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As filed with the Securities and Exchange Commission on December 15, 1997
Registration No. 333-5570-LA
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1 ON FORM S-3
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BRISTOL RETAIL SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 58-2235556
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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5000 BIRCH STREET, SUITE 205, NEWPORT BEACH, CALIFORNIA 92660
(714) 475-0800
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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RICHARD H. WALKER
PRESIDENT
BRISTOL RETAIL SOLUTIONS, INC.
5000 BIRCH STREET, SUITE 205, NEWPORT BEACH, CALIFORNIA 92660
(714) 475-0800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
NICK E. YOCCA, ESQ.
MICHAEL E. FLYNN, ESQ.
MARK L. SKAIST, ESQ.
STRADLING, YOCCA, CARLSON & RAUTH,
A PROFESSIONAL CORPORATION
660 NEWPORT CENTER DRIVE, SUITE 1600
NEWPORT BEACH, CALIFORNIA 92660
PHONE: (714) 725-4000
FAX: (714) 725-4100
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Post-Effective Amendment as determined
by market conditions.
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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. [ ]
<PAGE> 2
PROSPECTUS
BRISTOL RETAIL SOLUTIONS, INC.
781,250 shares of Common Stock issuable upon exercise of
Class A Redeemable Common Stock Purchase Warrants
125,000 shares of Common Stock issuable upon exercise
of Underwriters' Stock Warrants
62,500 Class A Redeemable Common Stock Purchase Warrants
issuable upon exercise of Underwriters' Warrants
SELLING STOCKHOLDERS OFFERING
577,417 shares of Common Stock
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This Prospectus relates to the issuance by Bristol Retail Solutions,
Inc. (the "Company" or "Bristol") of 718,750 shares of its common stock, par
value $.001 per share (the "Common Stock"), upon the exercise of 718,750 Class A
Redeemable Common Stock Purchase Warrants (the "Class A Warrants") sold by the
Company to the public in connection with the Company's November 12, 1996 initial
public offering. Each Class A Warrant (which entitles the holder thereof to
purchase one share of Common Stock) may be exercised at an exercise price of
$6.00 per share of Common Stock at any time (provided the Company has not
redeemed the Class A Warrants) after the opening of business New York City time
on December 12, 1997 and before 5:00 p.m. New York City time on December 12,
2002.
This Prospectus also relates to the issuance of 62,500 shares of Common
Stock upon the exercise of 62,500 Class A Warrants being registered hereunder at
an exercise price of $6.00 per share. The 62,500 Class A Warrants, in turn, are
issuable upon the exercise of the 62,500 Underwriters' Warrants sold by the
Company to First Cambridge Securities Corporation (the "Underwriter") in
connection with the Company's November 12, 1996 initial public offering.
This Prospectus also relates to the issuance of 125,000 shares of
Common Stock upon the exercise of 125,000 Underwriters' Stock Warrants (the
"Underwriters' Stock Warrants") sold by the Company to the Underwriter in
connection with the Company's November 12, 1996 initial public offering. Each
Underwriters' Stock Warrant (which entitles the holder thereof to purchase one
share of Common Stock) may be exercised at any time from November 20, 1997 until
5:30 p.m. New York City time on November 20, 2001 at an exercise price of $8.70
per share.
This Prospectus also relates to the issuance of 62,500 Class A Warrants
upon the exercise of 62,500 Underwriters' Warrants (the "Underwriters'
Warrants") sold by the Company to the Underwriter in connection with the
Company's November 12, 1996 initial public offering. Each Underwriters' Warrant
(which entitles the holder thereof to purchase one Class A Warrant) may be
exercised at any time from November 20, 1997 until 5:30 p.m. New York City time
on November 20, 2001 at an exercise price of $.125 per Class A Warrant.
This Prospectus also relates to the offer and sale by certain
stockholders of the Company (the "Selling Stockholders") of an aggregate of
577,417 shares of Common Stock. The Company will not receive any of the proceeds
from the sale of shares of Common Stock being registered by the Selling
Stockholders.
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The Common Stock and the Class A Warrants are listed for quotation on
the Nasdaq SmallCap Market under the symbols "BRTL" and "BRTLW," respectively.
On December 9, 1997, the closing sales price of the Common Stock and the Class A
Warrants was $3.125 and $0.6875, respectively.
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 HEREOF.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The Selling Stockholders may offer the shares of Common Stock offered hereby
from time to time to purchasers directly or through agents, brokers or dealers.
The shares of Common Stock offered by the Selling Stockholders may be sold at
market prices prevailing at the time of sale or at negotiated prices. The
agents, brokers or dealers through whom sales are made may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), and any amounts received by them in exchange for their
services in connection with such sales may be deemed to be underwriting
commissions. See "Plan of Distribution."
THE DATE OF THIS PROSPECTUS IS DECEMBER 15, 1997.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
AVAILABLE INFORMATION..........................................................2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................3
THE COMPANY....................................................................4
RISK FACTORS...................................................................5
USE OF PROCEEDS...............................................................12
SELLING STOCKHOLDERS..........................................................13
PLAN OF DISTRIBUTION..........................................................14
DESCRIPTION OF SECURITIES.....................................................15
LEGAL MATTERS.................................................................18
EXPERTS.......................................................................18
LIMITATION ON LIABILITY AND DISCLOSURE OF
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES.....18
</TABLE>
No person is authorized to give any information or to make any
representations, other than those contained or incorporated by reference in this
Prospectus, in connection with the offering described herein, and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company or any underwriters, brokers or agents. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy, nor shall there be any sale of these securities by any person in any
jurisdiction in which it is unlawful for such person to make such offer,
solicitation or sale. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create an implication that the
information contained herein is correct as of any time subsequent to the date
hereof
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") as a "small
business issuer" as defined under Regulation S-B promulgated under the
Securities Act. In accordance with the Exchange Act, the Company files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information may be inspected and copied at, and copies of such materials can be
obtained at prescribed rates from, the Public Reference Branch of the Commission
located at 450 Fifth Street, N.W., Washington, D.C. and at the Commission's
Pacific Regional Office located at 5670 Wilshire Boulevard, 11th Floor, Los
Angeles, California, the Commission's Northeast Regional Office located at 7
World Trade Center Suite 1300, New York, New York and at the Commission's
Midwest Regional Office located at Citicorp Center, 500 W. Madison Street Suite
1400, Chicago, Illinois. In addition, the Company has filed the registration
statement and other filings pursuant to the Exchange Act with the Commission
through its Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system,
and such filings are publicly available through the Commission's site on the
World Wide Web on the Internet, located at http://www.sec.gov.
This Prospectus does not contain all of the information set forth in the
Registration Statement of which this Prospectus is a part and which the Company
has filed with the Commission. For further information with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement, including the exhibits filed as a part thereof, copies of which can
be inspected at, or obtained at prescribed rates from, the Public Reference
Section of the Commission at the address set forth above. Additional updating
information with respect to the Company may be provided in the future by means
of appendices or supplements to this Prospectus.
The Company's securities are quoted on the Nasdaq SmallCap Market
(symbols: BRTL, BRTLW). Reports and other information concerning the Company may
be inspected at the National Association of Securities Dealers, Inc. at 1735 K
Street, N.W., Washington, D.C. 20006.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company with the
Commission under the Exchange Act and are incorporated by reference herein:
a. The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996, filed with the Commission on March 31,
1997.
b. The Company's Quarterly Reports on Form 10-QSB for the quarter
ended March 31, 1997, filed with the Commission on May 14, 1997,
for the quarter ended June 30, 1997, filed with the Commission on
August 13, 1997, and for the quarter ended September 30, 1997,
filed with the Commission on November 14, 1997.
c. The Company's Current Reports on Form 8-K filed December 20,
1996, January 15, 1997 (and the amendment thereto filed with the
Commission), April 17, 1997, May 23, 1997 (and the amendment
thereto filed with the Commission), May 29, 1997, June 12, 1997
(and the amendment thereto filed with the Commission), June 20,
1997 (and the amendment thereto filed with the Commission), July
21, 1997 and October 7, 1997.
d. The definitive Proxy Statement of the Company, filed with the
Commission on April 14, 1997 pursuant to Section 14 of the
Exchange Act in connection with the 1997 Annual Meeting of
Stockholders of the Company.
e. The description of the Company's Common Stock which is contained
in the Company's registration statement on Form 8-A under the
Exchange Act, filed with the Commission on October 28, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Prospectus and to be part hereof from the date of filing such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide, without charge, to each person to whom a copy
of this Prospectus is delivered, upon written or oral request of such person, a
copy of any and all of the information that has been or may be incorporated by
reference herein (other than exhibits to such documents unless such exhibits are
specifically incorporated by reference into such documents). Such requests
should be directed to Bristol Retail Solutions, Inc., Attention: Chief Financial
Officer, 5000 Birch Street, Suite 205, Newport Beach, California 92660,
telephone number (714) 475-0800.
