As filed with the Securities and Exchange Commission on October 30,1998
File No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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IFS INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
Delaware 13-3393646
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Rensselaer Technology Park
300 Jordan Road
Troy, New York 12180
(518) 283-7900
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
DAVID L. HODGE, Chief Executive Officer
Rensselaer Technology Park
300 Jordan Road
Troy, New York 12180
(518) 283-7900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------
Copies to:
MICHAEL D. DiGIOVANNA, Esq.
PARKER DURYEE ROSOFF & HAFT
529 Fifth Avenue
New York, New York 10017
(212) 599-0500
Approximate date of proposed sale to the public: From time to time
after the effective date of this Registration Statement.
<PAGE>
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act 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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
______________________________ ____________________ ___________________ ________________________ __________________
______________________________ ____________________ ___________________ ________________________ __________________
Proposed Maximum Proposed Maximum
Title of Each Class of Offering Price Aggregate Offering Amount of
Securities to be Registered Amount to be Per Share(1) Price(1) Registration Fee
Registered
______________________________ ____________________ ___________________ ________________________ __________________
<S> <C> <C> <C> <C>
Series A Convertible
Preferred Stock, par value
$.001 per share 87,094 shs. $2.41 $209,897 $58.00
Common Stock, par value
$.001 per share 492,354 shs. $2.63 $1,294,891 $360.00
Total Registration Fee
$418.00
______________________________ ____________________ ___________________ ________________________ __________________
______________________________ ____________________ ___________________ ________________________ __________________
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the bid and asked prices of
the Series A Convertible Preferred Stock and the Common Stock on The Nasdaq
Small Cap Market on October 28, 1998.
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 said Section 8(a),
may determine.
<PAGE>
October 28, 1998
IFS INTERNATIONAL, INC.
492,354 Shares of Common Stock
87,094 Shares of Series A Convertible Preferred Stock
The Series A Convertible Preferred Stock (the "Preferred Stock") and
shares of Common Stock ("Common Stock") are offered hereby from time to time on
behalf of and for the account of selling stockholders ("Selling Stockholders").
Of the 492,354 shares of Common Stock, 186,631 shares of Common Stock are
offered by an officer and director of the Company. Several persons, including
two directors are offering 180,723 shares acquired from the Company in
connection with the Company's repurchase of shares from a former executive
officer (see "Recent Developments"). Former lenders of the Company are offering
100,000 shares of Common Stock issued or to be issued pursuant to warrants. The
remaining 25,000 shares of Common Stock and all 87,094 of Preferred Stock are
being offered by a director of the Company who is the former principal
shareholder of NCI Holdings, Inc., and who acquired the shares in connection
with the merger of that corporation with a subsidiary of the Company pursuant to
a Plan and Agreement of Merger, dated January 30, 1998 (the "Merger Agreement")
and related extension agreement (the "Extension Agreement"). Each share of
Preferred Stock is convertible, at the option of the holder, into one share of
Common Stock of the Company, subject to adjustment, until February 20, 2002;
provided that the Preferred Stock must be converted into Common Stock upon the
earlier of February 20, 2002 or the occurrence of certain events. See "Selling
Stockholders" and "Description of Securities." As used herein the shares of
Common Stock and Preferred Stock offered hereby shall be referred to as the
"Shares."
See "Risk Factors" commencing on page 5.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE 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 Company has agreed to pay all expenses of registration in
connection with this offering but will not receive any of the proceeds from the
sale of the Shares being offered hereby. All brokerage commissions and other
similar expenses incurred by the Selling Stockholders will be borne by the
Selling Stockholders. The aggregate proceeds to the Selling Stockholders from
the sale of the Shares will be the purchase price of the Shares sold, less the
aggregate brokerage commissions and underwriters' discounts, if any, and other
expenses of issuance and distribution not borne by the Company.
<PAGE>
The Shares being offered hereby by the Selling Stockholders have not
been registered for sale under the securities laws of any state or jurisdiction
as of the date of this Prospectus. Brokers or dealers effecting transactions in
the Shares should confirm the registration thereof under the securities law of
the state in which such transactions occur, or the existence of any exemption
from registration.
The Preferred Stock and Common Stock are quoted on The Nasdaq SmallCap
Market. On October 28, 1998, the closing trading prices of the Preferred Stock
and Common Stock as reported by The Nasdaq SmallCap Market were $2.406 per share
and $2.625 per share, respectively.
