*24.1 Power of Attorney (included with signature page).
</TABLE>
- ----------
* Filed herewith.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14 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 Act, and is, therefore, unenforceable. If a claim for indemnification
against such liabilities (other than 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 Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities offered hereby, a post-effective amendment to this Registration
Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of 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 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is
II-2
<PAGE>
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Edison, State of New Jersey, on June 2, 1999.
FAXSAV INCORPORATED
By: /s/ Thomas F. Murawski
-----------------------------------------
Thomas F. Murawski, Chairman of the Board
of Directors, President and Chief
Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person or entity whose signature
appears below constitutes and appoints Thomas F. Murawski and Peter S. Macaluso,
and each of them, its true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for it and in its name, place and
stead, in any and all capacities, to sign any and all amendments, including any
post-effective amendments, to this Registration Statement on Form S-3, or any
registration statement relating to the offering to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other 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, as fully to all intents
and purposes as it might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated on June 2, 1999.
SIGNATURE TITLE
/s/ THOMAS F. MURAWSKI
----------------------
Thomas F. Murawski Chairman of the Board of Directors,
President and Chief Executive Officer
(principal executive officer)
/s/ PETER S. MACALUSO
---------------------
Peter S. Macaluso Vice President and Chief Financial Officer
(principal financial and accounting
officer)
II-4
<PAGE>
/s/ JEFFREY M. DRAZAN
----------------------
Jeffrey M. Drazan Director
/s/ PETER A. HOWLEY
----------------------
Peter A. Howley Director
/s/ ROBERT LABANT
----------------------
Robert Labant Director
/s/ RICHARD MILLER
----------------------
Richard Miller Director
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
--- ----------- ----
<S> <C> <C>
3.1 Registrant's Sixth Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.3 to the Registrant's
Registration Statement on Form S-1, Registration No. 333- 09613
("Registrant's Registration Statement")
3.2 By-Laws of the Registrant (incorporated by reference to Exhibit 3.4 and
3.5 to the Registrant's Registration Statement)
4.1 Specimen certificate for shares of the Registrant's Common Stock
(incorporated herein by reference to Exhibit 4.1 to the Registrant's
Registration Statement)
4.2 Provisions of the Articles of Incorporation and By-laws of the
Registrant defining rights of holders of Common Stock of the Registrant
(incorporated herein by reference to Exhibits 3.1., 3.2, 3.3, 3.4 and
3.5 to the Registrant's Registration Statement)
5.1 Opinion of Brobeck, Phleger & Harrison LLP*
10.1 Purchase Agreement, dated May 14, 1999, between the Registrant and the
investors listed on Schedule A thereto (incorporated by reference to
Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed
on May 18, 1999)
23.1 Consent of Brobeck, Phleger & Harrison LLP (included in the opinion
filed as Exhibit 5.1)
23.2 Consent of PricewaterhouseCoopers LLP, independent accountants*
24.1 Power of Attorney (included with signature page)
</TABLE>
* Filed herewith.
<PAGE>
June 2, 1999
FaxSav Incorporated
399 Thornall Street
Edison, New Jersey 088837
Re: FaxSav Incorporated Registration Statement on Form
S-3 for 2,499,000 Shares of Common Stock
Ladies and Gentlemen:
We have acted as counsel to FaxSav Incorporated, a Delaware
corporation (the "Company"), in connection with the proposed issuance and sale
by the Company of up to 2,499,000 shares of the Company's Common Stock (the
"Shares") pursuant to the Company's Registration Statement on Form S-3 (the
"Registration Statement") filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act").
This opinion is being furnished in accordance with the
requirements of Item 16 of Form S-3 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the
corporate proceedings taken by the Company in connection with the issuance and
sale of the Shares. Based on such review, we are of the opinion that the
2,499,000 Shares have been duly authorized, legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion letter as Exhibit 5.1
to the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus which is part of the Registration
Statement. In giving this consent, we do not thereby admit that we are within
the category of persons whose consent is required under Section 7 of the Act,
the rules and regulations of the Securities and Exchange Commission promulgated
thereunder, or Item 509 of Regulation S-K.
This opinion letter is rendered as of the date first written
above and we disclaim any obligation to advise you of facts, circumstances,
events or developments which hereafter may be brought to our attention and which
may alter, affect or modify the opinion expressed herein. Our opinion is
expressly limited to the matters set forth above and we render no opinion,
whether by implication or otherwise, as to any other matters relating to the
Company or the Shares.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-3 of our reports dated February 3, 1999
relating to the financial statements and the financial statement schedule, which
appear in the FaxSav Incorporated Annual Report on Form 10-K for the year ended
December 31, 1998. We also consent to the references to us under the heading
"Experts" in such Registration Statement.
/S/ PricewaterhouseCoopers, LLP
-------------------------------
PricewaterhouseCoopers, LLP
June 1, 1999
Florham, Park, New Jersey
