<PAGE> 1
Filed pursuant to Rule 424(b)(3)
Registration Statement No. 333-00003
SUPPLEMENT TO PROSPECTUS DATED JULY 1, 1996
INTERSYSTEMS, INC.
________________________________________
395,000 Shares of Common Stock
________________________________________
This Prospectus relates to the offer and sale of 395,000 shares of
common stock (the "Securities") of InterSystems, Inc. (the "Company"),
$.01 par value per share (the "Common Stock") as follows:
275,000 shares issuable upon exercise of the Company's Common Stock
Purchase Warrants expiring June 30, 2000 (the "Warrants");
20,000 shares sold by the Company in a private placement to two
employees (the "Employees") at a price of $1.25 per share, being the
closing price of the Common Stock on the American Stock Exchange (the
"AMEX") on September 8, 1995, the date of the sale; and
100,000 shares held by Helm Resources, Inc. ("Helm"), the holder of
24% of the Company's Common Stock (the "Helm Shares").
The Warrants are exercisable at $1.50 per share, and are redeemable
by the Company at a price of $.05 per warrant, upon not less than 30
days' prior notice, if the closing sales price of the Common Stock (as
reported by the AMEX) has been at least 200% of the then effective
exercise price on each of 20 consecutive trading days at a time when the
shares of Common Stock issuable upon exercise of the Warrants are
registered under the Securities Act of 1933, as amended (the "Act").
The Securities being offered hereby are being offered to permit the
issuance of registered stock upon the exercise of the Warrants.
Additionally, the Securities offered by the Selling Stockholders may be
sold from time to time by the Selling Stockholders, or by pledgees,
transferees or other successors in interest, on the AMEX (or such other
exchange on which the Securities are listed at the time of sale) in the
over-the-counter market or otherwise, at prices and at terms then
prevailing or at prices related to the then current market price, or in
privately negotiated transactions.
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As supplemented, this Prospectus is being used by certain holders of
the Warrants who have acquired shares of Common Stock upon exercise and
who may wish to sell such shares in transactions in which they may
(because of their relationship to the Company) be deemed to be
underwriters within the meaning of the Act.
This Prospectus also relates to such additional shares of Common
Stock which may be issuable pursuant to the anti-dilution provisions of
the Warrants, which shares are being registered pursuant to Rule 416
promulgated under the Act.
Other than proceeds equal to the aggregate exercise price of Warrants
exercised, if any, the Company will not receive any proceeds from the
sale of Common Stock offered hereby. The Company's Common Stock is
presently listed on the AMEX under the symbol "II." The closing price
for the Common Stock on the AMEX on June 28, 1996 was $1.50.
_________________________________________
SEE "SPECIAL CONSIDERATIONS" FOR
CERTAIN MATTERS TO BE CONSIDERED BY PROSPECTIVE INVESTORS.
_________________________________________
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 Supplement is July 1, 1996.
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No person is authorized in connection with the offering made by this
Prospectus to give any information or to make any representations not
contained or incorporated by reference in this Prospectus, and any
information or representation not contained or incorporated by reference in
this Prospectus must not be relied upon as having been authorized by the
Company. This Prospectus is not an offer to sell, or a solicitation of an
offer to buy, by any person in any jurisdiction in which it is unlawful for
that person to make an offer or solicitation. Neither the delivery of this
Prospectus or any sale made under this Prospectus shall, under any
circumstance, create any implication that the information in this
Prospectus is correct as of any time subsequent to the date of this
Prospectus.
AVAILABLE INFORMATION
InterSystems, Inc. (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934 (the "1934 Act") and,
in accordance therewith, files reports, proxy and information statements
and other information with the Securities and Exchange Commission ( the
"Commission"). Such reports, proxy and information statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; and at the regional offices of the Commission at:
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and 7 World Trade Center, Suite 1300, New York, New York 10001.