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THE COMPANY
Established in April 1996, the Company is engaged in key segments of the
retail automation industry, including point-of-sale ("POS") systems installation
and service, systems integration which provides retailers with turnkey operating
solutions and development and sale of proprietary software products.
The principal objective of the Company is the establishment of a
national network of full service dealers of retail automation equipment,
including POS systems, electronic cash registers ("ECRs") and related hardware
and software, which market their products to retail end users. As of December
12, 1997, the Company had acquired six POS dealers. In addition, the Company
intends to function as a systems integrator of computer hardware, software and
networking products in specific national retail markets. The Company intends to
offer its customers a variety of customized value-added services such as
consulting, integration and support services, together with a broad range of
turnkey computers and networking products from leading vendors. Currently, the
Company is seeking to expand in the systems integration field through
acquisition and internal development. It also is seeking to acquire companies
that produce retail automation software that can be of value to systems
integrators and can be sold through the Company's dealer network.
The Company is implementing a program of selective POS dealer
acquisitions and consolidation. The Company will then seek to enhance the
profitability of the acquired dealerships through the benefits derived from the
economies of scale flowing from a volume-oriented business, improved value added
operations, better trained personnel, quicker on-site service, greater product
diversity, focused leasing programs, major/national account programs and
enhanced service and support of end user installations. The Company also plans
to pursue selective acquisitions of systems integrators as well as producers of
proprietary retail software products to expand the Company's penetration of the
retail automation market.
A POS system is used at the "point-of-sale" in a retail establishment.
It leads or prompts the retail clerk through a sales transaction with a
customer. The POS system collects detailed information, including credit
information, about the transaction. Standard components of a POS system include
a display terminal to view the transaction, a keyboard for data entry, a cash
drawer for collecting funds, a printer to prepare a written record of the
transaction, a server for processing data and coordinating communications, and
software to guide the clerk through the transaction. Typically, a number of
sophisticated "registers" are installed in a retail establishment, thus allowing
multiple departments or locations to enter transactions simultaneously. The ECR
is a less expensive and less sophisticated alternative to the POS system,
comprised of a stand-alone cash register that is electronic rather than
mechanical. The Company also offers its customers continued support, customer
service and supplies from installation through the life span of its products.
The primary target markets for the products supplied by the Company are
supermarkets, convenience stores, quick service restaurants and higher-end table
service restaurants.
The Company's management believes the driving forces in United States
retailing are the need to attract and retain new customers, increase the average
sale per visit and maximize productivity. Retailers need the ability to quickly
identify the buying history and needs of a customer. Access to such information
allows retailers to match their current products and services to each customer's
needs.
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The current cash register system used by many retailers is incapable of
handling these needs. The Company believes that the most effective solution to
these needs is the modern POS system. The Company expects demand to come from
two sources: (i) retailers seeking to upgrade their systems and (ii) retailers
seeking to replace their obsolete systems.
In accordance with its strategic acquisition and consolidation program,
the Company acquired 100% of the outstanding capital stock of Cash Registers,
Incorporated ("CRI"), on June 28, 1996. CRI, which was founded in 1974, is an
independent supplier of retail POS systems in Kentucky and Southern Ohio. On
December 31, 1996, the Company completed the acquisition of Automated Retail
Systems, Inc. ("ARS"), a POS dealership headquartered in Seattle, Washington,
with additional offices in Spokane, Washington and San Mateo, California.
On April 1, 1997, MicroData, Inc. ("MicroData"), a POS dealer based in
Mount Vernon, Illinois, was acquired by CRI, then a wholly-owned subsidiary of
the Company. On May 29, 1997, the Company acquired Smyth Systems, Inc.
("Smyth"), a POS dealer and value-added reseller. Smyth, which was founded in
1949, is based in Canton, Ohio and Irvine, California. On June 6, 1997, CRI
acquired Electronic Business Machines, Inc. ("EBM"), a POS dealer based in
Indianapolis, Indiana. EBM also has an office in Louisville, Kentucky. On August
5, 1997, the Company acquired Pacific Cash Register and Computer, Inc. ("PCR"),
a POS dealer based in San Francisco, California.
The Company was incorporated in Delaware on April 3, 1996 as Bristol
Technology Systems, Inc. The Company's name was changed from Bristol Technology
Systems, Inc. to Bristol Retail Solutions, Inc. on July 18, 1997. Unless the
context requires otherwise, references herein to the "Company" shall include
Bristol Retail Solutions, Inc. and Bristol Technology Systems, Inc. The
Company's executive and administrative offices are located at 5000 Birch Street,
Suite 205, Newport Beach, California 92660. The Company's telephone number is
(714) 475-0800.
RISK FACTORS
The purchase of the shares of Common Stock and Warrants offered hereby
involves a high degree of risk. In addition to the other information set forth
elsewhere in this Prospectus, the following factors relating to the Company and
this offering should be considered when evaluating an investment in the Common
Stock and Warrants offered hereby. This Prospectus contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1993 and
Section 21E of the Securities Exchange Act of 1934. The Company's actual results
may differ materially from the results projected in the forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, the following:
Limited Operating History. The Company was founded in April 1996 and,
prior to the acquisition of CRI in June 1996, the Company had no operations upon
which an evaluation of the Company and its prospects could be based. There can
be no assurance that the Company will be able to implement successfully its
strategic plan, to generate sufficient revenue to meet its expenses or to
achieve or sustain profitability.
Risks related to the Company's Acquisition Strategy. The Company's
strategy is to increase its revenue and the markets it serves through the
acquisition of additional POS dealers and value added resellers ("VARs") serving
retail end users. Since the inception of the Company in April 1996, the Company
has consummated six acquisitions and intends to continue to make additional
acquisitions. There can be no assurance that the Company will be able to
identify, acquire or
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profitably manage additional companies or successfully integrate the operations
of additional companies into those of the Company without encountering
substantial costs, delays or other problems. In addition, there can be no
assurance that companies acquired in the future will achieve sales and
profitability that justify the Company's investment in them or that acquired
companies will not have unknown liabilities that could materially adversely
affect the Company's result of operations or financial condition. The Company
may compete for acquisition and expansion opportunities with companies that have
greater resources than the Company. There can be no assurance that suitable
acquisition candidates will continue to be available, that financing for
acquisitions will be obtainable on terms acceptable to the Company, or that
acquisitions can be consummated or that acquired businesses can be integrated
successfully and profitably into the Company's operations. Further, the
Company's results of operations in fiscal quarters immediately following a
material acquisition may be materially adversely effected while the Company
integrates the acquired business into its existing operations. The Company may
acquire certain businesses that have either been unprofitable or that have had
inconsistent profitability prior to their acquisition. An inability of the
Company to improve the profitability of these acquired businesses could have a
material adverse effect on the Company. Finally, the Company's acquisition
strategy places significant demands on the Company's resources, and there can be
no assurance that the Company's management and operational systems and structure
can be expanded to effectively support the Company's continued acquisition
strategy. If the Company is unable to implement successfully its acquisition
strategy, this inability may have a material adverse effect on the Company's
business, results of operations and financial condition.
Need for Additional Financing to Implement Acquisition Strategy. The
Company will need to obtain additional financing to implement its acquisition
strategy. The Company currently intends to obtain such financing through a
combination of private placements and public issuances of debt or equity
securities. There can be no assurance that the Company will be able to obtain
financing if and when it is needed on terms the Company deems acceptable. The
inability of the Company to obtain financing would have a material adverse
effect on the Company's ability to implement its acquisition strategy, and, as a
result, could require the Company to diminish or suspend its acquisition
strategy.
Consideration for Acquired Companies Exceeds Asset Value. The Company
has consummated six acquisitions to date. Valuations of the companies acquired
by the Company have not been undertaken based on independent appraisals, but
have been determined though arm's-length negotiations between the Company and
representatives of such companies. The consideration for each such company has
been based primarily on the judgment of management as to the value of such
company as a going concern and not on the book value of the acquired assets.
Valuations of these companies determined solely by appraisals of the acquired
assets may have been less than the consideration paid for the companies. No
assurance can be given that the future performance of such companies will be
commensurate with the consideration paid. Moreover, the Company has incurred and
expects to incur significant amortization charges resulting from consideration
paid in excess of the book value of the assets of the companies it has acquired
and of the companies it may acquire in the future.
