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As filed with the Securities and Exchange Commission on January 21, 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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BILLING CONCEPTS CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 74-2781950
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7411 JOHN SMITH DRIVE, SUITE 200
SAN ANTONIO, TEXAS 78229
(210) 949-7000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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W. AUDIE LONG, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY
BILLING CONCEPTS CORP.
7411 JOHN SMITH DRIVE, SUITE 200
SAN ANTONIO, TEXAS 78229
(210) 949-7000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES OF ALL COMMUNICATIONS, INCLUDING ALL COMMUNICATIONS SENT TO THE AGENT FOR
SERVICE, SHOULD BE SENT TO:
PHILLIP M. RENFRO, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
300 CONVENT STREET, SUITE 2200
SAN ANTONIO, TEXAS 78205
(210) 270-7172
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 only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, 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: / /
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF AMOUNT OF SHARES PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED PRICE PER SHARE(1) AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value per
share ............................. 2,492,759(4) $9.9688 $24,849,691.28 $6,908.25
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Purchase Rights(2)(3) ............. 2,492,759(4) - - -
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Total ............................. 2,492,759(4) - $24,849,691.28 $6,908.25
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(1) Pursuant to Rule 457(c), the proposed maximum offering price per share and
proposed maximum aggregate offering price have been calculated on the basis
of the average of the bid and ask prices of the Common Stock as reported on
the Nasdaq National Market on January 19, 1999.
(2) No fee pursuant to Rule 457(g).
(3) Purchase Rights related to the Common Stock pursuant to Rights Agreement
dated as of July 10, 1996, between Registrant and U.S. Trust Company of
Texas, N.A., Rights Agent.
(4) Pursuant to Rule 416(a), this Registration Statement shall also cover any
additional shares of Common Stock which become issuable by reason of any
stock dividend, stock split, recapitalization or other similar transactions
effected without the receipt of consideration which results in an increase
in the number of the outstanding shares of Common Stock.
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>
P R O S P E C T U S
2,492,759 SHARES
BILLING CONCEPTS CORP.
COMMON STOCK
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This prospectus relates to the public offering, which is not being
underwritten, of up to 2,492,759 shares (the "Shares") of our common stock, par
value $.01 per share ("Common Stock"), which is held by one of our current
stockholders.
The prices at which such stockholder may sell the Shares will be determined
by the prevailing market price for the Shares or in negotiated transactions. We
will not receive any of the proceeds from the sale of the Shares.
Our Common Stock is traded on the National Market System of Nasdaq (the
"Nasdaq National Market") under the symbol "BILL." On January 19, 1999, the
last reported sale price for our Common Stock on the Nasdaq National Market was
$10 per share.
The selling stockholder acquired his shares of Common Stock on December 18,
1998 in connection with our acquisition of Communications Software Consultants,
Inc.
This Prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
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INVESTING IN THE COMMON STOCK INVOLVES RISKS. YOU SHOULD READ THE "RISK
FACTORS" BEGINNING ON PAGE 3.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is January 21, 1999.
<PAGE>
AVAILABLE INFORMATION
We have filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act"), related to the Shares. This Prospectus
is part of that Registration Statement and does not contain all of the
information set forth in the Registration Statement and its exhibits. You may
obtain further information with respect to the Company and the Shares by
reviewing the Registration Statement and the attached exhibits, which you may
read and copy at the following locations of the Commission:
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Public Reference Room New York Regional Office Chicago Regional Office
Judiciary Plaza Seven World Trade Center Citicorp Center
450 Fifth Street, N.W., Rm. 1024 13th Floor 500 West Madison Street, Suite 1400
Washington, D.C. 20549 New York, New York 10048 Chicago, Illinois 60661-2511
</TABLE>
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Accordingly, we file reports,
proxy statements and other information with the Commission. Such reports, proxy
statements and other information can be inspected and copied at the locations
described above. Copies of such materials can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a Web site that contains
the Registration Statement, reports, proxy statements and other information
regarding the Company at http://www.sec.gov.
We furnish our stockholders with annual reports containing audited
financial statements with a report thereon by our independent public
accountants, Arthur Andersen LLP.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" certain information
into this Prospectus. This means that we can disclose important information to
you by referring you to another document we have filed separately with the
Commission. The information incorporated by reference is considered to be a part
of this Prospectus, except for any information that is superseded by other
information that is set forth directly in this document.
The following documents that we have previously filed with the Commission
pursuant to the Exchange Act are hereby incorporated by reference into the
Prospectus:
(1) Our Annual Report on Form 10-K for the fiscal year ended September 30,
1998.
(2) Our Registration Statement on Form 10/A dated July 11, 1996
(Registration No. 0-28536).
