As Filed with the Securities and Exchange Commission on January 13, 1999
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BASE TEN SYSTEMS, INC.
(Exact Name of Registrant as Specified in Its Charter)
New Jersey 22-1804206
- ---------------------------------- --------------------------------------
(State or Other Jurisdiction (I.R.S. Employer Identification Number)
of Incorporation or Organization)
One Electronics Drive
Trenton, New Jersey 08619
(609-586-7010)
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(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
Thomas E. Gardner
Base Ten Systems, Inc.
One Electronics Drive
Trenton, NJ 08619
(609-586-7010)
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(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
Approximate Date of Commencement of Proposed Sale to the Public:
From time to time following the effective date of this Registration Statement
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: ____
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 for the same offering: _____
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: _____
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CALCULATION OF REGISTRATION FEE
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Title of Each Amount Proposed Maximum Proposed Maximum Amount of
Class of Securities to be Offering Price Aggregate Registration
to be Registered Registered(1) Per Unit Offering Price Fee
========================= =================== ======================== ======================== =========================
Class A Common Stock,
$1.00 par value 17,585,131(2) $2.65(3) $ 46,160,968.88 $12,833
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Total Fee $12,833
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(1) Pursuant to Rule 416, this Registration Statement also relates to an
indeterminate number of additional shares of Class A Common Stock issuable upon
exercise of 1,579,968 warrants and conversion of Series B Preferred Shares
pursuant to stock splits, stock dividends and similar transactions.
(2) The calculation of the shares issuable upon conversion of Series B Preferred
Shares and upon exercise of Series B Warrants includes a number of Series B
Preferred Shares to be issued prior to the effectiveness of this Registration
Statement prorated to March 15, 1999. The actual number of shares offered will
be lower if this Registration Statement is declared effective prior to March 15,
1999. For purposes of estimating the number of shares of Common Stock to be
included in this Registration Statement, the Company calculated 150% of the
number of shares of Common Stock issuable in connection with the conversion of
the Company's Series B Preferred Shares and 100% of the Class A Common Stock
issuable upon exercise of the Series A Warrants and the Series B Warrants.
(3) Estimated solely for the purpose of calculating the amount of the
registration fee, and pursuant to Rule 457(c), based on the average of the high
and low sales prices of the Class A Common Stock, as reported on the Nasdaq
National Market on January 12, 1999.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
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<PAGE>
PROSPECTUS
Up to 17,585,131 Shares of Class A Common Stock
Offered by certain Selling Stockholders
BASE TEN SYSTEMS, INC.
This is an offering by certain Selling Stockholders, identified in this
prospectus, of up to 17,585,131 shares of Class A Common Stock of Base Ten
Systems, Inc.
The Selling Stockholders may offer the Shares through public or private
transactions at prevailing market prices, at prices related to such prevailing
market prices or at privately negotiated prices. See "Plan of Distribution" for
a discussion of the methods of sale the Selling Stockholders or their pledgees,
donees, transferees or other successors in interest may use to offer the Shares.
Base Ten will not receive any proceeds from the sale of the Shares by
the Selling Stockholders. We have indemnified the Selling Stockholders against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended. We will bear all expenses in connection with the registration and sales
of the Shares, other than underwriting discounts and selling commissions and
fees and expenses of counsel and other advisers to the Selling Stockholders.
On January 12, 1999, the last reported sale price of the Class A
Common Stock on the Nasdaq National Market was $2.50. The Class A Common Stock
is traded under the Nasdaq symbol "BASEA."
See "Risk Factors" beginning on page 3 for a discussion of certain
factors that you should consider before you invest in the Class A Common Stock
being sold with this prospectus.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
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The date of this Prospectus is ________________
<PAGE>
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TABLE OF CONTENTS
<S> <C>
Where You Can Find More Information about Base Ten Systems, Inc.................................................... 1
Summary............................................................................................................ 2
Risk Factors....................................................................................................... 3
History of Losses; No Assurance of Profitability.......................................................... 3
Shift in Focus of Business................................................................................ 3
Dependence on Software Systems............................................................................ 3
Uncertain Funding and Market Acceptance of Certain Products............................................... 3
Liquidity................................................................................................. 3
Year 2000 Compliance...................................................................................... 4
Limited Marketing Experience; Reliance on Third-Party Distribution Assistance............................. 4
Technical Obsolescence; Changing Requirements for Software Systems........................................ 4
Competition............................................................................................... 4
Product Defects; Product Liability........................................................................ 5
Reliance on Single Sources of Supply and Continued Support for Certain Software........................... 5
Proprietary Rights........................................................................................ 5
Dependence on Key Personnel............................................................................... 5
Foreign Trade and Currency Exchange Related Risks......................................................... 5
Regulation................................................................................................ 5
Inability to Pay Dividends................................................................................ 6
Effect of Actual or Potential Future Conversions Below Market Price....................................... 6
Dilution.................................................................................................. 6
Selling Stockholders............................................................................................... 7
Use of Proceeds.................................................................................................... 8
Plan of Distribution............................................................................................... 8
</TABLE>
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION ABOUT BASE TEN SYSTEMS, INC.
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (SEC). You may
read and copy any of the information on file with the SEC at the SEC's public
reference rooms in Washington, D.C., New York, New York, and Chicago, Illinois.
Copies of the filed documents can be obtained by mail from the Public Reference
Section of the SEC at Room 1024, 450 Fifth Street, N.W. Washington, D.C. 20549
at prescribed rates. You may call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Filed documents are also available to
the public at the SEC's Web site at http://www.sec.gov. and at our web site at
http://www.base10.com.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until all of the shares offered are sold.
