Filed with the Securities and Exchange Commission on June 29, 1999.
Registration No.333-81513
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3/A
AMENDMENT NO. 1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
XCEED INC.
(Exact name of registrant as specified in its charter)
488 Madison Avenue, New York, New York 10022
(212) 753-5511
(Address and telephone number of registrant's principal executive offices)
New York 3398 13-3006788
(State or other jurisdiction (Standard Industrial (IRS Employer
of incorporation) Classification Code) I.D. Number)
Werner Haase, President
X-ceed, Inc.
488 Madison Avenue, New York, New York 10022
(212) 753-5511
(Name, address and telephone number of agent for service)
Copies of all Richard J. Blumberg, Esq.
communications to: McLaughlin & Stern, LLP
260 Madison Avenue
New York, New York 10016
(212) 448-1100
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to section 8(a), may
determine.
Approximate date of commencement of proposed sale to the public: from
time to time after the effective date of this registration statement depending
on market conditions.
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]
<PAGE>
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [__] ___
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [__] ___
<TABLE>
Calculation of Registration Fee
<CAPTION>
Title of each Proposed Proposed
class of Amount to be maximum maximum Amount of
securities to be registered offering price aggregate offering registration
registered per unit price fee
<S> <C> <C> <C> <C>
Common Stock 136,122 shares $20.00 $2,722,440 $756.85(1)
par value
$.01 per share
<FN>
(1) Estimated for purposes of this filing pursuant to Rule 457(c) based
upon the average of the closing bid and asked prices on June 23, 1999.
</FN>
</TABLE>
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PROSPECTUS
XCEED INC.
136,122 Shares of Common Stock, Par Value $.01 per Share
This prospectus relates to the public offering of 136,122
shares of our common stock by three shareholders (the "Selling Shareholders").
See "Selling Shareholders." This prospectus does not relate to the sale or
issuance by us of any securities. We will pay all expenses of Registration in
connection with this offering, but the selling shareholder will pay all selling
commissions, brokerage fees and related expenses.
Our common stock is traded on the NASDAQ National Market under
the symbol "XCED." The closing bid price for the common stock was $21.937 on
June 23, 1999.
We urge you to carefully read the "Risk Factors" beginning on
page 9 before you make an investment decision.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION. PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is June ____, 1999.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any reports, statements or other information that we file
at the Securities and Exchange Commission's public reference room at 450 Fifth
Street N.W., Washington, D.C. 20549 or at its regional public reference rooms in
New York, New York and Chicago, Illinois. Please call the Securities and
Exchange Commission at 1-800-SEC-0330 for further information on the operations
and locations of the public reference rooms. Our Securities and Exchange
Commission filings are also available to the public from commercial document
retrieval services and at the Internet World Wide Web site maintained by the
Securities and Exchange Commission at http://www.sec.gov.
This prospectus is a part of a registration statement we filed
with the Securities and Exchange Commission. As allowed by the rules of the
Securities and Exchange Commission, this prospectus does not contain all of the
information that can be found in the registration statement or in the exhibits
to the registration statement. You should read the registration statement and
its exhibits for a complete understanding of all of the information included in
the registration statement.
The Securities and Exchange Commission allows us to
"incorporate by reference" information into this prospectus, which means that we
can disclose important information to you by referring you to another document
filed separately with the Securities and Exchange Commission. The information
incorporated by reference becomes part of this prospectus, and information that
we file later with the Securities and Exchange Commission will automatically
update and supersede this information. We incorporate by reference the documents
listed below that we have previously filed with the Securities and Exchange
Commission:
1. Annual Report on Form 10-K for the fiscal year ended August 31, 1998.
2. Quarterly Report on Form 10-Q for quarter ending February 28, 1999.
3. Current Report on Form 8-K as filed with the Commission on January 28,
1999.
4. Current Report on Form 8-K as filed with the Commission on June 24, 1999.
5. The section entitled "Description of Securities" in the Company's
registration statement on Form S-1 (Registration No. 33-23910) declared
effective on October 31, 1988.
We also incorporate by reference in this prospectus additional
documents that we may file with the Securities and Exchange Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after
the date of this prospectus. These include periodic reports, such as annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form
8-K and proxy statements.
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You may obtain the documents incorporated by reference as
described above. You may also request a copy of these filings, at no cost, from
us by writing or telephoning us:
Xceed Inc.
Attn: Alex Alaminos, Investor Relations
243 Veterans Boulevard
Carlstadt, NJ 07072
(201) 507-8300
FORWARD-LOOKING STATEMENTS
All statements other than statements of historical fact
included in this prospectus regarding the Company's financial position, business
strategy and plans and objectives of management of the Company for future
operations, are forward-looking statements. When we use words in this
prospectus, such as "anticipate," "believe," "estimate," "expect," "intend" and
similar expressions, as they relate to the Company or its management, these
constitute forward-looking statements. Such forward-looking statements are based
on management's beliefs of the Company's management, as well as assumptions made
by and information currently available to the Company's management. Actual
results could differ materially from those contemplated by the forward-looking
statements as a result of certain factors such as those disclosed under "Risk
Factors," including but not limited to, competitive factors and pricing
pressures, loss of major customers, technological change or difficulties,
product development risks, commercialization and trade difficulties and general
economic conditions. Such statements reflect our current views with respect to
future events and are subject to these and other risks, uncertainties and
assumptions relating to the operations, results of operations, growth strategy
and liquidity of the Company. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on behalf are expressly
qualified in their entirety by this paragraph.
PROSPECTUS SUMMARY
We set forth below certain summary information which does not
purport to be complete and is qualified in its entirety by reference to other
more detailed information and financial statements appearing elsewhere in this
prospectus or in documents incorporated by reference. We urge you to read this
prospectus in its entirety.
THE COMPANY
We were originally incorporated under the name Trilling
Resources, Ltd. and changed our name to Trilling Medical Technologies, Inc. in
September 1987 and subsequently to Water-Jel Technologies, Inc. in July 1991. On
February 20, 1998, shareholders approved a name change to Xceed Inc. and also
approved a change in the Company's state of incorporation from New York to
Delaware. The Company's executive offices are located at 488 Madison Avenue, New
York, NY 10022 and its telephone number is (212) 753-5511.
