<PAGE> 1
Registration No. 333 --
As filed with the Securities and Exchange Commission on December 15, 1997
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INTERSYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3256265
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
537 Steamboat Road, Greenwich, CT 06830 (203) 629-1400
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Fred S. Zeidman, President, InterSystems, Inc.
5120 Woodway, Suite 9029, Houston, Texas 77056 (713) 622-7710
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
With a copy to:
Clare J. Attura, Esq.,
537 Steamboat Road, Greenwich, CT 06830
(203) 629-1400 FAX (203) 629-1961
Approximate date of commencement of proposed sale to the public: From time to
time after the Registration Statement becomes effective.
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 (the "Act"), other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Act, please check the following box and list the Act
registration statement number of the earlier registration statement for the same
offering. [ ]
--------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Act, check the following box and list the Act registration statement number
of the earlier effective registration statement for the same offering. [ ]
------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
Page 1 of 22 Pages; Exhibits begin on page 20
<PAGE> 2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Each Proposed
Class of Maximum Proposed
Securities Amount Offering Maximum Amount of
to be to be Price Aggregate Registration
Registered Registered Per Unit Price Fee
- ---------- ---------- -------- ----- ---
<S> <C> <C> <C> <C>
Common Stock 1,549,623(1) $1.9375(2) $3,002,394 $ 909.82
Common Stock 450,000(1) $1.9375(3) $ 871,875 $ 264.20
Common Stock 60,000(1) $1.9375(3) $ 116,250 $ 35.23
Common Stock 50,000(1) $1.9375(3) $ 96,875 $ 29.36
Common Stock 35,424(1) $1.9375(3) $ 68,634 $ 20.80
Common Stock 150,000(1) $1.9375(3) $ 290,625 $ 88.07
Common Stock 295,500(1) $2.75 (4) $ 812,625 $ 246.25
Total 2,590,547 $1,593.73
</TABLE>
(1) Pursuant to Rule 416 promulgated under the Securities Act of 1933, as
amended (the "Act"), this Registration Statement covers such additional shares
of Common Stock to be offered or issued to prevent dilution as a result of
future stock splits, stock dividends or similar transactions.
(2) Pursuant to Rule 457(c), the offering price with respect to the SGI Shares,
the Directors Shares, the Settlement Shares and the Helm Shares is based upon
the average of the high and low prices reported on the American Stock Exchange
on December 9, 1997 (being within 5 business days prior to the date of the
filing of this registration statement).
(3) The Offering Price per share is calculated pursuant to Rule 457(g).
(4) The Offering Price per share is calculated pursuant to Rule 457(g).
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 Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
Page 2 of 22 Pages; Exhibits begin on page 20
<PAGE> 3
PROSPECTUS
INTERSYSTEMS, INC.
2,590,547 Shares of Common Stock
This Prospectus relates to the offer and sale of 2,590,547 shares of
common stock of InterSystems, Inc. (the "Company"), $.01 par value per share
(the "Common Stock") identified herein as follows:
168,000 (the "SGI Shares") sold by the Company in a private placement
to Strategic Growth International, Inc. and two principals thereof;
510,000 shares (the "SGI Warrant Shares") issuable upon the exercise of
common stock purchase warrants granted to Strategic Growth
International, Inc. and two principals thereof (the "SGI Warrants").