1. Annual Report on Form 10-K for the year ended October 31, 1997
and the Amendment to Annual Report on Form 10-K/A for the year
ended October 31, 1997.
2. Quarterly Report on Form 10-Q for the transition period from
November 1, 1997 to December 31, 1997 and Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1998, June 30, 1998
and September 30, 1998.
3. Current Reports on Form 8-K, filed November 12, 1997, December
18, 1997, January 9, 1998, February 2, 1998, March 6, 1998, March
9, 1998, March 16, 1998, April 23, 1998, November 20, 1998, and
January 13, 1999, Form 8-K/A-1 filed May 5, 1998, and Form
8-K/A-2 filed May 11, 1998.
4. The Description of the Company's Capital Stock contained in the
Current Report on Form 8-K, filed January 13, 1999.
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 which also is or is deemed to be
incorporated by reference herein modifies or supersedes that statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
You can request, and we will send to you, without charge, copies of
documents that are incorporated by reference in this Prospectus but which are
not delivered to you (other than exhibits to such documents which are not
specifically incorporated by reference). You may request these copies by writing
or telephoning the Company at: Base Ten Systems, Inc., One Electronics Drive,
Trenton, New Jersey 08619, Attention: William F. Hackett, telephone number (609)
586-7010.
You should rely on the information incorporated by reference or
provided in this Prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information.
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the detailed
information and consolidated financial statements included elsewhere or
incorporated by reference in this Prospectus.
The Company. We develop, manufacture and market computer software
systems that assist manufacturers in industries regulated by the Food and Drug
Administration (FDA). Our software systems aid our customers in complying with
FDA guidelines and improve our customer's overall productivity. Our software
systems include BASE10 ME(TM) and BASE10 FS(TM), which are "management execution
systems." BASE10 ME(TM) uses Windows NT operating systems and BASE10 FS(TM) uses
HP-UX and Digital VAX/VMS operating systems. Our software systems also include
BASE10 CS(TM), which is a "clinical supplies management system." This software
system assists manufacturers in production during various phases of clinical
trials. BASE10 CS(TM) uses Windows NT operating systems. Our software systems
primarily target three FDA regulated industries: (1) human drugs, biologics, and
medical devices, (2) chemicals, and (3) food and cosmetics. We design our
software systems to help customers comply with FDA regulations, including
current Good Manufacturing Practice (cGMP), which involves inventory,
dispensing, production and packaging.
We also develop and market other medical devices, including uPACs(TM)
and Prenval(TM). uPACS(TM) is an ultrasound picture archiving communications
systems that digitizes, records and stores images on CD-ROM as an alternative to
film and video storage. In 1997 we formed a limited liability company (LLC) with
an individual investor who currently is a principal stockholder of Base Ten. We
contributed uPACs(TM) technology to the LLC and the investor contributed $3
million to the LLC to fund required further development of the technology. We
have a 9% interest in the LLC and the investor has a 91% interest in the LLC.
Our percentage interest will increase if the other member's distributions reach
a certain level. The PRENVAL(TM) software program analyzes results of blood
tests for prenatal detection of certain birth defects. We receive revenue from
PRENVAL(TM) from a license to Johnson & Johnson, who markets the product in
Europe under the name Prenata(TM).
The Offering. This offering of up to 17,585,131 shares of Class A
Common Stock of Base Ten Systems, Inc. is by certain Selling Stockholders. The
shares offered consist of the following:
(1) 10,166,666 Shares by one Selling Stockholder. We issued 6,666,666
Shares in a private placement to the Selling Stockholder. We may issue
1,000,000 Shares upon exercise of warrants we issued to the Selling
Stockholder that are exercisable at $3.00 per share. Upon conversion of
a convertible debenture upon the effectiveness of the registration
statement of which this prospectus is a part we issued 2,500,000 Shares
to a trust, of which the Selling Stockholder is trustee.
(2) 5,718,496 Shares that we may issue to some of the Selling Stockholders
upon conversion of Series B, Convertible Preferred Stock (Series B
Preferred Shares). We issued Series B Preferred Shares to some of the
Selling Stockholders upon the effectiveness of the registration
statement of which this prospectus is a part. We issued the Series B
Preferred Shares in exchange for the Selling Stockholders' shares of
Series A, Convertible Preferred Stock (Series A Preferred Shares).
(3) 1,329,969 Shares that we may issue to some of the Selling Stockholders
upon conversion of warrants we issued with the Series A Preferred
Shares and warrants we issued with the Series B Preferred Shares. We
issued warrants to purchase 720,000 shares of Class A Common Stock to
certain holders of Series A Preferred Shares in December 1997 (Series A
Warrants). We amended 609,968 Series A Warrants when we issued the
Series B Preferred Shares to, among other things, decrease the exercise
price from $16.25 to $3.00 per share. We amended 110,032 Series A
Warrants when we issued the Series B Preferred Shares to allow for a
change in exercise price in certain circumstances.
We issued warrants to purchase 609,969 shares of Class A Common Stock
that are exercisable at $3.00 per share to holders of Series B
Preferred Shares (Series B Warrants) when we issued the Series B
Preferred Shares.
(4) 370,000 Shares that we may issue to some of the Selling Stockholders
upon exercise of warrants and options we issued for consulting and
placement agent services. We issued warrants to purchase 350,000 shares
of Class A Common Stock, that are exercisable at $3.00 per share, in
connection with placement agent services for the placement of shares
and convertible debentures. We issued options to purchase 20,000 shares
of Class A Common Stock to a consultant, half of which are exercisable
at $2.00 per share and half of which are exercisable at $3.50 per
share.
