<PAGE> 1
As Filed with the Securities and Exchange Commission on August 28, 2000
Registration No. _________
================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Exact name of registrant as specified in charter
------------------------------------------------
MSI HOLDINGS, INC.
<TABLE>
<S> <C> <C>
State or jurisdiction of Address, including zip code, and telephone number, including I.R.S. Employer
incorporation or organization area code, of registrant's principal executive offices Identification Number
----------------------------- ------------------------------------------------------------ ---------------------
UTAH MSI HOLDINGS, INC. 87-0280886
1121 EAST 7TH STREET
AUSTIN, TEXAS 78702
(512) 476-6925
Name, address, including zip code, and telephone number, With a copy to:
including area code, of agent for service ---------------
----------------------------------------- PETER E. LORENZEN
ROBERT J. GIBBS MSI HOLDINGS, INC.
1121 EAST 7TH STREET 14131 MIDWAY ROAD, SUITE 800
AUSTIN, TEXAS 78702 ADDISON, TEXAS 75001
(512) 476-6925 (972) 851-3519
</TABLE>
Approximate date of commencement of proposed sale to the public
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AS SOON AS PRACTICABLE AFTER 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. [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
registrations 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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Title of each class of Amount to be Proposed maximum unit Proposed maximum Amount of
securities to be registered registered offering price aggregate offering price registration fee
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<S> <C> <C> <C> <C>
Common stock
$0.10 par value (1) 999,999 $4.25(2) $4,249,996 $1,122
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</TABLE>
(1) Such securities have been registered for issuance by the registrant on
a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933
(2) Estimated solely for the purpose of computing the amount of the
registration fee in accordance with Rule 457(c) promulgated under the
Securities Act. The
<PAGE> 2
proposed maximum unit offering price is the average of the high and low
prices quoted on August 23, 2000.
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 this registration statement shall
become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE> 3
SUBJECT TO COMPLETION, DATED August 28, 2000
PROSPECTUS
MSI HOLDINGS, INC.
999,999 SHARES OF COMMON STOCK
The shares of our common stock covered by this prospectus are offered
by the shareholders listed under "Selling Shareholders" beginning on page 8. We
will not receive any of the proceeds from this offering.
The information in this document is not complete and may be changed.
These securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is declared effective. This document is not
an offer to sell these securities and it is not soliciting an offer to buy
securities in any state where the offer or sale is not permitted.
Our common stock is listed on the Nasdaq Stock Market under the trading
symbol APRN.
-----------------------------
THE COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVES A HIGH DEGREE OF
RISK. YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD A COMPLETE LOSS. SEE
"RISK FACTORS" BEGINNING ON PAGE 2.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------------------------
The date of this prospectus is August 28, 2000
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Additional information is incorporated in this prospectus by reference
to our reports filed with the SEC. The additional information includes our
financial statements for the year ended March 31, 2000. Please refer to "Where
You Can Find More Information" on page 10 for instructions on obtaining copies
of our filed reports. You are urged to read this prospectus and our SEC reports
in their entirety. All references to "we," "us" and "our," mean MSI Holdings,
Inc., and its subsidiaries.
RISK FACTORS
You should carefully consider the following factors in evaluating us
and our business before purchasing the shares of common stock offered by this
prospectus.
RISKS RELATED TO OUR BUSINESS
OUR FORECASTS ARE BASED ON AN UNPROVEN BUSINESS MODEL. IF OUR MODEL'S
ASSUMPTIONS ARE NOT ACCURATE WE MAY FAIL TO GENERATE PROFITS AND MAY
CONTINUE TO RECOGNIZE LOSSES.
The success of our business model depends on developing a market for
unproven products and services. We generate revenues by providing customers with
bandwidth and related services, relatively new products and services. Our
success relies on our products and services achieving wide acceptance in the
market at competitive prices. Because of the relative novelty of our products
and services, our business model is based on limited and uncertain information
about future demand and costs. As a result, we may not generate revenues at the
expected levels or control expenses. If our earnings are lower than anticipated,
we may disappoint investors, which could cause our stock price to decline.