30,000 SGI Warrants granted to each of the principals are exercisable at
$1 3/8 per share, and 450,000 SGI Warrants granted to SGI are
exercisable at $1 1/8 per share and expire on June 11, 2002;
50,000 shares (the "FF Warrant Shares") issuable upon the exercise of
common stock purchase warrants granted to Financial Federal Corporation
(the "FF Warrants") as a fee for entering into a financing arrangement
with the Company's subsidiary, Chemtrusion, Inc. The FF Warrants are
exercisable at $1.00 per share and expire on July 15, 2002;
150,000 shares (the "Private Placement Compensation Warrants Shares")
issuable upon the exercise of common stock purchase warrants (the
"Private Placement Compensation Warrants") granted to three executive
officers of the Company as compensation for the placement of Units in
connection with the Company's 1995-1996 private placement. The Private
Placement Compensation Warrants are exercisable at $1.375 per share and
expire October 29, 2001;
150,000 shares (the "Compensation Warrants Shares") issuable upon the
exercise of common stock purchase warrants (the "Compensation
Warrants") granted to two executive officers of the Company in lieu of
cash compensation. The Compensation Warrants are exercisable at $1.125
per share and expire July 11, 2000;
295,500 shares (the "Conversion Shares") held by Helm Capital Group,
Inc. ("Helm"), the holder of approximately 17% of the Company's
outstanding common stock. The Conversion Shares are to be transferred
by Helm to certain holders of outstanding promissory notes (the
"Notes") issued by Helm's subsidiary, Mezzanine Financial Corp., upon
conversion of the Notes in accordance with their terms;
35,424 shares (the "Directors Shares") issuable to outside directors of
the Company as directors' fees or issuable upon conversion of common
stock purchase warrants issued to outside directors as directors' fees;
Page 3 of 22 Pages; Exhibits begin on page 20
<PAGE> 4
279,659 shares (the "Settlement Shares") issued to several creditors of
the Company in settlement of indebtedness; and
951,964 additional shares held by Helm (the "Helm Shares").
The SGI Shares, the SGI Warrant Shares, the FF Warrant Shares, the
Private Placement Compensation Shares, the Compensation Shares, the Conversion
Shares, the Directors Shares, the Settlement Shares and the Helm Shares are
hereinafter collectively referred to as the "Securities." The SGI Warrants, the
FF Warrants, the Private Placement Compensation Warrants and the Compensation
Warrants are hereinafter collectively referred to as the "Warrant Securities."
The Securities being offered hereby are being offered to permit the
sale of the Securities by the Selling Stockholders, the sale of the Conversion
Shares by the holders thereof and the issuance of registered stock by the
Company upon the exercise of the Warrants Securities. 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.
Additionally, this Prospectus has been prepared for use, with the prior
consent of the Company, by certain holders of the Conversion Shares and the
Warrant Securities who will acquire shares of Common Stock upon conversion and
exercise, as the case may be, 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 Warrant
Securities, which shares are being registered pursuant to Rule 416 promulgated
under the Act.
Other than proceeds equal to the aggregate exercise price of the
Warrant Securities 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 December 9, 1997 was $1.9375.
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 is
December 15, 1997.
Page 4 of 22 Pages; Exhibits begin on page 20
<PAGE> 5
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., Suite 1024, Washington, D.C. 20549; and
at the regional offices of the Commission at: Northwest Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 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, such reports and other information may be
electronically accessed at the Commission's site on the World Wide Web located
at http://www.sec.gov. 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.
The Company has filed a Registration Statement on Form S-3 (together with all
amendments thereto referred to herein as the "Registration Statement") under
the Act with the Commission, covering the shares of Common Stock being offered
by this Prospectus. This Prospectus does not contain all the information set
forth or incorporated by reference in the Registration Statement and the
exhibits and schedules relating thereto, certain portions of which have been
omitted as permitted by the rules and regulations of the Commission. For
further information with respect to the Company and the securities offered by
this Prospectus, reference is made to the Registration Statement and the
exhibits and schedules thereto which are on file at the offices of the
Commission and may be obtained upon payment of the fee prescribed by the
Commission, or may be examined without charge at the offices of the Commission.
Statements contained in this Prospectus as to the contents of any contract or
other documents referred to are not necessarily complete, and are qualified in
all respects by such reference.
-----------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company (Commission File No. 1-9547) 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, 1996.
2. The Company's Quarterly Report on Form 10-QSB for the fiscal quarter
ended March 31, 1997.
3. The Company's Quarterly Report on Form 10-QSB for the fiscal quarter
ended June 30, 1997.
4. The Company's Quarterly Report on Form 10-QSB for the fiscal quarter
ended September 30, 1997.
5. The definitive Proxy Statement of the Company date July 15, 1997,
relating to the 1997 Annual Meeting of Stockholders.