RISK FACTORS
Before you invest in our Class A Common Stock, you should be aware that
there are various risks, including those described below. You should carefully
consider these risk factors together with all of the other information included
in this registration statement before you decide to purchase shares of our Class
A Common Stock.
Forward-Looking Information
Some of the information in this registration statement contains
forward-looking statements. You can identify these forward-looking statements
with words like "believe," "expect," "may," "will," "should," "anticipate,"
"estimate," "continue," "goal" and other similar words. These statements discuss
future expectations, contain projections of results of operations or of
financial condition or state other "forward-looking" information. When you
consider these forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in this registration statement. The risk
factors and other uncertainties in this registration statement could cause
actual results to differ materially from those contained in any forward-looking
statement. We do not undertake to publicly update or revise any forward-looking
statements.
History of Losses; No Assurance of Profitability
Our net losses from continuing operations were $8.4 million in fiscal
1996 and $16.0 million in fiscal 1997. These losses resulted primarily from (1)
interest, (2) write-offs of capitalized software, (3) expenses of
non-capitalized development of our software systems, (4) amortization of
software development expenses from prior periods, (5) marketing and sales
expenses, (6) transaction costs related to the sale of our defense-related
assets, and (7) expenses created by changes in our senior management.
We anticipate that our losses will continue in 1998 and possibly in
subsequent periods. Our profitability depends on our (1) development and testing
of our software systems, (2) marketing success, (3) delivery and installation
efficiency, (4) customer validation rates for our systems, and (5) successful
competition in our marketplace. While we can give no assurances, our goal is to
break-even in 1999 and achieve profitability in 2000.
Shift in Focus of Business
Historically, our business focused on developing electronic systems for
the defense industry. In the early 1990s, we began developing software for the
pharmaceutical and medical device manufacturing industries. On December 31,
1997, we sold our defense-related assets to Strategic Technology Systems, Inc.
Our business now primarily focuses on the development, production and
manufacture of software systems for FDA-regulated manufacturers. Our ability to
generate revenue depends on our ability to successfully implement this new
business strategy, of which there can be no assurance.
Dependence on Software Systems
Our growth and profitability depend on the success of our software
systems. We integrate our software systems with our customers' existing hardware
platform and operating systems. We then test and modify these installations at
our own expense. Each installation is complete only when our customer provides
formal validation. Our business operations and financial condition may be
adversely affected if (1) our software systems do not perform properly, (2) we
do not timely install and test the software systems as obligated under
outstanding contracts, (3) our customers do not validate our installations, or
(4) our existing or future customers cancel outstanding contracts.
Uncertain Funding and Market Acceptance of Certain Products
The success of the LLC's operations depend on its ability to first
develop the uPACS(TM) technology and then to market it. The LLC currently does
not have sufficient funds to further develop the uPACS(TM) technology. We are
seeking a buyer for a majority interest in the LLC to provide additional funding
for product development and marketing. Sale proceeds would facilitate the LLC's
marketing of its new Imaging Diagnostics Archiving Version 2.0 product line.
There can be no assurance that (1) the LLC will have sufficient funds to further
develop its products, or (2) the LLC will commence sales of its products.
Liquidity
We believe that cash generated by our operations and existing capital
resources will provide sufficient funds for our operations through fiscal 1999.
If, however, orders for our products and services decrease during 1999 and
revenue is lower than expected, we may reduce our operating costs or seek
alternative financing. Cost reductions could have an adverse effect on our
business operations. Further, we cannot assure our ability to obtain alternative
financing on acceptable terms, if at all.
Year 2000 Compliance
Some computers, software and other equipment include programming code
that abbreviate calendar year data to only two digits. As a result of this
design decision, some of these systems could fail to operate or fail to produce
correct results if "00" is interpreted to mean 1900, rather than 2000. We have
reviewed our internal computer programs and systems and software that we develop
and sell to customers to determine if the programs and systems will be Year 2000
compliant.
With respect to internal systems, we currently believe we have
identified substantially all of the major computers, software applications and
related equipment used in our internal operations that must be replaced or
upgraded. We presently believe that internal systems that are not Year 2000
compliant will be replaced or upgraded in the normal replacement cycle prior to
the year 2000. We currently believe that the total cost of these replacements
and upgrades will not have a material adverse effect on our business or results
of operations.
We currently believe that we have substantially identified and resolved
all potential Year 2000 problems with our latest versions of our manufacturing
execution systems. We cannot assure that all Year 2000 problems affecting the
latest versions of our software have been identified or corrected. We have not
fully tested earlier versions of our manufacturing execution systems for Year
2000 compliance but have advised customers that we are willing to help make
earlier versions of our software Year 2000 compliant. We currently believe that
we can make the earlier versions Year 2000 compliant without material financial
or human resource cost.
We have initiated communications with third-party suppliers to resolve
issues involving the Year 2000 problem. The majority of our significant
suppliers have committed to upgrades to resolve any Year 2000 problems. While we
currently expect that we will be able to resolve any significant Year 2000
problems with these systems, we cannot assure that our third-party suppliers
will resolve any or all Year 2000 problems before a material disruption to our
business or the business of our customers.
We currently expect to identify and resolve all Year 2000 problems that
could have a material adverse effect on our business operations. However, it is
not possible to determine with complete certainty that all problems affecting us
have been or will be identified or corrected. We are currently developing
contingency plans and expect to complete these plans early in 1999. These plans
could include accelerated replacement of third-party equipment or software and
the hiring of additional personnel to correct any problems.