YOU HAVE LIMITED INFORMATION ON WHICH TO EVALUATE US. OUR FUTURE
RESULTS MAY VARY SIGNIFICANTLY FROM OUR PAST PERFORMANCE.
Since March 1999, we have changed the focus of our business from
providing hardware and systems integration services to providing a suite of
high-speed Internet access, data transport and networking services, co-location
services and web site hosting services. Because of our limited operating history
in providing our current product mix, there is limited operating and financial
data about our business for you to use in evaluating us or our performance.
WE HAVE A HISTORY OF LOSSES AND EXPECT CONTINUING LOSSES. AS A
SHAREHOLDER, YOUR INVESTMENT MAY BE LOST IF WE FAIL TO BECOME
PROFITABLE.
To date, we have had limited revenues and have not shown a profit in
our operations. During fiscal 2000, our total revenues were only $1.8 million of
which $956,736 came from our new Internet infrastructure business. First quarter
fiscal year 2001 revenues were $909,445, all of which came from our Internet
infrastructure business. We expect our losses, which were approximately $22.0
million in fiscal year 2000 and approximately $4.3 million for the quarter ended
June 30, 2000 to increase during fiscal year 2001, and possibly beyond, as we
continue to expand our operations. As of June 30, 2000, our accumulated deficit
was approximately $50.2 million. Approximately $12.9 million of the accumulated
deficit relates to preferred stock discounts and dividends. Approximately $37.3
million of the deficit relates to losses from operations. Of the fiscal year
2000 net loss from operations, approximately $8.7 million was due to non-cash
charges for issuances of common stock, stock options, and stock warrants to
employees and non-employees. We cannot predict when profitability might be
achieved, if at all. If we are able to become profitable, we may not be able to
sustain it. If we are unable to obtain profitability or sustain it, we may have
to discontinue operations.
WE MAY BE UNABLE TO MANAGE COMPLICATIONS THAT ARISE DURING THE BUILD
OUT OF ADDITIONAL DATA CENTERS. THESE BUILD OUTS MAY COST MORE THAN
BUDGETED AND NOT GENERATE REVENUES AS QUICKLY AS ANTICIPATED.
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We are planning to build out new data centers across a wide range of
geographic regions. The build out of data centers is a key element of our
business strategy. Each data center takes approximately 30 to 90 days to
complete. Any delay in the build out of new data centers could significantly
harm our expansion plans. Many of the risks associated with significant
expansion projects are beyond our control and could delay the build out of
additional data centers. These risks include cost estimation errors or overruns,
equipment and material delays or shortages, and the inability to obtain
necessary permits on a timely basis, if at all.
IF OUR NEW DATA CENTERS EXCEED OUR MANAGERIAL AND CAPITAL RESOURCES,
OUR CUSTOMER SERVICE MAY SUFFER, CAUSING US TO LOSE CUSTOMERS.
If completed, new data centers will result in substantial new operating
expenses and managerial burdens. Moreover, a failure to institute adequate
financial and managerial controls, reporting systems and procedures for multiple
facilities would significantly harm our operations. Failure to manage the data
centers' increased expenses and managerial burdens could interrupt operations
causing us to lose customers.
WE HAVE HAD RECENT CHANGES IN MANAGEMENT. OUR CURRENT MANAGEMENT MAY BE
UNABLE TO LEAD US INTO PROFITABILITY.
Many of our senior managers have only recently been hired. We are
continuing to build a new management team. This team has not had the opportunity
to work together in the past. There is no assurance the new management team will
be able to successfully lead us into profitability.
WE WILL BE UNABLE TO COMPETE EFFECTIVELY IF WE ARE UNABLE TO ATTRACT
AND RETAIN KEY PERSONNEL.
Our future success depends on highly qualified technical, sales,
marketing and customer service personnel. The industry in which we compete has a
high level of employee mobility and aggressive recruiting of skilled personnel.
We face intense competition for qualified personnel in software development,
network engineering and product management. If we are unable to attract and
retain qualified personnel, our ability to compete will be compromised.
OUR POSSIBLE EXPOSURE TO INFRINGEMENT CLAIMS MAY CAUSE UNEXPECTED LEGAL
EXPENSES AND DIVERT MANAGEMENT RESOURCES.