(3) The description of our Common Stock and our Preferred Stock Purchase
Rights, each of which is contained under the caption "Description of Capital
Stock" in the Registration Statement on Form 10/A dated June 11, 1996
(Registration No. 0-28536).
Billing Concepts also incorporates by reference additional documents that
may be filed with the Commission between the date of this Prospectus and the
date of completion of the offering of the shares of common stock by the selling
stockholder. These include periodic reports, such as Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as
proxy statements.
Documents incorporated by reference are available from us without charge,
excluding all exhibits, except that if we have specifically incorporated by
reference an exhibit in this Prospectus, the exhibit also will be available
without charge. Stockholders may obtain documents incorporated by reference in
this Prospectus by requesting them in writing or by telephone from Billing
Concepts at the following address:
Billing Concepts Corp.
7411 John Smith Drive, Suite 200
San Antonio, Texas 78229
Attention: Investor Relations
Telephone: 210 949-7000
You should rely only on the information contained or incorporated by reference
in this Prospectus. We have not authorized anyone to provide you with
information that is different from what is contained in this Prospectus. This
Prospectus is dated January 21, 1999. You should not assume that the
information contained in this Prospectus is
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accurate as of any date other than that date. In this Prospectus, the
"Company," "Billing Concepts," "Billing," "we" and "our" refer to Billing
Concepts Corp.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference contain certain
forward-looking statements including, without limitation, statements concerning
our expectations of future sales, gross profits, research and development
expenses, selling, general and administrative expenses, product introductions
and cash requirements. Forward-looking statements often, although not always,
include words or phrases such as "will likely result," "expect," "will
continue," "anticipate," "estimate," "intend," "plan," "project," "outlook" or
similar expressions. Actual results may vary materially from those expressed in
such forward-looking statements. Factors which could cause actual results to
differ from expectations include those set forth under "Risk Factors." We cannot
be certain that our results of operations will not be adversely affected by one
or more of these factors.
RISK FACTORS
You should carefully examine this entire Prospectus and should give
particular attention to the risk factors set forth below in conjunction with the
other information contained or incorporated by reference in this Prospectus in
evaluating an investment in the Shares.
LACK OF OPERATING HISTORY AS A SEPARATE ENTITY; LIMITED RELEVANCE OF
HISTORICAL FINANCIAL INFORMATION. We were organized in 1996 for the purpose of
effecting the Distribution (as defined below). We have a limited operating
history as an independent public company, but we operate the billing
clearinghouse and information management services business previously conducted
by USLD Communications Corp., formerly known as U.S. Long Distance Corp.
("USLD").
Some of the financial information incorporated by reference into this
Prospectus may not necessarily reflect the results of operations, financial
position and cash flows of the Company in the future or what the results of
operations, financial position and cash flows would have been had the Company
been a separate, stand-alone entity during the periods presented.
DEPENDENCE UPON KEY PERSONNEL; MANAGEMENT OF GROWTH. Our future success
depends to a significant degree upon the continued services of our Chairman of
the Board and Chief Executive Officer, Parris H. Holmes, Jr., our President and
Chief Operating Officer, Alan W. Saltzman, and other key senior management
personnel. Messrs. Holmes and Saltzman are covered by a life insurance policy
under which we are the beneficiary. We have a four-year employment agreement
with Mr. Holmes and a two-year employment agreement with Mr. Saltzman, each of
which contains non-compete and confidentiality provisions. Billing's future
success also depends on its continuing ability to attract and retain highly
qualified managerial personnel. Competition for such personnel is intense, and
there can be no assurance that Billing will be able to retain its key managerial
employees or attract, assimilate or retain other highly qualified managerial
personnel in the future. Our ability to manage growth successfully will
require that we continue to improve our operational, management and financial
systems and controls. Failure to do so could have a material adverse effect
upon the Company's business and results of operations.
DEPENDENCE ON PROPRIETARY TECHNOLOGY. Our future success is heavily
dependent upon our proprietary software technology. We rely principally on
trade secret and copyright law and nondisclosure agreements and other
contractual arrangements to protect our software technology. We also enter into
confidentiality agreements with our key employees. There can be no assurance
that the steps we have taken will be effective in preventing misappropriation of
our proprietary rights.