Reliance on Third-Party Distribution Assistance
We have a limited number of sales people and a limited number of
marketing relationships with third-party distributors. We cannot assure (1)
successful expansion of our internal sales force or an increase in the number of
relationships with third-party distributors, or (2) successful product marketing
by our internal sales force and third-party distributors.
Technical Obsolescence; Changing Requirements for Software Systems
The software systems' market experiences ongoing, rapid, technological
change. When third-party software suppliers (such as Microsoft(R) and Oracle(R))
update their software, we likewise update our systems to make them compatible
with the third-party suppliers' software. These design changes can result in
significant costs to us that we cannot pass on to our customers. Changes in
customer requirements and changes in manufacturing information systems and
manufacturing processes effect the market for our software systems. Our ability
to update and improve our products will likely have an effect on our ability to
successfully market our software systems. While we have been successful in
accomplishing product updates to date, there could be a material adverse effect
on our business operations and financial condition if we are unable to improve
our products to address technological developments, or if we are unable to
address our customers' ever-changing requirements.
Competition
Our business is intensely competitive. We believe that competition in
the software market will continue to increase. Companies addressing
complementary customer needs may develop or acquire the requisite technology to
compete in the software market. Competitors may merge or establish cooperative
relationships with each other or with third-parties. These business combinations
may increase our competitors' ability to address the needs of our prospective
customers. Many of our potential competitors are larger and have greater
financial resources and may have more operating flexibility. Increased
competition could result in price reductions, reductions in gross margins and
loss of market share, any of which could materially and adversely affect our
business operations and financial condition. We cannot assure our successful
competition with existing or new competitors or that competitive pressures will
not materially and adversely affect our business operations and financial
condition.
Product Defects; Product Liability
Our products are used in applications in which errors or failures could
have catastrophic results. Consumers may claim that defects in our software
systems failed to prevent defects in pharmaceutical products. Certain of our
other products are involved in critical health care decision-making processes.
We maintain product liability insurance of $10 million for commercial products
and $10 million for defense-related products that were produced prior to the
sale of our defense-related assets. This insurance is subject to certain
deductibles and exclusions. While we believe that our insurance coverage is
appropriate, we cannot assure that our insurance coverage is adequate for claims
arising out of alleged defects.
Reliance on Single Sources of Supply and Continued Support for Certain Software
We rely on single sources of supply for certain software, such as
Microsoft(R) and Oracle(R), and the continued support for certain software, such
as that provided by Microsoft(R) and Oracle(R). If any of such single sources
were to become unable to support our requirements, we may not be able to locate
acceptable alternative sources of supply on favorable terms or on a timely
basis. If any of the continued support for certain software were to become
unavailable to us from the single sources of supply, we may not be able to
redesign our products to make them compatible with the continued support then
offered by our supplier. In the event of any of these situations, we could
experience production delays and increased costs. These delays could have a
material adverse effect on our business operations and financial condition.
Proprietary Rights
We believe that our trademarks, copyrights, patents and other
proprietary rights are important to our success and competitive position.
Accordingly, we devote substantial resources to the establishment and protection
of our proprietary rights. However, the actions we have taken to establish these
proprietary rights may be inadequate to prevent imitation of our products by
others or to prevent others from claiming violations of our trademarks,
copyrights, patents and other proprietary rights. In addition, others may assert
rights in our trademarks, copyrights, patents and other proprietary rights.
Dependence on Key Personnel
We believe that our ability to successfully implement our business
strategy and to operate profitably depends on the continued employment of our
senior management team led by Thomas E. Gardner. If Mr. Gardner or other members
of the senior management team become unable or unwilling to continue in their
present positions, our business and financial results could materially suffer.
Foreign Trade and Currency Exchange Related Risks
A portion of our revenues is derived from foreign customers and is
subject to disruption by political and economic conditions abroad. Currency
exchange fluctuations could increase the price of our products to foreign
customers or decrease the price of competing foreign products to U.S. customers.
Our United Kingdom facility relies on stable values of the pound Sterling.
Variations in the value of the pound could affect our costs either positively or
negatively. We spend approximately $2.0 million, or 1.2 million pounds Sterling,
annually at the current exchange rate. All of our sales contracts are
denominated in U.S. dollars and are unaffected by the exchange rates. We do not
currently engage in any hedging transactions.
Regulation
Our customers validate the performance of our systems against FDA
standards. Our software systems do not presently require FDA clearance and we do
not currently anticipate that our software systems will require FDA approval. If
FDA approval were required in the future, and we were unable to obtain such
approval on a timely basis, if at all, our business could be materially
adversely effected. Some of our current or future products may be considered
"medical devices" under FDA regulations. Before we market these products in the
U.S., the FDA could require FDA clearance. Obtaining clearance can take
substantial time and can require substantial expenditures. Many other countries
regulate the manufacture, marketing and use of medical devices in ways similar
to the U.S. We cannot assure successful procurement of any required clearances
for any products we develop on a timely or cost-effective basis, if at all.
Unlikeliness to Pay Dividends
We have not paid dividends since 1985. For the foreseeable future, we
intend to retain any future earnings for reinvestment in our business.
Effect of Actual or Potential Future Conversions Below Market Price
Our Series B Preferred Shares may be converted into shares of Class A
Common Stock at prices that may be substantially below the market price of the
Class A Common Stock at the time of conversion. This potential conversion at
below market prices could depress the market price of, and reduce trading
activity in our Class A Common Stock.
Dilution
If all the Series B Preferred Shares, Class B Common Stock and all
outstanding options and warrants were converted into the maximum number of
shares of Class A Common Stock, the number of shares of Class A Common Stock
outstanding would increase by approximately 89.5%. As a result, the existing
holders of Class A Common Stock would incur significant dilution in their
ownership interests and proportionate voting power.
