<PAGE>
Filed pursuant to Rule 424(b)(3)
File No. 333-24675
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 13, 1997
VISUAL EDGE SYSTEMS INC.
Common Stock
______________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
______________________________
This supplements the Prospectus, dated June 13, 1997, which relates to the offer
and sale of up to an aggregate of 2,200,000 shares (the "Shares") of Common
Stock of Visual Edge Systems Inc. (the "Company"), which Shares consist of the
following: (i) 200,000 shares of Common Stock to be offered and sold by certain
investors who received such shares in a bridge financing consummated by the
Company in March 1997, (ii) 25,000 shares to be offered and sold by a former
officer of the Company, (iii) 220,000 shares of Common Stock to be offered and
sold by certain investors who invested in the Company prior to the Company's
initial public offering (the "IPO"), (iv) 260,000 shares of Common Stock
underlying an aggregate of 260,000 warrants held by Whale Securities Co., L.P.
Whale, the underwriter in the Company's IPO, and (v) 1,495,000 shares of
Common Stock underlying the Company's Redeemable Warrants, which were sold in
the IPO.
This Prospectus Supplement consists of (i) the Company's Current Report on
Form 8-K as filed with the Securities and Exchange Commission (the "SEC") on
June 23, 1997; and (ii) the Company's Current Report on Form 8-K/A, as filed
with the SEC on June 27, 1997.
The Common Stock of the Company is traded on the Nasdaq SmallCap Market
("Nasdaq") under the symbol "EDGE." On June 30, 1997, the last reported sale
price of the Common Stock as quoted on Nasdaq was $8.625 per share.
The date of this Prospectus Supplement is July 1, 1997
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM 8-K
CURRENT REPORT
Pursuant to Section l3 or l5(d) of the
Securities Exchange Act of l934
Date of Report (Date of earliest event reported) June 13, 1997
VISUAL EDGE SYSTEMS INC.
--------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-20995 13-377-8895
-----------------------------------------------------------------------------
(State of other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) Identification No.)
2424 North Federal Highway, Suite 100, Boca Raton, FL 33431
----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(561) 750-7559
--------------
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
On June 13, 1997, Visual Edge Systems Inc. (the "Company") arranged a three
year $7.5 million debt and convertible equity facility with a group of
investment funds advised by an affiliate of Hunt Sports Group, a sports and
entertainment management company controlled by the Lamar Hunt family of Dallas,
Texas. The Company issued and sold to Infinity Investors Limited, Infinity
Emerging Opportunities Limited, Sandera Partners, L.P. and Lion Capital
Partners, L.P. (collectively, the "Funds") the following securities pursuant to
the Bridge Securities Purchase Agreement, dated as of June 13, 1997 (the "Bridge
Agreement"), among the Company and the Funds : (i) 8.25% unsecured convertible
bridge notes in the aggregate principal amount of $7,500,000 with a maturity
date of three years from the date of issuance (the "Bridge Notes"), which Bridge
Notes are convertible into shares of Common Stock (the "Note Conversion
Shares") at any time and from time to time commencing January 1, 1998 at the
option of the holder thereof; (ii) 93,677 shares of Common Stock, par value $.01
per share (the "Grant Shares"); and (iii) five-year warrants (the "Warrants")
to purchase 100,000 shares of Common Stock (the "Warrant Shares") with an
exercise price equal to $10.675. Such Warrants are redeemable commencing
October 1, 1998, based on a 20-day minimum closing bid price, at a redemption
price equal to $.10 per share. The Funds payed an aggregate of $ 7,474,438 to
the Company for the Bridge Notes, Grant Shares and Warrants.
Pursuant to the Bridge Agreement, the Company will issue additional Grant
Shares (the "Additional Grant Shares") to the Funds in the event that the
closing bid price of the Common Stock for each trading day during any
consecutive 10 trading days from June 13, 1997 (the "Closing Date") through
December 31, 1997 does not equal at least $10.00 per share. In the event that
any Additional Grant Shares are issued, the exercise price of the Warrants will
be adjusted so that the value of the Warrants (using a Black -Scholes or similar
model) equals the value of the Warrants as of the Closing Date.