The date of this Prospectus is October 30, 1998
[The following language is located on the left margin of the preliminary
prospectus]
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
<PAGE>
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION..........................................................1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................2
THE COMPANY....................................................................3
RISK FACTORS...................................................................5
SELLING STOCKHOLDERS..........................................................11
PLAN OF DISTRIBUTION..........................................................13
DESCRIPTION OF SECURITIES.....................................................14
LEGAL MATTERS.................................................................16
EXPERTS.......................................................................17
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus or
incorporated by reference to this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. The delivery of this Prospectus at any time
does not imply that the information contained herein is correct as of any time
subsequent to its date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance
therewith, the Company files reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Regional Offices of the
Commission at 7 World Trade Center, New York, New York 10048 and Northwestern
Atrium Center, 500 West Madison Street, Chicago, Illinois 60621. Copies of such
material may be obtained from the Public Reference Section of the Commission at
prescribed rates by writing to the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, the Commission maintains a Web site on the
Internet at http://www.sec.gov that contains reports, proxy and information
statements and other information of issuers that file electronically with the
Commission. The Company has filed with the Commission a Registration Statement
on Form S-3 under the Securities Act, with respect to the Preferred Stock and
Common Stock offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement, copies of
which can be obtained from the Public Reference Section of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of the
fees prescribed by the Commission.
1
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated herein by reference are the following documents filed by
the Company with the Commission (File No. 1-12687) under the Exchange Act:
(a) The Company's Annual Report on Form 10-KSB for its fiscal year
ended April 30, 1998;
(b) The Company's Quarterly Report on Form 10-QSB for its fiscal
quarter ended July 31, 1998;
(c) The Company's Registration Statement on Form 8-A for a description
of the Preferred Stock and Common Stock.
All documents filed by the Company with the Commission pursuant to
Sections 13, and 14 and 15(d) of the Exchange Act subsequent hereto, but prior
to the termination of this offering, shall be deemed to be incorporated herein
by reference and to be a part hereof from their respective dates of filing. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written and oral request of any such
person, a copy of any or all of the documents referred to above which have been
incorporated into this Prospectus by reference (other than the exhibits to such
documents). Requests for such copies should be directed to Carmen A. Pascuito,
Rensselaer Technology Park, 300 Jordan Road, Troy, New York 12180; telephone
number (518) 283-7900.
2
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THE COMPANY
General
IFS International, Inc. (the "Company"), a Delaware corporation, is
engaged in the business of developing, marketing and supporting software
products for the electronic funds transfer ("EFT") and retail banking markets.
These markets are served through the Company's two wholly-owned subsidiaries,
IFS International, Inc. ("IFS"), a New York corporation and Network Controls
International, Inc. ("NCI"), a North Carolina corporation.
IFS' family of software products, marketed under the name TPII
("TPII"), serve as a UNIX-based manager for EFT systems. An EFT system ("EFT
System") of a bank or other financial institution permits the processing of
transactions involving credit cards and debit cards (e.g., ATM cards). TPII
software products are compatible with a significant portion of the industry
standard computer platforms, are designed to operate with computers utilizing
the UNIX operating system, are written in C programming language and incorporate
Oracle relational database technology and object oriented design concepts.
TPII software is offered in separate modules which perform different
functions, including (i) interfacing with ATMs, POS terminals, a financial
institution's host computer and Network computers, (ii) updating credit and
debit card information, (iii) providing stand-in authorization for transactions
when the financial institution's host computer is not operating, (iv) computing
fees for processed transactions (v) generating reports, and (vi) processing
Smart Card transactions. The TPII software products are typically installed at
the financial institution's main processing facility. TPII software is also
capable of managing EFT Systems that involve the "loading" of value on smart
cards. A smart card is a plastic card with an electronic chip that acts as a
small computer which can enable the holder to "load" a fixed amount of
purchasing power or cash equivalent on the card as authorized. TPII software
products have been primarily installed in EFT Systems of banks and other
financial institutions located in emerging countries and former Eastern Bloc
nations.
The Company principally derives its revenues from the licensing of its
family of software and hardware products. A substantial portion of such revenues
are generated by licensing through or to computer manufacturers, which
incorporate the TPII software products into a turnkey system installed at a
financial institution. The preparation of functional specifications,
customization and installation of TPII software products and the training by IFS
of the financial institution's personnel in the use of the TPII software
products take an average of six to twelve months, depending upon the timing of
installation and final acceptance of the EFT System by the customer. IFS
generally receives payment of a substantial portion of the license fee prior to
the final acceptance by the customer. The Company provides its customers with
maintenance services for its software products for a separate fee. The Company
also offers other support services, such as additional training of customer
personnel, project management and consulting, for additional consideration.
3
<PAGE>
IFS has developed software for Visa International Service Association
("Visa") to manage an EFT System that facilitates the "loading" of value on a
smart card through a bank's terminals. As a result of a successful test of IFS'
TPII smart card software, Visa entered into an agreement with IFS in July 1996
for the licensing and installation of this software in connection with the
operation of up to seven pilot programs for the purposes of evaluating the TPII
smart card software and other aspects of the smart card system. The license for
each pilot program is for a term of 24 months commencing on the date such pilot
program goes on-line. Since the first calendar quarter of 1997, several pilot
programs have become fully operational. Visa has renewed license and maintenance
agreements for the initial test site.