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Since our inception and until 1996, we were primarily engaged
in the development, manufacture and marketing of emergency first aid products
for industry and on a limited basis for the consumer marketplace.
In July 1996, we acquired all of the outstanding stock of
Journeycraft, Inc., a company engaged through its Xceed Performance Group
division ("The Performance Group") in providing services to corporations in the
field of performance improvement services, Internet-based performance
improvement programs as well as corporate communications. The Journeycraft
Travel Management division of the Performance Group provides travel management
to corporate clients. We also acquired all of the outstanding stock of TheraCom
Integrated Medical Communications, Inc. ("TheraCom"), which is engaged in
training and communications in the health care industry and provides patient
education in the area of women's health care and various aspects of prescription
drugs.
During our fiscal year ending August 31, 1998 ("fiscal 1998"),
our management decided on strategic acquisitions designed to let us evolve as a
fully integrated marketing and communications company with Internet and
interactive services at its core. The acquired companies were selected to be
compatible with and complementary to our primary existing operations,
specifically The Performance Group and TheraCom, as well as with each other,
thus affording us the opportunity to participate in the rapidly expanding
Internet and interactive business sector.
The first of these acquisitions occurred just prior to the end
of fiscal 1998, when we acquired Reset, Inc. ("Reset"). On September 9, 1998, we
acquired Mercury Seven, Inc. ("Mercury Seven"), and subsequently on September
14, 1998, we acquired Zabit & Associates, Inc. ("Zabit & Associates"). All of
these acquisitions were by way of a merger. Zabit & Associates was merged into
the Company, and Reset and Mercury Seven were merged into newly created
subsidiaries.
As we are presently constituted, we have four main divisions,
Zabit & Associates, Reset, Mercury Seven and Water-Jel, and two subsidiaries,
Journeycraft (consisting of The Performance Group and Journeycorp divisions)
and, TheraCom. We are setting forth below a description of each of the
subsidiaries and divisions.
Journeycraft Subsidiary - The Performance Group Division
The Performance Group offers a full-service approach to its
corporate clients for the establishment of specially designed performance
improvement programs such as sales and quality assurance programs. This
full-service approach consists of identifying the client's business objectives
and budget parameters, as well as analyzing the demographics of the program's
participants to arrive at the optimal type of awards program and the mix of
awards offered in connection with the program. As part of its services, The
Performance Group offers a specially designed Internet technology, "Maestro," to
communicate the business objectives and contest rules of the program to
participants as well as to maintain the excitement and enthusiasm for the
program's objectives throughout the life of a program, which can range from
three
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months to one year. Ongoing communication to the program participants of their
ranking in the program and feed-back from the participants to management are the
key factors by which a program sponsor achieves possible results and,
ultimately, a measurable return on an investment in a performance improvement
program.
We believe that Maestro has the potential to significantly
increase the Company's market share of performance improvement services;
however, there can be no assurance that Maestro will serve to attract additional
clients. In addition, competitors may adopt similar type programs. See "Risk
Factors."
The Performance Group derives its revenues from service fees
received from clients for designing, executing and monitoring performance
improvement programs and fees from Maestro, as well as from mark-ups on the
merchandise and/or services provided as awards.
The Performance Group markets its services through direct
contacts by its sales representatives with corporate sales, marketing and human
resource executives. For the fiscal year ended August 31, 1998 ("fiscal 1998")
the division had revenues of approximately $35,206,000, accounting for
approximately 60% of the Company's total revenues.
Two clients of The Performance Group accounted for
approximately 60% of the division's total revenues: Pfizer Pharmaceutical
accounted for 45%, and MCI accounted for 15%. A loss of any one of these
customers or a reduction in fees paid by any one of these customers could have a
material effect on The Performance Group's revenues in the future. See "Risk
Factors." The Performance Group is concentrating on building a wider client
base, but there can be no assurance that these efforts will be successful. See
"Risk Factors." We believe that the recently acquired companies may be able to
introduce The Performance Group services to their respective corporate clients,
which could result in a possible expansion of the client base as well as
additional revenues.
TheraCom Subsidiary
The TheraCom subsidiary is a medical communications agency. It
offers continuing educational and training programs to doctors, pharmacists,
nurses and other health care professionals. TheraCom's major clients are
pharmaceutical companies, hospitals and managed care organizations which sponsor
such programs. TheraCom provides all of the necessary services to organize such
medical seminars including agenda preparation, procurement of faculty to
lecture, publicity and travel and meeting place arrangements.
TheraCom has also expanded into providing health care
education beyond the traditional channels. TheraCom has prepared, in conjunction
with medical professionals, programs for patients in such areas as menopause,
compliance with drug regimens, and psycho-social aspects of medicine.
TheraCom's current clients include Pfizer, Inc., Merck and
Co., SmithKline Beecham, Schering-Plough Corp. and Novartis Pharmaceutical Corp.
For fiscal 1998,
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TheraCom had revenues of $7,063,000. Pfizer, Inc. accounted for more than 85% of
those revenues. A loss of Pfizer, Inc. could have a material effect on
TheraCom's future revenues. See "Risk Factors."
Journeycraft Subsidiary - Journeycorp Division
The Journeycorp division provides comprehensive travel
services primarily for business travel by corporate clients. Travel services
include trip planning, reservations, ticketing, and other incidental services.
In addition, the division acts as a consultant regarding corporate travel policy
and travel budgeting. For these purposes, the division has created a management
system which analyzes a corporation's historical travel expenses data in order
to develop a definitive corporate travel policy and to enable the client to
budget on an ongoing basis. The system also captures travel expense data and
provides the client with a program to plan, account for and control travel and
entertainment expenses. Like The Performance Group division, Journeycorp uses
Internet technology and software to facilitate direct booking through the
Internet, to access current data via e-mail and to quickly create travel expense
reports and analyses.
Journeycorp derives its revenues primarily from commissions
from suppliers and fees from customers generated by travel bookings. In
addition, a portion of its revenues are derived from management or consulting
fees charged to certain selected accounts. At the present time, the airlines are
shifting away from paying travel agents' fees or are reducing travel agents'
fees, and as a result, this division is reorienting its customer relationships
towards fee-based travel management. However, there can be no assurance that
this reorientation will be successful. See "Risk Factors."