Copies of such material can be obtained from the Public Reference Section of
the Commission, in Washington, D.C. at prescribed rates. In addition, the
Common Stock is listed on the American Stock Exchange, 86 Trinity Place, New
York, N.Y. 10006, and reports, proxy and information statements and other
information can be inspected at the offices of the Exchange.
-----------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates by reference into this Prospectus the following
documents and portions of documents:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1995.
2. The Company's Quarterly Report on Form 10-QSB for the fiscal quarter
ended March 31, 1996.
3. All other reports filed pursuant to Section 13(a) or Section 15(d) of
the 1934 Act since the date of this Prospectus.
4. The definitive Proxy Statement of the Company date June 1, 1995,
relating to the Annual Meeting of Shareholders.
5. A description of the Common Stock as set forth in Registration Statement
Form 8-A filed with the Commission on February 2, 1987.
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All other reports filed pursuant to Section 13(a), 13(c), 14 or 15(d)
of the 1934 Act prior to the termination of this offering shall be deemed
to be incorporated by reference in this Prospectus and to be a part of this
Prospectus from the date of filing thereof.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute
part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of that person, a
copy of all other documents incorporated by reference into the Registration
Statement of which this Prospectus is a part, other than exhibits to those
documents. Requests should be directed to Daniel T. Murphy, InterSystems,
Inc., 537 Steamboat Road, Greenwich, CT 06830 (telephone: (203) 629-1400).
-----------------------
THE COMPANY
The Company is engaged in the design, manufacture and sale of
specialized materials handling equipment and in providing custom
compounding services for resin producers.
The Company's two principal lines of business today consist of the
operations of its wholly-owned subsidiary, InterSystems, Inc., a Nebraska
corporation ("InterSystems Nebraska"), which designs, manufactures and
sells specialized materials handling equipment, and, beginning in late 1995
through a newly formed subsidiary, Tropical Systems, Inc., sells and
distributes commercial rolling doors and hurricane resistant shutters, and
the custom resin compounding operations conducted by its wholly-owned
subsidiary, Chemtrusion, Inc. ("Chemtrusion"). For each of the two years
ended December 31, 1995, approximately 76% of the Company's revenues were
attributable to the business of InterSystems Nebraska and approximately 24%
of the Company's revenues were attributable to the business of Chemtrusion.
InterSystems, Inc. was organized under the laws of the state of
Delaware in 1984. As used herein, "Company" refers to InterSystems, Inc.
and its subsidiaries, unless the context indicates otherwise. The
Company's principal executive offices are located at 8790 Wallisville Road,
Houston, Texas 77029 and its telephone number at that location is (713) 675-
0307.
SPECIAL CONSIDERATIONS
All prospective investors should consider carefully, among other
things, the following factors before purchasing any securities offered
hereby:
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Recent Operating Losses; Limited Capital. For the years ended
December 31, 1994 and 1995, the Company had losses from operations of
$732,000 and $695,000.
The Company had a loss from operations of $303,000 for the first three
months of 1996, as compared to a net loss of $250,000 for the comparable
period in 1995. At March 31, 1996 the Company had working capital of
$924,000 and a cash balance of approximately $237,000, and all amounts
available under the lines of credit available to the Company and its
subsidiaries were fully drawn, with the exception of $107,500 which was
available on Chemtrusion's line.
The capital needs of the Company's newly formed subsidiary, Tropical
Systems, Inc. ("TSI"), are significant. While original estimates of the
cost of clearing title to the assets of Tropical Manufacturing Group, Inc.
to be purchased by TSI remain at approximately $200,000, additional working
capital is needed to maintain the day to day operating expenses of this
division while marketing and sales are being developed to cover future cash
flow and working capital needs. For the year ended December 31, 1995, TSI
recorded revenues of $852,000 and a net loss from operations of $231,000.
For 1996 through the date of this Prospectus, TSI has operated at a loss of
approximately $350,000. Working capital needs for this subsidiary through
the end of 1996 are currently estimated at a minimum of approximately
$500,000. No assurance can be given that the Company will be able to raise
sufficient funds needed to fund TSI for the foreseeable future.