Our management personnel were previously employees of other
telecommunications companies. Our management personnel may have had contracts
with the prior companies. In many cases, these individuals conduct activities
for us in areas similar to those in which they were involved before joining us.
As a result, our employees or we could be subject to allegations of violation of
trade secrets, breach of contract or unfair competition. These claims may
distract our management and employees from their duties and require reallocation
of our resources. Moreover, an unfavorable ruling may hinder our ability to use
technology we need to conduct our business. Liability and defense costs under
these claims could increase our expenses and adversely affect our ability to
compete.
OUR OPERATIONS DEPEND ON OUR ABILITY TO MAINTAIN FAVORABLE
RELATIONSHIPS WITH THIRD PARTY SUPPLIERS. WE CANNOT ASSURE THE
CONTINUITY OF THOSE RELATIONSHIPS.
We have entered into several alliance and contractual agreements to
utilize third parties' infrastructures and networks for our products and
services. We are dependent on the continued availability of these
infrastructures and networks for our growth and development. If we are unable to
maintain or replace our relationships with our suppliers, we will be unable to
provide the current level of services to our customers. Our failure to
consistently provide our current levels of service could result in a reduction
of our client base and sales volume.
SYSTEM FAILURES COULD DISRUPT OUR SERVICES AND CAUSE US TO LOSE
CUSTOMERS.
Our target market is particularly sensitive to service failures.
Service failures may reduce or terminate the services we supply to our
customers. Any reduction or termination of our services could cause our
customers to switch their business to our competitors and may hinder our ability
to obtain new customers. Our system is vulnerable to damage from human error,
power loss, facility failures, fire, earthquake, floods, telecommunications
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failure, break-ins, sabotage and vandalism. Moreover, we have not yet
implemented a disaster recovery plan, and do not carry any business interruption
insurance or have any secondary off-site systems.
RISKS RELATED TO OUR INDUSTRY
OUR GROWTH AND PERFORMANCE MAY BE HINDERED IF THE INTERNET USE FAILS TO
INCREASE AS PREDICTED.
Demand for our services could be reduced if the market for
business-related Internet solutions fails to develop further. Critical issues
concerning the commercial use of the Internet remain unresolved and may hinder
the growth of Internet use. These issues are particularly critical in the
business sector -- our target market. If demand for our services fails to
materialize at the anticipated levels, our revenues will also fail to reach
expectations.
THE MARKET FOR OUR PRODUCTS AND SERVICES IS HIGHLY COMPETITIVE, AND WE
MAY NOT BE ABLE TO COMPETE EFFECTIVELY.
The market for our products and services is rapidly evolving. Our
market is also intensely competitive, partly due to relatively low barriers to
entry. Many of our competitors and potential competitors have longer operating
histories, greater name recognition and substantially greater financial,
technical and marketing resources than us. Moreover, our competitors may be able
to negotiate contracts with suppliers on more favorable terms than we can. Some
of these competitors may also provide products with some performance advantages
over our products. Given the fierce competition in our industry and our
comparatively limited resources, we may not be able to compete effectively.
OUR SERVICES ARE SUBJECT TO UNCERTAIN GOVERNMENT REGULATION. CHANGES IN
LAWS OR REGULATIONS COULD RESTRICT THE WAY WE OPERATE OUR BUSINESS.
We operate in an environment of unstable and evolving laws and
regulations. Changes in applicable laws or regulations could impact our
operations and impact our costs, service requirements and the scope of
competition. Incumbent local carriers are likely to pursue efforts to affect the
applicable laws and regulations in a manner that would be more favorable to them
and that may be against our interests. The likely means to affect the laws
include litigation in courts, administrative proceedings with the Federal
Communications Commission and state telecommunications regulators and lobbying
the U.S. Congress. We may choose to expend significant resources to participate
in regulatory proceedings at the federal or state level. The expenses associated
with participating in and complying with an evolving regulatory framework may
increase our operating expenses beyond expectations. Despite our possible
expenditures, we cannot assure any favorable results.
DEMAND FOR OUR PRODUCTS AND OUR PROJECTED INCOME WILL FAIL TO MEET
EXPECTATIONS IF DIGITAL SUBSCRIBER LINE SERVICES ARE NOT ACCEPTED BY
BUSINESSES AT PROFITABLE PRICES.