NCI provides bank teller/platform and networking solutions to large
financial institutions and major suppliers of branch automation equipment. NCI
is currently developing a new product line, NCI Business Centre. NCI Business
Centre will be a server-centric and enterprise-wide retail banking solution
which will automate delivery channels, such as teller, platform, Internet
banking, call center and kiosks. NCI Business Centre will use Windows NT,
browsers and TCP/IP protocol technologies for delivery of functionality over
Intranet and Internet networks. NCI is headquartered in Charlotte, North
Carolina.
NCI GmbH, a wholly owned subsidiary of NCI based in Germany , was
established in 1988 and operates primarily in Germany, Switzerland, Italy, and
Austria. This subsidiary has been a reseller of NCI products for the past
decade. NCI Ltd., a wholly owned subsidiary of NCI based in the United Kingdom,
was established in January 1990 in central London and operates primarily
throughout Europe. With a business focus on systems integration, money broking
consulting, software product development, and software product integration, NCI
Ltd. provides solutions to customers across Europe. NCI also maintains a branch
office in Melbourne Australia.
The Company was incorporated in Delaware in September 1986 under the
name Wellsway Ventures, Inc. ("WWV"). WWV subsequently changed its name to IFS
International, Inc. The Company's principal offices are located at Rensselaer
Technology Park, 300 Jordan Road, Troy, New York 12180 and its telephone number
is (518) 283-7900.
Recent Developments
On January 30, 1998, the merger of a wholly owned subsidiary of IFS
with and into NCI Holdings, Inc. ("Holdings") was consummated pursuant to a Plan
and Merger Agreement, dated January 30, 1998 (the "Merger Agreement"). Holdings
owns approximately 94% of the issued and outstanding shares of capital stock of
NCI, which develops and markets software products for bank automation. On June
1, 1998 NCI was merged into Holdings and Holdings subsequently changed its name
to Network Controls International, Inc.
On September 1, 1998, Mr. Charles J. Caserta, co-founder of IFS
International, Inc., resigned from the Company as Director of Business
Development and a Director. At that time, Mr. Caserta and the Company entered
into a termination, severance and release agreement (the "Termination
Agreement"). Mr. Caserta will consult for IFS from time to time for consulting
fees and commissions. As part of the Termination Agreement, the Company is
obligated to pay Mr. Caserta an aggregate of $382,660 of which $361,446 ($2.00
per share) represents consideration for his shares ("Caserta Shares") and
$21,214 for the surrender of his options. The Company sold the Caserta Shares to
several individuals for $382,660 or approximately $2.12 per share simultaneously
with the purchase of the shares from Mr. Caserta. Of the Caserta Shares sold
Messrs. John Singleton and DuWayne Peterson, directors of the Company, purchased
50,000 and 25,000 shares respectively. These shares are included in the
registration statement of which this prospectus forms a part.
4
<PAGE>
RISK FACTORS
Each prospective investor should carefully consider the following risk
factors, as well as all other information set forth elsewhere in this
Prospectus.
This Prospectus and the documents incorporated by reference contain certain
forward-looking statements. Such statements are forward looking statements that
involve a number of risks and uncertainties. Factors that could cause actual
results to differ materially include the following (i) general economic
conditions, (ii) competitive market influences, (iii) the success of the Visa
pilot programs, (iv) the development of the capacity to accommodate additional
and larger contracts, (v) establishing the ability of TPII software products to
process transactions for larger EFT systems, (vi) continued acceptance of the
Company's software products by a significant number of new customers, (vii) the
Company's continued relationship with computer manufacturers, (viii) acceptance
of NCI Business Centre (TM) by a significant number of new customers.
Operating Losses
Although the Company had net income of $514,708 for its quarter ended
July 31, 1998, the Company incurred a net loss of $1,261,473 for its fiscal year
ended April 30, 1998. As of July 31, 1998, the Company had an accumulated
deficit of $3,365,228. There can be no assurance as to the future profitability
of the Company.
Dependence on Revenues from Foreign Sources
The Company derived approximately 53%, 74% and 57% of its total
revenues for the fiscal years ended April 30, 1997 and 1998, and the three
months ended July 31, l998, respectively, from the licensing of TPII software
products to customers outside the United States, primarily banks and other
financial institutions located primarily in emerging countries and former
Eastern Bloc nations. Foreign revenues generally are subject to certain risks,
including collection of accounts receivable, compliance with foreign regulatory
requirements, variability of foreign economic conditions and changing
restrictions imposed by United States export laws. To date, all foreign
customers have paid the Company in United States currency, but if future
customers pay in foreign currencies, the Company would be subject to
fluctuations in exchange rates. There can be no assurance that the Company will
be able to manage the risks related to licensing its TPII software products and
selling its services in foreign markets.