Interest payments on the Bridge Notes will, at the option of the Company,
be payable in cash or in shares of Common Stock. Effective January 1, 1998, the
aggregate outstanding principal amount of Bridge Notes exceeding $2,500,000 will
be automatically exchanged for an number of shares of Convertible Preferred
Stock with an aggregate liquidation preference equal to the principal amount of
Bridge Notes so exchanged and with terms substantially identical to the Notes,
which Preferred Stock is convertible into shares of Common Stock (the "Stock
Conversion Shares"). In addition, if the Company elects to redeem its
redeemable warrants issued on July 24, 1997 in connection with the Company's
initial public offering of Common Stock, the Company must redeem at least
$5,000,000 principal amount of the Bridge Notes with the net proceeds of such
redemption.
In connection with the sale of the Note Conversion Shares, Stock Conversion
Shares, Grant Shares, Warrant Shares and Additional Grant Shares (collectively,
the "Securities") to the Funds, the Company granted to the Funds registration
rights covering the Securities. As soon as
3
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practicable after July 24, 1997, the Company is obligated to file a
registration statement covering the sale of the Grant Shares. In addition,
on or before November 15, 1997, the Company is obligated to file a
registration statement covering the sale of the Note Conversion Shares, Stock
Conversion Shares, Warrant Shares and Additional Grant Shares.
The Company also agreed, pursuant to the Bridge Agreement, that the
proceeds from the issuance and sale of the Securities by the Company must be
used, in part, to repay the remaining outstanding balance due and owing on the
Company's $3,500,000 line of credit with Barnett Bank. Further, the Company
agreed to certain covenants, including limitations on the amount of capital
expenditures and minimum limits of net worth.
The Company will also begin to explore potential business opportunities
with Hunt Sports Group.
4
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Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Bridge Securities Purchase Agreement, dated as of June 13, 1997,
among the Company and Infinity Investors Limited, Infinity Emerging
Opportunities Limited, Sandera Partners, L.P. and Lion Capital Partners, L.P.
(collectively, the "Funds")
99.2 Registration Rights Agreement, dated as of June 13, 1997, among the
Company and the Funds
99.3 Transfer Agent Agreement, dated as of June 13, 1997, among the
Company, the Funds and American Stock Transfer & Trust Company
99.4 Form of Common Stock Purchase Warrant
99.5 Form of Convertible Note
5
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VISUAL EDGE SYSTEMS INC.
------------------------
(Registrant)
By: /s/ Earl Takefman
----------------------
Earl T. Takefman
Chief Executive Officer
Date: June 23, 1997
6
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EXHIBIT INDEX
No.
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99.1 Bridge Securities Purchase Agreement, dated as of June 13, 1997, among
the Company and Infinity Investors Limited, Infinity Emerging
Opportunities Limited, Sandera Partners, L.P. and Lion Capital
Partners, L.P. (collectively, the "Funds")
99.2 Registration Rights Agreement, dated as of June 13, 1997, among the
Company and the Funds
99.3 Transfer Agent Agreement, dated as of June 13, 1997, among the
Company, the Funds and American Stock Transfer & Trust Company
99.4 Form of Common Stock Purchase Warrant
99.5 Form of Convertible Note
7
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM 8-K/A
CURRENT REPORT
Pursuant to Section l3 or l5(d) of the
Securities Exchange Act of l934
Date of Report (Date of earliest event reported) June 3, 1997
VISUAL EDGE SYSTEMS INC.
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-20995 13-377-8895
--------------------------------------------------------------------------
(State of other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) Identification No.)