The market for high-speed Internet access, data transport and
networking services using copper telephone lines is in the early stages of
development. If the market for our digital subscriber line services fails to
develop, grows more slowly than anticipated or becomes saturated with
competitors, our operations and future revenue stream may not achieve our
expectations. We cannot accurately predict the rate at which this market will
grow or whether new or increased competition will result in market saturation.
If demand for our products and services does not meet expectations, our revenues
may be lower than anticipated.
INTERNET SECURITY CONCERNS MAY HINDER THE DEVELOPMENT OF ELECTRONIC
COMMERCE AND DEMAND FOR OUR PRODUCTS AND SERVICES.
A significant barrier to commerce and communications over the Internet
has been the need for the secure transmission of confidential information.
Security breaches or the inadvertent transmission of computer viruses could
expose us to litigation and possible liability. We may incur significant costs
to protect against the threat of security breaches or to alleviate problems
caused by breaches. A party who is able to penetrate our network security could
misuse our users' personal information and our users might sue us or bring
claims against us. If any well-publicized compromise of security occurs,
Internet usage and the demand for our services could decline.
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RISKS RELATED TO THE SHARES BEING OFFERED
OUR ARTICLES OF INCORPORATION AND BYLAWS CONTAIN PROVISIONS THAT COULD
PREVENT A THIRD PARTY FROM BUYING US. AS A SHAREHOLDER, YOU MAY BE
PREVENTED FROM CONSIDERING A THIRD PARTY'S OFFER.
Provisions of our articles of incorporation and bylaws could make it
more difficult for a third party to acquire control of us, even if a change in
control would be beneficial to shareholders. Our articles of incorporation allow
our board of directors to issue preferred stock with terms set by the board of
directors and without shareholder approval. The preferred stock could be issued
quickly with terms that delay or prevent a change in control or make removal of
management more difficult. Also, the issuance of preferred stock may cause the
market price of our common stock to decrease
OUR STOCK PRICE HAS BEEN VOLATILE, AND IS LIKELY TO CONTINUE TO BE
VOLATILE.
The market price of our common stock has been volatile in the past and
is likely to continue to be volatile. In addition, the securities markets in
general, and Internet-related stocks in particular, have experienced significant
price volatility and accordingly the trading price of our common stock is likely
to be affected by this activity.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
Any statement in this prospectus, other than a statement of historical
fact, may be a forward-looking statement. You can generally identify
forward-looking statements by looking for words like may, will, expect, intend,
estimate, anticipate, believe or continue. Variations on those or similar words,
or the negatives of those or similar words, also may indicate forward-looking
statements.
This prospectus and the documents incorporated by reference contain
forward-looking statements. Although we believe that the expectations reflected
in this prospectus are reasonable, we cannot assure you that our expectations
will be correct. Our actual results may differ significantly from the results
discussed in the forward-looking statements. This prospectus includes a
discussion entitled "Risk Factors," discussing important factors that could
cause our actual results to differ materially from our expectations. These risk
factors are further discussed in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business" sections of the
10-KSB and in our Form 10-QSB for the quarter ended June 30, 2000.
If our expectations change, or if new events, conditions or
circumstances arise, we are not required to, and may not, update or revise any
forward-looking statement in this prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common
stock sold in this offering.
REINCORPORATION AND STOCK COMBINATION
We have filed a preliminary proxy statement with the SEC to permit us
to seek shareholder approval of our reincorporation from Utah to Delaware. As
part of the reincorporation, we will adopt a new certificate of incorporation
and new bylaws. We are also seeking shareholder approval to combine each three
shares of our existing common stock into one share of common stock of the new
Delaware company. For further details, please see our definitive proxy statement
on Schedule 14A, filed with the Securities and Exchange Commission on August 17,
2000, file number 000-08164.
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SELLING SHAREHOLDERS
The following table lists the owners of the common stock to be included
in this registration statement. The table assumes exercise and conversion of all
outstanding warrants and options covered by the shares contained in this
registration statement. Each owner holds less than one percent of our fully
diluted common stock.