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information about the shares of
Class A Common Stock beneficially owned by each of the Selling Stockholders both
before and after the sale of shares offered hereby.
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Shares Beneficially Owned
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Shares Beneficially
Owned Before Shares Beneficially
Offering Shares to Owned After Offering
Name Number be Offered Number Percentage(1)
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<S> <C> <C> <C> <C>
Jesse L. Upchurch (2) 11,941,519 10,166,666 1,774,853 9.5%
Andrew Sycoff (3) 360,000 345,000 15,000 *
Brian Zimmerman(4) 5,000 5,000 -0- -0-
JMG Capital Partners, L.P. (5)(11) 201,884 199,484 2,400 *
Triton Capital Investments, Ltd.(6)(11) 199,484 199,484 -0- -0-
RGC International Investors, LDC(7)(11) 1,690,165 1,595,875 94,290 *
Shepherd Investment International, Ltd. (8)(11) 1,426,778 1,426,778 -0- -0-
Stark International(8)(11) 1,426,778 1,426,778 -0- -0-
Societe Generale(9)(11) 1,925,621 1,925,621 -0- -0-
Elara Ltd.(10)(11) 274,445 274,445 -0- -0-
Kris Adriaenssens(12) 23,000 20,000 3,000 *
------ ------ -----
TOTAL 19,474,674 17,585,131 1,889,543
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</TABLE>
*Represents less than 1% of the total outstanding shares of Class A Common
Stock.
(1) Based on a total of 18,659,738 shares of Class A Common Stock outstanding
on January 4, 1999.
(2) The Selling Stockholder is a principal stockholder of Base Ten and also
holds a 91% interest in the LLC. Represents the following, which are being
registered hereby: (i) 6,666,666 shares held directly by the Selling
Stockholder, (ii) 1,000,000 shares issuable upon exercise of a warrant,
exercisable at $3.00 per share, held by the Selling Stockholder, and (iii)
2,500,000 shares issued upon conversion of a convertible debenture to a
trust of which the Selling Stockholder is trustee. Also represents the
following, which are not being registered hereby: (i) 1,018,650 shares
held directly by the Estate of Constance Upchurch, of which the Selling
Stockholder is the executor and beneficiary, (ii) 231,400 shares held by a
corporation of which the Selling Stockholder is the sole shareholder, and
(iii) 524,803 shares held directly by the Selling Stockholder.
(3) The Selling Stockholder is an employee of Andrew Garrett, Inc, who
assisted Base Ten in arranging financing during 1996 and 1998. Represents
(i) 345,000 shares issuable upon exercise of warrants, exercisable at
$3.00 per share, issued for placement agent services, and (ii) 15,000
shares which are not being offered hereby.
(4) The Selling Stockholder is an employee of Andrew Garrett, Inc. who
assisted Base Ten in arranging financing during 1996 and 1998. Represents
5,000 shares issuable upon exercise of warrants, exercisable at $3.00 per
share, issued for placement agent services.
(5) Represents (i) 162,185 shares, which is 150% of the number of shares
issuable upon conversion of Series B Preferred Shares (based on a
conversion price of $4.00), (ii) 20,000 shares issuable upon exercise of
Series A Warrants, (iii) 17,299 shares issuable upon exercise of Series B
Warrants, and (iv) 2,400 shares which are not being offered hereby.
(6) Represents (i) 162,185 shares, which is 150% of the number of shares
issuable upon conversion of Series B Preferred Shares (based on a
conversion price of $4.00), (ii) 20,000 shares issuable upon exercise of
Series A Warrants, and (iii) 17,299 shares issuable upon exercise of
Series B Warrants.
(7) Represents (i) 1,297,477 shares, which is 150% of the number of shares
issuable upon conversion of Series B Preferred Shares (based on a
conversion price of $4.00), (ii) 160,000 shares issuable upon exercise of
Series A Warrants, (iii) 138,398 shares issuable upon exercise of Series B
Warrants, (iv) 31,290 shares which are not being offered hereby, and (v)
63,000 shares issuable upon exercise of warrants, exercisable at $12.26
per share, which shares are not being offered hereby.
(8) Represents (i) 1,162,752 shares, which is 150% of the number of shares
issuable upon conversion of Series B Preferred Shares (based on a
conversion price of $4.00), (ii) 140,000 shares issuable upon exercise of
Series A Warrants, and (iii) 124,026 shares issuable upon exercise of
Series B Warrants.
(9) Represents (i) 1,559,297 shares, which is 150% of the number of shares
issuable upon conversion of Series B Preferred Shares (based on a
conversion price of $4.00), (ii) 200,000 shares issuable upon exercise of
Series A Warrants, and (ii) 166,324 shares issuable upon exercise of
Series B Warrants.
(10) Represents (i) 211,848 shares, which is 150% of the number of shares
issuable upon conversion of Series B Preferred Shares (based on a
conversion price of $4.00), (ii) 40,000 shares issuable upon exercise of
Series A Warrants, and (iii) 22,597 shares upon exercise of Series B
Warrants.
(11) Includes a portion of approximately 1,906,167 shares that may be issued
upon conversion of Series B Preferred Shares, which is 150% of the actual
number of shares issuable upon conversion of the Series B Preferred Shares
(based on a conversion price of $4.00), which shares have been prorated
among the identified Selling Stockholders. Also includes a portion of
approximately 1,329,969 shares that may be issued upon exercise of the
Series A Warrants and the Series B Warrants. Pursuant to the terms of the
Series B Preferred Shares, Series A Warrants and Series B Warrants, no
holder of such securities is entitled to receive shares of Class A Common
Stock upon conversion or exercise of such securities to the extent that,
based upon the Selling Stockholder's other holdings, the number of shares
of Class A Common Stock issuable upon conversion or exercise of such
securities then being converted or exercised, would result in beneficial
ownership by the Selling Stockholder and its affiliates of more than 4.9%
of the outstanding Class A Common Stock.