Page 5 of 22 Pages; Exhibits begin on page 20
<PAGE> 6
6. All other reports filed pursuant to Section 13(a) or Section 15(d) of
the 1934 Act since the date of this Prospectus.
7. A description of the Common Stock as set forth in Registration
Statement Form 8-A filed with the Commission on February 2, 1987.
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 Clare J. Attura, InterSystems, Inc., 537
Steamboat Road, Greenwich, CT 06830 (telephone: (203) 629-1400).
-----------------------
THE COMPANY
The Company's two principal lines of business 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 the custom resin compounding operations
conducted by its wholly-owned subsidiary, Chemtrusion, Inc. ("Chemtrusion"). For
each of the two years ended December 31, 1996 and 1995, approximately 71% and
75%, respectively, of the Company's revenues were attributable to the business
of InterSystems Nebraska and approximately 29% and 25%, respectively, 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 537 Steamboat Road, Greenwich, CT 06830 and its
telephone number at that location is (203) 629-1400.
SPECIAL CONSIDERATIONS
All prospective investors should consider carefully, among other
things, the following factors before purchasing any securities offered hereby:
HISTORICAL OPERATING LOSSES; LIMITED CAPITAL. The Company had revenues
from continuing operations of $20,387,000 and $15,703,000,
Page 6 of 22 Pages; Exhibits begin on page 20
<PAGE> 7
respectively, for the years ended December 31, 1996 and 1995. For these same
periods, losses from continuing operations were ($399,000) and ($478,000),
respectively. The total losses for the years ended December 31, 1996 and 1995
were ($2,319,000) and ($695,000), respectively. The loss from discontinued
operations was ($1,920,000) in 1996 and ($217,000) in 1995 of which ($1,440,000)
was incurred in 1996 on the disposal of Tropical Systems, Inc., the Company's
Miami-based subsidiary previously engaged in the sale and distribution of
hurricane resistant doors and shutters.
To date, 1997 has been a profitable year for the Company. The Company
had net income of $645,000 for the first nine months of 1997, as compared to a
net loss of ($854,000), of which ($730,000) is attributable to discontinued
operations, for the comparable period in 1996.
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, nor can there
be any assurance that the Company will be continue to be profitable in the
future.
CONTROL BY HELM CAPITAL GROUP, INC. Helm Capital Group, Inc. ("Helm")
currently owns approximately 17% 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 5% of the outstanding Common Stock. Such a
concentration of effective voting power and control could serve to perpetuate
management. The overlap of directors of the both companies creates inherent
conflicts of interests, although the Company does have one independent director,
Mr. William Lurie.
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 $102,000 and $52,920 for 1996 and
1995. These expenses have continued during 1997, 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 the
company does not have in place an assistant to Mr. Owens who could assume his
responsibilities should Mr. Owens leave the employment of the Company or
otherwise be unable to perform his duties, although the Company recently has
hired supervisors at both the Houston and Indiana facilities of Chemtrusion.
CUSTOMER DEPENDENCE. For each of the last two fiscal years,
approximately 70% to 80% of total revenues of the compounding business were
attributable to between eight and ten regular customers. Of these, two
customers, one of which is Mytex Polymers, Inc., accounted for approximately 36%
of total revenues of the compounding business for the year ended December 31,
1996. One other customer accounted for 77% of Chemtrusion's revenues in 1995. In
addition, beginning in 1997, Mytex is expected to account for approximately one
half of the Company's total revenues. The Company believes that the loss of
either of these customers would have a material adverse effect on its business
and revenues.
Page 7 of 22 Pages; Exhibits begin on page 20
<PAGE> 8
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 to 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.
As of December 2, 1997, there were 7,752,528 shares of Common Stock
outstanding. In addition, approximately 525,000 shares of Common Stock and
65,000 warrants (with an exercise price of $3.50) are issuable upon conversion
of outstanding debentures, 2,402,352 shares of Common Stock are issuable upon
exercise of warrants that are outstanding or reserved for issuance at an average
exercise price of $2.30, 500,000 shares of Common Stock are reserved for
issuance under the Company's 1997 Stock Option Plan (414,000 of which are
subject to currently outstanding options at an average exercise price of $2.125)
and 540,000 shares of Common Stock are issuable upon the exercise of other
outstanding options at an average exercise price of $2.25. In addition, the
Company is contractually obligated to sell 168,000 shares of Common Stock and
issue 510,000 warrants in a private placement. 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.