5
<PAGE>
Dependence on EFT Market
The TPII software products are solely for installation in the EFT
market, making the Company susceptible to adverse events in that market. For
example, a decrease in the number of EFT transactions by the general public or
in spending by financial institutions for software and related services could
result in a smaller overall market for EFT software. These factors, as well as
others negatively affecting the EFT market, could have a material adverse effect
on the Company's financial condition and results of operations.
Possible Need for Additional Financing
The Company believes that anticipated cash flow from operations along
with the remaining proceeds from the public offering in 1997 will be sufficient
to finance the Company's working capital requirements for the foreseeable
future. However, since a portion of the license fee for TPII software products
is not paid until acceptance by the customer and, as a result, the Company is
required to fund a portion of the costs of configuration and installation of
such products from available capital, any substantial increase in the number of
installations or delay in payment could create a need for additional financing.
In such event, there can be no assurance that additional financing will be
available on terms acceptable to the Company.
Dependence on Relationships with Computer Manufacturers
In 1994, IFS entered into a strategic alliance with Digital Equipment
International BV ("DEC"), pursuant to which DEC agreed to market on a
nonexclusive basis TPII software products in connection with DEC's world-wide
sale of its computers for EFT Systems. In connection with DEC's sale of
computers for EFT Systems, DEC, rather than the financial institutions, is
generally the licensee of IFS' TPII software products. For the fiscal years
ended April 30, 1997 and 1998 and the three months ended July 31, 1998,
approximately 21%, 19% and 9%, respectively, of the Company's total revenues
were derived pursuant to this relationship. The Company is, therefore, dependent
upon this relationship and would be adversely affected by the loss of such
relationship. IFS has a similar agreement with Unisys for the European and
African markets, but as of the date hereof, IFS has not derived any revenues
pursuant to its relationship with Unisys. IFS is currently seeking to enter into
alliances with additional computer manufacturers.
Growth Dependent on Expanding Customer Base
The Company receives additional revenues from existing customers as a
result of providing ongoing maintenance services in support of its licensed
software and may receive additional revenues for enhancements of the software
products. The Company generally will not receive significant license revenues in
a subsequent period from these customers. Although the Company usually generates
significant repeat business from its customers, the Company will still be
required to continually attract new customers in order to increase revenues in
the future. As a result, the Company will incur the higher marketing expenses
generally associated with attracting new customers as compared to marketing
expenses associated with attracting additional business from existing customers.
Moreover, the Company's inability to generate additional business upon
completion of its existing contracts would also have a material adverse effect
on the Company's financial condition and results of operations.
6
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Fluctuations in Quarterly Revenues and Operating Results
Quarterly revenues and operating results have fluctuated and will
fluctuate as a result of a variety of factors. The Company can experience long
delays (i.e., between three to twelve months) before a customer executes a
software licensing agreement. These delays are primarily due to extended periods
of software evaluation, contract review and the selection of the computer
system. In addition, following execution of the agreement, the preparation of
functional specifications, customization and installation of software products
and the training by the Company of the financial institution's personnel in the
use of the software products take an average of six to twelve months, depending
upon the timing of installation and final acceptance of the System by the
customer. Accordingly, the Company's revenues may fluctuate dramatically from
one quarter to another, making quarterly comparisons extremely difficult and not
necessarily indicative of any trend or pattern for the year as a whole.
Additional factors effecting quarterly results include the timing of revenue
recognition of advance payments of license fees, the timing of the hiring or
loss of personnel, capital expenditures, operating expenses and other costs
relating to the expansion of operations, general economic conditions and
acceptance and use of EFT.
Attraction and Retention of Key Personnel
The Company's success depends on the retention of David Hodge and John
Singleton, its President and CEO and Chairman, respectively. Other individuals
whose loss could have a material adverse effect on the Company's financial
condition and results of operations are Simon Theobald, Executive Vice President
and Director, Mark Gilder, Vice President of Development, Senior board members
Frank Pascuito, Executive Vice President, Director and Founder, DuWayne
Peterson, Director, Per Olof Ezelius, President and CEO of NCI and Director, and
Garry Benson, Managing Director of NCI Ltd. Each of these individuals with the
exception of John Singleton, Mark Gilder, and DuWayne Peterson, is a party to
employment agreements with the Company. The Company believes that its future
success also depends on its ability to attract and retain highly-skilled
technical, managerial and marketing personnel, including, in particular,
additional personnel in the areas of research and development, technical support
and project management. Competition for personnel is intense. There can be no
assurance that the Company will be successful in attracting and retaining the
personnel it requires.
Competition
The development and marketing of software for financial institutions is
highly competitive. Many of the Company's competitors have greater financial
resources than the Company. In addition, many of the larger financial
institutions have developed their own systems internally. However, the Company
believes its current software products will continue to be competitive based on
cost and technology.