<TABLE>
<CAPTION>
RELATION TOTAL
NAME TO US SHARES
---- -------- ------
<S> <C> <C>
Tomorrow's Technologies Investment Trust 284,690
Michael W. Erwin employee 247,088
Sebastian D. Hassinger 81,340
Borrowed Time, Inc. 30,503
Robert P. Wolfe employee 87,714
Charles H. Scott, Jr. employee 136,582
Donald J. Nadon 9,355
Thomas J. Premo 41
L. Theodore Ollier 452
Michael G. Mood 814
Jennifer L. Alexander 407
Scott E. Mullen employee 1,831
Margaret Anne Green 204
Rob Nadon 407
John N. Opiela 1,627
Terri England 91
Marsha Sheiness 91
Eric B. Meyertons 367
Kevin L. Daffer 367
B. Noel Kivlin 367
Jeffrey C. Hood 367
Jeff A.McDaniel 367
Jason Hemmenway 2,156
Edward Kwan employee 18,302
Susan Marie Beckwith 100
Kevin Harlon Ingle 1,627
Kimberly K. Reeb employee 257
Rhonda Simonson 22
Robert W Blemler 14
Texas Two, Mike Neill Partner 1,221
Ronald W. Blemler 82
Richard E. Sepulveda 1,221
Thomas Preson Gregg 543
Michael Skelton 2,441
William Hurley 123
Gerard I. Armstrong 123
Cegla, LTD. 8,134
Holly Goff Broussard 1,151
Tadd Balfour employee 814
</TABLE>
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<TABLE>
<CAPTION>
RELATION TOTAL
NAME TO US SHARES
---- -------- ------
<S> <C> <C>
Henry Davis 4,067
Monica L. Knighton employee 814
James R. Wilson employee 17,285
Tracy Cogdill employee 34,570
Matt Bradbury employee 6,101
William A. Broussard 13,352
Adam Biskobing 407
--------
TOTAL 999,999
--------
</TABLE>
PLAN OF DISTRIBUTION
The shares of common stock being offered by the selling shareholders
will be sold in one or more transactions on the NASDAQ National Market System or
on any other market on which the common stock may be trading. The transactions
may include block transactions. The shares may be sold in any of the following
manners:
o privately negotiated transactions
o through the writing of options on the shares of common stock
o short sales
o any combination of private transactions, writing options or
short sales.
The sale price to the public may be the market price prevailing at the
time of sale, a price related to the prevailing market price or any other price
the selling shareholder determines. The shares of common stock may also be sold
under Rule 144. The selling shareholder will have the sole and absolute
discretion not to accept any purchase offer or make any sale of shares if they
believe the purchase price to be unsatisfactory at any particular time.
The selling shareholders may also sell the shares directly to market
makers acting as principals or broker-dealers acting as agents for themselves or
their customers. Brokers acting as agents for the selling shareholders will
receive usual and customary commissions for brokerage transactions. Market
makers and block purchasers purchasing shares will do so for their own account
and at their own risk. It is possible that the selling shareholders 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 any of the shares will be sold by the selling
shareholders. After completing the sale of any of the shares offered by the
selling shareholders, the selling shareholders and any brokers, dealers or
agents may be underwriters.
If we are notified of any material arrangement by a selling shareholder
with a broker or dealer for the sale of shares through a block trade, special
offering, exchange distribution or secondary distribution or a purchase by a
broker or dealer, a supplemental prospectus will be filed, if required, under
Rule 424(c) of the Securities Act. If filed, the supplemental prospectus will
disclose:
o the name of each broker-dealer involved in the arrangement
o the number of shares involved
o the price at which shares were sold
o any commissions paid or discounts or concessions allowed to each
broker-dealer
o that each broker-dealer did not conduct any investigation to verify
the information presented or incorporated by reference in this
document, as supplemented
o other facts material to the transaction.
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The selling shareholders and any other persons participating in the
sale or distribution of the shares will be subject to applicable provisions of
the Exchange Act and its rules and regulations. The Exchange Act and its rules
and regulations may limit the timing of purchases and sales of any of the
shares, which may affect the marketability of the shares.