Journeycorp markets its services through direct contacts by
its sales representative with clients, targeted direct mailings, and
participation in trade shows. In fiscal 1998, Journeycorp had revenues of
$10,988,000, accounting for approximately 18.6% of the Company's total revenues.
Water-Jel Division
The Water-Jel First Aid division manufactures and markets a
proprietary line of first aid products for burns and a line of generic creams
and ointments. The proprietary line of first aid products for burns consists of
fire blankets, burn dressings and topical creams which are marketed to the
industrial as well as, on a limited basis, the consumer marketplaces. The
division's generic creams and ointment product line consists of hydrocortisone
cream, triple antibiotic ointment, first aid cream, antiseptic gel and a hand
and body lotion which are marketed under the WJ brand. The division also
provides private label packing of its creams and ointment products to some of
its customers. For the fiscal year ended August 31, 1998, the Water-Jel
division's revenues accounted for approximately 10% of the Company's total
revenues.
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Reset Division
On August 29, 1998, we acquired Reset, Inc. ("Reset"), a
privately held company, by way of a merger. The consideration for the
transaction was the issuance of restricted common stock having a market value of
$6,250,000 in exchange for all of the issued and outstanding stock of Reset
owned by its three principals. Reset currently operates as a division.
Reset was established in 1996 and is engaged in creating
Internet-based business solutions for corporate clients through Internet
consulting, interactive marketing strategies and e-commerce development. At the
present time, Reset derives 70% of its revenues by providing these services to
the entertainment industry. Reset's current clients include, among others, Home
Box Office, MCA, Inc., New Line Cinema, Warner Bros. Online, Consolidated
Edison, Inc., and The Wall Street Journal. One client, Home Box Office,
currently accounts for approximately 17% of its gross revenues.
Mercury Seven Division
On September 9, 1998 we completed the acquisition of Mercury
Seven, Inc. ("Mercury Seven"), a privately held company, by way of merger. The
Company paid a total consideration consisting of 1,073,333 shares of restricted
common stock having a market value of $8,050,000 and cash of $1,500,000.
Mercury Seven was established in late 1996. It is engaged in
creating Internet-based business solutions for corporate clients through
Internet consulting, interactive marketing strategies and e-commerce
development. Mercury Seven's current clients include, among others, Spree.com,
WorldNow/Gannaway, AnotherUniverse.com, Ericsson, Men's Health, the New York
Rangers, and Madison Square Garden. Spree.com and Men's Health each
account for approximately 10% of Mercury Seven's total revenues.
Mercury Seven is also the publisher and creator of
ChannelSeven.com, an online network for Internet professionals worldwide. The
network incorporates cross-marketing navigational techniques and centralized
rich media advertising management to connect Internet professionals with
valuable resources and services. In addition to the online network, ChannelSeven
provides its core audience with printed publications, special industry events, a
speaker's bureau and a subscription-based e-mail newsletter. ChannelSeven
derives its revenues from advertising and sponsorships. The present advertisers
and sponsors include, among others, Intel, Microsoft, DoubleClick, Ericsson and
Cyberlabs, Inc.
Zabit & Associates Division
On September 14, 1998 we completed a Plan of Merger with Zabit
& Associates, Inc. ("Zabit & Associates"), a privately held company, by which
Zabit & Associates was merged into the Company. We paid a total consideration
which consisted of the issuance of 2,258,724 shares of restricted common stock
and the issuance of four notes totaling 6,670,208. Two of the notes aggregating
$4.8 million were paid on March 15, 1999, and the other two notes aggregating
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$1,930,208 are due on or before September 14, 2002. All of the notes bear
interest. In separate transactions, the Company purchased all of the issued and
outstanding stock of Water Street Design, Inc., a company engaged in design and
production and owned by the principals of Zabit, for $2 million and the trade
name and trademark of Zabit for $3.2 million in cash.
Zabit & Associates was established in 1993. Since its
formation, it has been engaged in advising organizations, primarily publicly
held companies, in developing strategic communication solutions in connection
with the dissemination of information to their employees, shareholders,
customers and the general public. At the current time approximately sixty (60%)
percent of the division's revenues are derived from work performed in connection
with the dissemination of information to employees regarding human resource
programs, including compensation plans, 401(k) programs, health programs, stock
option plans and other employee-related programs. The remaining forty (40%)
percent of the division's revenues are derived from services for general
employee communication, marketing communication and public relations services.
Currently, the division maintains an ongoing client consulting
relationship with Aetna Life Insurance, Pitney Bowes, Dell Computer, McKesson
Corp., Transamerica Corp. and Fireman's Fund. Each of these clients has paid
fees to Zabit & Associates in amounts exceeding $200,000 for services. In
addition, Zabit & Associates has other ongoing clients such as Kaiser
Permanente, Inc., Promus and Indiana Power and Light. Fireman's Fund presently
accounts for more than fifteen (15%) percent of Zabit & Associates' total
revenues. To date, Zabit & Associates has also generated fees of less than
$200,000 from clients who include Applied Materials, United Airlines, Sears,
Bechtel and Shell/Texaco.
Additionally, and as part of the Zabit transaction, we entered
into an employment agreement with William Zabit, the principal owner of Zabit,
making him President of Xceed. His employment agreement is for a period of four
years and provides for an annual salary of $400,000, with the potential for
bonuses based upon performance and profitability of the Company.
The mergers of Reset, Mercury Seven and Zabit & Associates
have been accounted for by the purchase method of accounting. As a result of
these transactions, Xceed's future financial statements will reflect good will
and other intangibles of approximately $41 million.
OTHER RECENT DEVELOPMENTS
As part of our new objectives to operate as an integrated
marketing and communications company, we also entered into an employment
agreement on July 17, 1998 with Scott Mednick, who has assumed the position of
Chairman of the Board of Directors along with Werner Haase as Co-Chairman. Mr.
Mednick has also assumed the responsibilities of Chief Strategic Officer of the
Company.
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Mr. Mednick was the founder and past chairman and chief
executive officer of THINK New Ideas, Inc. ("THINK"). Under Mr. Mednick's
direction, THINK was named as one of the top interactive agencies of the year
(1995) by both Adweek and the Advertising Club of New York. Mr. Mednick enjoys a
reputation as a highly respected marketing strategist and graphic designer.