(12) Represents (i) 10,000 shares issuable upon exercise of options,
exercisable at $2.00 per share, issued for consulting services, (ii)
10,000 shares issuable upon exercise of options, exercisable at $3.50 per
share, issued for consulting services and (iii) 3,000 shares issuable upon
exercise of warrants, exercisable at $10.375 per share, which shares are
not being offered hereby.
The information in this table was provided to us by the Selling
Stockholders. We agreed to register the Shares for the account of the Selling
Stockholders and have filed with the SEC under the Securities Act a Registration
Statement on Form S-3, of which this Prospectus is a part, covering the resale
of the Shares from time to time.
<PAGE>
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the Shares. We
will, however, receive the exercise prices upon exercise of the Series A
Warrants, Series B Warrants and other warrants and options if any of these
warrants or options are exercised. These proceeds, if any, will be used for
general corporate purposes.
PLAN OF DISTRIBUTION
The Shares offered for resale are not being underwritten, and we will
not receive any proceeds from this offering. The Selling Stockholders (or,
subject to applicable law, their respective pledges, donees, transferees or
other successors in interest) may offer their Shares at various times in one or
more of the following transactions:
* on the Nasdaq National Market or on such other market on
which the Common Stock may from time to time be trading,
* in the over-the-counter market,
* in negotiated transactions not on an exchange or
over-the-counter market,
* by pledge to secure debts or other obligations,
* in connection with the writing of options on the Shares,
short sales or in hedging transactions, and
* in a combination of any of the above transactions.
The Selling Stockholders also may sell Shares that qualify under Rule 144 of the
Securities Act, where applicable. The Selling Stockholders shall have the sole
and absolute discretion not to accept any purchase offer or make any sale of
Shares if they deem the purchase price to be unsatisfactory at any particular
time.
The Selling Stockholders or their respective pledgees, donees,
transferees or other successors in interest, may also sell the Shares directly
to market makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers. Such broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the Selling Stockholders
and/or the purchasers of Shares for whom such broker-dealers may act as agents
or to whom they sell as principal or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). Market makers and
block purchasers purchasing the Shares will do so for their own account and at
their own risk. It is possible that a Selling Stockholder will attempt to sell
shares of Common Stock in block transactions to market makers or other
purchasers at a price per share which may be below the then market price. There
can be no assurance that all or any of the Shares offered hereby will be issued
to, or sold by, the Selling Stockholders. The Selling Stockholders and any
brokers, dealers or agents, upon effecting the sale of any of the Shares offered
hereby, may be deemed "underwriters" as that term is defined under the
Securities Act or the Exchange Act, or the rules and regulations thereunder.
The Selling Stockholders, alternatively, may sell all or any part of
the Shares offered hereby through an underwriter. No Selling Stockholder has
entered into any agreement with a prospective underwriter and there is no
assurance that any such agreement will be entered into. If a Selling Stockholder
enters into such an agreement or agreements, the relevant details will be set
forth in a supplement or revisions to this Prospectus.
The Selling Stockholders and any other persons participating in the
sale or distribution of the Shares will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder, including, without
limitation, Regulation M, which provisions may restrict certain activities of,
and limit the timing of purchases and sales of any of the Shares by the Selling
Stockholders or any other such person. Furthermore, under Regulation M, persons
engaged in a distribution of securities are prohibited from simultaneously
engaging in market making and certain other activities with respect to such
securities for a specified period of time prior to the commencement of such
distributions, subject to specified exceptions or exemptions. The foregoing may
affect the marketability of the Shares.
At the time a particular offer of Shares is made by or on behalf of the
Selling Stockholders, a prospectus will be delivered to the extent required by
the Securities Act.
We have agreed with the Selling Stockholders, among other things, (i)
to bear all expenses (other than underwriting discounts and selling commissions,
and fees and expenses of counsel and other advisers to the Selling Stockholders)
in connection with the registration and sale of the Shares being offered by the
Selling Stockholders, and (ii) to indemnify the Selling Stockholders against
certain liabilities, including liabilities under the Securities Act, as an
underwriter or otherwise.
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
Item 14. Other Expenses of Issuance and Distribution.
<S> <C>
SEC registration fee.......................................... $12,833*
NASDAQ fees and expenses...................................... $35,000
Blue sky fees and expenses.................................... $0*
Printing and engraving costs.................................. $10,000*
Legal fees.................................................... $35,000*
Accounting fees............................................... $5,000*
Miscellaneous................................................. $10,000*
Total................................................. $107,833*
</TABLE>
- --------------------------------------------
* Estimated
Item 15. Indemnification of Officers and Directors
Article 9 of Base Ten's Restated Certificate of Incorporation, as
amended, provides as follows:
Any present or future Director or Officer of the Corporation, and any
present or future director or officer of any other corporation serving
as such at the request of the Corporation, or the legal representative
of any such Director or Officer, shall be indemnified by the
Corporation against reasonable costs, expenses (exclusive of any amount
paid to the Corporation in settlement) and counsel fees paid or
incurred in connection with any action, suit or proceeding to which any
such Director or Officer or his legal representative may be made a
party by reason of his being or having been such Director or Officer;
provided that, (1) said action, suit or proceeding shall be prosecuted
against such Director or Officer or against his legal representative to
final determination, and it shall not be finally adjudged in said
action, suit or proceeding that he had been derelict in the performance
of his duties as such Director or Officer, or (2) said action, suit or
proceeding shall be settled or otherwise terminated as against such
Director or Officer or his legal representative without a final
determination on the merits and it shall be determined by a majority of
the members of the Board of Directors who are not parties to said
action, suit or proceeding, or by a person or persons specially
appointed by the Board of Directors to determine the same that said
Director or Officer has not in any substantial way been derelict in the
performance of his duties as charged in such action, suit or
proceeding. The foregoing right of indemnification shall not be
exclusive of other rights to which such Director or Officer or legal
representative may be entitled by law, and shall inure to the benefit
of the heirs, executors or administrators of such Director or Officer.