We have agreed to indemnify the selling shareholders, or their
transferees or assignees, against liabilities under the Securities Act, or to
contribute to payments the selling shareholders may be required to make for
liabilities under the Securities Act.
We are bearing all costs relating to the registration of the shares,
other than fees and expenses, if any, of counsel or other advisers to the
selling shareholders. Any commissions, discounts or other fees payable to
broker-dealers with any sale of the shares will be paid by the selling
shareholders.
THE SECURITIES OFFERED
We are authorized to issue up to 50,000,000 shares of common stock and
up to 10,000,000 shares of preferred stock.
As of June 30, 2000, there were 36,687,452 shares of common stock
outstanding. No shares of preferred stock are outstanding and the board of
directors has no intention or plan to issue preferred stock.
The following is a summary of the material provisions and terms of our
articles and bylaws that might be important to you as a shareholder. You should
refer to our articles of incorporation and bylaws for a complete statement of
your rights as a stockholder.
As a holder of our common stock you will have one vote per share on all
matters voted on by shareholders, including elections of directors. The articles
of incorporation do not provide for cumulative voting. Cumulative voting is the
ability to cast as many votes for a director as the shareholder has shares of
stock multiplied by the numbers of directors to be elected, in the election of
directors. The articles of incorporation also do not provide for preemptive
rights. A preemptive right is a shareholder's right to acquire new shares issued
by a company to preserve his proportional interest. Owners of our common stock
will receive dividends if the board declares them out of available funds.
However, we do not expect to declare or pay dividends on our common stock.
We have filed a preliminary proxy statement with the SEC to permit us
to seek shareholder approval of our reincorporation from Utah to Delaware. As
part of the reincorporation, we will adopt a new certificate of incorporation
and new bylaws. We are also seeking shareholder approval to combine each three
shares of our existing common stock into one share of common stock of the new
Delaware company. Our definitive proxy statement on Schedule 14A, filed with the
Securities and Exchange Commission on August 17, 2000, file number 000-08164
describes the material differences between your rights as the holder of shares
of MSI and the holder of shares of the new Delaware corporation.
The transfer agent for our common stock is Interwest Transfer Company,
Inc.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms located at:
<TABLE>
<S> <C>
Securities and Exchange Commission or Securities and Exchange Commission
450 Fifth Street, N.W. 801 Cherry Street, 19th Floor
Washington, D.C. 20549 Ft. Worth, Texas 76102
</TABLE>
Further information on the SEC's public reference rooms, is available from the
SEC at 1-800-SEC-0330. Our SEC filings are also available on the Internet at
http://www.sec.gov.
The SEC allows us to incorporate by reference information from other
documents that we file with them, which means that we can disclose important
information by referring to those documents. The information incorporated by
reference is considered to be part of this document, 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 we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 before the sale of all the shares covered by
this prospectus:
o Definitive proxy statement on Schedule 14A, filed with the SEC on
August 17, 2000, file number 000-08164
o Annual report on Form 10-KSB for the year ended March 31, 2000, as
amended by Form 10-KSB/A, filed with the SEC on July 28, 2000
o All other reports filed with the SEC in compliance with Sections
13(a) or 15(d) of the Exchange Act since the end of the fiscal year
ended March 31, 2000
o The description of our common stock contained in our registration
statement on Form 10, filed with the SEC on October 27, 1975, file
number M862263.
We will deliver to each person receiving this document, a copy of any
or all of the information that has been incorporated by reference and not
delivered with this prospectus. You may request a copy of these filings, at no
cost, by writing or telephoning:
MSI Holdings, Inc.
1121 East 7th Street
Austin, Texas 78702
Attn: James Wilson
Telephone: (512) 476-6925
INDEMNIFICATION
Our revised articles of incorporation state that we may indemnify each
of our directors, officers, employees, or agents to the full extent permitted by
the laws of the state of Utah. In summary, the Utah Revised Business Corporation
Act:
o authorizes any corporation to indemnify directors and officers
against any judgments, fines, amounts paid in settlement and
reasonable expenses, including attorney's fees, incurred by reason
of his having been a corporate director or officer;
o confers on the director or officer an absolute right to
indemnification for expenses, including attorney's fees, actually
and reasonably incurred to the extent he is successful on the
merits or defense of any claim, issue, or matter;
o allows a corporation to pay attorney's fees and other litigation
expenses on behalf of a director or officer in advance of the final
disposition of the action, provided the director or officer
undertakes
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<PAGE> 12
to reimburse the corporation, if it is ultimately determined that
he is not entitled to be indemnified by the corporation or if the
advances exceed the indemnification to which he is entitled; and
o recognizes that a director or officer may be entitled to additional
indemnification under the corporation's certificate or articles of
incorporation, bylaws, agreements, or by shareholders' vote.