Mr. Mednick's employment agreement is for a period of four
years at an annual salary of $350,000 per year, together with bonuses based on
the Company's performance and profitability. In addition, Mr. Mednick received a
signing bonus of $960,000 payable in twelve monthly installments and options to
purchase 1,000,000 shares of the Company's common stock at an exercise price of
$6.00 per share. However, of the 1,000,000 shares, 500,000 may only be sold in
increments of 100,000 shares when the market price of the common stock attains
certain price levels, ranging from $12.00 a share to $24.00 a share. The
foregoing restrictions are for a period of four years from the date of the
employment agreement.
On November 19, 1998, Mr. Wolf Boehme joined the Company as
its Chief Operations Officer. Prior to joining the Company since 1986, Mr.
Boehme served as operations controller for Bloomberg Financial Markets.
On June 11, 1999, we completed a private sale of 976,562
shares of our common stock to 12 accredited investors and recovered gross
proceeds of $10 million. Pursuant to the terms of the securities purchase
agreements, the purchasers were granted limited "piggy-back" rights as well as
demand registration rights. The proceeds of this offering are intended for
strategic acquisitions and general working capital purposes.
THE OFFERING
Common Stock - 136,122 shares of common stock
consisting of stock owned by three Selling
Shareholders.
All expenses relating to the registration of
these securities, estimated at $17,000, will
be borne by the Company.
Use of Proceeds - The Company will not receive
any proceeds from the sale of the
securities. All proceeds will go to the
Selling Shareholders.
RISK FACTORS
In evaluating our business, prospective investors should
carefully consider the following risks in addition to the other information
contained in the prospectus. Any of the following risks could materially impact
our business, operating results and financial condition and result in a
substantial, if not total, loss of your investment.
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Our Subsidiaries and Divisions Face Intense Competition
The Mercury Seven and Reset divisions. Our Internet and
interactive divisions, Mercury Seven and Reset, provide services in a highly
competitive market. These two divisions compete with local, national and global
web consultancy, web development and interactive companies as well as national
and global advertising and communications companies which have begun to develop
or acquire these capabilities. Some of Mercury Seven's and Reset's competitors
have longer operating histories, longer client relationships and greater
financial and technological resources. There can be no assurance that existing
or future competitors will not develop superior Internet technologies, develop
greater expertise in interactive marketing strategies or take smarter e-commerce
solutions to market, including pricing advantages, all of which could have a
material adverse effect on the financial condition and operating results of the
Company.
The Performance Group division. This division offers
performance improvement and communications services to corporate clients in a
highly competitive marketplace. Well-established companies such as Maritz, Inc.,
Carlson Marketing Group, Inc. and B.I. Performance Group, Inc. have greater name
recognition and a much broader customer base and generate revenues far in excess
of The Performance Group. In addition, The Performance Group competes with
numerous smaller incentive marketing companies and consultants, and, at times,
has to compete with a corporations' own in-house staff which designs and
executes performance improvement and communications programs. Only recently, The
Performance Group introduced "Maestro," a proprietary Inter- and intranet
software product applying net-based technology to the performance improvement
sector. While The Performance Group believes that this technology is unique,
competitors may develop their own software and compete against The Performance
Group in the market.
The Zabit & Associates division. This division competes with
several companies, including Andersen Consulting, Towers and Perrin, William M.
Mercer & Company and Watson Wyatt Worldwide. Zabit & Associates' competitors for
the most part have longer operating histories, longer client relationships,
greater financial resources and greater technological resources than Zabit &
Associates. While Zabit & Associates believes it can effectively compete and has
within the last five years developed a significant client base, there can be no
assurances that Zabit & Associates will be able to keep the present client base
or continue to attract new clients. In the event Zabit & Associates cannot
compete effectively , this could have a material effect on the financial
condition and operating results of the Company.
The TheraCom subsidiary. This subsidiary provides integrated
training, communications and data to the health care industry. It competes with
many consultants who provide similar services to the health care industry. Many
of these consultants have greater name recognition and greater financial
resources. TheraCom competes on the basis of price and quality of its services.
To date, TheraCom has only one significant customer, Pfizer, Inc. TheraCom is
attempting to broaden its client base, and no assurances can be made that it
will be able to effectively compete. Moreover, if TheraCom lost Pfizer as a
customer or if Pfizer reduced its requirements for services, the Company's
revenues and earnings would be affected.
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The Journeycorp division. This division provides comprehensive
travel services for business travel and faces intense competition. There are
more than 30,000 travel agents in the United States which are capable of
providing business travel services. In addition, the ongoing consolidation in
the travel industry has created mega-agencies, national and global in scope,
which have resulted in an escalation of competition in this industry.
The Water-Jel division. This division manufactures and markets
a line of first aid products for burns and a line of generic creams and
ointments. There are other companies, such as Spenco Medical Corporation, C.R.
Bard, Inc. and Johnson & Johnson, which manufacture similar first aid products
for burns. These companies have been established for a longer period of time,
are better established and have financial resources and facilities which are
greater than the division's. While some segments of the burn first aid market
are dominated by large manufacturers, other segments of the market are
characterized by intense competition among smaller manufacturers such as
Water-Jel.
Market and Technological Changes Affect Journeycorp and The Performance Group
Several of the markets in which our products and services are
offered are undergoing technological advances and other changes. In particular,
and with respect to Journeycorp, the airlines have lowered the commissions they
are willing to pay travel agents. As a result, the corporate travel business is
changing from commissions paid by suppliers to fee-based services in which
corporate travel service providers such as Journeycorp are paid fixed fees by
their clients based upon the volume of travel services purchased in lieu of
commissions. These developments have tended to reduce the revenues available to
travel service providers such as Journeycorp. Also, the corporate travel
business is experiencing technological changes such as "ticketless" air travel
and Internet-based reservation systems which tends to reduce the need for
outside travel agents. These changes are further accelerating the trend for
travel service businesses to act as consultants working for fixed fees rather
than commission-based booking agencies.
With respect to The Performance Group, a significant amount of
its business is based upon the development of innovative technologies for
delivering incentive programs using the Internet. The Internet is characterized
by rapid technological advances which may render The Performance Group's
technologies, specifically Maestro, out-of-date or obsolete. There is no
assurance that The Performance Group will be in a position to adapt to such
technological advances and market changes.