Substantial Competition. The POS industry is highly fragmented and
competitive. Competitive factors within the industry include product prices,
quality of products, service levels, and reputation and geographical location of
dealers. The Company primarily competes with independent POS dealers and some of
these dealers may have greater financial resources available to them than does
the Company. In addition, there are original equipment manufacturers of POS
equipment that compete in certain product areas. The Company's ability to make
acquisitions will also be subject to competition. The Company believes that,
during the next few years, competing POS dealers may
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seek growth through consolidation with entities other than the Company. No
assurance can be given, furthermore, that the major manufacturers will not
choose to effect or expand the distribution of their products through their own
wholesale organizations or effect distribution directly to many of the retail
accounts of the Company in the markets served by the Company. Any of these
developments could have a material adverse effect on the Company's business,
results of operations and financial condition.
Reliance on Key Personnel. Implementation of the Company's acquisition
strategy is largely dependent on the efforts of a few senior officers. In
particular, the Company's operations are dependent on a great degree on the
continued efforts of its Chief Executive Officer, Richard H. Walker.
Furthermore, the Company will in most probability continue to be dependent on
the senior management of companies that are acquired. Competition for highly
qualified personnel is intense, and the loss of any executive officer or other
key employee, or the failure to attract and retain other skilled employees,
could have a material adverse effect upon the Company's business, results of
operations or financial condition. The Company is a party to employment
agreements with Mr. Walker, as well as with Paul Spindler, an Executive Vice
President of the Company. Each of the agreements with Messrs. Walker and
Spindler will terminate in the year 2001, unless terminated earlier pursuant to
the terms of the agreements, and each contains confidentiality provisions and
covenants not to compete. State laws, however, may limit the enforceability of
the confidentiality provisions and/or the covenants not to compete. The Company
is currently the beneficiary of a key man life insurance policy in the amount of
$1,000,000 on the life of Mr. Walker for a term of three years. There can be no
assurance that the Company will maintain the policy in effect or that the
coverage will be sufficient to compensate the Company for the loss of the
services of Mr. Walker.
Substantial Fluctuations in Future Operating Results. The Company may
experience substantial fluctuations in its annual and quarterly operating
results in future periods. The Company's operating result are affected by a
number of factors, many of which are beyond the Company's control. A substantial
portion of the Company's backlog is typically scheduled for delivery within 90
days. Delivery dates for products sold by the Company are subject to change due
to customers changing the required installation date of a automation retail
solution system. The changing of such delivery dates is beyond the Company's
control. Quarterly sales and operating results therefore depend in large part on
customer-driven delivery dates, which are subject to change. In addition, a
significant portion of the Company's operating expenses are relatively fixed in
nature and planned expenditures are based in part on anticipated orders. Any
inability to adjust spending quickly enough to compensate for any revenue
shortfall may magnify the adverse impact of such revenue shortfall on the
Company's results of operations.
Dependence on Manufacturers. A substantial portion of the Company's
total revenue is and will be derived from the sale of POS systems, ECRs and
related equipment, none of which are manufactured by the Company. The Company's
business is dependent upon close relationships with manufacturers of POS
equipment and the Company's ability to purchase equipment in the quantities
necessary and upon competitive terms so that it will be able to meet the needs
of its end user customers. During the nine months ended September 30, 1997 and
the period from inception (April 3, 1996) to December 31, 1996, the Company
purchased its hardware principally from three main vendors, Panasonic, ERC
Parts, Inc. ("ERC"), a distributor of Panasonic products, and NCR Corporation
("NCR"). Sales of Panasonic, ERC and NCR products accounted for approximately
37% and 51% of net revenue for the nine month period ended September 30, 1997
and the period from inception (April 3, 1996) to December 31, 1996,
respectively. There can be no assurance that the relationships with these
manufacturers will continue or that the Company's supply requirements can
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be met in the future. The Company's inability to obtain equipment, parts or
supplies on competitive terms from its major manufactures could have a material
adverse effect on the Company's business, results of operations and financial
condition.
Fixed Fee Contracts. Many of the Company's service contracts are fixed
fee contracts pursuant to which the customer pays a specified fee for the
Company's performance of all necessary maintenance and remedial services during
the contract's term. Under these agreements, the Company is responsible for all
costs incurred in maintaining and repairing the equipment, including the cost of
replacement parts, regardless of actual costs incurred. Accordingly, the Company
can incur losses from fixed fee contracts if the actual cost of maintaining or
repairing the equipment exceeds the costs estimated by the Company.
Potential Inability to Market Newly Developed Products. The technology
of POS systems, ECRs, VARs and related equipment is changing rapidly. There can
be no assurance that the Company's existing manufacturers will be able to supply
competitive new products or achieve technological advances necessary to remain
competitive in the industry. Further, there can be no assurance that the Company
will be able to obtain the necessary authorizations from manufacturers to market
any newly developed equipment. The Company's Smyth subsidiary operates in the
VAR solutions segment, wherein it develops customized turnkey retail automation
solutions, involving both computer hardware and software. There can be no
assurance that Smyth will be able to continue to develop commercially viable and
technologically advanced VAR solutions at competitive prices.
Possible Environmental Liabilities. Under various federal, state and
local environmental laws, ordinances and regulations, a current or previous
owner or operator of real property may be held liable for the costs of removal
or remediation of certain hazardous or toxic substances which could be located
on, in or under such property. These laws and regulations often impose liability
whether or not the owner or operator knew of, or was responsible for, the
presence of the hazardous or toxic substances. The costs of any required remedy
or removal of these substances could be substantial, and the liability as to any
property is generally not limited under these laws and regulations and could
exceed the value of the property and the aggregate assets of the owner or
operator. The presence of these substances or failure to remediate these
substances properly may also adversely affect the owner's ability to sell or
rent the property or to borrow using the property as collateral. In connection
with the ownership or operation of its acquired companies, the Company could be
liable for these and other related costs.
Effect of Quarterly Fluctuations in Operating Results on Price of Common
Stock. The Company's business can be subject to seasonal influences. The POS
dealers which the Company has acquired to date have typically had lower net
revenues in the first quarter of the calendar year, primarily due to the lower
level of the new store openings by customers from January through March. As the
Company grows through acquisitions, this pattern of seasonality may continue.
Quarterly results in the future may be materially affected by the timing and
magnitude of costs related to such acquisitions, the timing and extent of
staffing additions at the Company's headquarters necessary to integrate acquired
companies and support future growth, and general economic conditions. Therefore,
results for any quarter are not necessarily indicative of the results that the
Company may achieve for any subsequent fiscal quarter or for a full fiscal year.
Fluctuations caused by variations in quarterly operating results may adversely
affect the market price of the Common Stock.
Shares Eligible for Future Sale. Sales of Common Stock in the public
market, or the perception that sales could occur, could materially adversely
affect the market price of the Common
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Stock and could impair the Company's future ability to obtain capital through an
offering of securities. The Company had 5,548,510 shares of Common Stock
outstanding at December 9, 1997 of which approximately 3,304,938 shares are
"restricted securities" within the meaning of Rule 144 under the Securities Act
and may not be sold in the absence of registration under the Securities Act
unless an exemption from registration is available, including the exemption
contained in Rule 144. In general, under Rule 144, as currently in effect, a
person who has beneficially owned shares for at least one year is entitled to
sell, within any three-month period, a number of "restricted" shares that does
not exceed the greater of 1% of the then outstanding shares of Common Stock or
the average weekly trading volume during the four calendar weeks preceding such
sale. Sales under Rule 144 are also subject to certain manner of sale
limitations, notice requirements and the availability of current public
information about the Company. Rule 144(k) provides that a person who is not
deemed an "affiliate" and who has beneficially owned shares for at least two
years is entitled to sell such shares at any time under Rule 144 without regard
to the limitations described above.
Of the 3,304,938 restricted shares, 861,010 shares are also subject to
contractual restrictions on transferability. These restrictions expire at
various times from April 30, 1998 to August 6, 1999.
In addition to the shares of Common Stock that are currently
outstanding, a total of 200,000 shares of Common Stock have been reserved for
issuance under the Company's 1997 Employee Stock Purchase Plan (the "Purchase
Plan"). As of December 12, 1997, no shares of Common Stock have been issued
under the Purchase Plan. The Company anticipates that shares of Common Stock
will be issued under the Purchase Plan beginning December 31, 1997.