TPII software products face strong competition from proprietary
(legacy) and UNIX-based software. In the international EFT market, well
established worldwide competition includes Transaction Systems Architects, Inc.,
Deluxe Data Systems, Inc., SDM International, Inc., S2 Systems, Inc., a
subsidiary of Stratus, SLM Software, Inc., Consolidated Software and Oasis
Systems. IFS also encounters competition from original equipment manufacturers
such as NCR Corporation, Interbold, Fujitsu and Omron; EFT software system
integrators such as Kirchman Corporation, Hogan Systems, Inc., ARKSYS (formerly
known as Arkansas Systems), Jack Henry and Diebold, Incorporated; and EFT shared
regional networks such as NYCE, MAC and HONOR. Price competition is
considerable.
7
<PAGE>
IFS is aware of only a limited number of companies primarily marketing
UNIX-based products for EFT Systems. The Company is also aware that S2 Systems,
Inc. has developed its own UNIX-based transaction processing package and
Transaction Systems Architects, Inc. has begun to market a UNIX-based product,
TRANS 24.
There are numerous more established companies which offer EFT
outsourcing services. These third party providers primarily drive ATMs belonging
to financial institutions. A significant portion of all of ATM transactions are
processed by these third party providers. The principal companies in this area
are: Electric Data Systems (EDS), Deluxe Data Corporation, Affiliated Computer
Services, Inc., Fiserv, Inc., Money Access Services (MAC), Information Services
and First Data Corporation.
The aforementioned companies are well established, have greater
financial resources than the Company and an established customer base. There can
be no assurance that the Company can make any inroads in this highly competitive
marketplace or that its efforts will be successful.
In the smart card market, other financial institutions and companies
including certain institutions and companies which have greater resources than
the Company, have developed and are developing their own smart card technology.
The Company is unable to predict which technology, if any, will become the
industry standard.
NCI has limited direct competition with most of its IBM 4700 migration
products as the Company is unaware of any equivalent products offered by
competitors. There are several competitors for NCI's 3270 Coax solution and
IBM's LANDP product is a competitor for NCI's middleware product NCI
ClientServer-Mgr. NCI also experiences competition with core banking solutions
that include a branch and teller system integrated with their product, like
Alltel, OSI, FISERV, Jack Henry & Associates, and Unisys. With the web-banking
outsourcing strategy, NCI's major competitors in this business are Online
Resource and Communications, Digital Insight, Jack Henry & Associates, Security
First Technologies, Edify, nFront, Fund Xpress, and Q-UP Systems. Most of the
Company's competition comes from competitors with substantial financial
resources who possess greater abilities to market their products and withstand
general economic and sales volatility.
Technological Change
The market for software in general is characterized by rapid changes in
computer and software technology and is highly competitive with respect to the
need for timely product innovation and new product introductions. If, for
example, the UNIX operating system were no longer a significant operating
system, the Company would be adversely affected if it could not adapt its TPII
software products to whatever operating system becomes dominant. The Company
believes that its future success, of which there can be no assurance, depends
upon its success in enhancing the performance of its current TPII software
products, such as the ability for TPII to handle higher volumes of card
transactions and the adaptation of its software products to smart card
technology, and developing new software products that address the increasingly
complex needs of customers.
8
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Dependence on Proprietary Technology
The Company relies on a combination of trade secret and copyright laws,
nondisclosure and other contractual and technical measures to protect its
proprietary rights in its software products. There can be no assurance that
these provisions will be adequate to protect its proprietary rights. In
addition, the laws of certain foreign countries do not protect intellectual
property rights to the same extent as the laws of the United States. Although
the Company believes that its intellectual property rights do not infringe upon
the proprietary rights of third parties, there can be no assurance that third
parties will not assert infringement claims against the Company.
No Assurance of Active Market; Possible Volatility of Stock Price
Although the Preferred Stock and the Common Stock are quoted on The
Nasdaq SmallCap Market, there can be no assurance that an active market in the
Preferred Stock and the Common Stock will be sustained. In the absence of an
active public trading market, an investor may be unable to liquidate his or her
investment.
There has been volatility in the market price of securities of
technology companies. Future announcements concerning the Company or its
competitors, including variations in financial results, changes in general
market conditions, governmental regulations or other developments may have a
significant impact on the market price of the Preferred Stock and the Common
Stock and could cause the market price of the Preferred Stock and the Common
Stock to fluctuate significantly. In addition, broad market fluctuations and
general economic or political conditions may adversely affect the market price
of the Preferred Stock and the Common Stock, regardless of the Company's actual
performance.
Year 2000
The Company has assigned project teams dedicated to prepare the
Company's computer systems, applications, current installed customers and future
products for the year 2000. Management expects to incur internal costs as well
as other expenses related to system enhancements and product modifications for
the year 2000. These costs are being expensed. These costs associated with the
year 2000 project are not expected to have a material impact on the future
results of operations. However, there could be a material adverse effect on the
results of operations if the system enhancements and modifications for the year
2000 prove not to be effective. A contingency plan for the Company would be to
install temporary modifications to existing customers to ensure system
integrity. These modifications would be utilized until a time when complete
system compliance could be attained at the customer site.