2424 North Federal Highway, Suite 100, Boca Raton, FL 33431
---------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(561) 750-7559
--------------
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
As of June 3, 1997, Visual Edge Systems Inc. (the "Company"), Greg Norman
("Norman") and Great White Shark Enterprises, Inc. executed an amendment (the
"Amendment") to the License Agreement, dated as of March 1, 1995 (the
"Agreement"), pursuant to which Norman granted to the Company a worldwide
license (the "Greg Norman License") to use his name, likeness, endorsement and
certain trademarks in connection with the production and promotion of the
Company's One-on-One with Greg Norman personalized video golf lessons. Norman
and the Company have agreed to restructure the terms of the payments due to
Norman under the Agreement by: (i) altering the character of the payments such
that Norman will receive $1,020,000 of his royalties in shares of the Company's
Common Stock, rather than cash as was originally contemplated by the Agreement;
(ii) changing the schedule of the payments such that they will be paid to Norman
over a period of time from January 1998 through April 2000; and (iii) granting
to Norman 25,000 options to purchase shares of the Company's Common Stock at an
exercisable price of $10.00 per share.
Prior to the execution of the Amendment, the Agreement provided that the
continued use of the Greg Norman License by the Company was conditioned upon
guaranteed payments to Norman aggregating $3.3 million during the three-year
period commencing July 1, 1996, which would be applied against a royalty equal
to 8% of the Company's Net Revenues from product sales. "Net Revenues" is
defined in the Agreement as revenues less costs associated with discounts,
allowances, payments to golf clubs, driving ranges or golf professionals, sales
tax and returns, not to exceed 20% of product sales. Pursuant to the Agreement,
the Company has paid Norman $600,000 to date, and was required to make payments
aggregating $1,000,000 and $1,700,000, respectively, during each of the years
commencing July 1, 1997 and 1998, regardless of whether the Company derived any
revenues from product sales. Such annual payments were payable on a quarterly
basis.
The Amendment restructures the payments to Norman by: (i) deferring the
date that the next payment is due from July 1, 1997 until January 1, 1998; (ii)
extending the date that the last payment is due from April 1, 1999 until April
1, 2000; and (iii) providing that a portion of the payments will be in shares of
the Company's Common Stock (rather than cash payments as contemplated by the
Agreement) in accordance with the following schedule:
Common Stock
Payment Date Cash Payment Payment (shares)
July 1, 1997 $ 0 0
October 1, 1997 $ 0 0
January 1, 1998 $ 140,000 6,000
April 1, 1998 $ 140,000 6,000
2
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July 1, 1998 $ 210,000 9,000
October 1, 1998 $ 210,000 9,000
January 1, 1999 $ 300,000 12,000
April 1, 1999 $ 300,000 12,000
July 1, 1999 $ 300,000 12,000
October 1, 1999 $ 300,000 12,000
January 1, 2000 $ 240,000 12,000
April 1, 2000 $ 240,000 12,000
----------- --------
Total: $ 2,980,000 102,000 shares
For the purposes of calculating the royalties payable to Norman, the Common
Stock issued to Norman by the Company will be valued at $10.00 per share
regardless of the actual market price of the Common Stock at the time of
payment. Any royalties earned by Norman pursuant to the Amendment that are in
excess of the fees as scheduled above are to be paid in cash.
After the initial term, which ends on June 30, 2000, the Company has the
option to renew the Agreement for two additional five-year periods (each
five-year period, a "Renewal Term"). The guaranteed fee to Norman in the first
year of the first Renewal Term will be $1,300,000, increasing by $100,000 each
successive year thereafter; all such fees will be payable in cash, in equal
quarterly installments.
The Company has agreed to register all Common Stock issued to Norman
pursuant to the Amendment under the Securities Act of 1933, as amended.
The 25,000 options to purchase shares of the Company's Common Stock, at an
exercise price of $10.00 per share, vest immediately and are exercisable at
Norman's discretion at any time prior to their expiration on June 30, 2000.
(c) Exhibits
99.1 Amendment to License Agreement, dated as of June 3, 1997, by and among
Greg Norman, Great White Shark Enterprises, Inc. and Visual Edge
Systems Inc.
3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VISUAL EDGE SYSTEMS INC. (Registrant)
------------------------
By: /s/ Earl T. Takefman
----------------------
Earl T. Takefman
Chief Executive Officer
Date: June 27, 1997
4
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EXHIBIT INDEX
No.
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99.1 Amendment to License Agreement, dated as of June 3, 1997, by and among
Greg Norman, Great White Shark Enterprises, Inc. and Visual Edge
Systems Inc.
5