Effect of Options, Warrants and Registration Rights. The Company has
reserved an aggregate of 2,450,000 shares of Common Stock for issuance upon
exercise of options granted under the Company's Stock Option Plan. As of
December 12, 1997, options to acquire 1,120,000 shares of Common Stock had been
granted pursuant to the Stock Option Plan. The exercise price of the options
presently outstanding ranges from $2.875 per share to $6.00 per share. The
Company has outstanding 718,750 Class A Warrants to purchase an aggregate of
718,750 shares of Common Stock at a price of $6.00 per share. In addition, the
Company has sold to First Cambridge Securities Corporation, the lead underwriter
of it initial public offering on November 12, 1996, or its designees (the
"Underwriter"), Underwriters' Stock Warrants to purchase up to 125,000 shares of
Common Stock and Underwriters' Warrants, entitling the Underwriter to purchase
62,500 Class A Warrants, which in turn are exercisable into 62,500 shares of
Common Stock. The Underwriters' Stock Warrants are exercisable at a price equal
to $8.70 per share of Common Stock, while the Underwriters' Warrants are
exercisable at a price equal to $.125 per Class A Warrant. For the respective
terms of the Underwriters' Stock Warrants, the Underwriters' Warrants, the Class
A Warrants issuable upon exercise of the Underwriters' Warrants and any options
granted or that may be granted by the Company under the Company's Stock Option
Plan, the holders thereof are given an opportunity to profit in the event of a
rise, in the market price of the Common Stock or the Warrants, with a resulting
dilution in the interest of the other stockholders or holders of warrants,
without assuming the risk of ownership. Further, the terms on which the Company
may obtain additional equity financing during those periods may be materially
adversely affected by the existence of the warrants, options and plans. The
holders of options or warrants to purchase Common Stock may exercise such
options or warrants at a time when the Company might be able to obtain
additional capital through new offerings of securities on terms more favorable
than those provided by such options or warrants. In addition, the holders of the
Underwriters' Stock Warrants and Underwriters' Warrants have demand and
"piggyback" registration rights with respect to their securities. Exercise of
the demand registration rights may involve substantial expense to the Company.
Additionally, if the Underwriters should exercise their
9
<PAGE> 12
registration rights to effect a distribution of the Underwriters' Stock Warrants
and the Underwriters' Warrants or underlying securities, the Underwriter, prior
to and during such distribution, may be unable to make a market in the Company's
Securities. If the Underwriter must cease making a market in the Company's
Securities, the market and market price for the securities may be adversely
affected. See "Description of Securities."
Control by Management. The officers and directors of the Company and
members of their families beneficially owned approximately 44% of the
outstanding shares of Common Stock at December 9, 1997. Accordingly, these
persons, if acting together, will likely be able to control substantially all
matters requiring approval by the stockholders of the Company, including the
election of directors and the approval of mergers or other business combination
transactions. This concentration of ownership could discourage or prevent a
change in control of the Company.
Anti-Takeover Effects of Certain Charter and Bylaw Provisions. Certain
provisions of the Company's Certificate of Incorporation and Bylaws may have the
effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, control of the Company.
These provisions may make it more difficult for stockholders to take certain
corporate actions and could have the effect of delaying or preventing a change
in control of the Company. For example, the Company has not elected to be
excluded from the provisions of Section 203 of the Delaware General Corporation
Law, which impose certain limitations on business combinations with interested
stockholders upon acquiring 15% or more of the Common Stock. This statute may
have the effect of inhibiting a non-negotiated merger or other business
combination involving the Company, even if such event would be beneficial to the
then-existing stockholders. In addition, the Company's Certificate of
Incorporation authorizes the issuance of up to 4,000,000 shares of preferred
stock with such rights and preferences as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors may, without
stockholder approval, issue preferred stock with dividends, liquidation,
conversion, voting or other rights that could adversely affect the voting power
or other rights of the holders of the Company's Common Stock. See "Description
of Securities -- Preferred Stock." The issuance of preferred stock could have
the effect of entrenching the Company's Board of Directors and making it more
difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. The Company currently has no plans, arrangements or
understandings to issue shares of preferred stock. See "Description of
Securities."
Possible Volatility of Stock Price. The stock market has from time to
time experienced significant price and volume fluctuations that are unrelated to
the operating performance of particular companies. These broad market
fluctuations may materially adversely affect the market price of the Company's
Common Stock. In addition, the market price of the Company's Common Stock has
been and may continue to be highly volatile. Factors such as possible
fluctuations in the Company's business, results of operations or financial
condition, failure of the Company to meet expectations of security analysts and
investors, announcements of new acquisitions, the timing and size of
acquisitions, the loss of suppliers or customers, the announcement of new or
terminated supply agreements by the Company or its competitors, changes in
regulations governing the Company's operations or its suppliers, the loss of the
services of a member of senior management, litigation and changes in general
market conditions all could have a material adverse affect on the market price
of the Company's Common Stock.
Maintenance Criteria for Nasdaq, Risks of Low-Priced Securities. The
Company's Common Stock and Class A Warrants are presently traded on the Nasdaq
SmallCap Market. To maintain inclusion on the Nasdaq SmallCap Market, the
Company's Common Stock must continue to be
10
<PAGE> 13
registered under Section 12(g) of the Exchange Act, and the Company must
continue to have either net tangible assets of at least $2,000,000, market
capitalization of at least $35,000,000, or net income (in either its latest
fiscal year or in two of its last three fiscal years) of at least $500,000. In
addition, the Company must meet other requirements, including, but not limited
to, having a public float of at least 500,000 shares and $1,000,000, a minimum
bid price of $1.00 per share of Common Stock, at least two market makers and at
least 300 stockholders, each holding at least 100 shares of Common Stock. While
the Company currently meets these maintenance requirements, there is no
assurance that the Company will be able to maintain these requirements in the
future. If the Company fails to meet the Nasdaq SmallCap Market continued
listing requirements, the market value of the Common Stock and Class A Warrants
likely would decline and holders of the Company's Common Stock and Class A
Warrants likely would find it more difficult to dispose of, and to obtain
accurate quotations as to the market value of, the Common Stock and Class A
Warrants.
If the Company's Common Stock ceases to be included on the Nasdaq
SmallCap Market, the Company's Common Stock could become subject to rules
adopted by the Commission regulating broker-dealer practices in connection with
transactions in "penny stocks." Penny stocks generally are equity securities
with a price of less than $5.00 (other than securities registered on certain
national securities exchanges or quoted on Nasdaq, provided that current price
and volume information with respect to transactions in such securities is
provided). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document in a form prepared by the Commission which provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and its sales person in the transaction and monthly account statements showing
the market value of each penny stock held in the customer's account. The bid and
officer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation. In addition, the penny stock rules require
that prior to a transaction in a penny stock not otherwise exempt from these
rules, the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for a stock that becomes subject to these penny stock rules. If the
Company's Common Stock becomes subject to the penny stock rules, investors may
be unable to readily sell their shares of Common Stock.
Indemnification and Limitation of Liability. The Company's Certificate
of Incorporation (the "Certificate") and Bylaws include provisions that
eliminate the directors' personal liability for monetary damages to the fullest
extent possible under Delaware Law or other applicable law (the "Director
Liability Provision"). The Director Liability Provision eliminates the liability
of directors to the Company and its stockholders for monetary damages arising
out of any violation by a director of his fiduciary duty of due care. Under
Delaware Law, however, the Director Liability Provision does not eliminate the
personal liability of a director for (i) breach of the director's duty of
loyalty, (ii) acts or omissions not in good faith or involving intentional
misconduct or knowing violation of law, (iii) payment of dividends or
repurchases or redemptions of stock other than from lawfully available funds, or
(iv) any transaction from which the director derived an improper benefit. The
Director Liability Provision also does not affect a director's liability under
the federal securities laws or the recovery of damages by third parties. See
"Limitation on Liability and Disclosure of Commission Position on
Indemnification for Securities Act Liabilities."
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<PAGE> 14
Absence of Dividends. The Company has not paid dividends on its Common
Stock and does not anticipate paying cash dividends in the foreseeable future.
Although the Company's current lines of credit do not expressly prohibit the
Company from paying dividends, the lines of credit of certain of the Company's
subsidiaries contain covenants which prohibit the reduction or depletion of
capital without the prior written consent of the party providing the line of
credit. The Company anticipates that future financing, including any lines of
credit, may restrict or prohibit the Company's ability to pay dividends.
Year 2000 Compliance. 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 three years, computer systems and software used by many companies may need
to be upgraded to comply with such "Year 2000" requirements. Although the
Company is working to ensure that its products and internal systems are Year
2000 compliant, there can be no assurance that such compliance will be achieved.
In addition, the Company believes that the purchasing patterns of customers and
potential customers may be affected by Year 2000 issues as companies expend
significant resources to correct or patch their current software systems for
Year 2000 compliance. These expenditures may result in reduced funds available
to purchase software products such as those offered by the Company, which could
result in a material adverse effect on the Company's business, operating results
and financial condition.
USE OF PROCEEDS
If all of the 718,750 Class A Warrants currently outstanding are
exercised, the Company will realize total proceeds of $4,312,500. The proceeds,
if any, will be used for general corporate purposes. It is anticipated that the
Class A Warrants will be exercised, if at all, from time to time based upon
decisions of holders of such warrants, and the Company will receive the proceeds
gradually through December 12, 2002, unless the warrants are redeemed by the
Company at an earlier time.