Article 10 of Base Ten's Restated Certificate of Incorporation, as
amended, provides as follows:
No director or officer of the corporation shall be personally liable to
the corporation or its shareholders for damages for breach of any duty
owed to the corporation or its shareholders, except for liability for
any breach of duty based upon an act or omission (a) in breach of such
director's or officer's duty of loyalty to the corporation or its
shareholders, (b) not in good faith or involving a knowing violation of
law, or (c) resulting in receipt by such director or officer of an
improper personal benefit. As used in this Article, an act or omission
in breach of a director's or officer's duty of loyalty means an act or
omission which such director or officer knows or believes to be
contrary to the best interests of the corporation or its shareholders
in connection with a matter in which such director or officer has a
material conflict of interest.
The provisions of this Article shall be effective as and to the fullest
extent that, in whole or in part, they shall be authorized or permitted
by the laws of the State of New Jersey. No repeal or modification of
the provisions of this Article nor, to the fullest extent permitted by
law, any modification of law shall adversely affect any right or
protection of a director or officer of the corporation which exists at
the time of such repeal or modification.
Article X of Base Ten's By-Laws, as amended, entitled "Indemnification:
Insurance," provides as follows:
Section 1. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including an action by or in the right
of the Corporation) by reason of the fact that he is or was a director
or officer of the Corporation against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement to the maximum
extent permitted by law, and shall advance expenses incurred by such
person in any such action to the maximum extent permitted by law
accordance with the procedures provided by applicable law.
Section 2. To the extent, according to standards and in such manner as
the Board of Directors may direct pursuant to and in accordance with
applicable law in the particular case, the Corporation shall indemnify
any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (including an
action by or in the right of the Corporation) by reason of the fact
that he is or was an employee or agent of the Corporation, or is or was
serving at the request of the Corporation, as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement.
Section 3. The indemnification provided by this Article X shall not be
deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any agreement, vote of
stockholder or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while
holding such office and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
Section 4. The Corporation, acting by its Board of Directors, shall
have power to purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such
liability under the provisions of this Article X. Nothing in this
Section 4 shall obligate the Corporation to indemnify any person to any
extent other than as provided in Sections 1, 2, 3 and 4 of this Article
X.
Statutory authority for indemnification of and insurance for Base Ten's
directors and officers is contained in the New Jersey Business Corporation Act
("the Act"), in particular, Section 14A:3-5 of the Act, the material provisions
of which may be summarized as follows:
Directors and officers may be indemnified in non-derivative proceedings
against settlements, judgments, fines and penalties and against reasonable
expenses (including counsel fees) where the person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation and also, in a criminal proceeding, he must have had no
reasonable cause to believe that his conduct was unlawful. In derivative
proceedings such persons may be indemnified against reasonable expenses
(including counsel fees) where the person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, but not against settlements, judgments, fines or penalties except
that, without a court determination as to entitlement to indemnity, no indemnity
may be provided to a person who has been adjudged liable to the corporation. In
all cases, the Act provides that indemnification may only be made by the
corporation (unless ordered by a court) only as authorized in a specific case
upon a determination that indemnification is proper in the circumstances because
the person has met the applicable standard of conduct required of the person,
requires a person to be indemnified for reasonable expenses (including counsel
fees) to the extent he has been successful in any proceeding and permits a
corporation to advance expenses upon an undertaking for repayment if it shall be
ultimately determined that the director or officer is not entitled to
indemnification. The indemnification and advancement of expenses provided by or
granted pursuant to the Act is not exclusive of other rights of indemnification
to which a corporate agent may be entitled under a certificate of incorporation,
by-law, agreement, vote of shareholders or otherwise. However, no
indemnification may be made to or on behalf of a director or officer if a final
adjudication adverse to the director or officer establishes that the director's
or officer's acts or omissions were in breach of his duty of loyalty to the
corporation or its shareholders, were not in good faith or involved a knowing
violation of law, or resulted in receipt by the director or officer of an
improper personal benefit. A corporation may purchase and maintain insurance on
behalf of any directors and officers against expenses incurred in any proceeding
and liabilities asserted against them by reason of being or having been a
director of officer, whether or not the corporation would have the power to
indemnify the directors or officers against such expenses and liabilities under
the statute.
Each of the officers and directors of Base Ten is insured against
certain liabilities which he might incur in his capacity as an officer or
director of Base Ten or its subsidiaries pursuant to a Directors and Officers
Insurance and Company Reimbursement Policy issued by National Union Fire
Insurance Company of Pittsburgh, PA., Zurich Insurance Company of Philadelphia,
PA and Genesis Insurance Company of White Plains, NY. The general effect of the
policy is that if any claims are made against officers or directors of Base Ten
or its subsidiaries or any of them for a Wrongful Act (as defined in the policy)
while acting in their individual or collective capacities as directors or
officers, to the extent Base Ten or its subsidiary has properly indemnified such
officers and directors, the insurer will, subject to the retention amount,
reimburse Base Ten or its subsidiary for 100% of any Loss (as defined in the
policy). In addition, to the extent that Base Ten or its subsidiary has not
indemnified an officer or director, the insurer will, subject to the retention
amount, pay on behalf of such officer or director 100% of the Loss. Defense
Costs (as defined in the Policy) are part of Loss and are subject to the limits
of the policy.