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 supermajority vote required for the removal of directors are
additional factors which could make it more difficult for stockholders to change
control of the Company.
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 foreseeable future. Furthermore, InterSystems Nebraska is
a party to a credit and security agreement 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.
Page 8 of 22 Pages; Exhibits begin on page 20
<PAGE> 9
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the
Securities by the Selling Stockholders hereby. It will receive the aggregate
exercise price of the Warrant Securities, estimated to be approximately
$1,013,750 if all the Warrant Securities are exercised. The Warrant Securities
are being registered to provide the holders thereof with freely tradable Common
Stock upon exercise. The Company does not know whether any of the SGI Warrants,
FF Warrants or Private Placement Compensation Warrants will be exercised, and
therefore has made no specific plans to utilize the proceeds, if any, from such
exercise. If any SGI Warrants, FF Warrants or Private Placement Compensation
Warrants are exercised, the Company intends to use the proceeds for general
corporate purposes.
[The rest of this page intentionally left blank.]
Page 9 of 22 Pages; Exhibits begin on page 20
<PAGE> 10
SELLING STOCKHOLDERS
The following table provides information as of December 1, 1997 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>
<CAPTION>
SHARES/% SHARES SHARES/%
BENEFICIALLY OFFERED BENEFICIALLY
OWNED PRIOR TO PURSUANT OWNED AFTER
NAME OFFERING(1) HERETO OFFERING
- ---- -------------- ------ --------
<S> <C> <C> <C>
Helm Capital, 1,261,921/16.3% 1,255,586 6,035/*
Group, Inc. (2)
Herbert M 731,549/8.8% 160,000 571,549/6.9%
Pearlman(3)
Fred Zeidman(4) 680,000/8.2% 30,000 650,000/7.8%
David Lawi(5) 504,847/5.9% 110,000 394,847/4.9%
Financial Federal 50,000/* 50,000 --
Corporation(6)
Mezzanine Financial 121,000/1.6% 121,000 --
Fund, L.P.(7)
Professionals' 109,000/1.4% 109,000 --
Financial Services,
Inc.(8)
Richard Cooper(9) 90,000/1.2% 90,000 --
Stanley Altschuler(10) 90,000/1.2% 90,000 --
Strategic Growth 498,000/6.1% 498,000 --
International,
Inc.(11)
</TABLE>
Page 10 of 22 Pages; Exhibits begin on page 20
<PAGE> 11
SELLING STOCKHOLDERS, Con't
<TABLE>
<CAPTION>
SHARES/% SHARES SHARES/%
BENEFICIALLY OFFERED BENEFICIALLY
OWNED PRIOR PURSUANT OWNED AFTER
NAME TO OFFERING(1) HERETO OFFERING
- ---- -------------- ------ --------
<S> <C> <C> <C>
Daniel T. Murphy(12) 25,232/* 21,232 4,000/*
Dr. Dorrance Kelly 9,000/* 9,000(13) --
Marcus Stephanides IRA 8,000/* 8,000(13) --
Bobbi McClintick 3,305/* 3,305(13) --
Thomas Werblin 8,122/* 8,122(13) --
William Lurie 20,000/* 20,000(14) --
John Stiegltiz 27,388/* 15,424(14) 11,964/*
- --------------
* less than 1%
</TABLE>
(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 295,500 Conversion Shares and 960,086 Helm Shares offered hereby,
and 6,035 shares issuable upon exercise of Common Stock Purchase Warrants
expiring December 31, 1999 and exercisable at $3.50 (the "Dividend Warrants").
(3) Mr. Pearlman is the Chairman of the Board of Directors of the Company.
Includes 60,000 Private Placement Compensation Warrant Shares and 100,000
Compensation Warrant Shares, all of which are offered hereby. Also includes
shares issuable upon exercise of Dividend Warrants (77,551), Common Stock
Purchase Warrants expiring June 30, 2000 and exercisable at $1.50 per share (the
"1995 Warrants") (45,000) and stock options (100,000), and upon conversion of
Series A 10% Debentures (157,480).