The agreements governing the provisions of the Underwriter's Stock
Warrants and the Underwriters' Warrants provide that the holders thereof may
exercise such warrants either by a cash payment to the Company or by a "cashless
exercise." In the event such warrants are exercised, the Company is unable at
this time to determine whether the holders of the Underwriter's Stock Warrants,
the Underwriters' Warrants and the Class A Warrants issuable upon exercise of
the Underwriters' Warrants will exercise such warrants by cash payment to the
Company or by "cashless exercise." See "Description of Securities."
If all of the Underwriters' Stock Warrants and Underwriters' Warrants
are exercised by the holders thereof by a cash payment to the Company, the
Company will realize total proceeds of $1,095,312.50 therefrom. The proceeds, if
any, will be used for general corporate purposes. It is anticipated that the
Underwriters' Stock Warrants and the Underwriters' Warrants will be exercised,
if at all, from time to time based upon decisions of holders of such warrants,
and the Company will receive the proceeds gradually through November 12, 2001.
If all of the 62,500 Class A Warrants issuable upon exercise of the
Underwriters' Warrants are exercised, the Company will realize total proceeds of
$375,000. The proceeds, if any, will be used for general corporate purposes. It
is anticipated that the Class A Warrants issuable upon exercise of the
Underwriters' Warrants will be exercised, if at all, from time to time based
upon
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<PAGE> 15
decisions of holders of such warrants, and the Company will receive the
proceeds gradually through December 12, 2002, unless the warrants are redeemed
by the Company at an earlier time.
If any of the Underwriters' Stock Warrants and Underwriters' Warrants
are exercised pursuant to the "cashless exercise" provisions governing such
warrants, the Company will receive no cash proceeds, but will instead issue to
such holders that number of securities issuable upon exercise of such warrants
having an aggregate value, based on the market price of the underlying
securities, equal to the difference between (i) the product of (a) the number of
warrants being exercised and (b) the market price of the underlying securities
(per share of Common Stock or per Class A Warrant, as the case may be) and (ii)
the product of (x) the number of warrants being exercised and (y) the exercise
price per warrant of the warrant.
SELLING STOCKHOLDERS
The Registration Statement of which this Prospectus is a part also
covers the offerings of 577,417 shares of Common Stock owned by the Selling
Stockholders. The Selling Stockholders were originally issued Common Stock by
the Company in transactions exempt from the registration requirements of the
Securities Act. The sale of the Common Stock by the Selling Stockholders is
subject to prospectus delivery and other requirements of the Securities Act. The
Company will not receive any proceeds from the sale of Common Stock by the
Selling Stockholders.
The following table sets forth the names of each Selling Stockholder,
the number of shares of Common Stock currently held by each Selling Stockholder,
and the number of shares (and percentage of all outstanding shares of Common
Stock represented by such number, if such percentage is one percent or more)
held by each Selling Stockholder after the completion of this offering, assuming
all of the shares registered hereunder are sold.
<TABLE>
<CAPTION>
SHARES OF COMMON
NUMBER OF STOCK OWNED AFTER
SHARES OF NUMBER OF SHARES SELLING
COMMON STOCK OF COMMON STOCK STOCKHOLDERS'
STOCKHOLDER OWNED REGISTERED HEREIN OFFERING (1)
----------- ----------- ----------------- -----------------
Number Percent
------ -------
<S> <C> <C> <C> <C>
Gregg Marcus 143,032 10,595 132,437 2.0%
Thomas Lutri (2) 105,950 105,950 0 *
Sanford J. Herman 5,297 5,297 0 *
Lawrence Browner 5,297 5,297 0 *
First Tyme Investments Inc. 127,138 127,138 0 *
Richard Puzo 5,297 5,297 0 *
Myron Weiner 15,892 15,892 0 *
Nicholas Stinycky 52,974 52,974 0 *
Robert Marton 5,297 5,297 0 *
Peter Montalbano 10,595 10,595 0 *
Robert Nardone 5,297 5,297 0 *
Richard Schurig 5,297 5,297 0 *
Andrew Perrota 5,297 5,297 0 *
Robert B. Brand 5,297 5,297 0 *
Edward Meyer 15,892 15,892 0 *
Andrew Levy 5,297 5,297 0 *
Henilia Financial Ltd. 84,759 84,759 0 *
Lupin Investment Service 105,949 105,949 0 *
------- ------- ------- ----
709,854 577,417 132,437 2.0%
======= ======= ======= ====
</TABLE>
- ---------------
*Less than one percent
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<PAGE> 16
(1) Assumes all of the shares of Common Stock held by the Selling Stockholders
and registered hereunder are sold.
(2) Mr. Lutri is a Director of the Company.
PLAN OF DISTRIBUTION
The 718,750 shares of Common Stock offered hereby upon the exercise of
the outstanding Class A Warrants, and the 62,500 shares of Common Stock offered
hereby upon the exercise of the 62,500 Class A Warrants registered hereunder,
will be issuable in accordance with the terms of the Warrant Agreement (the
"Warrant Agreement") dated November 12, 1996, by and between the Company and
American Stock Transfer & Trust Company (the "Transfer Agent"). Among other
things, the Warrant Agreement provides that upon the surrender of the Warrant
Certificate and submission of the duly executed Form of Election to Purchase,
together with payment in full of the exercise price of $6.00 per warrant to the
Warrant Agent (or its successor) at its corporate office set forth in the
Warrant Agreement, the Company will issue to the registered holder of such
warrant or warrants one share of Common Stock for each warrant being exercised,
registered in such name or names as may be directed by such holder. See
"Description of Securities -- Class A Warrants."
The 125,000 shares of Common Stock offered hereby upon the exercise of
the outstanding Underwriters' Stock Warrants will be issuable in accordance with
the terms of the Underwriter's Warrant Agreement for Shares, dated November 20,
1996, by and between the Company and the Underwriter. Among other things, the
Underwriter's Warrant Agreement for Shares provides that upon surrender at the
Company's principal offices of an Underwriter's Warrant Certificate with the
annexed Form of Election to Purchase duly executed, together with payment of the
exercise price of $8.70 per warrant, the registered holder of an Underwriter's
Warrant Certificate shall be entitled to receive a certificate or certificates
for the shares of Common Stock so purchased.
The 62,500 Class A Warrants registered hereunder will be issuable in
accordance with the terms of the Underwriter's Warrant Agreement for Warrants,
dated November 20, 1996, by and between the Company and the Underwriter. Such
Class A Warrants will be issued if and when the holders of the 62,500
outstanding Underwriters' Warrants exercise the Underwriters' Warrants, in
accordance with the terms of the Underwriter's Warrant Agreement for Warrants.
Among other things, the Underwriter's Warrant Agreement for Warrants provides
that upon surrender at the Company's principal offices of an Underwriter's
Warrant Certificate with the annexed Form of Election to Purchase duly executed,
together with payment of the exercise price of $.125 per warrant exercised, the
registered holder of an Underwriter's Warrant Certificate shall be entitled a
certificate or certificates for the Class A Warrants so purchased. The
Underwriter's Warrant Agreement for Warrants further provides that the Class A
Warrants, which are exercisable into Common Stock, shall be issuable in
accordance with the terms of the Warrant Agreement.
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<PAGE> 17
DESCRIPTION OF SECURITIES
As of the date of this Prospectus, the authorized capital stock of the
Company consists of 20,000,000 shares of Common Stock, par value $.001 per
share, and 4,000,000 shares of preferred stock, par value $.001 per share. As of
December 9, 1997, 5,548,510 shares of Common Stock and no shares of preferred
stock were outstanding.
PREFERRED STOCK
The Board of Directors has the authority, without further action by the
stockholders of the Company, to issue up to 4,000,000 shares of preferred stock
in one or more series and to fix the rights, preferences and privileges thereof,
including the dividend rights, conversion rights, voting rights, terms of
redemption (including sinking fund provisions), redemption prices, liquidation
preferences and the number of shares constituting any series or the designation
of the series. Although it presently has no commitment to do so, the Board of
Directors, without stockholder approval, could issue preferred stock with voting
and conversion rights that could adversely affect the voting powers of the
holders of the Common Stock and the market price of the Common Stock. Issuance
of preferred stock may also have the effect of delaying, deferring or preventing
a change of control of the Company without further action by the stockholders
and may discourage bids for the Common Stock at a premium over the market price.