The retention amount under the policies is $200,000 for SEC-related
matters and $100,000 for all other matters. The retention amount is first
applied to Base Ten or its subsidiary. The retention amount is not applicable to
officers or directors if Base Ten or its subsidiary is not permitted or required
to indemnify the officers or directors. If, however, Base Ten or its subsidiary
is permitted or required to indemnify the officers or directors, then the
retention amount does apply to them.
Under the policy, the term "Wrongful Act" means any actual or alleged
error, or misstatement, or misleading statement, or act, or omission, or neglect
or breach of duty by the directors or officers in their capacities as such,
individually or collectively, or any matter claimed against them solely by
reason of their being directors or officers of Base Ten or its subsidiaries,
except that certain claims are excluded by the terms and conditions of the
policy. The term "Loss" means damages, judgments, settlements and Defense Costs.
The term "Defense Costs" means reasonable and necessary fees, costs and expenses
consented to by the insurer resulting solely from the investigation, adjustment,
defense and appeal of any claim against any director or officer, but excluding
salaries of officers or employees of Base Ten or its subsidiaries.
Item 16. Exhibits.
The following documents are filed as Exhibits to this Registration
Statement:
Exhibit
Number Exhibit
5 Opinion of Pitney, Hardin, Kipp & Szuch
23 Consent of Pitney, Hardin, Kipp & Szuch (contained in Exhibit 5) *
24 Power of Attorney (contained on the
signature page of this Registration Statement) *
- ---------------------
*Included elsewhere in this Registration Statement
Item 17. Undertakings.
1. The undersigned registrant hereby undertakes:
(A) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement;
Provided, however, that paragraphs (i) and (ii) above do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the Registration Statement.
(B) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(C) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions discussed in Item 15 of
this Registration Statement, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or a controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in such Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Trenton, State of New Jersey, on the 13th day of
January, 1999.
BASE TEN SYSTEMS, INC.
THOMAS E. GARDNER WILLIAM F. HACKETT
By:--------------------------------- By:-------------------------------------
Thomas E. Gardner William F. Hackett
Chief Executive Officer Chief Financial Officer
(Principal Executive Officer) (Principal Accounting Officer)
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Thomas E. Gardner and William F.
Hackett, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution for him and in his name, place and stead in any
and all capacities, to sign any and all amendments to this Registration
Statement (including post-effective amendments), and to file the same with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming what said attorneys-in-fact and agents or their
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Title Date
<S> <C> <C>
By: THOMAS E. GARDNER President, Chief Executive January 13, 1999
- --------------------------------------- Officer and Chairman
Thomas E. Gardner
By: ALEXANDER M. ADELSON Director January 13, 1999
- ---------------------------------------
Alexander M. Adelson
By: WILLIAM H. SWORD Director January 13, 1999
- ---------------------------------------
William H. Sword
By: ALAN S. POOLE Director January 13, 1999
- ---------------------------------------
Alan S. Poole
By: Director January __, 1999
- ---------------------------------------
David C. Batten
By: CARL W. SCHAFER Director January 13, 1999
- ---------------------------------------
Carl W. Schafer
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
5 Opinion of Pitney, Hardin, Kipp & Szuch
23 Consent of Pitney, Hardin, Kipp & Szuch (contained in Exhibit 5) *
24 Power of Attorney (contained on the
signature page of this Registration Statement). *
- ---------------
* Included elsewhere in this Registration Statement.
Exhibit 5
PITNEY, HARDIN, KIPP & SZUCH
MAIL P.O. BOX 1945
MORRISTOWN, NEW JERSEY 07962-1945
January 13, 1999
Base Ten Systems, Inc.
One Electronics Drive
Trenton, New Jersey 08619
We have acted as counsel to Base Ten Systems, Inc. (the Company) in
connection with the registration by the Company under the Securities Act of
1933, as amended (the Act) of 17,585,131 shares of Class A Common Stock of the
Company (the Shares).
We have examined the Registration Statement on Form S-3 (the
Registration Statement), dated January 13, 1999 to be filed by the Company with
the Securities and Exchange Commission in connection with the registration of
the Shares.
We have also examined originals, or copies certified or otherwise
identified to our satisfaction, of the Restated Certificate of Incorporation and
By-Laws of the Company, as currently in effect, and relevant resolutions of the
Board of Directors of the Company; and we have examined such other documents as
we deemed necessary in order to express the opinion hereinafter set forth. In
our examination of such documents and records, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, and conformity with the originals of all documents submitted to us as
copies.
Based on the foregoing, it is our opinion that when, as and if the
Registration Statement shall have become effective pursuant to the provisions of
the Act, and the Shares shall have been duly issued and delivered in the manner
contemplated by the Registration Statement, including the Prospectus therein,
the Shares will be legally issued, fully paid and non-assessable.
The foregoing opinion is limited to the laws of the State of New
Jersey, and we are expressing no opinion as to the effect of the laws of any
other jurisdiction.
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Act, or the Rules and Regulations of the Securities and Exchange Commission
thereunder.
VERY TRULY YOURS,
PITNEY, HARDIN, KIPP & SZUCH