The recent history of losses subjects the Company and its subsidiaries
to a number of risks, including limited access to capital, uncertain
markets and competition. There can be no assurance that the Company's
existing capital and cash flow from operations will be sufficient to meet
its working capital needs, or the working capital needs of its
subsidiaries, in the future should operating losses continue, nor can there
be any assurance that the Company will be profitable in the future.
Capital in the amount of $13,750 may be needed by the Company to call
the Warrants, or to call the common stock purchase warrants (the "Placement
Warrants") or redeem the shares (the "Placement Shares") comprising the
units offered in the Company's December 1995 private placement in
accordance with the terms of those securities. The maximum amount required
to call the Placement Warrants will be $39,000, and the maximum amount
required to redeem all the Placement Shares will be $2,808,000. Should the
Company decide to call any warrants, or should the holders of Units require
the Company to redeem the Placement Shares, the Company may be required to
undertake a financing to raise sufficient capital to complete any such call
or redemption. No assurance can be given that the Company will be able to
successfully complete such a financing or otherwise raise the necessary
funds.
Control by Helm Resources, Inc. Helm Resources, Inc. ("Helm")
currently owns approximately 24% of the Common Stock. Four officers and
directors of Helm, who are also officers and directors of the Company, in
the aggregate own approximately another 4.4% of the Common Stock. Such a
concentration of effective voting power and control could serve to
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perpetuate management. The overlap of directors of the both companies
creates inherent conflicts of interests. For example, in connection with
the possible acquisition of Interpak Holdings, Inc. from Helm, this
transaction and other similar transactions may indirectly benefit directors
and officers of the Company who are also directors, officers and security
holders of Helm, although the Board of Directors of the Company has
recently elected Mr. William Lurie and Mr. Leonard Friedman as independent
directors to the Board, and has appointed Mr. Lurie Chairman of the
Acquisition Committee which will evaluate and negotiate the possible
acquisition. In addition, Helm provides management services to the
Company. The allocated expenses for such management services, based on
certain formulas which management deems to be reasonable, amounted to
$36,000 and $52,920 for 1994 and 1995. These expenses have continued
during 1996, and are expected to continue in the future.
Reliance on Key Personnel. Mr. Scott Owens, President of Chemtrusion,
is integral to the operation of that subsidiary, and at the present time
that company does not have in place an assistant to Mr. Owens who could
assume his responsibilities should Mr. Owens leave the employ of the
Company or otherwise be unable to perform his duties.
Customer Dependence. During 1995, one customer, Montell U.S.A., Inc.,
accounted for approximately 75%, respectively, of Chemtrusion's revenues
and 20% of the Company's revenues. The loss of this customer would have a
material adverse effect on the compounding business and the Company's
revenues, and there can be no assurance that Chemtrusion could fill the
production capacity resulting from such loss.
Market for the Common Stock; Shares Eligible for Future Sale. The
Common Stock is currently traded on the American Stock Exchange. However,
there is no assurance that an active trading market in the Common Stock
will continue. Accordingly, no assurance can be given that a holder of the
Common Stock will be able to sell the Common Stock in the future or as the
price at which the Common Stock might trade. The liquidity of the market
will depend upon the number of holders thereof, the interest of the
securities dealers in making a market in the Common Stock and other factors
beyond the Company's control.
There are currently 6,368,873 shares of Common Stock outstanding. In
addition, 1,596,685 shares of Common Stock are or will become issuable upon
conversion of outstanding debentures, 1,724,375 shares of Common Stock are
issuable upon exercise of warrants that are outstanding or reserved for
issuance, 325,000 shares of Common Stock are reserved for issuance under
the Company's employee stock option plan (121,228 of which are subject to
currently outstanding options) and 450,000 shares of Common Stock are
issuable upon the exercise of other outstanding options. The shares of
Common Stock and shares issuable upon conversion or exercise of other
outstanding securities of the Company will be eligible for immediate resale
in the public market without restriction. Future sales of substantial
amounts of Common Stock in the public market following this offering could
adversely affect the market price of the Common Stock. It is anticipated
that a significant amount of Common Stock would be issued to Helm in
connection with the possible purchase of Interpak Holdings.