COMMON STOCK
Each share of Common Stock entitles the holder to one vote on all
matters submitted to a vote of the stockholders. The holders of Common Stock are
entitled to receive dividends, when, as and if declared by the Board of
Directors, in its discretion, from funds legally available therefor. The Company
does not currently intend to declare or pay cash dividends on the Common Stock
in the foreseeable future, but rather intends to retain any future earnings to
finance the expansion of its businesses. Upon liquidation or dissolution of the
Company, the holders of Common Stock are entitled to share ratably in the assets
of the Company, if any, legally available for distribution to stockholders after
the payment of all debts and liabilities of the Company and the liquidation
preference of any outstanding preferred stock.
The Common Stock has no preemptive rights and no subscription,
redemption or conversion privileges. The Common Stock does not have cumulative
voting rights, which means that the holders of a majority of the outstanding
shares of Common Stock voting for the election of directors can elect all
members of the Board of Directors. A majority vote is also sufficient for other
actions that require the vote or concurrence of stockholders. All of the
outstanding shares of Common Stock are validly issued, fully paid and
nonassessable.
CLASS A WARRANTS
The Company has outstanding 718,750 Class A Warrants to purchase an
aggregate of 718,750 shares of Common Stock at an exercise price of $6.00 per
share. The Class A Warrants are not exercisable until December 12, 1997 and are
exercisable until five years after that date.
The Class A Warrants are governed by a warrant agreement ("Warrant
Agreement") between the Company and American Stock Transfer & Trust Company as
warrant agent (the "Warrant
15
<PAGE> 18
Agent"). The information included herein concerning the Class A Warrants is
subject to the detailed provisions of the Warrant Agreement.
Provision is made in the Warrant Agreement for adjustment of the price
and number of shares of Common Stock issuable thereunder pursuant to certain
anti-dilution provisions upon the occurrence of certain events, such as stock
dividends, stock splits, stock reclassifications in connection with a merger or
consolidation, sale of the Company's securities below the then Class A Warrant
exercise price, issuance of rights or warrants to the holders of the Company's
Common Stock entitling such holders to subscribe for or purchase shares of
Common Stock at a price below the then Class A Warrant exercise price,
distribution to the holders of Common Stock of evidences of indebtedness or
assets (other than cash dividends out of earned surplus) or subscription rights
or warrants, and for other unusual events. No adjustment to the exercise price
will be made, however, upon issuance or sale by the Company or any shares of
Common Stock upon or in connection with (i) the conversion or exchange of
convertible securities, (ii) the exercise of options granted under the Stock
Option Plan, (iii) the exercise of the Class A Warrants, (iv) the acquisition by
the Company of the stock or assets of third party business entities in bona fide
transactions, (v) a bona fide public offering pursuant to a firm commitment
underwriting or (vi) a private placement. No adjustment in the Class A Warrant
exercise price will be made unless such adjustment would require an increase or
decrease of at least one (1%) percent in such price; however, any such
adjustment not so made will be taken into account and carried forward in
determining the amount of any subsequent adjustments.
The Class A Warrants are redeemable by the Company commencing February
12, 1998, on not less than 30 days' written notice, at a price of $.01 per Class
A Warrant, provided the closing bid price of the Company's Common Stock has been
at least $10.00 for twenty consecutive trading days ending on the third day
prior to the date of the Company's notice of redemption.
The holders of the Class A Warrants may exercise the Class A Warrants at
any time (provided the Company has not redeemed such Class A Warrants) from the
opening of business New York City time on December 12, 1997 until 5:00 p.m. New
York City time on December 12, 2002, provided that (i) a current registration
statement relating to the shares of Common Stock underlying the Class A Warrants
is on file with the Commission and then in effect and (ii) such securities are
qualified for sale or exempt from qualification under the securities laws of the
state in which the particular holder of the Class A Warrants resides. The
Warrant Agreement requires the Company to endeavor to maintain a registration
statement current and effective for these purposes. However, there can be no
assurance that the Company will be able to do so. In addition, the Company is
under no obligation to qualify the Common Stock underlying the Class A Warrants
for sale under the applicable securities laws of each state where warrant
holders reside.
The Company is not required to issue fractions of shares upon exercise
of the Class A Warrants; if any fraction of a share is issuable upon exercise of
a Class A Warrant, the Company may purchase the fraction based upon the then
current market value of the Common Stock.
The Class A Warrants may be exercised upon surrender of the certificate
therefor on or prior to the expiration date or redemption date at the offices of
the Company with the Purchase Form attached thereto filled out and executed as
indicated, accompanied by payment (in the form of cash, certified check, bank
draft payable to the order of the Company or wire transfer of immediately
available funds to the Company) of the full exercise price of the Class A
Warrants being exercised.
16
<PAGE> 19
UNDERWRITERS' STOCK WARRANTS AND UNDERWRITERS' WARRANTS
In connection with the Company's public offering on November 12, 1996,
the Company sold to the Underwriter, at a price of $.001 per warrant, 125,000
Underwriters' Stock Warrants entitling the holders thereof to purchase up to
125,000 shares of Common Stock at an initial per share exercise price equal to
$8.70, and 62,500 Underwriters' Warrants entitled the holders to purchase up to
62,500 Class A Warrants at an initial per warrant exercise price equal to $.125,
each for a period of four years commencing November 20, 1997. The Class A
Warrants underlying the Underwriters' Warrants entitle the holders to purchase
up to 62,500 shares of Common Stock at an initial per share exercise price equal
to $6.00. The Underwriters' Stock Warrants and Underwriters' Warrants cannot be
transferred, assigned, or hypothecated until November 12, 1997, except that they
may be assigned in whole or in part, to any successor, officer of the
Underwriters or selling group member (or any officer or partner or any successor
or partner). The Underwriters' Stock Warrants and Underwriters' Warrants contain
anti-dilution provisions provided for appropriate adjustment upon the occurrence
of certain events.
The holders of the Underwriters' Stock Warrants, Underwriters' Warrants
and the shares and Class A Warrants underlying the Underwriters' Stock Warrants
and the Underwriters' Warrants, respectively, have demand and "piggyback"
registration rights with respect to these securities. At any time commencing
after November 12, 1997 through and including November 12, 2001, the holders of
the Underwriters' Stock Warrants, the Underwriters' Warrants and shares and
Class A Warrants underlying the Underwriters' Stock Warrants and the
Underwriters' Warrants, respectively, representing a majority of the shares of
Common Stock or Class A Warrants, as the case may be, issuable upon the exercise
of the Underwriters' Stock Warrants and the Underwriters' Warrants (assuming the
exercise of all of the Underwriters' Stock Warrants and Underwriters' Warrants)
have the right, on one occasion, to require the Company to prepare and file with
the Commission a registration statement and such other documents, including a
prospectus, as may be necessary so as to permit a public offering and sale of
their respective Underwriters' Stock Warrants and Underwriters' Warrants and
shares and Class A Warrants underlying the Underwriters' Stock Warrants and
Underwriters' Warrants, respectively. In addition, if, at any time commencing
after November 12, 1997 through and including November 12, 2001, the Company
proposes to register any of its securities under the Act (other than in
connection with a merger or pursuant to Form S-8 or a similar form), the Company
must give written notice to the Underwriter and to all other holders of the
Underwriters' Stock Warrants and Underwriters' Warrants and the shares and Class
A Warrants underlying the Underwriters' Stock Warrants and Underwriters'
Warrants, respectively, of its intention to do so. If the Underwriter or any of
the other holders of the Underwriters' Stock Warrants, the Underwriters'
Warrants or the shares or the Class A Warrants underlying the Underwriters'
Stock Warrants and the Underwriters' Warrants, respectively, notify the Company
within twenty (20) days after receipt of any such notice of its or their desire
to include any such securities in such proposed registration statement, the
Company shall afford the Underwriter and such holders of the Underwriters' Stock
Warrants, the Underwriters' Warrants or the shares and Class A Warrants
underlying the Underwriters' Stock Warrants and the Underwriters' Warrants,
respectively, the opportunity to have any of such securities registered under
such registration statement.
The shares and Class A Warrants underlying the Underwriters' Stock
Warrants and the Underwriters' Warrants, respectively, otherwise are identical
in all respects to the shares and Class A Warrants issued to the public in the
Company's initial public offering on November 12, 1996.
17
<PAGE> 20
THE COMPANY'S WARRANTS GENERALLY
Holders of any of the Company's warrants will automatically forfeit
their rights to purchase the shares of the Company's Common Stock issuable upon
exercise of the warrants unless the warrants are exercised before they are
redeemed or expire. The Company shall not be able to call the warrants nor shall
they be exercisable unless a registration statement covering the securities
issuable upon exercise of the warrants is, and remains, current throughout the
period fixed for redemption or at the exercise date. There can be no assurance
that the Company will be able to maintain a registration statement current and
effective at all relevant times. Additionally, the Company's warrants may only
be exercised if the Common Stock issuable upon exercise is registered or
qualified for sale under the applicable state securities laws of the states
where the warrant holders reside. There can be no assurance that the Company
will be able to comply with applicable state laws where all warrant holders
reside.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered
hereby will be passed upon for the Company by Stradling, Yocca, Carlson & Rauth,
a Professional Corporation, Newport Beach, California.