9
<PAGE>
Nonpayment of Dividends
No dividends will be paid on the Preferred Stock, except that holders
of Preferred Stock will be entitled to receive dividends if dividends are
declared with respect to the Common Stock and, in such event, ratably with the
holders of the Common Stock. The Company has never declared or paid a cash
dividend on its Common Stock and does not expect to pay cash dividends in the
foreseeable future.
Shares Eligible for Future Sale
As of the date hereof, the Company has outstanding an aggregate of
1,280,019 shares of Series A Preferred Stock and 1,327,424 shares of Common
Stock. 1,192,925 of the shares of Series A Preferred Stock and 977,534 shares of
Common Stock are freely tradable without restriction or further registration
under the Securities Act. The remaining 87,094 shares of Preferred Stock, which
are included in this registration statement, are "restricted" shares owned by an
"affiliate" of the Company. Of the remaining 349,890 shares of Common Stock
outstanding, 294,851 shares are "restricted" shares that are owned by
"affiliates" of the Company as such terms are defined under the Securities Act
and 55,039 shares are "restricted" shares that are owned by "nonaffiliates" of
the Company. Absent registration under the Securities Act, the sale of such
shares of Common Stock is subject to Rule 144, as promulgated under the
Securities Act. In general, under Rule 144, subject to the satisfaction of
certain other conditions, a person, including an affiliate of the Company, who
has beneficially owned restricted shares of Common Stock for at least one year
is entitled to sell in brokerage transactions, within any three-month period, a
number of shares that does not exceed the greater of 1% of the total number of
outstanding shares of the same class, or if the Common Stock is quoted on The
Nasdaq Stock Market or a national stock exchange, the average weekly trading
volume during the four calendar weeks preceding the sale. No prediction can be
made as to the effect, if any, that sales of shares of Common Stock or the
availability of such shares for sale will have on the market prices of the
Company's securities prevailing from time to time. The possibility that
substantial amounts of Common Stock may be sold under Rule 144 into the public
market may adversely affect prevailing market price for the Common Stock and
could impair the Company's ability to raise capital in the future through the
sale of equity securities.
Dilutive Effect of Options, Warrants and Convertible Securities
As of the date hereof, there were (i) options and warrants outstanding
to purchase an aggregate of 715,371 shares of Common Stock, with exercise prices
ranging from $.66 to $7.31 per share and which will expire on various dates
through 2008 and (ii) certain outstanding debt convertible into a maximum of
43,554 shares of Common Stock (subject to adjustment pursuant to anti-dilution
provisions). If the outstanding options and warrants are exercised and the
outstanding debt is converted, the percentage of capital stock then held by the
existing stockholders will be reduced. Furthermore, the outstanding options and
warrants can be expected to be exercised at a time when the Company would be
able to obtain funds from the sale of Series A Preferred Stock, Common Stock or
other securities at a price higher than the exercise prices thereof.
10
<PAGE>
SELLING STOCKHOLDERS
Of the 492,354 Shares of Common Stock offered hereby 186,631 Shares are
offered by Frank Pascuito, 25,000 are offered by Per Olof Ezelius, 50,000 are
offered by John Singleton, and 25,000 shares are offered by DuWayne Peterson.
Mr. Pascuito is Executive Vice President, Mr. Ezelius is the Chief Executive
Officer of NCI Holdings, Inc., a wholly-owned subsidiary of the Company, and Mr.
Singleton is Chairman of the Board of the Company. All four are Directors of the
Company. All of shares of Preferred Stock are offered by Mr. Ezelius, who
acquired such Shares pursuant to the Merger of NCI Holdings, Inc. with a
subsidiary of the Company. Prior to the Merger, Mr. Ezelius had no relationship
with the Company.
Pursuant to the terms of the Merger Agreement, Mr. Ezelius was issued
87,094 shares of Preferred Stock and the Company agreed to register the Shares
pursuant the Securities Act in a Registration Statement of which this Prospectus
forms a part for the purpose of registering the potential resale of such Shares
and/or the shares of Common Stock into which they are convertible. Mr. Ezelius
agreed that he will not sell more than 10,000 Shares during any sixty (60) day
period. Any unsold Shares during any period may be sold during subsequent
periods, provided that Mr. Ezelius may only sell a maximum of 15,000 Shares
during any sixty (60) day period.
Of Mr. Ezelius' Shares, 14,035 Shares are currently held in Escrow to
secure Mr. Ezelius' indemnity obligations to the Company pursuant to the Merger
Agreement (the "Escrowed Shares"). The Escrowed Shares may be sold, subject to
the above limitation, but the proceeds must remain in escrow. Any Escrowed
Shares returned to the Company may not be sold pursuant to this Prospectus.