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Dividend Policy. The Company has not paid any cash dividends during
the past several years. The Company currently intends to retain all of its
earnings to support the development of its business and does not anticipate
paying any cash dividends for the forseeable future. Furthermore,
InterSystems Nebraska is a party to a credit and security agreement
providing for a revolving line of credit up to $1.75 million which
prohibits the declaration or payment of cash dividends by InterSystems
Nebraska. This prohibition has the practical effect or restricting the
payment of dividends on the Company's common stock.
Anti-Takeover Provisions. The Company's Certificate of Incorporation
and By-Laws include provisions that may have the effect of delaying or
preventing a change in control of the Company. The Company's Certificate
of Incorporation authorizes the issuance of up to 5,000,000 shares of
preferred stock. As a result, the Board of Directors could, without
stockholder approval, issue preferred stock with voting, liquidation
preference, dividend and other rights superior to those of the Common
Stock. The issuance of such preferred stock could adversely affect the
voting power of holders of the Common Stock and could be used to prevent a
third party from acquiring control of the Company. In addition, the
Company's Certificate of Incorporation provides for the Board of Directors
to be divided into three classes of directors serving staggered three year
terms, with the number of directors in each class to be as nearly equal as
possible. The vote of two-thirds of the outstanding shares of stock
entitled to vote on the matter is required to remove a director from
office. A staggered board and the super majority vote required for the
removal of directors are additional factors which could make it more
difficult for stockholders to change control of the Company.
Contingent Liabilities of the Trading Business. In April 1993 the
Company completed the sale of its trading business to Bamberger Acquisition
Corp. ("BAC"), a newly formed Delaware corporation owned by six individuals
who were then members of the Company's senior management. In connection
with the sale, BAC did not assume all of the liabilities of the trading
business. In addition, with respect to those liabilities which were
assumed, the Company remains liable, together with BAC, to all secured and
unsecured creditors (including lessors), vendors and trade creditors of the
trading business who did not release the Company following consummation of
the sale. As of December 31, 1995, such contingent liabilities (which by
such date consisted of lease obligations only) were estimated to be
approximately $654,000. In circumstances where the Company has a
continuing liability together with BAC for such obligations, the Company
would have a contractual right to indemnification from BAC for any
liabilities actually incurred. No assurance can be given that such
indemnity could be easily and quickly enforced by the Company.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the
Securities by the Selling Stockholders hereby, except that it will receive
the aggregate exercise price of the Warrants, estimated to be approximately
$412,500. The shares of Common Stock underlying the Warrants are being
registered to provide the holders thereof with freely tradable Common Stock
upon exercise. The Company does not know whether any of the Warrants will
be exercised, and therefore has made no specific
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plans to utilize the proceeds, if any, from such exercise. If any Warrants
are exercised, the Company intends to use the proceeds for general
corporate purposes.
SELLING STOCKHOLDERS
The following table provides information with respect to the name of
each Selling Stockholder (Column 1), the number and percentage of shares of
Common Stock held by each Selling Stockholder prior to the offering,
including shares which the Selling Stockholder has the right to acquire
within 60 days (Column 2), the number of shares of Common Stock which are
offered hereby (Column 3) and the number and percentage of shares of Common
Stock which will be held by each Selling Stockholder after the offering,
including shares which the Selling Stockholder has the right to acquire
within 60 days (Column 4). Because the Selling Stockholders may sell all
or a portion of their Common Stock offered hereby, and the fact that this
offering is not being underwritten on a firm commitment basis, the amount
of securities that may be owned after the offering assumes that the Selling
Stockholders will offer and sell all of the Common Stock offered for sale
hereby and not acquire any other securities issued by the Company.