EXPERTS
The consolidated financial statements of Bristol Technology Systems,
Inc. as of December 31, 1996, and for the period from inception (April 3, 1996)
to December 31, 1996 appearing in Bristol Retail Solutions, Inc.'s Annual Report
(Form 10-KSB) for the year ended December 31, 1996, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The financial statements of Automated Register Systems, Inc. as of
December 31, 1996 and 1995, and for the years then ended appearing in Bristol
Technology Systems, Inc.'s Form 8-KA dated March 14, 1997 have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The financial statements of Electronic Business Machines, Inc. as of
December 31, 1996 and May 31, 1997, and for each of the two years ended
December 31, 1996 and the five-month period ended March 31, 1997 appearing in
Bristol Retail Solutions, Inc.'s Form 8-KA dated August 11, 1997 have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The financial statements of Smyth Systems, Inc. for the years ended
December 31, 1996 and 1995 incorporated in this prospectus by reference from
the Bristol Retail Solutions, Inc. filing on Form 8-K/A on July 29, 1997 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
LIMITATION ON LIABILITY AND DISCLOSURE OF
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The bylaws of the Company provide for indemnification of the Company's
directors and officers to the fullest extent permitted by law. Insofar as
indemnification for liabilities under the Securities Act may be permitted to
directors, officers or controlling persons of the Company pursuant to the
Company's Certificate of Incorporation, as amended, bylaws and the Delaware
General Corporation Law (the "DGCL"), the Company has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in such Act and is therefore unenforceable.
18
<PAGE> 21
- --------------------------------------------------------------------------------
BRISTOL RETAIL SOLUTIONS, INC.
781,250 SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
CLASS A REDEEMABLE COMMON STOCK PURCHASE WARRANTS
125,000 SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
UNDERWRITERS' STOCK WARRANTS
62,500 CLASS A REDEEMABLE COMMON STOCK PURCHASE WARRANTS
ISSUABLE UPON EXERCISE OF UNDERWRITERS' WARRANTS
---------------
SELLING STOCKHOLDERS OFFERING
577,417 SHARES OF COMMON STOCK
---------------
---------------
PROSPECTUS
---------------
DECEMBER 15, 1997
- --------------------------------------------------------------------------------
<PAGE> 22
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following sets forth the costs and expenses, all of which shall be
borne by the Company, in connection with the offering of the securities pursuant
to this Post-Effective Amendment to Registration Statement:
<TABLE>
<S> <C>
Registration Fee............................... $ 6,638*
Accounting Fees and Expenses................... $13,000**
Legal Fees and Expenses........................ $ 6,000**
--------
Total.................................. $25,638**
=======
</TABLE>
- ---------------
* Previously paid
** Estimated
Item 15. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation (the "Certificate") and
Bylaws include provisions that eliminate the directors' personal liability for
monetary damages to the fullest extend possible under Delaware Law or other
applicable law (the "Director Liability Provision"). The Director Liability
Provision eliminates the liability of Directors to the Company and its
stockholders for monetary damages arising out of any violation by a director of
his fiduciary duty of due care. Under Delaware Law, however, the Director
Liability Provision does not eliminate the personal liability of a director for
(i) breach of the director's duty of loyalty, (ii) acts or omissions not in good
faith or involving intentional misconduct or knowing violation of law, (iii)
payment of dividends or repurchases or redemption of stock other than from
lawfully available funds, or (iv) any transactions from which the director
derived an improper benefit. The Director Liability Provision also does not
affect a director's liability under the federal securities laws or the recovery
of damages by third parties. Furthermore, pursuant to Delaware Law, the
limitation liability afforded by the Director Liability Provision does not
eliminate a director's personal liability for breach of the director's duty of
due care. Although the directors would not be liable for monetary damages to the
corporation or its stockholders for negligent acts or commissions in exercising
their duty of due care, the directors remain subject to equitable remedies, such
as actions for injunction or rescission, although these remedies, whether as a
result of timeliness or otherwise, may not be effective in all situations. With
regard to directors who also are officers of the Company, these persons would be
insulated from liability only with respect to their conduct as directors and
would not be insulated from liability for acts or omissions in their capacity as
officers. These provisions may cover actions undertaken by the Board of
Directors, which may serve as the basis for a claim against the Company under
the federal and state securities laws. The Company has been advised that it is
the position of the Commission that insofar as the foregoing provisions may be
involved to disclaim liability for damages arising under the Securities Act,
such provisions are against public policy as expressed in the Act and are
therefore unenforceable.
Delaware Law provides a detailed statutory framework covering
indemnification of directors, officers, employees or agents of the Company
against liabilities and expenses arising out of legal proceedings brought
against them by reason of their status or service as directors, officers,
employees or agents. Section 145 of the Delaware General Corporation Law
("Section 145") provides that a director, officer, employee or agent of a
corporation (i) shall be indemnified by the corporation for expenses actually
and reasonably incurred in defense of any action or proceeding if such person is
sued by reason of his service to the corporation, to the extent that such person
has been successful in defense of such action or proceeding, or in defense of
any claim, issue or matter raised in such litigation, (ii) may, in actions other
than actions by or in the right of the corporation (such as derivative actions),
be indemnified for expenses actually and reasonably incurred, judgments, fines
and amounts paid in settlement of such litigation, even if he is not successful
on the merits, if he acted in good faith
II-1
<PAGE> 23
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation (and in a criminal proceeding, if he did not have
reasonable cause to believe his conduct was unlawful), and (iii) may be
indemnified by the corporation for expenses actually and reasonably incurred
(but not judgments or settlements) of any action by the Corporation or of a
derivative action (such as a suit by a stockholder alleging a breach by the
director or officer of a duty owed to the corporation), even if he is not
successful, provided that he acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the corporation,
provided that no indemnification is permitted without court approval if the
director has been adjudged liable to the corporation.
Delaware Law also permits a corporation to elect to indemnify its
officers, directors, employees and agents under a broader range of circumstances
than that provided under Section 145. The Certificate contains a provision that
takes full advantage of the permissive Delaware indemnification laws (the
"Indemnification Provision") and provides that the Company is required to
indemnify its officers, directors, employees and agents to the fullest extent
permitted by law, including those circumstances in which indemnification would
otherwise be discretionary, provided, however, that prior to making such
discretionary indemnification, the Company must determine that the person acted
in good faith and in a manner he or she believed to be in the best interests of
the Company and, in the case of any criminal action or proceeding, the person
had no reason to believe his or her conduct was unlawful.
In furtherance of the objectives of the Indemnification Provision, the
Company has also entered into agreements to indemnify its directors and
executive officers, in addition to the indemnification provided for in the
Company's Certificate and Bylaws (the "Indemnification Agreements"). The Company
believes that the Indemnification Agreements are necessary to attract and retain
qualified directors and executive officers. Pursuant to the Indemnification
Agreements, an indemnitee will be entitled to indemnification to the extent
permitted by Section 145 or other applicable law. In addition, to the maximum
extent permitted by applicable law, an indemnitee will be entitled to
indemnification for any amount or expense which the indemnitee actually and
reasonably incurs as a result of or in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, preparing to be a witness, or
otherwise participating in any threatened, pending or completed claim, suit,
arbitration, inquiry or other proceeding (a "Proceeding") in which the
indemnitee is threatened to be made or is made a party or participant as a
result of his or her position with the Company, provided that the indemnitee
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Company and had no reasonable cause to
believe his or her conduct was unlawful. If the Proceeding is brought by or in
the right of the Company and applicable law so provides, the Indemnification
Agreement provides that no indemnification against expenses shall be made in
respect of any claim, issue or matter in the Proceeding as to which the
indemnitee shall have been adjudged liable to the Company.
On or about August 7, 1997 a class action complaint was filed against
the Company and certain of its officers and directors. Underwriters for the
Company's initial public offering are also named as defendants. The class action
plaintiffs are Lincoln Adair, Antique Prints, Ltd., and Martha Seamons, on
behalf of themselves and all other similarly situated. The case is pending in
the United States District Court for the Southern District of New York. In
addition to seeking themselves declared proper plaintiffs and having the case
certified as a class action, plaintiffs seek unspecified monetary damages.
Plaintiffs complaint alleges claims under the federal securities laws for
alleged misrepresentations and omissions in connection with purchases of
securities. The Company disputes the allegations made in the complaint and
intends to vigorously defend itself.
Item 16. Exhibits.