We Are Confronted with the Risks of Integration
In light of our recent acquisitions of Reset, Mercury Seven
and Zabit & Associates, our success will depend in part on our ability to manage
the combined operations of those companies and to integrate the operations of
these companies along with our other subsidiaries and divisions into a single
organizational structure. There can be no assurance that we will be able to
effectively integrate the operations of our subsidiaries and divisions into a
single organizational structure. Integration of these operations could also
place additional
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pressures on management as well as on our key technical resources. The failure
to successfully manage this integration could have an adverse material effect on
our future revenues and income. Finally, while we believe that the newly
acquired entities can market these services to our existing clients as well as
market our established services to the existing clients of the newly acquired
companies, there can be no assurance that the cross-marketing will be achieved
or sustained.
We May Need to Raise Additional Capital
The acquisitions of Mercury Seven and Zabit & Associates
required us at closing to pay cash as part of the consideration: $1.5 million in
the case of Mercury Seven and $5.2 million in the case of Zabit & Associates,
which includes Water Street Design, Inc. The Zabit & Associates transaction also
required us to pay an additional $4.8 million in March 1999, and an additional
$1.9 million is due on or before September 14, 2002, together with interest.
While we believe that our present cash position and cash flow from operations
will be sufficient to fund our operations and provide for further expansion, we
may require additional financing to sustain further growth and expand our
business. There can be no assurances that we will be able to successfully
negotiate or obtain additional financing or that such financing will be on terms
favorable or acceptable to us. The failure to secure necessary financing could
have a material adverse impact on our future viability.
We Depend on the Internet's Developing Market
Our ability, primarily through our Reset and Mercury Seven
divisions, to derive revenues by providing marketing solutions through the use
of the Internet will depend in part upon a robust industry and the
infrastructure for providing Internet access and the management of Internet
traffic. While the Internet has made significant improvements in both accessing
and managing traffic, there can be no assurance that as more demand is made upon
the Internet technological improvements will keep pace. Additionally, critical
issues concerning the use of the Internet, including federal regulation,
security, reliability, cost, ease of use and access and quality of service still
remain to be resolved, and as such the Internet may prove not to be a
commercially viable marketplace. This could result in impacting our future
operating results.
We May Not Be Able to Respond to Rapid Technological Changes
The market for such interactive marketing services such as we
provide through our Reset and Mercury Seven divisions is characterized by rapid
changes in technology. As such we will be required to maintain our technical
competence to effectively compete with other integrated marketing service
providers as well as traditional advertising agencies. There can be no assurance
that we will be successful in providing competitive solutions for our clients.
Failure to do so could result in the loss of existing customers or the inability
to attract and retain new customers, and as a result, this could have a material
adverse effect on our business, financial condition and operating results.
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We Face Project Profit Exposures; We Need to Develop Recurring Revenue
Zabit & Associates, Mercury Seven and Reset normally generate
a substantial majority of their revenue through project fees on fixed
fee-for-service basis. Zabit & Associates, Mercury Seven and Reset assume
greater financial risk on fixed-price type contracts than on either time- and
material- or cost-reimbursable contracts. Failure to anticipate technical
problems, estimate costs accurately or control costs during performance of a
fixed-price contract may reduce Zabit & Associates, Mercury Seven and Reset's
profit or possibly result in a loss. Although the majority of Zabit &
Associates, Mercury Seven and Reset's projects typically last six to twelve
weeks and therefore each individual short-term project creates less exposure
than a long-term fixed-price contract, in the event Zabit & Associates, Mercury
Seven and Reset do not accurately anticipate the progress of a number of
significant revenue-generating projects, this could have a material adverse
effect on Zabit & Associates, Mercury Seven and Reset's operating results which
would impact our revenues and profits. Zabit & Associates, Mercury Seven and
Reset's future success will depend in part on their ability to convert their
project-by-project relationships to continuing relationships characterized by
recurring revenues. There can be no assurance that Zabit & Associates', Mercury
Seven's and Reset's efforts will be successful.
We Are Dependent on a Few Customers
At the present time, approximately 85% of TheraCom's services
are supplied to one customer, Pfizer, Inc. ("Pfizer"). Of the revenues from The
Performance Group's business, for the fiscal year ended August 31, 1998, 60% was
derived from two clients, Pfizer and MCI Communications, Inc., which represent
45% of revenues and 15% of The Performance Group's revenues, respectively. The
loss of either of these clients or a reduction in the amount of business
generated from these clients could materially adversely affect the Company's
future business and prospects. While both TheraCom and The Performance Group are
attempting to increase their client bases, there can be no assurance that such
efforts will be successful.
We Generally Have No Contracts with Customers
With certain exceptions, we generally do not have written
agreements with our customers or clients, or such agreements are terminable at
will upon relatively short notice. Unexpected or other termination of relations
with significant customers could adversely affect our business and future
prospects. See "Competition" and "Dependence on Few Customers."
We Need Market Acceptance for Our Products and Services
We believe that our ability to market our products and
services requires educating potential users as to their benefits and
applications. This is particularly true for the Internet technologies developed
by The Performance Group and the first aid product line for burns manufactured
by the Water-Jel division. No assurance can be given that the Company will be
able to successfully market our products and services.
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We Have Limited Patent Protection
The Performance Group Division
The Performance Group division has developed a proprietary
software, "Maestro," which is designed to enable clients to communicate business
objectives, track and report sales and deliver awards over the Internet. The
clients who elect to utilize Maestro do not receive the software, but rather are
only granted a license to utilize the software, which is at all times maintained
at our offices. The clients feed information to the Maestro program over the
Internet by using a sign-on identification and password. The clients can
thereafter gain access with the proper password to Maestro to enable them to
evaluate the progress of their awards program. We do not presently hold a
copyright to the Maestro software but intends to apply with the US Patent and
Trademark Office for protection as well as a trademark for the name "Maestro."
The actual software is retained under stringent controls at our offices and only
a small number of people who are within the Company and who are under
confidentiality agreements with us have access to the software and code. Should
our Maestro software and other proprietary technology be disclosed publicly, the
business and prospects of The Performance Group could be adversely affected.