<TABLE>
Shares/% Shares Shares/%
Name Beneficially Offered Benefically
and Owned Prior pursuant Owned After
Address to Offering(1) hereto Offering
<S> <C> <C> <C>
Helm Resources, Inc. 1,517,583/24.0% 100,000 1,417,583/22.4%
537 Steamboat Road
Greenwich, CT 06830(2)
Herbert Pearlman(3) 557,940/8.4% 45,000 512,940/7.9%
Fred Zeidman(4) 645,000/9.5% 15,000 630,000/9.3%
David Lawi(5) 391,101/6.0% 30,000 361,101/5.6%
Marcus Finkle(6) 282,500/4.5% 65,000 217,500/3.5%
Leonard Friedman(7) 173,100/2.8% 57,700 115,400/1.9%
Jay Green(8) 90,000/1.5% 30,000 60,000/1.0%
Joseph Kaplan(9) 18,000/+ 6,000 12,000/+
John Stieglitz(10) 33,524/+ 5,000 28,524/+
Julia Pearlman(11) 15,000/+ 5,000 10,000/+
Lee Pearlman(11) 15,000/+ 5,000 10,000/+
Lawrence Marolda(11) 15,000/+ 5,000 10,000/+
Mary Dailey(12) 1,800/+ 600 1,200/+
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Kurt Hentschke(13) 1,800/+ 600 1,200/+
Chris Mathers(14) 20,500/+ 17,500 3,000/+
Karen Roe(15) 900/+ 300 600/+
Kenneth Schrader(16) 34,000/+ 3,000 31,000/+
Francis White(17) 900/+ 300 600/+
Robert Moser(18) 4,000/+ 4,000 -
Total 395,000
</TABLE>
_______________
+ less than 1%
(1) Except as otherwise indicated, each named holder has, to the best of
the Company's knowledge, sole voting and investment power with respect to
the shares indicated. Also includes shares that may be acquired within 60
days by any of the named persons upon exercise of any right.
(2) Includes shares that are issuable within 60 days upon exercise of
Common Stock Purchase Warrants expiring December 31, 1999 at $3.50 per share
which were issued as a dividend to the holders of common stock in October
1991 (the "Dividend Warrants") (6,035) and upon conversion of 10%
Convertible Subordinated Debentures due 2001 at $1.83 per share (the "10%
Debentures") (16,393).
(3) Mr. Pearlman is the Chairman of the Board of Directors of the Company.
His holdings include shares that are issuable upon exercise of stock options
(62,500), Dividend Warrants (77,551), Common Stock Purchase Warrants
expiring July 31, 2002 at $1.125 per share issued in lieu of compensation
(the "Employment Warrants")(33,333), conversion of Series A 10% Convertible
Subordinated Debentures due June 30, 2001 at $1.35 per share (the "Series A
10% Debentures") (148,148), and conversion of 8% Convertible Debentures due
January 31, 2004 at $1.43 per share (the "8% Debentures") (13,356), as well
as shares issuable upon exercise of Warrants (45,000) which are offered
hereby. Does not include shares held by Mr. Pearlman's wife and children as
to which he disclaims beneficial ownership.
(4) Mr. Zeidman is the President, Chief Executive Officer and a Director of
the Company. His holdings include shares that are issuable upon exercise of
400,000 stock options and shares issuable upon exercise of 15,000 Warrants
which are offered hereby.
(5) Mr. Lawi is Secretary and a Director of the Company, as well as Chairman
of the Company's Executive Committee. His holdings include shares that are
issuable upon exercise of stock options (39,062) and Dividend Warrants
(73,875), Employment Warrants (16,667) and conversion of Series A 10%
Debentures (148,148) and 8% Debentures (17,483), as well as shares issuable
upon exercise of 30,000 Warrants which are offered hereby. Does not include
shares held by Mr. Lawi's wife and children as to which he disclaims
beneficial ownership.
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(6) Mr. Finkle's holdings include shares that are issuable upon exercise of
Dividend Warrants (37,500), Common Stock Purchase Warrants expiring January
15, 2000 at $1.80 per share (60,000) and Warrants (65,000), which Warrant
shares are offered hereby, but do not include shares held by his wife as to
which he disclaims beneficial ownership.