The following tables set forth certain information as of October 28,
1998 with respect to the Selling Stockholders. The following tables assume all
shares may be sold by the selling stockholders, but the actual number may be
less. The number of Shares that may actually be sold by any Selling Stockholder
will be determined by the Selling Stockholder, which may depend upon a number of
factors including, among other things, the market prices of the Preferred Stock
and the Common Stock.
11
<PAGE>
TABLE I
Shares of Shares of
Preferred Preferred
Shares of Stock Offered Stock Owned
Preferred Stock in After Sale of
Owned Before Offering Offering All Shares(1)
--------------------- ------------- ------------------
Name of Stockholder Number (1) Percent(2) Number Number Percent
- ------------------- --------- --------- ------------- ------- -------
Per Olof Ezelius 87,094 6.8% 87,094 - -
(1) Does not include additional Preferred Stock the Selling Stockholder may
receive in the future based on a formula set forth in the Merger Agreement,
if the consolidated pre-tax profit of NCI exceeds certain levels during
each of the years ending April 30, 1999, 2000 and 2001 and during the three
years ending April 30, 2001.
(2) The percentages indicated are based on 1,280,019 shares of Preferred Stock
issued and outstanding on October 28, 1998.
TABLE II
Shares of Shares of
Common Common
Shares of Stock Offered Stock Owned
Common Stock in After Sale of
Name of Stockholder Owned Before Offering Offering All Shares
--------------------- --------------- ----------------
Number Percent(1) Number Number Percent
------- ---------- --------------- ------- -------
Frank Pascuito 350,956 23.5% 186,631 164,325 11.0%
Per Olof Ezelius (2) 160,094 11.7% 25,000 135,094 9.9%
John Singleton 60,000 4.5% 50,000 10,000 .7%
Andrew Pollett 25,000 1.9% 25,000 - -
C. Rex Welton 50,000 3.8% 50,000 - -
DuWayne Peterson 42,700 3.2% 25,000 17,700 1.3%
Erick E. Richardson Jr. 5,000 .4% 5,000 - -
J.R. Johnson 5,000 .4% 5,000 - -
Christopher Marlett 20,723 1.6% 20,723 - -
Wei Ying Wong (3) 5,000 .4% 5,000 - -
Roseann Wexler (3) 10,000 .7% 10,000 - -
Twinvalley Inc. (3) 65,000 4.9% 65,000 - -
Philip Lifschitz (3) 20,000 1.5% 20,000 - -
(1) The percentages indicated are based on 1,327,424 shares of Common Stock
issued and outstanding on October 28, 1998.
(2) Includes an option to purchase 18,000 shares of Common Stock and 87,094
shares of Common Stock which may be acquired by converting 87,094 shares of
Preferred Stock which were acquired pursuant to the terms of the Merger
Agreement, and 25,000 shares of Common Stock and an option to purchase
25,000 shares of Common Stock pursuant to the terms of the Extension
Agreement.
(3) Except 10,000 shares owned by Mr. Philip Lifschitz, all of these shares are
issuable upon exercise of warrants.
The Selling Stockholders may have sold, transferred or otherwise
disposed of all or a portion of their Shares since the date on which they
provided the information regarding their Shares in transactions exempt from the
registration requirements of the Securities Act. Additional information
concerning the Selling Stockholder may be set forth from time to time in
prospectus supplements to this Prospectus. See "Plan of Distribution."
12
<PAGE>
PLAN OF DISTRIBUTION
Subject to the limitations discussed under "Selling Stockholders,"
sales of the Shares may be made from time to time by the Selling Stockholders,
or, subject to applicable law, by pledgees, donees, distributees, transferees or
other successors in interest. Such sales may be made on The Nasdaq SmallCap
Market, in another over-the-counter market, on a national securities exchange
(any of which may involve crosses and block transactions), in privately
negotiated transactions or otherwise or in a combination of such transactions at
prices and at terms then prevailing or at prices related to the then current
market price, or at privately negotiated prices. In addition, any Shares covered
by this Prospectus which qualify for sale pursuant to Section 4(1) of the
Securities Act or Rule 144 promulgated thereunder may be sold under such
provisions rather than pursuant to this Prospectus. Without limiting the
generality of the foregoing, the Shares may be sold in one or more of the
following types of transactions: (a) a block trade in which the broker-dealer so
engaged will attempt to sell the Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) an exchange distribution in accordance
with the rules of such exchange; (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (e) face-to-face
transactions between sellers and purchasers without a broker-dealer. In
effecting sales, brokers or dealers engaged by the Selling Stockholders may
arrange for other brokers or dealers to participate in the resales.