LEC BILLING REVENUE. Local Exchange Carrier ("LEC") billing services
revenues increased 22.5% to $147.5 million in 1998, and increased 15.9% to
$120.5 million in 1997 from $103.9 million in 1996. The LEC billing services
revenue increases are primarily attributable to an increase in the number of
telephone call records processed and billed on behalf of direct dial long
distance customers. Direct dial long distance billing services revenues have
exceeded prior period revenues on a quarterly basis since the inception of this
business in 1993. Despite the overall increase in LEC billing services revenue
from 1997, revenue growth during 1998 was negatively impacted by "slamming" and
"cramming" issues. Slamming is defined as the unauthorized and illegal switching
of a customer's telephone service from one carrier to another carrier while
cramming is the practice of a company billing customers for products and
services that they may not have ordered, and may not have received. During the
third quarter of 1998, in response to these issues, certain LECs established
various temporary moratoriums that affected the ability of certain of our
customers to market some of their services. Billing played an active role in
assisting certain local telephone companies, the Federal Communications
Commission ("FCC") and certain Public Utilities Commissions in providing the
best solution to eliminate these issues from the telecommunications industry,
including taking part in forming an
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industry coalition which released a set of "Standards of Practice" that
addresses these issues. The FCC subsequently published similar standards in
its Best Billing Practices document. The Company intends to continue to
adhere to the Best Billing Practices and will work with the local telephone
companies to reduce the level of consumer complaints. As a proactive measure,
Billing has taken action against certain customers that include, but is not
limited to, the cessation of billing for certain new or existing products. It
is still unclear what monetary impact these actions will have on the LEC
billing business and the Company's revenues in the future.
DEPENDENCE UPON CONTRACTS WITH LOCAL TELEPHONE COMPANIES. Billing's
business is dependent upon its contractual relationships with over 1,300 local
telephone companies pursuant to which these local telephone companies bill and
collect from their customers on Billing's behalf. Most of the billing and
collection agreements cover a one to five year period and provide for automatic
renewals unless notice of termination is given. Certain of these local
telephone companies, whose billing services provide access to a vast majority of
the businesses and households in the United States, are legally required to
provide billing and collection services for Billing if they provide such
services for any other third party, such as Billing's competitors and their own
competition. Although the Company has not experienced the termination of any
contracts in the past, there can be no assurance that these contracts will
continue in effect on their present terms, if at all. The termination of one or
more of these contracts would severely diminish the Company's capacity to
provide billing services in the geographic areas covered by the terminated
contracts and could adversely affect the Company's business.
ANTICIPATED BILLING SYSTEM EXPENDITURES. To facilitate and support the
growth anticipated in our business, we plan to make significant expenditures in
our operations over the next few years. Specifically, we intend to spend
material amounts to license, develop and create information systems that will
enable us to expand upon our "direct billing" and "invoice ready" services.
These expenditures are expected to be made in the areas of software development,
hardware, related staffing and additional local telephone company agreements.
The Company is in the process of negotiating additional local telephone company
agreements for the implementation of "invoice ready" billing services. The
Company believes that it will be able to fund these expenditures with internally
generated funds and borrowings, but there can be no assurance that such funds
will be generated and/or spent on these projects.
COMPETITION. The billing services industry is highly competitive and is
based upon pricing, customer service and value-added services. The Company
competes primarily with OAN Services, Inc. Billing's success is dependent upon
its continued ability to maintain high quality, market driven services at
competitive prices. Although our management believes that we compete favorably
with respect to these factors, there can be no assurance that Billing will be
able to compete successfully with existing or future competitors or that the
competitive pressures faced by Billing will not have a materially adverse effect
on its business, operating results or financial condition.
YEAR 2000. The operation of the Company's business is highly dependent on
its computer software programs and operating systems (collectively, "Programs
and Systems"). These Programs and Systems are used in several key areas of the
Company's business, including information management services, third-party
billing clearinghouse services (including the advance funding program), direct
billing services and financial reporting, as well as in various administrative
functions. In providing information management, third-party billing
clearinghouse and direct billing services, the Company processes telephone call
records which are date sensitive. The Company also develops, sells and supports
sophisticated billing systems and software (the "Billing Systems") which must be
able to process date-dependent data correctly. Certain of the Billing Systems
sold by the Company have been warranted to process information related to or
including dates that are prior to, on or after January 1, 2000.
The Company has been evaluating its Programs and Systems to identify
potential Year 2000 readiness problems, as well as manual processes, external
interfaces with customers and services supplied by vendors to coordinate Year
2000 compliance and conversion. The Year 2000 problem refers to the limitations
of the programming code in certain existing software programs to recognize
date-sensitive information for the Year 2000 and beyond. Unless modified prior
to December 31, 1999, such systems may not properly recognize such information
and could generate erroneous data or cause a system to fail to operate properly.
The Company has installed the Year 2000 compliant Version 4.0 of its Modular
Business Applications ("MBA") in its Service Bureau operation, which is
processing 11 clients. Billing Concepts Systems, Inc., a wholly owned subsidiary
of the Company ("BCS"), has completed beta testing of Version 4.0 at one of its
largest MBA clients and expects to prepare for a general release of MBA Version
4.0 in the first quarter of 1999. The Company's systems which perform LEC
billing are on target to be Year 2000 compliant by April 1999. It is
anticipated that modification or replacement of the Company's Programs and
Systems will be performed in-house by Company personnel.