(7) Mr. Friedman's holdings include shares issuable upon exercise of 57,700
Warrants which are offered hereby.
(8) Mr. Green provides public relations services to the Company. His
holdings include shares issuable upon exercise of 30,000 Warrants which are
offered hereby.
(9) Mr. Kaplan's holdings include shares issuable upon exercise of 6,000
Warrants which are offered hereby.
(10) Mr. Stieglitz is a Director of the Company. His holdings include
shares issuable upon exercise of 5,000 Warrants which are offered hereby
and conversion of 8% Debentures (1,858).
(11) Holdings include shares issuable upon exercise of 5,000 Warrants which
are offered hereby.
(12) Ms. Dailey is Controller of InterSystems, Inc., a Nebraska corporation
and subsidiary of the Company ("InterSystems-Nebraska"). Her holdings
include shares issuable upon exercise of 600 Warrants which are offered
hereby.
(13) Mr. Hentschke is Plant Manager of InterSystems-Nebraska. His holdings
include shares issuable upon exercise of 600 Warrants which are offered
hereby.
(14) Mr. Mathers is Chief Accounting Officer of the Company. His holdings
include 16,000 shares sold to Mr. Mathers in a private placement and shares
issuable upon exercise of 1,500 Warrants all of which are offered hereby.
(15) Ms. Roe is employed by Interpak Terminals, inc., an affiliate of the
Company, as human resources manager. Her holdings include shares issuable
upon exercise of 300 Warrants which are offered hereby.
(16) Mr. Schrader is President of InterSystems-Nebraska. His holdings
include shares issuable upon exercise of stock options (25,000) and
Warrants (3,000), which Warrant shares are offered hereby.
(17) Ms. White is executive assistant to Mr. Zeidman. Her holdings include
shares issuable upon exercise of 300 Warrants, which are offered hereby.
(18) Mr. Moser is Executive Vice President of InterSystems-Nebraska. His
holdings include 4,000 shares sold to him in a private placement which are
offered hereby.
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PLAN OF DISTRIBUTION
This Prospectus relates to the offer and sale of 275,000 shares of
Common Stock by the Company upon the exercise of the Warrants (hereinafter
in the aggregate the "Warrant Securities"), and the offer and sale of
120,000 shares of Common Stock by three Selling Stockholders (together with
the Warrant Securities, the "Securities"). Pursuant to the Prospectus
Supplement dated July 1, 1996, the Company is amending this Prospectus to
permit the offer of the Warrant Securities by certain persons who may, by
virtue of their relationship to the Company, be deemed to be underwriters
within the meaning of the Act.
The shares of Common Stock issuable upon exercise of the Warrant
Securities will be issued and distributed by the Company pursuant to the
terms and conditions of those securities. Such Common Stock is being
registered pursuant to the Act pursuant to the Company's contractual
obligation to the holders of the Warrants and offered by the Company hereby
to permit the issuance by the Company of registered stock upon the exercise
of the Warrant Securities in accordance with their terms. Additional
shares of Common Stock may be issuable pursuant to the anti-dilution
provisions of the Warrant Securities which shares are being registered
hereby pursuant to Rule 416 promulgated under the Act. If all of the
Warrant Securities are exercised, the Company will receive aggregate cash
proceeds estimated to be approximately $412,500. See "Use of Proceeds."
All securities covered by this Prospectus Supplement are being
offered for the accounts of the respective holders listed thereof under the
caption "Selling Stockholders." Consequently, the Company will not receive
any of the proceeds from the sale of the Securities offered hereby.