(4) Mr. Zeidman is the President, Chief Executive Officer and a Director of the
Company. His holdings include 30,000 Private Placement Compensation Warrant
Shares, all of which are offered hereby. Also includes shares that are issuable
upon exercise of 500,000 stock options and shares issuable upon exercise of
15,000 1995 Warrants.
(5) Mr. Lawi is Secretary and a Director of the Company, as well as Chairman of
the Company's Executive Committee. Includes 60,000 Private Placement
Compensation Warrant Shares and 50,000 Compensation Warrant Shares, all of which
are offered hereby. Also includes shares issuable upon exercise of Dividend
Warrants (73,875) and stock options (50,000), and upon conversion of Series A
10% Debentures (157,480).
(6) Includes 50,000 FF Shares offered hereby.
Page 11 of 22 Pages; Exhibits begin on page 20
<PAGE> 12
(7) Includes 121,000 Settlement Shares offered hereby. Messrs. Pearlman, Lawi
and Craig are officers and directors of the Fund's general partner, and Mr.
Craig is president of the Fund.
(8) Includes 109,000 Settlement Shares offered hereby. Messrs. Pearlman, Lawi
and Craig are officers and directors of PFS.
(9) Includes 60,000 SGI Shares and 30,000 SGI Warrant Shares offered hereby. Mr.
Cooper is a principal of SGI.
(10) Includes 60,000 SGI Shares and 30,000 SGI Warrant Shares offered hereby.
Mr. Altschuler is a principal of SGI.
(11) Includes 48,000 SGI Shares and 450,000 SGI Warrant Shares offered hereby.
(12) Includes 21,232 Settlement Shares offered hereby and 4,000 Dividend
Warrants. Mr. Murphy is a director of the Company.
(13) Consists of Settlement Shares offered hereby.
(14) Consists of Directors Shares offered hereby.
PLAN OF DISTRIBUTION
This Prospectus relates to the offer and sale of 168,000 SGI Shares,
510,000 SGI Warrant Shares, 50,000 FF Warrant Shares, 150,000 Private Placement
Compensation Warrant Shares, 150,000 Compensation Warrant Shares, 295,500
Conversion shares, 35,424 Directors Shares, 279,659 Settlement Shares and
951,964 Helm Shares (the SGI Warrant Shares, the FF Warrant Shares, the Private
Placement Compensation Warrant Shares and the Compensation Warrant Shares are
hereinafter collectively referred to as the "Warrant Securities" ). From time to
time, the Company may amend this Prospectus by Prospectus Supplements or
post-effective amendments to the Registration Statement of which this Prospectus
is a part, to offer shares of Common Stock issuable upon exercise of Warrant
Securities or received as Conversion Shares 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 or received as Conversion Shares will be issued and distributed by
the Company pursuant to the terms and conditions of the Warrant Securities and
the Notes, as the case may be. Such Common Stock is being registered pursuant to
the Act pursuant to the Company's contractual obligation to the holders of the
Warrant Securities and Notes and offered by the Company hereby to permit the
issuance by the Company of registered stock upon the exercise of the Warrant
Securities or conversion of the Notes in accordance with their respective 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 SGI Warrants, FF
Warrants, Private Placement Compensation Warrants and Compensation Warrants are
exercised, the Company will receive aggregate cash proceeds estimated to be
approximately $1,013,750. See "Use of Proceeds."
Page 12 of 22 Pages; Exhibits begin on page 20
<PAGE> 13
All remaining securities covered by this Prospectus are being offered for
the accounts of the respective holders of the SGI Shares, the Conversion Shares,
the Settlement Shares and the Helm Shares listed under the caption "Selling
Stockholders." Consequently, the Company will not receive any of the proceeds
from the sale of the SGI Shares, the Conversion Shares, the Settlement Shares
and the Helm Shares offered hereby.
The Securities may be sold from 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, and (e) 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. In addition any of the Securities which qualify for sale pursuant to
Rule 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."