Likewise, and if there was public disclosure of the software and codes, we at
the present time may have no or very limited legal recourse, unless we can
demonstrate that the codes and software were illegally converted or taken or
that a specific client violated it's licence agreements with us.
The Water-Jel Division
The design of Water-Jel's Fire Blanket products was protected
by United States and foreign patents which were assigned to Water-Jel in 1979
and 1985. The United States patent which protected a substantial portion of
Water-Jel's technology expired in 1992. New competitors are free to enter
Water-Jel's markets. Water-Jel may be materially and adversely affected if
Water-Jel fails to establish a secure market base before the entrance of any new
significant competitors now that the original United States patent has expired.
See "Competition." Further, in January 1995, Water-Jel was granted a patent for
a synthetic fabric containing a therapeutic, non-toxic, water-soluble and
bio-degradable gel used in Water-Jel's Burn Dressing product line. This patent
expires in April 2014. However, no assurance can be given that this patent will
prove enforceable or prevent others from marketing products similar to, or which
perform comparable functions as Water-Jel's products at the current time. The
Water-Jel burn dressing products covered by this patent account for
approximately thirty percent (30%) of Water-Jel's revenues.
Our Water-Jel Division Is Regulated by the Food and Drug Administration
Water-Jel's emergency first aid products and manufacturing
practices are subject to regulation by the Food and Drug Administration ("FDA")
as well as by similar foreign authorities. The Water-Jel Fire Blanket and Burn
Dressing are medical devices subject to regulation by the FDA. Water-Jel's
generic creams and ointment, Burn Jel and UnBurn line are classified as
over-the-counter drugs. FDA requirements include adherence to good
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manufacturing practices, proper labeling, and either premarket notification
under section 510(k) of the Medical Device Amendments to the Federal Food, Drug
and Cosmetics Act or premarket approval (depending on the category of product)
prior to commercial marketing in the United States. Water-Jel is also subject to
periodic inspections by the FDA relating to good manufacturing practices. The
FDA has the authority to require a suspension of manufacturing operations if it
finds serious deficiencies. Additional regulation may, in the future, be imposed
by Federal, state or local authorities, particularly the FDA. Any new products
will also be subject to review of various regulatory authorities in virtually
every foreign country in which such products are offered for sale. To the extent
that any new products which Water-Jel may develop are deemed to be new
pharmaceutical or new medical devices, such products will require FDA and other
regulatory clearance and/or approvals prior to marketing. Such governmental
regulation may prevent or substantially delay the marketing of any products
developed by Water-Jel, cause Water-Jel to undertake costly procedures, and
furnish a competitive advantage to the more substantially capitalized companies
which compete with Water-Jel. There can be no assurance that Water-Jel will have
the requisite financial resources to complete the regulatory approval process
with respect to any new products which may be developed.
We Face Potential Product Liability
To date, there have been no material claims on threatened
claims against us by users of its products, particularly the Water-Jel products,
based on a failure to perform as specified. In the event that any claims for
substantial amounts were to be asserted against the Company, they could have a
materially adverse effect on the Company's financial condition and its ability
to distribute and sell our products. We maintain $11,000,000 of general product
liability insurance. There is no assurance that this amount will be sufficient
to cover potential claims.
We Are Dependent on Certain Key Executives
We are significantly dependent upon the continued
availability of Scott Mednick, Chairman and Chief Strategic Officer, Werner
Haase, our Co-Chairman and Chief Executive Officer, and William Zabit, our
President. Mr. Zabit and Mr. Mednick are under employment agreements with the
Company until December 2002. Mr. Haase is under an employment agreement with us
until May 2001. The loss or unavailability of Mr. Mednick or Mr. Haase or Mr.
Zabit to the Company for an extended period of time would have a material
adverse effect on the our business operations and prospects. To the extent that
Mr. Mednick's, Mr. Haase's or Mr. Zabit's services would be unavailable to the
Company for any reason, we would be required to procure other personnel to
manage and operate the Company. There can be no assurance that we will be able
to locate or employ such qualified personnel on acceptable terms. At the present
time, we do not have "key man" life insurance covering any of the principal
officers of the Company.
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Mr. Haase and Mr. Zabit Hold Considerable Voting Power
Werner Haase, Co-Chairman and CEO of the Company, and his wife
Nurit Kahane, who is a Senior Vice President of the Company, own together a
total of 2,319,374 shares of the Company's common stock, and Mr. Zabit owns
1,048,675 shares, which together represent approximately 27% of the total shares
outstanding. Under Delaware law, a simple majority of stockholders may
constitute a quorum for a meeting of stockholders and may effect any action
requiring a vote of stockholders. There are no requirements for supermajority
votes on any matter, nor is there any cumulative voting for directors.
Therefore, Mr. Haase, his wife and Mr. Zabit, as a group, will be in a position
to substantially influence the election of directors and the conduct of the
Company's affairs.
Future Sales of Restricted Common Stock May Affect Our Common Stock Price
As of the current time, there are presently 15,866,693 shares
of the common stock outstanding. Approximately 7,000,000 of the outstanding
shares are deemed to be "restricted securities" ("Restricted Securities") within
the meaning of Rule 144 promulgated under the Securities Act of 1933 (the "Act")
by virtue of the fact that they are held by "affiliates" of the Company or were
issued pursuant to an exemption under the Act. Approximately 2,500,000 shares
are currently eligible for public sale in accordance with Rule 144. Sales made
pursuant to Rule 144 could have an adverse effect on the price of our common
stock. Additionally, the recent private offering of 976,562 shares of our common
stock which the Company may be obligated to register could, if the shares were
sold, have a depressant effect on the price of our common stock.
We Do Not Anticipate Paying Dividends
We have not paid any cash dividends on our common stock since
our inception and, by reason of our present financial status and our
contemplated financial requirements, we do not anticipate paying any cash
dividends in the foreseeable future. It is anticipated that earnings, if any,
which may be generated from operations will be used to finance our operations.
We Must Make Year 2000 Compliance
We have taken remedial steps to ensure that our computer
systems are compliant with the Year 2000 ("Y2K"). In this regard, The
Performance Group has purchased for internal operations new personal computers
(PCs) which have been tested by the National Software Testing Laboratories
(NSTL) and have been certified as Y2K compliant. With respect to client support,
the division has upgraded its software at no extra cost and is compliant with
Y2K. With respect to our internal software affecting accounting systems and
telecommunications, these have been upgraded and our internal systems is now
compliant. With respect to the Journeycorp division reservation systems, the
division utilizes PC hardware provided by the Sabre Group, the American Airlines
reservations system, which only recently became Y2K compliant. We believe we are
now Y2K compliant in all phases of our operations.