The Company believes that, with modifications to existing software and
conversions to new software, the Year 2000 problem will not pose a significant
operational problem for the Company. However, because the Company's business
relies on processing date-sensitive telephone call records supplied by third
parties, it is possible that non-compliant third-party computer systems may not
be able to provide accurate data for processing through the Company's computer
systems. The Company's business, financial condition and results of operations
could be materially adversely affected by the Year 2000 problem if it or
unrelated parties fail to successfully address this issue.
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Management of the Company currently anticipates that the total expenses and
capital expenditures associated with its Year 2000 readiness project, including
costs associated with modifying the Programs and Systems and the cost of
purchasing or leasing certain hardware and software, will be less than $3
million. As of December 1998, the Company has spent approximately $1.5 million
on capital expenditures for related hardware and software and incurred and
expensed approximately $300,000 in personnel and other costs related to the Year
2000 readiness process. The Company anticipates incurring less than $1 million
in additional personnel and other costs, which will be expensed as incurred. The
cost of Year 2000 readiness and the expected completion dates are the best
estimates of Company management and are believed to be reasonably accurate.
In the event the Company's plan to address the Year 2000 problem is not
successfully or timely implemented, the Company may need to devote more
resources to the process and additional costs may be incurred, which could have
a material adverse effect on the Company's financial condition and results of
operations. Problems encountered by the Company's vendors, customers and other
third parties also may have a material adverse effect on the Company's financial
condition and results of operations.
In the event the Company determines, following the Year 2000 date change,
that its Programs and Systems are not Year 2000 ready, the Company will be
unable to process date-sensitive telephone call records and thus be unable to
provide most of its revenue-producing services, which will have a material
adverse effect on the Company's financial condition and results of operations.
The Company will also likely experience considerable delays in compiling
information required for financial reporting and performing various
administrative functions. In addition, in the event the Company's Billing
Systems are not Year 2000 ready, the Company will be required to devote more
monetary and other resources to achieving such readiness, which could have a
material adverse effect on the Company's financial condition and results of
operations.
The Company is currently developing a contingency plan for implementation
in the event its Programs and Systems are not Year 2000 ready prior to December
31, 1999. Such contingency plan will be modeled upon the Company's Disaster
Recovery Plan. The Disaster Recovery Plan outlines a strategy for reduced
continued operations following a natural disaster which damages the Company's
operations center in San Antonio, Texas.
The above Year 2000 disclosure constitutes a "Year 2000 Readiness
Disclosure" as defined in The Year 2000 Information and Readiness Disclosure Act
(the "Act"), which was signed into law on October 19, 1998. The Act provides
added protection from liability for certain public and private statements
concerning a company's Year 2000 readiness.
DIVIDEND POLICY. The Company has never paid cash dividends. The future
payment of dividends by the Company will depend on decisions that will be made
by the Board of Directors of the Company based on the results of operations and
financial condition of Billing and such other business considerations as the
Board of Directors of Billing considers relevant. We do not expect to pay
dividends in the foreseeable future. Additionally, the Company is a holding
company whose only material assets are the stock of its subsidiaries. As a
result, we conduct no business and will be dependent on distributions we receive
from our subsidiaries to pay dividends. There can be no assurance that any such
distributions will be adequate to pay any dividends. Moreover, Billing is
subject to certain restrictions on the payment of dividends pursuant to its
credit agreements.
AUTHORIZATION OF PREFERRED STOCK. The Company's Certificate of
Incorporation authorizes the issuance of preferred stock with designations,
rights and preferences determined from time to time by its Board of Directors.
Accordingly, the Board of Directors is empowered, without your approval, to
issue preferred stock with dividend, liquidation, conversion, voting or other
rights that could adversely affect the voting power or other rights of the
holders of the Common Stock. In the event of issuance, the preferred stock
could be used, under certain circumstances, as a method of discouraging,
delaying or preventing a change in control of the Company. Although the Company
has no present intention to issue any shares of its preferred stock, we may do
so in the future.
THE COMPANY
The Company is a billing services provider to the communications industry.
Billing provides third-party billing clearinghouse and information management
services and develops, sells and supports sophisticated billing and customer
care software applications. Billing's customers include direct dial long
distance telephone companies, operator services providers, information
providers, telecommunications providers, competitive local exchange companies,
Internet service providers, data services providers and integrated
communications services providers.