However, the indemnification authorized by the Utah Revised Business
Corporation Act is limited to those situations where:
o the director or officer acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation;
o If in criminal proceedings, the director or officer had no
reasonable cause to believe his conduct was unlawful; and
o either the board of directors, acting through a quorum of
disinterested directors or on the advice of independent legal
counsel, has or the shareholders have made a determination that
indemnification is proper in the circumstances.
Moreover, we may not indemnify a director if the director is adjudged
liable to us or has derived an improper personal benefit in an action in which
the director is adjudged liable. We may also purchase and maintain insurance to
provide indemnification.
Though indemnification for liabilities arising under the Securities Act
may be permitted to members of the board of directors, officers, employees, or
person controlling us under the provisions outlined above, we have been advised
that in the opinion of the Securities and Exchange Commission indemnification
for liabilities arising under the Securities Act is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
LEGAL MATTERS
The validity of the shares offered by this document has been passed
upon for us by Parr Waddoups Brown Gee & Loveless P.C. of Salt Lake City, Utah.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our annual report on Form 10-KSB for the year
ended March 31, 2000, as reflected in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
- 10 -
<PAGE> 13
You should rely on the information contained in this document. We have not
authorized anyone to provide you with information different from that contained
in this document. The statements and representations contained in this document
are true and correct as of the date indicated on the coverage page. The delivery
of this document does not, under any circumstances, create the implication that
there has been no change since that date. This document is not an offer to sell
or a solicitation of an offer to buy any securities other than those securities
to which the document relates. Moreover, this document does not constitute an
offer to sell or a solicitation of an offer to buy in any circumstances in which
an offer or solicitation is unlawful.
-----------------
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Risk Factors..........................................2
Use of Proceeds.......................................5
Selling Shareholders..................................6
Plan of Distribution..................................7
Securities Offered....................................8
Where You Can Find More Information...................9
Indemnification.......................................9
Legal Matters........................................10
Experts..............................................10
</TABLE>
999,999
MSI HOLDINGS, INC.
Common Stock
-----------------
PROSPECTUS
-----------------
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses payable by us in
connection with the sale and distribution of the securities being registered.
All amounts are estimates except the SEC registration fee.
<TABLE>
<S> <C>
Filing Fee-Securities and Exchange Commission................................ $ 1,112
Accountants' Fees and Expenses............................................... $ 5,000
Fees and Expenses of Counsel for the Registrant.............................. $ 5,000
Printing and Communication Expenses.......................................... $ 2,500
Blue Sky Fees and Expenses................................................... $ 0
Miscellaneous Expenses....................................................... $ 1,500
-------
Total................................................................ $15,122
</TABLE>
The selling security holders are bearing no portion of the expenses of
the offering pursuant to agreement.
ITEM 15. Indemnification of Directors and Officers.
Our revised articles of incorporation state that we may indemnify each
of our directors, officers, employees, or agents to the full extent permitted by
the laws of the state of Utah. In summary, the Utah Revised Business Corporation
Act:
o authorizes any corporation to indemnify directors and officers
against any judgments, fines, amounts paid in settlement and
reasonable expenses, including attorney's fees, incurred by reason
of his having been a corporate director or officer;
o confers on the director or officer an absolute right to
indemnification for expenses, including attorney's fees, actually
and reasonably incurred to the extent he is successful on the
merits or otherwise defense of any claim, issue, or matter;
o allows a corporation to pay attorney's fees and other litigation
expenses on behalf of a director or officer in advance of the final
disposition of the action upon receipt of an undertaking by or on
behalf of such director or officer to reimburse the corporation, if
it is ultimately determined that he is not entitled to be
indemnified by the corporation or to the extent the advances exceed
the indemnification to which that officer or director is entitled;
and
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<PAGE> 15
o recognizes that a director or officer may be entitled to additional
indemnification under the corporation's certificate or articles of
incorporation, bylaws, agreements, shareholders's vote or
otherwise.