If required by law, at the time a particular offer of Securities is made,
a supplement to this Prospectus will be distributed which will identify and set
forth the aggregate amount of 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 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. Such supplement to this Prospectus
and, if necessary, a post-effective amendment to the Registration Statement of
which this Prospectus is a part, will be filed with the
Page 13 of 22 Pages; Exhibits begin on page 20
<PAGE> 14
Commission to reflect the disclosure of additional information with respect to
the distribution of the 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 Regulation M, 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.
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,
L.L.C, Two Penn Plaza East, 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.
Page 14 of 22 Pages; Exhibits begin on page 20
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses of
InterSystems, Inc. in connection with the distribution of the securities being
registered pursuant to this Registration Statement.
<TABLE>
<S> <C>
Registration Fee............................. $1,593.73
Legal Fees and Expenses...................... 5,000.00
Blue Sky Fees and Expenses................... -
Accounting Fees and Expenses................. 1,500.00
Transfer Agent's Fees and Expenses............ -
Printing and Engraving Expenses.............. 1,000.00
Miscellaneous Expenses....................... 500.00
---------
TOTAL................................. $9,593.73
</TABLE>
Item 15. Indemnification of Directors and Officers.
Section 145(a) of the General Corporation Law of the State of
Delaware (the "General Corporation Law") provides, in general, that a
corporation shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation), by reason of the
fact that he is or was a director or officer of the corporation. Such indemnity
may be against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding, if the indemnitee acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of the
corporation and with respect to any criminal action or proceeding, the
indemnitee must not have had reasonable cause to believe his conduct was
unlawful.
Section 145(b) of the General Corporation Law provides, in
general, that a corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgement in its favor by reason of the fact that he is or was a director or
officer of the corporation (including attorney's fees) acutally and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interest of the corporation.
Section 145(g) of the General Corporation Law provides in
general that a corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director or officer of the corporation
against any liability asserted against him or incurred by him in any capacity,
or arising out of his status as such, whether or not the corporation would have
the power to indemnify him against such liability under the provisions of the
law.
Page 15 of 22 Pages; Exhibits begin on page 20
<PAGE> 16
Article Eighth of the Registrant's Certificate of
Incorporation and Section Six of the Registrants's By-Laws give a director or
officer the right to be indemnified by the Registrant to the fullest extent
permitted under Delaware law.
Item 16: Exhibits
5.1 Opinion of St. John & Wayne, L.L.C., legal counsel to the Company *
23.1 Consent of BDO Seidman, LLP. *
23.2 Consent of St. John & Wayne, L.L.C.(included in Exhibit 5.1) *
24.1 Power of Attorney (included on Signature Page) *
- --------------
* filed herewith
Item 17. Undertakings
The Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) [Not applicable];
(ii) [Not applicable];
(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.
(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 the purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities 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) Insofar as indemnification of 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
Page 16 of 22 Pages; Exhibits begin on page 20
<PAGE> 17
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in said 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 a 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 said Act and will be governed by the final adjudication of such
issue.
Page 17 of 22 Pages; Exhibits begin on page 20
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas on this 10th day of December 1997.
INTERSYSTEMS, INC.
By:/s/ Fred S. Zeidman
--------------------------------
Fred S. Zeidman, President,
Chief Executive Officer
and Director
(principal executive officer)
By:/s/ Chris Mathers
--------------------------------
Wm. Chris Mathers
Chief Financial and Accounting
Officer
(principal financial officer)
Each person whose signature appears below constitutes and appoints Fred
S. Zeidman and Wm. Chris Mathers true and lawful attorneys-in-fact and agents,
each acting alone, with full powers of substitution and resubstitution, for him
and in his name, place an stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this 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 agents, each acting alone, full powers 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 agents, each acting alone, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on December 10, 1997.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/s/ Walter M. Craig, Jr. Director
- --------------------------------
Walter M. Craig, Jr.