The Company maintains contractual billing arrangements with over 1,300
local telephone companies that provide access lines to, and collect for services
from, end users of telecommunication services. The Company processes telephone
call records and other transactions and collects the related end-user charges
from these local telephone
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companies on behalf of its customers. This process is known within the
industry as "Local Exchange Carrier billing" or "LEC billing."
Billing's direct dial long distance customers use the Company as a billing
clearinghouse for processing and collecting call records generated by their end
users. Although such carriers can bill end users directly, Billing provides
these carriers with a cost-effective means of billing and collecting residential
and small commercial accounts through the local telephone companies.
The Company also processes telephone call records for customers providing
operator services largely to the hospitality, penal and private pay telephone
industries. In addition, Billing processes records for telephone calls that
require operator assistance and/or alternative billing options such as collect
and person-to-person calls, third-party billing and calling card billing. Since
operator services providers have only the billing number and not the name or
address of the billed party, they must have access to the services of the local
telephone companies to collect their charges. The Company provides this access
to its customers through its contractual billing arrangements with the local
telephone companies that bill and collect on behalf of these operator services
providers.
Billing acts as an aggregator of telephone call records and other
transactions from various sources and due to its large volume, it receives
discounted billing costs with the local telephone companies and can pass on
these discounts to its customers. Additionally, Billing can provide its services
to those long distance carriers and operator services providers who would
otherwise not be able to make the investments in billing and collection
agreements with the local telephone companies, fees, systems, infrastructure and
volume commitments required to establish and maintain the necessary
relationships with the local telephone companies.
In 1994, Billing began providing enhanced billing services for processing
transactions related to providers of premium services or products that can be
billed through the local telephone companies, such as charges for 900 access
pay-per-call transactions, cellular long distance services, paging services,
voice mail services, Internet access, Caller ID and other non-regulated
telecommunications equipment charges.
In addition to its full-service LEC billing product, Billing also offers
billing management services to customers who have their own billing arrangements
with the local telephone companies. These management services may include data
processing, accounting, end-user customer service and telecommunication tax
processing and reporting.
The Company offers software applications that support customer management
and billing of a communication company's customers. The software applications
offered by the Company provide the capability to combine many communications
products in a single convergent customer bill. These products include local
telephone service, long distance service, data services, wireless services,
paging services, cable television services, Internet services, and utilities.
The software applications can be configured to meet a company's unique business
rules and product set. Billing offers the software applications to companies
through licensing agreements and outsourcing arrangements. Billing has
professional services and facilities management organizations that provide
consulting, development and systems operations services centered around the
communications industry and its software products. Billing also sells hardware
and provides custom software development and other related services.
The Company entered the software market in June 1997 as a result of the
acquisition of Computer Resources Management, Inc. ("CRM"). CRM had developed
and sold billing applications to the long distance and convergent services
markets. Additionally, in October 1998, the Company acquired Expansion Systems
Corporation ("ESC") and integrated it into Billing. ESC has developed a customer
care and billing application for Internet Service Providers ("ISP") that
automates the registration of new Internet subscribers and creates bills for
customers' services. In September 1998, Billing acquired a 22% ownership
position in Princeton TeleCom Corporation ("PTC"), which provides Internet-based
bill publishing and automated payment using secure Internet transactions or
integrated voice response accessed by toll-free numbers. Through these actions,
Billing has expanded its potential markets to include companies focused on
Internet technology and services. In December 1998, the Company completed the
merger of Communications Software Consultants, Inc. ("CommSoft"). CommSoft is
an international software development and consulting firm specializing in the
telecommunications industry. By merging with CommSoft, Billing has taken another
step toward making the Company the most comprehensive provider of customer care
and billing solutions to the communications industry.
Billing is a Delaware corporation. Our principal executive offices are
located at 7411 John Smith Drive, Suite 200, San Antonio, Texas 78229, and our
telephone number is (210) 949-7000.
USE OF PROCEEDS
The Shares to be sold pursuant to the Prospectus are owned by a stockholder
of the Company. The Company will not receive any of the proceeds from the sale
of the Shares. See "Selling Stockholder."
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SELLING STOCKHOLDER
The table below presents the following information about the number of
shares of the Common Stock of the Company which is owned by the Selling
Stockholder: (i) the number of shares the Selling Stockholder beneficially
owns as of the date of this prospectus, (ii) the percentage of the Company's
outstanding shares of Common Stock that the Selling Stockholder beneficially
owns prior to the offering, (iii) the number of shares that the Selling
Stockholder is offering under this prospectus, (iv) the number of shares that
the Selling Stockholder will beneficially own after the completion of this
offering and (v) the percentage of the Company's outstanding shares of Common
Stock that the Selling Stockholder will beneficially own after the completion of
the offering.