3.1* Certificate of Incorporation, as amended, of the Company. Filed
as Exhibit 3.1 to the Registration Statement on Form SB-2 (No.
333-5570-LA), and incorporated herein by reference.
3.2* Bylaws of the Company. Filed as Exhibit 3.2 to the Registration
Statement on Form SB-2 (No. 333-5570-LA), and incorporated
herein by reference.
II-2
<PAGE> 24
4.5* Underwriter's Warrant Agreement for Shares entered into between
the Company and First Cambridge Securities Corporation dated as
of November 20, 1996. Filed as Exhibit 4.5 to the Registration
Statement on Form SB-2 (No. 333-5570-LA), and incorporated
herein by reference.
4.6* Underwriter's Warrant Agreement for Warrants entered into
between the Company and First Cambridge Securities Corporation
dated as of November 20, 1996. Filed as Exhibit 4.6 to the
Registration Statement on Form SB-2 (No. 333-5570-LA), and
incorporated herein by reference.
4.7* Warrant Agreement entered into between the Company and American
Stock Transfer & Trust Company dated as of November 12, 1996.
Filed as Exhibit 4.7 to the Registration Statement on Form SB-2
as amended (No. 333-5570-LA), and incorporated herein by
reference.
5.1 Opinion of Stradling, Yocca, Carlson & Rauth, a Professional
Corporation.
16.1* Letter on change in certifying accountant. Filed as Exhibit 16.1
to the Company's Form 8-K filed on October 7, 1997, and
incorporated herein by reference.
23.1 Consent of Stradling, Yocca, Carlson & Rauth, a Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Deloitte & Touche LLP.
24.1 Power of Attorney (included on the signature page to the
Registration Statement - see page II-3).
- ----------------
* Previously Filed
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this registration
statement to:
(iii) Include any additional or changed information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at
that time to be deemed the initial bona fide offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the
foregoing provisions, or otherwise, the small business issuer 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. In the event that a claim for
indemnification against such liabilities (other than the payment by the
small business issuer of expenses incurred or paid by a director,
officer or controlling person of the small business issuer 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 small business issuer will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
II-3
<PAGE> 25
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.
II-4
<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
Post-Effective Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Newport
Beach, State of California, on the 15th day of December, 1997.
BRISTOL RETAIL SOLUTIONS, INC.
By: /s/ Richard H. Walker
------------------------------------
Richard H. Walker
President and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Bristol Retail Solutions,
Inc., do hereby constitute and appoint Richard H. Walker and Roger T. Monaco or
either of them, our true and lawful attorneys-in-fact and agents, each 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 to this
Registration Statement, and to file the same, with 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 are
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 each of said attorney-in-fact and agents, 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, 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/ Richard H. Walker Chief Executive Officer, December 15, 1997
- ----------------------------- President and Director
Richard H. Walker (principal executive officer)
/s/ Roger T. Monaco Senior Vice President and December 15, 1997
- ----------------------------- Chief Financial Officer
Roger T. Monaco (principal financial and
accounting officer)
/s/ Paul Spindler Chairman of the Board of December 15, 1997
- ----------------------------- Directors, Executive Vice
Paul Spindler President and Secretary
/s/ Lawrence Cohen* Vice Chairman of the Board of December 15, 1997
- ----------------------------- Directors
Lawrence Cohen
/s/ Jack Borsting, Ph.D.* Director December 15, 1997
- -----------------------------
Jack Borsting, Ph.D.
Director
- -----------------------------
Thomas Lutri, M.D.
*By /s/ Richard H. Walker
-------------------------
Richard H. Walker
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 27
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
3.1* Certificate of Incorporation, as amended, of the Company. Filed
as Exhibit 3.1 to the Registration Statement on Form SB-2 (No.
333-5570-LA), and incorporated herein by reference.
3.2* Bylaws of the Company. Filed as Exhibit 3.2 to the Registration
Statement on Form SB-2 (No. 333-5570-LA), and incorporated
herein by reference.
4.5* Underwriter's Warrant Agreement for Shares entered into between
the Company and First Cambridge Securities Corporation dated as
of November 20, 1996. Filed as Exhibit 4.5 to the Registration
Statement on Form SB-2 (No. 333-5570-LA), and incorporated
herein by reference.
4.6* Underwriter's Warrant Agreement for Warrants entered into
between the Company and First Cambridge Securities Corporation
dated as of November 20, 1996. Filed as Exhibit 4.6 to the
Registration Statement on Form SB-2 (No. 333-5570-LA), and
incorporated herein by reference.
4.7* Warrant Agreement entered into between the Company and American
Stock Transfer & Trust Company dated as of November 12, 1996.
Filed as Exhibit 4.7 to the Registration Statement on Form SB-2
as amended (No. 333-5570-LA), and incorporated herein by
reference.
5.1 Opinion of Stradling, Yocca, Carlson & Rauth, a Professional
Corporation.
16.1* Letter on change in certifying accountant. Filed as Exhibit 16.1
to the Company's Form 8-K filed on October 7, 1997, and
incorporated herein by reference.
23.1 Consent of Stradling, Yocca, Carlson & Rauth, a Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Deloitte & Touche LLP.
24.1 Power of Attorney (included on the signature page to the
Registration Statement - see page II-3).
</TABLE>
- ------------------------
* Previously filed.
<PAGE> 1
EXHIBIT 5.1
[STRADLING, YOCCA, CARLSON & RAUTH LETTERHEAD]
December 15, 1997 FILE NO. 18865-0000
Bristol Retail Solutions, Inc.
5000 Birch Street, Suite 205
Newport Beach, California 92660
Re: Post-Effective Amendment No. 1 on Form S-3 to Registration
Statement on Form SB-2
Ladies and Gentlemen:
At your request, we have examined Post Effective Amendment No. 1 on Form
S-3 to Registration Statement on Form SB-2, File No. 333-5570-LA (the
"Registration Statement") being filed by Bristol Retail Solutions, Inc., a
Delaware corporation (the "Company"), with the Securities and Exchange
Commission in connection with the registration under the Securities Act of 1933,
as amended, of an aggregate of (i) 781,250 shares of the Company's common stock,
$0.001 par value ("Common Stock"), issuable pursuant to the exercise of Class A
Redeemable Common Stock Purchase Warrants ("Class A Warrants"), (ii) 125,000
shares of Common Stock issuable upon exercise of Underwriters' Stock Purchase
Warrants, (iii) 62,500 Class A Warrants issuable upon exercise of Underwriters'
Warrants and (iv) 577,417 shares of Common Stock being sold by certain
stockholders of the Company (the "Selling Stockholders").
We have examined the proceedings heretofore taken and are familiar with
the additional proceedings proposed to be taken by the Company in connection
with the authorization, issuance and sale of the securities referred to above.
Based on the foregoing, it is our opinion that the 781,250 shares of
Common Stock to be issued upon exercise of the Class A Warrants, the 125,000
shares of Common Stock to be issued upon exercise of the Underwriters' Stock
Purchase Warrants, the 62,500 Class A Warrants to be issued upon exercise of the
Underwriters' Warrants and the 577,417 shares of Common Stock being sold by the
Selling Stockholders, when issued and paid for in the manner described in the
Registration Statement, will be legally and validly issued, fully paid and
nonassessable.
<PAGE> 2
Bristol Retail Solutions, Inc.
December 15, 1997
Page Two
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the use of our name under the caption "Legal Matters" in the
Prospectus which is a part of the Registration Statement.
Very truly yours,
/s/ STRADLING, YOCCA, CARLSON & RAUTH
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Post-Effective Amendment No. 1 to the Registration Statement (Form S-3 No.
333-5570-LA) and related Prospectus of Bristol Retail Solutions, Inc. for the
registration of 1,483,667 shares of its common stock and to the incorporation by
reference therein of our report dated March 27, 1997, with respect to the
consolidated financial statements of Bristol Retail Solutions, Inc. included in
its Annual Report (Form 10-KSB) for the year ended December 31, 1996; of our
report dated March 5, 1997, with respect to the financial statements of
Automated Register Systems, Inc. included in its Form 8-K/A dated March 14,
1997; and of our report dated July 15, 1997, with respect to the financial
statements of Electronic Business Machines, Inc. included in its Form 8-K/A
dated August 12, 1997 filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Orange County, California
December 15, 1997
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 1 to Registration Statement No. 333-5570-LA of Bristol Retail Solutions,
Inc. on Form SB-2 of our report dated June 5, 1997 (relating to the financial
statements of Smyth Systems, Inc. not presented separately herein), appearing
on the Form 8-K/A of Bristol Retail Solutions, Inc. filed on July 29, 1997.
We also consent to the reference to us under the heading "Experts" in the
Prospectus, which is part of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Akron, Ohio
December 15, 1997