The Securities may be sold form time to time by the Selling
Stockholders, or by their pledgees, transferees or other successors in
interest, on the American Stock Exchange (or such other exchange on which
the Securities are listed at the time of sale), in the over-the-counter
market or otherwise, at prices and at terms then prevailing or at prices
related to the then current market price, or in privately negotiated
transactions. The Securities may be sold by various methods, including,
but not limited to one or more of the following: (a) directly in a
privately negotiated transaction, (b) a block trade in which the broker or
dealer so engaged will attempt to sell Securities as agent but may position
and resell a portion of the block as principal to facilitate the
transaction, (c) purchases by a broker or dealer as principal and resale by
the broker or dealer for its own account pursuant to this Prospectus, (d) a
transaction on the American Stock Exchange in accordance with the rules of
such exchange, (e) and ordinary brokers transactions and transactions in
which the broker solicits the purchasers. In effecting sales, brokers or
dealers engaged by the Selling Stockholders may arrange for other brokers
or dealers to participate. Alternatively, the Selling Stockholder may from
time to time offer the Securities through underwriters, dealers or agents
who may receive compensation in the form of underwriting discounts,
concessions, or commissions from the Selling Stockholders and/or purchasers
of Securities for whom they act as agents.
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<PAGE> 12
In addition any of the Securities which qualify for sale pursuant to Rule
- -12-144 under the Securities Act of 1933, as amended (the "Act"), or
otherwise pursuant to an applicable exemption under the Act, may be sold
other that pursuant to this Prospectus.
The Selling Stockholders and any such underwriters, dealers or
agents that participate in the distribution of Securities may be deemed to
be underwriters, and any profit on the sale of the Securities by them and
any discounts, commissions or concessions received by them may be deemed to
be underwriting discounts and commissions under the Act. The Company will
not receive any of the proceeds of the offering of the Securities hereunder
for the account of the Selling Stockholders. See "Use of Proceeds."
This Prospectus Supplement is being distributed in order to identify
and set forth the aggregate amount of Warrant Securities being offered and
the terms of the offering, including the name or names of any underwriters,
dealers or agents, the purchase price paid by any underwriter for Warrant
Securities purchased from the Selling Stockholder, any discounts,
commissions and other items constituting compensation from the Selling
Stockholder and/or the Company and any discounts, commissions or
concessions allowed or reallowed or paid to dealers, including the proposed
selling price to the public. This Prospectus Supplement will be filed with
the Commission to reflect the disclosure of additional information with
respect to the distribution of the Warrant Securities.
The Selling Stockholders have entered into indemnification
agreements with the Company pursuant to which the Company will be
indemnified against failure by the Selling Stockholders to deliver a
Prospectus if required, as well as against certain civil liabilities,
including liabilities under the Act or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), incurred in connection with any untrue (or
alleged untrue) statement of a material fact or ommission of a material
fact in this Registration Statement to the extent such liability relates to
information supplied by the Selling Stockholder for inclusion in the
Registration Statement or Prospectus.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Securities may not simultaneously
engage in market making activities with respect to the Securities for a
period of nine business days prior to the commencement of such
distribution. In addition and without limiting the foregoing, certain of
the Selling Stockholders and any person participating in the distribution
of the Securities will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including without limitation
Rules 10b-6 and 10b-7, which provisions may limit the timing of purchases
and sales of the Securities by the Selling Stockholders. All of the
foregoing may affect the marketability of the Securities.
In order to comply with certain states' securities laws, if
applicable, the Securities will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states the
Securities may not be sold unless the Securities have been registered or
qualify for sale in such state, or unless an exemption from registration or
qualification is available and complied with.
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The Company will pay all of the expenses incident to the
registration and certain other expenses related to this offering of the
Securities, other than underwriting commissions and discounts, normal
commission expenses and brokerage fees, applicable transfer taxes and
attorneys' fees of Selling Stockholders' counsel, which will be borne by
the Selling Stockholders.
LEGAL MATTERS
Certain legal matters relating to the validity of the Common Stock being
registered hereby have been passed upon for the Company by St. John & Wayne
(formerly Robinson, St. John & Wayne), Two Penn Plaza, Newark, New Jersey 07105
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in this Prospectus have been audited by BDO Seidman, LLP,
independent certified public accountants, to the extent and for the periods
set forth in their report incorporated herein by reference, and is
incorporated herein in reliance upon such report given upon the authority
of said firm as experts in auditing and accounting.
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