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BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
BEFORE THE OFFERING AFTER THE OFFERING(1)
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NUMBER PERCENTAGE SHARES TO NUMBER PERCENTAGE
NAME OF SHARES OF CLASS(2) BE SOLD OF SHARES OF CLASS
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Larry A. Davis(3) 2,500,060(4) 6.8% 2,492,759 7,301(5) *
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* represents less than 1%
(1) Assumes all shares of Common Stock offered hereby are sold.
(2) Based on 36,973,129 shares of the Company outstanding as of January 19,
1999.
(3) Mr. Davis was elected a director of the Company on January 5, 1999, and
serves as Senior Vice President of the Company and President of Concepts
Acquisition Corp., d/b/a CommSoft, a wholly owned subsidiary of the
Company.
(4) Includes 7,301 shares of Common Stock issuable upon exercise of options
held by Mr. Davis' wife. Mr. Davis disclaims beneficial ownership of such
shares.
(5) Represents 7,301 shares of Common Stock issuable upon exercise of options
held by Mr. Davis' wife. Mr. Davis disclaims beneficial ownership of such
shares.
In December 1998, CommSoft was merged (the "Merger") into a wholly owned
subsidiary of the Company. In connection with the Merger, Mr. Davis received
2,492,759 shares of Common Stock, which are being offered hereby.
PLAN OF DISTRIBUTION
All 2,492,759 shares of Common Stock being registered hereby are being
registered on behalf of the Selling Stockholder. All of the shares were issued
by us in connection with our acquisition of CommSoft. Billing will receive no
proceeds from this offering. As used herein, the term "Selling Stockholder"
includes donees and pledgees selling Shares received from the Selling
Stockholder after the date of this Prospectus.
The Selling Stockholder will act independently of Billing in making
decisions with respect to the timing, manner and size of each sale. The Selling
Stockholder may choose to sell the Shares from time to time at market prices
prevailing at the time of the sale, at prices related to the then prevailing
market prices or in negotiated transactions, including pursuant to an
underwritten offering or pursuant to one or more of the following methods:
- a block trade in which the broker or dealer so engaged will attempt to
sell the Shares as agent but may position and resell a portion of the
block as principal in order to facilitate the transaction,
- purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus, and
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers.
In connection with the sale of the Shares, the Selling Stockholder may
engage broker-dealers who in turn may arrange for other broker-dealers to
participate. Broker-dealers may receive commissions or discounts from the
Selling Stockholder in amounts to be negotiated immediately prior to the sale.
In addition, underwriters or agents may receive compensation from the Selling
Stockholder or from purchasers of the Shares for whom they may act as agents, in
the form of discounts, concessions or commissions. Underwriters may sell shares
to or through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters or commissions from
the purchasers for whom they act as agents. The Selling Stockholder,
underwriters, brokers, dealers and agents that participate in the distribution
of the Shares may be deemed to be underwriters, and any discounts or commissions
received by them from the Selling Stockholder and any profit on the resale of
the Shares by them may be deemed to be underwriting discounts and commissions
under the Securities Act.
7
<PAGE>
At the time a particular offer of Shares is made, to the extent required, a
supplement to this Prospectus will be distributed which will identify and set
forth the aggregate amount of Shares being offered and the terms of the
offering. Such supplement will also disclose the following information:
- the name or names of any underwriters, dealers or agents,
- the purchase price paid by any underwriter for Shares purchased from
the Selling Stockholder,
- any discounts, commissions and other items constituting compensation
from the Selling Stockholder and/or Billing, and
- any discounts, commissions or concessions allowed or reallowed or paid
to dealers, including the proposed selling price to the public.
We have agreed to indemnify the Selling Stockholder in certain
circumstances against certain liabilities, including liabilities under the
Securities Act. The Selling Stockholder has agreed to indemnify Billing in
certain circumstances against certain liabilities, including liabilities under
the Securities Act.
The Selling Stockholder also may resell all or a portion of the Shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided he meets the criteria and conforms to the requirements of such Rule.
The Selling Stockholder and any other persons participating in the sale or
distribution of the Shares being registered hereby will be subject to the
provisions of the Exchange Act and the rules and regulations thereunder,
including Regulation M, to the extent applicable. The foregoing provisions may
limit the timing of purchases and sales of any of the Shares by the Selling
Stockholder or any other such person. This may affect the marketability of the
Shares. The Selling Stockholder also will comply with the applicable prospectus
delivery requirements under the Securities Act in connection with the sale or
distribution of the Shares hereunder.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In certain states, the Shares may not be sold unless the
Shares have been registered or qualified for sale in such state, unless an
exemption from registration or qualification is available and is obtained.