However, the indemnification authorized by the Utah Revised Business
Corporation Act is limited to those situations where:
o the director or officer acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation;
o if in criminal proceedings, the director or officer had no
reasonable cause to believe his conduct was unlawful; and
o either the board of directors, acting through a quorum of
disinterested directors or on the advice of independent legal
counsel, has or the shareholders have made a determination that
indemnification is proper in the circumstances.
Moreover, we may not indemnify a director if the director is adjudged
liable to us or deemed to have derived an improper personal benefit in an action
in which the director is adjudged liable. We may also purchase and maintain
insurance to provide indemnification.
ITEM 16. Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION LOCATION
----------- ------------------- --------
<S> <C> <C>
4 Specimen of Securities (1) Incorporated by reference to Exhibit Nos.
1A and 1B of Registrant's Form 8-A
Registration Statement (File #0-8146)
5 Legal Opinion of Parr Waddoups Brown Gee & Exhibit 5
Loveless P.C. (2)
23.1 Consent of Ernst & Young LLP (2) Exhibit 23.1
23.2 Consent of Parr Waddoups Brown Gee & Loveless Exhibit 23.2
P.C. (2)
</TABLE>
(1) Previously filed with the Securities and Exchange Commission and
incorporated by reference pursuant to Rule 12b-32 of the Securities
Exchange Act of 1934.
(2) Filed herewith.
ITEM 17. Undertakings.
The Undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to
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<PAGE> 16
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered in that post-effective amendment, and the offering of those
securities at that time shall be deemed to be the initial bona fide
offering of those securities.
(3) To remove from registration by means of post-effective amendment any
of the securities being registered in which remain unsold at the
termination of the offering.
(4) 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 foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
-3-
<PAGE> 17
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has responsible grounds to believe that it meets
all of the requirements of filing on Form S-3 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Austin,
State of Texas, on August 25, 2000.
MSI HOLDINGS, INC.
By: /s/ ROBERT J. GIBBS
--------------------------------
Robert J. Gibbs, President & CEO
Pursuant to the requirements of the Securities Act of 1933, this registration
statement or amendment thereto has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ ROBERT J. GIBBS President, CEO and Director August 25, 2000
----------------------------
Robert J. Gibbs
Vice President and
/s/ DOUGLAS W. BANISTER Chief Financial Officer August 25, 2000
----------------------------
Douglas W. Banister
/s/ CHRIS BRICKLER Director August 25, 2000
----------------------------
Chris Brickler
/s/ DANIEL DORNIER Director August 25, 2000
----------------------------
Daniel Dornier
/s/ STEVE METZGER Director August 25, 2000
----------------------------
Steve Metzger
/s/ HUMBERT B. POWELL, III Director August 25, 2000
----------------------------
Humbert B. Powell, III
/s/ DAVINDER SETHI Director August 25, 2000
----------------------------
Davinder Sethi
/s/ ELIZABETH MONTOYA Controller and Chief August 25, 2000
---------------------------- Accounting Officer
Elizabeth Montoya
</TABLE>
<PAGE> 18
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION LOCATION
----------- ------------------- --------
<S> <C> <C>
4 Specimen of Securities (1) Incorporated by reference to Exhibit Nos.
1A and 1B of Registrant's Form 8-A
Registration Statement (File #0-8146)
5 Legal Opinion of Parr Waddoups Brown Gee & Exhibit 5
Loveless P.C. (2)
23.1 Consent of Ernst & Young LLP (2) Exhibit 23.1
23.2 Consent of Parr Waddoups Brown Gee & Loveless Exhibit 23.2
P.C. (2)
</TABLE>
(1) Previously filed with the Securities and Exchange Commission and
incorporated by reference pursuant to Rule 12b-32 of the Securities
Exchange Act of 1934.
(2) Filed herewith.