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USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares
offered by the Selling Shareholders.
SELLING SHAREHOLDERS
The 136,122 shares now being offered are held by three Selling
Shareholders. The Selling Shareholders listed below may choose not to sell all
of their shares of common stock owned by such Selling Shareholders in this
offering. The chart below sets forth the number of shares to be offered for sale
by each such Selling Shareholder, which information was furnished to the Company
by each such Selling Shareholder. The chart also sets forth the amount and
percentage of common stock to be owned after completion of the offering,
assuming the sale of all such shares owned by such Selling Shareholder. The
Selling Shareholders have not entered into any arrangements regarding the sale
of his shares and have informed us that any shares sold would be sold in normal
brokerage transactions.
Securities Owned Securities Securities to Be
Name before Offering To Be Sold Owned after Offering
Troon Ltd. (1) 26,122 26,122 -0-
Robert Podolsky (2) 10,000 10,000 -0-
Jason H. Pollack (3) 100,000 100,000 -0-
- --------------
(1) On March 10, 1999 we entered into an Asset Purchase Agreement with
Troon Ltd. ("Troon") and its sole shareholder James Yaffe. Troon was an
interacting market and communications company. We purchased all inventory,
proprietary products, the intellectual property, accounts receivable, contract
rights and other miscellaneous assets. The purchase price paid to Troon was
$30,000 in cash and shares of our common stock having an aggregate value of
$240,000, which amounted to 26,122 shares priced at $9.187 a share, which was
the average of closing market price of our stock for five trading days preceding
the closing date of the transaction. Under the terms of the Agreement, we are
required to register Troon's shares. Mr. Yaffe was also given an employment
agreement for a period of three (3) years and was granted 250,000 options under
our 1999 Long Term Incentive Plan. 83,333 options vested on the effective date
of his employment, 83,333 options vest one year from date of grant and 83,334
options vest two years from date of grant. As of the date of this prospectus,
Mr. Yaffe exercised 20,000 options and sold 20,000 shares. This leaves him with
a balance of 63,333 vested options.
(2) We issued Mr. Podolsky 10,000 shares of common stock as
consideration for consulting services rendered to us during the period November
1998 through May 1999. We agreed to register Mr. Podolsky's shares.
(3) On February 15, 1999, we entered into a twelve-month consulting
agreement with Mr. Pollack. Under the terms of the agreement Mr. Pollack
received 8,337 options upon signing the agreement and 8,333 options at the end
of each month of consulting services during the term of the consulting
agreement, for a total of 100,000 options. The options entitle Mr. Pollack to
purchase our common stock at $9.00 per share. We agreed to register the
underlying shares. Mr. Pollack has not exercised any of his options as yet.
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PLAN OF DISTRIBUTION
The shares are being offered for the accounts of the Selling
Shareholders. The Company will not receive any of the proceeds from the sale of
securities.
The sale for the shares by the Selling Shareholders may be
effected from time to time in transactions on the NASDAQ National Market, at
fixed prices or negotiated prices relating to the then prevailing market price.
The Selling Shareholders may effect such transaction by selling the securities
to or through registered broker-dealers, and such broker-dealers may receive
compensation in the form of discounts or commissions from the Selling
Shareholders and for the purchases of the securities for which such
broker-dealers may act as agent or to whom they may sell as principal or both.
The Selling Shareholders and any broker-dealers who act in
connection with the sale of the securities hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) or the Securities Act and any
commissions received by them and any profit received by them on any sale of the
securities as principal might be deemed to represent underwriting discounts or
commissions under the Securities Act.
LEGAL MATTERS
Certain legal matters in connection with this offering are
being passed upon for the Company by McLaughlin & Stern, LLP, 260 Madison
Avenue, New York, New York 10016.
EXPERTS
The financial statements of Xceed Inc. for the fiscal years
ended August 31, 1998, incorporated by reference from the Company's annual
report on Form 10-K, have been examined by Holtz Rubenstein & Co. LLP,
independent certified public accountants, as stated in their report, and are
included in reliance upon the report of such firm and upon their authority as
experts on accounting and auditing.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The Company's Certificate of Incorporation permits the
Company to indemnify directors, officers, employees and agents to the fullest
extent permissible under the Delaware General Corporation Law.
Insofar as indemnification for liabilities arising under
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to any charter provision, by-law contract
arrangements statute, or otherwise, the Company has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore,
unenforceable.
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- ------------------------------------------ -----------------------------------
No dealer, salesman or any other person
has been authorized to give any
information or to make any representations
other than those contained in this
Prospectus in connection with this
offering and, if given or made, such
information or representations must not be
relied upon as having been authorized by
the Company or the Underwriters. This
Prospectus does not constitute an offer to
sell, or the solicitation of an offer to
buy, any of the securities offered hereby
in any jurisdiction to any person to whom 136,122 Shares
it is unlawful to make such offer or of Common Stock
solicitation in such jurisdiction. Neither ($.01 Par Value)
the delivery of this Prospectus nor any
sale made hereunder shall, under any
circumstances, create any implication that
the information contained herein is
correct as of any time subsequent to the Xceed Inc.
date hereof or that there has been no
change in the affairs of the Company since
such date.