Billing will bear all out-of-pocket expenses incurred in connection with
the registration of the Shares, including, without limitation, all registration
and filing fees imposed by the Commission, The Nasdaq Stock Market, Inc. and
blue sky laws, printing expenses, transfer agents' and registrars' fees, and the
fees and disbursements of Billing's outside counsel and independent public
accountants. The Selling Stockholder will bear all underwriting discounts and
commissions and transfer or other taxes.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Article XV of the Company's Certificate of Incorporation ("Article XV")
eliminates the personal liability of the Company's directors to the Company or
its stockholders for monetary damages for breach of fiduciary duty except under
certain circumstances. Directors remain liable for (i) any breach of the duty
of loyalty to the Company or its stockholders, (ii) any act or omission not in
good faith or which involves intentional misconduct or a knowing violation of
law, (iii) any violation of Section 174 of the Delaware General Corporation Law
("DGCL"), which proscribes the payment of dividends and stock purchases or
redemptions under certain circumstances, and (iv) any transaction from which a
director derived an improper personal benefit.
Article XV further provides that future repeal or amendment of its terms
will not adversely affect any rights of directors existing thereunder with
respect to acts or omissions occurring prior to such repeal or amendment.
Article XV also incorporates any future amendments to Delaware law which further
eliminate or limit the liability of directors.
Under Section 145 of the DGCL, directors and officers as well as other
employees and individuals may be indemnified against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement in connection
with specified actions, suits or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation -- a "derivative action"), if they acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests of
the Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard of
care is applicable in the case of derivative actions, except that
indemnification extends only to expenses (including attorneys' fees) incurred in
connection with defense or settlement of such an action, and the DGCL requires
court approval before there can be any indemnification where the person seeking
indemnification has been found liable to the Company.
8
<PAGE>
Article VIII of the Company's Amended and Restated Bylaws provides that the
Company shall indemnify any person to whom, and to the extent, indemnification
may be granted pursuant to Section 145 of the DGCL.
Article XI of the Company's Certificate of Incorporation provides that each
person who was or is made a party to, or is involved in any action, suit or
proceeding by reason of the fact that he is or was a director, officer or
employee of the Company, will be indemnified by the Company against all expenses
and liabilities, including attorneys' fees, reasonably incurred by or imposed
upon him, except in such case where the director, officer or employee is
adjudged guilty of willful misfeasance or malfeasance in the performance of his
duties. Article XI also provides that the right of indemnification shall be in
addition to and not exclusive of all other rights to which such director,
officer or employee may be entitled.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors and officers and controlling persons pursuant to
the foregoing provisions, the Company has been advised that, in the opinion of
the Commission, such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon by W.
Audie Long, General Counsel of the Company. At January 15, 1999, Mr. Long
beneficially owned 211,500 shares of Billing's Common Stock.
EXPERTS
The consolidated financial statements included in the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 1998 incorporated by
reference in this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, to the extent and for the periods set forth in
their reports incorporated herein by reference, and are incorporated herein in
reliance on such reports given upon the authority of such firm as experts in
accounting and auditing.
9
<PAGE>
================================================================================
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT 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 AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
-------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents
by Reference ........................................................... 2
Special Note Regarding Forward-Looking
Statements ............................................................. 3
Risk Factors ............................................................. 3
The Company............................................................... 5
Use of Proceeds........................................................... 6
Selling Stockholder....................................................... 7
Plan of Distribution ..................................................... 7
Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities............................................................. 8
Legal Matters............................................................. 9
Experts................................................................... 9
</TABLE>
================================================================================
================================================================================
2,492,759 SHARES
BILLING CONCEPTS CORP.
COMMON STOCK
-------------------
P R O S P E C T U S
JANUARY 21, 1999
-------------------
================================================================================
<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with this offering are:
<TABLE>
<S> <C>
Commission registration fee $6,908.25
Legal fees and expenses* 3,500.00
Miscellaneous* 500.00
Total $10,908.25
----------
----------
</TABLE>
--------------------
* Estimated
The Company has agreed to pay all the costs and expenses of this
offering.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the DGCL empowers the Registrant to, and the Bylaws of
the Registrant provide that it shall, indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding by reason of the fact that he is or was
a director, officer, employee or agent of the Registrant, or is or was
serving at the request of the Registrant as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit
or proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interest of the Registrant, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful; except that, in the case of an action or
suit by or in the right of the Registrant, no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of his
duty to the Registrant unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall
determine that such person is fairly and reasonably entitled to indemnity for
proper expenses.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
The Registrant maintains directors' and officers' liability insurance
that covers the directors and officers of the Registrant.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ----------- -------
<S> <C>
2.1 Plan of Merger and Acquisition Agreement effective December
1, 1998 among Billing Concepts Corp., Concepts Acquisition Corp.,
Communications Software Consultants, Inc., and Larry A. Davis
(incorporated herein by reference to Exhibit 2.1 to the Company's
Current Report on Form 8-K dated December 23, 1998).