/s/ David S. Lawi Director
- --------------------------------
David S. Lawi
</TABLE>
Page 18 of 22 Pages; Exhibits begin on page 20
<PAGE> 19
<TABLE>
<S> <C>
/s/ William Lurie Director
- ----------------------------
William Lurie
/s/ Daniel T. Murphy Director
- ----------------------------
Daniel T. Murphy
/s/ Herbert M. Pearlman Chairman of the Board of
- ----------------------------
Herbert M. Pearlman Directors
/s/ John E. Stieglitz Director
- ----------------------------
John E. Stieglitz
/s/ Fred S. Zeidman President, Chief Executive
- ----------------------------
Fred S. Zeidman Officer and Director
</TABLE>
Page 19 of 22 Pages; Exhibits begin on page 20
<PAGE> 20
EXHIBIT INDEX
5.1 Opinion of St. John & Wayne, L.L.C., legal counsel to the Company *
23.1 Consent of BDO Seidman, LLP. *
23.2 Consent of St. John & Wayne, L.L.C. (included in Exhibit 5.1) *
24.1 Power of Attorney (included on Signature Page) *
<PAGE> 1
EXHIBIT 5.1
St. John & Wayne, L.L.C.
Attorneys At Law
Two Penn Plaza East
Newark, New Jersey 07105-2249
(201) 491-3300
December 12, 1997
InterSystems, Inc.
537 Steamboat Road
Greenwich, CT 06830
RE: INTERSYSTEMS, INC.
FORM S-3 REGISTRATION STATEMENT COVERING 2,590,547 SHARES OF
COMMON STOCK ("Registered Common Stock")
Gentlemen:
We have acted as counsel for InterSystems, Inc., a Delaware corporation
(the "Company"), in connection with the preparation and filing by the Company of
the captioned Registration Statement on Form S-3 filed under the Securities Act
of 1933, as amended (the "Act")(the "Registration Statement"). Terms used herein
and not otherwise defined shall have the meaning ascribed thereto in the
Registration Statement.
In that connection, we have examined the Certificate of Incorporation
and the By-Laws of the Company, the minutes of the various meetings and consents
of the Board of Directors of the Company, and such other documents,
certificates, records, authorizations, proceedings, statutes and judicial
decisions as we have deemed necessary to form the basis of the opinion expressed
below. In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals and the
conformity to originals of all documents submitted to us as copies thereof. As
to various questions of fact material to such opinion, we have relied upon
statements and certificates of officers and representatives of the Company and
others.
Page 20 of 22 Pages; Exhibits begin on page 20
<PAGE> 2
InterSystems, Inc.
December 12, 1997
Page 2
Based upon the foregoing, we are of the opinion that:
1. The Company has been duly organized and is validly existing as a corporation
under the laws of the State of Delaware.
2. The shares of Registered Common Stock issued and outstanding as of the date
hereof have been duly authorized and are validly issued, fully paid and
non-assessable.
3. The shares of Registered Common Stock issuable upon (a) exercise of the SGI
Warrants, the FF Warrants, the Private Placement Compensation Warrants, the
Compensation Warrants and any warrants issued and outstanding as of the date
hereof with respect to the Director Shares (collectively, the "Warrants"); or
(b) conversion of the Notes (the Notes and the Warrants are collectively
referred to as the "Derivative Securities") when issued in accordance with the
terms of any such Derivative Security, so long as such Derivative Security is
then outstanding and binding upon the Company in accordance with its terms, will
be validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the caption
"Legal Matters" in the Prospectus comprising a part of the Registration
Statement.
By giving the foregoing consent, we do not come within the category of
persons whose consent is required under Section 7 of the Act or are otherwise
within the category of persons described in Section 11(a)(4) of the Act.
Very truly yours,
ST. JOHN & WAYNE, L.L.C.
Page 21 of 22 Pages; Exhibits begin on page 20
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
InterSystems, Inc.
Greenwich, CT
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated March 14,
1997, relating to the consolidated financial statements of InterSystems, Inc.
appearing in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1996.
We also consent to the reference to us under the caption "Expert" in the
Prospectus.
BDO Seidman, LLP
Houston, Texas
December 10, 1997
Page 22 of 22 Pages; Exhibits begin on page 20