--------------------------
TABLE OF CONTENTS
PAGE __________________________
WHERE YOU CAN FIND MORE INFORMATION.....2
FORWARD-LOOKING STATEMENTS..............3 PROSPECTUS
PROSPECTUS SUMMARY......................3 __________________________
THE COMPANY.............................3
OTHER RECENT DEVELOPMENTS...............8
THE OFFERING............................9
RISK FACTORS............................9
USE OF PROCEEDS........................17
SELLING SHAREHOLDERS...................17 June __, 1999
PLAN OF DISTRIBUTION...................18
LEGAL MATTERS..........................18
EXPERTS ..............................18
DISCLOSURE OF COMMISSION POSITION
ON INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES.....................18
- ------------------------------------------ -----------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution
The expenses in connection with the issuance and distribution
of the securities being registered hereunder are estimated as follows:
Blue Sky qualification fees and expenses..............$ 2,000
Legal fees and expenses..................................7,500
Accountant's fees and expenses...........................3,000
Miscellaneous............................................1,500
Total $ 14,000
ITEM 15. Indemnification of Directors and Officers
Pursuant to Section 145 of the General Corporation Law of
Delaware (the "Delaware Corporation Law"), Article 7 of the Company's
Certificate of Incorporation, a copy of which is filed as Exhibit 3(c) to this
registration statement, provides that the Company shall indemnify, to the
fullest extent permitted by Section 145 of the Delaware Corporation Law, as
amended from time to time, each person that such section grants the Corporation
the power to indemnify. Section 145 of the Delaware Corporation Law permits the
Company to indemnify any person in connection with the defense or settlement of
any threatened, pending or completed legal proceeding (other than a legal
proceeding by or in the right of the Company) by reason of the fact that he is
or was a director or officer of the Company or is or was a director or officer
of the Company serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with the defense or
settlement of such legal proceeding if he acted in good faith and in a manner
that he reasonably believes to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action of proceeding, if he had no
reasonable cause to believe that his conduct was unlawful. It the legal
proceeding, however, is by or in the right of the Company, the director or
officer may be indemnified by the Company against expense (including attorneys'
fees) actually and reasonably incurred in connection with the defense or
settlement of such legal proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company
and except that he may not be indemnified in respect of any claim, issue or
matter as to which he shall have been adjudged to be liable to the Company
unless a court determines otherwise.
Pursuant to Section 102(b)(7) of the Delaware Corporation Law,
Article 7 of the Certificate of Incorporation of the Company, a copy of which is
filed as Exhibit 3(c) to this registration statement, provides that no director
of the Company shall be personally liable to the Company or its stockholders for
monetary damages for any breach of his fiduciary duty as a director; provided,
however, that such clause shall not apply to any liability of a director (i) for
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breach of his duty of loyalty to the Company or its stockholders, (ii) for acts
or omissions that are not in good faith or involve intentional misconduct or a
knowing violation of the law, (iii) under Section 174 of the Delaware
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. The aforesaid provision also eliminates the liability
of any stockholder for managerial acts or omissions, pursuant to Section 350 of
the Delaware Corporation Law or any other provision of Delaware law, to the same
extent that such liability is limited for a director.
The Company maintains directors and officers liability
insurance.
ITEM 16. Exhibits
(5) Opinion of McLaughlin & Stern, LLP*
(23)(a) Consent of Holtz Rubenstein & Co., LLP dated June 24, 1999*
(23)(b) Consent of McLaughlin & Stern, LLP (included in Exhibit 5)*
- -----------------------------
* Filed herewith
ITEM 17. Undertakings
The undersigned Company hereby undertakes:
(1) 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) of the Act and (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 represents a fundamental change in the
information in the registration statement and (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 if the information required to
be included in a post-effective amendment is included in periodic reports filed
or furnished to the Commission by the Company pursuant to section 13 or Section
15(d) of the Exchange Act, then the Company shall not be required to file a
post-effective amendment.
(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 therein
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That for purposes of determining any liability under the
Securities Act of 1933, each filing of Company's annual report pursuant to
Section 13(a) or 15(d) of the Securities
II-2
<PAGE>
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to 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.
(5) In the event acceleration is requested by the Company and
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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, Xceed Inc., has duly caused this registration statement on Form
S-3/A to be signed on its behalf by the undersigned, thereunto duly authorized,
in New York, New York on June 29, 1999.
XCEED INC.
By: /s/ Werner G. Haase
Werner G. Haase
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
hereby constitutes and appoints Werner G. Haase his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
or all pre-effective and post-effective amendments to the registration
statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
/s/ Scott Mednick Chairman, Chief 6/29/99
Scott Mednick Strategic Officer
/s/ Werner G. Haase Chief Executive 6/29/99
Werner G. Haase Officer, Co-Chairman
/s/ William Zabit President 6/29/99
William Zabit
/s/ Norman Doctoroff Director 6/29/99
Norman Doctoroff
/s/ John Bermingham Director 6/29/99
John Bermingham
/s/ Terry Anderson Director 6/29/99
Terry Anderson
Exhibit 5
MCLAUGHLIN & STERN, LLP
260 MADISON AVENUE
NEW YORK, NEW YORK 10016
(212) 448-1100
FAX (212) 448-0066
RICHARD J. BLUMBERG MILLBROOK OFFICE
Direct Phone: (212) 448-6205 Franklin Avenue
P.O. Box 1369
Millbrook, New York 12545
(914) 677-5700
Fax (914) 677-0097
June 22, 1999
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Xceed Inc.
Gentlepersons:
We have acted as counsel to Xceed Inc. in connection with the
registration statement on Form S-3 (the "Registration Statement") filed with the
Securities and Exchange Commission by Xceed Inc. (the "Company").
We hereby advise you that we have examined originals or copies
certified to our satisfaction of the Company's Certificate of Incorporation,
minutes of the meetings of the Board of Directors and shareholders and such
other documents and instruments as we deemed necessary, and we have made such
examination of law as we have deemed appropriate as a basis for the opinions
hereinafter expressed.
Based on the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of Delaware.
2. The 136,122 shares of common stock offered by three selling
shareholders constituting a portion of the offering being so registered have
been duly authorized and validly issued, are fully paid and non-assessable.
We hereby consent to the reference to this Firm in this
Registration Statement and to the filing of this opinion as an Exhibit to the
Registration Statement.
Very truly yours,
/s/ McLaughlin & Stern, LLP
McLAUGHLIN & STERN, LLP
Exhibit 23(a)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference into the Registration
Statement on Form S-3 of our report dated November 13, 1998 with respect to the
consolidated financial statements of Xceed Inc. Included in the Company's Annual
Report on Form 10-K for the year ended August 31, 1998, and to the reference to
us under the heading "Experts" in the Prospectus which is part of such
Registration Statement.
/s/ Holtz Rubenstein & Co., LLP
Holtz Rubenstein & Co., LLP
Melville, New York
June 25, 1999
Exhibit 23(b)
(included in Exhibit 5)