5.1 Opinion of Billing Concepts Corp. regarding legality (filed
herewith)
23.1 Consent of Billing Concepts Corp. (contained in Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP (filed herewith)
24.1 Power of Attorney (included on signature page).
</TABLE>
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement 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;
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof; and
(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.
(b) The undersigned Registrant hereby undertakes 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 15(d) of the Exchange
Act 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.
(c) The undersigned Registrant hereby undertakes that, 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 foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission, such indemnification is
against public policy as expressed in the 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-2
<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 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 San Antonio and State of Texas the
20th day of January, 1999.
BILLING CONCEPTS CORP.
By: /s/ Kelly E. Simmons
-----------------------------------------
Kelly E. Simmons
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Alan W. Saltzman and Kelly E. Simmons,
or either of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, 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 file the
same and all exhibits thereto, and all documents in connection therewith,
with the Securities and Exchange Commission, granting said attorney-in-fact
and agent, 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 attorney-in-fact and
agent or either 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 and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Parris H. Holmes, Jr. Chairman of the Board and January 21, 1999
- ---------------------------- Chief Executive Officer
Parris H. Holmes, Jr. and a Director
(Principal Executive Officer)
/s/ Alan W. Saltzman President and Chief January 20, 1999
- ---------------------------- Operating Officer
Alan W. Saltzman and a Director
/s/ Kelly E. Simmons Executive Vice President January 20, 1999
- ---------------------------- and Chief Financial Officer
Kelly E. Simmons (Principal Financial and
Accounting Officer)
/s/ Larry A. Davis Senior Vice President January 20, 1999
- ---------------------------- and a Director
Larry A. Davis
/s/ Lee Cooke Director January 20, 1999
- ----------------------------
Lee Cooke
/s/ James E. Sowell Director January 20, 1999
- ----------------------------
James E. Sowell
/s/ Thomas G. Loeffler Director January 20, 1999
- ----------------------------
Thomas G. Loeffler
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT PAGE
- ----------- ------- ----
<S> <C>
2.1 Plan of Merger and Acquisition Agreement effective December 1, 1998 among Billing
Concepts Corp., Concepts Acquisition Corp., Communications Software Consultants,
Inc., and Larry A. Davis (incorporated herein by reference to the Company's Current
Report on Form 8-K dated December 23, 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1 Opinion of Billing Concepts Corp. regarding legality (filed herewith). . . . . . . . . . . . . II-5
23.1 Consent of Billing Concepts Corp. (contained in Exhibit 5.1) . . . . . . . . . . . . . . . . . II-5
23.2 Consent of Arthur Andersen LLP (filed herewith). . . . . . . . . . . . . . . . . . . . . . . . II-6
24.1 Power of Attorney (included on signature page) . . . . . . . . . . . . . . . . . . . . . . . . II-3
</TABLE>
II-4
<PAGE>
EXHIBIT 5.1
[BILLING CONCEPTS LETTERHEAD]
January 21, 1999
Billing Concepts Corp.
7411 John Smith Drive, Suite 200
San Antonio, Texas 78229
Dear Sirs:
As General Counsel to Billing Concepts Corp., a Delaware corporation (the
"Company"), I am familiar with the Registration Statement on Form S-3 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission on or about January 21, 1999, under the Securities Act of 1933, as
amended, relating to an aggregate of 2,492,759 shares (the "Shares") of Common
Stock, $.01 par value ("Common Stock"), and the Series A Junior Participating
Preferred Stock Purchase Rights carried with the Common Stock (the "Rights"), of
the Company to be sold by a selling stockholder listed in the Registration
Statement (the "Selling Stockholder"). The Shares have been issued pursuant to
the terms of the Merger described in the Registration Statement.
In connection therewith, I have examined such corporate records, documents
and such questions of law as I have considered necessary or appropriate for the
purposes of this opinion and, upon the basis of such examination, advise you
that in my opinion the 2,492,759 shares of Common Stock, and the Rights carried
with the Common Stock, to be sold by the Selling Stockholder have been duly and
validly authorized, validly issued, fully paid and nonassessable.
I consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ AUDIE LONG
Audie Long
General Counsel
<PAGE>
[ARTHUR ANDERSEN LLP LETTERHEAD]
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our reports dated November 12,
1998, included in the Billing Concepts Corp. Form 10-K for the year ended
September 30, 1998, and to all references to our firm included in this
Registration Statement.
/s/ Arthur Andersen LLP
San Antonio, Texas
January 15, 1999
II-6