In connection with distributions of the Shares or otherwise, the
Selling Stockholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the Shares registered hereunder in the course of hedging the positions they
assume with the Selling Stockholders. The Selling Stockholders may also sell
Shares short and deliver the Shares to close out such short positions. The
Selling Stockholders may also enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the Shares
registered hereunder, which the broker-dealer may resell pursuant to this
Prospectus. The Selling Stockholders may also pledge the Shares registered
hereunder to a broker or dealer and upon a default, the broker or dealer may
effect sales of the pledged Shares pursuant to this Prospectus.
Information as to whether underwriters who may be selected by the
Selling Stockholders, or any other broker-dealer, is acting as principal or
agent for the Selling Stockholders, the compensation to be received by
underwriters who may be selected by the Selling Stockholders, or any
broker-dealer, acting as principal or agent for the Selling Stockholders and the
compensation to be received by other broker-dealers, in the event the
compensation of such other broker-dealers is in excess of usual and customary
commissions, will, to the extent required, be set forth in a supplement to this
Prospectus (the "Prospectus Supplement"). Any dealer or broker participating in
any distribution of the Shares may be required to deliver a copy of this
Prospectus, including the Prospectus Supplement, if any, to any person who
purchases any of the Shares from or through such dealer or broker.
13
<PAGE>
The Company has advised the Selling Stockholders that during such time
as they may be engaged in a distribution of the Shares included herein they are
required to comply with Regulation M promulgated under the Exchange Act. In
general, Regulation M precludes the Selling Stockholders, any affiliated
purchasers and any broker-dealer or other person who participates in such
distribution from bidding for or purchasing, or attempting to induce any person
to bid for or purchase any security which is the subject of the distribution
until the entire distribution is complete. A "distribution" is defined in the
rules as an offering of securities that is distinguished from ordinary trading
activities and depends on the "magnitude of the offering and the presence of
special selling efforts and selling methods." Regulation M also prohibits any
bids or purchases made in order to stabilize the price of a security in
connection with the distribution of that security.
It is anticipated that the Selling Stockholders will offer all of the
Shares for sale. Further, because it is possible that a significant number of
Shares could be sold at the same time hereunder, such sales, or the possibility
thereof, may have a depressive effect on the market price of the Preferred Stock
and the Common Stock.
DESCRIPTION OF SECURITIES
The following descriptions of the Company's securities are qualified in
all respects by reference to the Certificate of Incorporation and By-laws of the
Company and the Certificate of Designation of the Preferred Stock. The
Certificate of Incorporation of the Company authorizes the Company to issue up
to 50,000,000 shares of Common Stock, par value $.001 per share, and 25,000,000
shares of preferred stock, par value $.001 per share.
Common Stock
As of the date hereof, there were 1,327,424 shares of Common Stock
outstanding. The holders of Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the stockholders. Subject
to preferential rights with respect to future outstanding preferred stock,
holders of Common Stock are entitled to receive ratably such dividends as may be
declared by the Board of Directors out of funds legally available therefor. In
the event of a liquidation, dissolution or winding up of the Company, holders of
Common Stock are entitled to share ratably in all assets remaining after payment
of liabilities and satisfaction of preferential rights and have no rights to
convert their Common Stock into any other securities. All shares of Common Stock
have equal, non-cumulative voting rights, and have no preference, exchange,
preemptive or redemption rights.
14
<PAGE>
Preferred Stock
As of the date hereof, there were 1,280,019 shares of Preferred Stock
outstanding. The Company's Certificate of Incorporation authorizes the issuance
of the preferred stock with designations, rights and preferences determined from
time to time by its Board of Directors. The Board of Directors has adopted a
resolution that 20,000,000 shares of the preferred stock be designated as Series
A Convertible Preferred Stock (the "Preferred Stock"). The holders of Preferred
Stock are entitled to one vote for each share held of record on all matters
submitted to a vote of the stockholders. All such matters require approval of
the Preferred Stock, voting separately as a class, except that with respect to
the election of directors, the Preferred Stock and Common Stock vote together as
one class. No dividends will be paid on the Preferred Stock, except that holders
of Preferred Stock will be entitled to receive dividends if dividends are
declared with respect to the Common Stock and, in such event, ratably with the
holders of Common Stock.
Each share of Preferred Stock is convertible at the option of the
holder into one share of Common Stock, subject to adjustment, during the
five-year period commencing on February 21, 1997; provided that the Preferred
Stock must be converted on the earlier of (i) February 20, 2002 or (ii) the
consummation date of a merger or acquisition of the Company in which the then
outstanding securities of the Company are surrendered or exchanged for cash,
property or securities of another entity if the consideration received in any
such transaction is not less than $5.00 per share on a fully-diluted basis. The
number of shares of Common Stock into which the Preferred Stock is convertible
is subject to adjustment in certain circumstances, including a stock dividend
on, or a stock split, subdivision, combination or recapitalization of, the
Common Stock or the issuance or sale of Common Stock or securities convertible
into or exchangeable for Common Stock at less than $5.00 per share, except in
certain circumstances.
In the event of liquidation, dissolution or winding up of the Company,
holders of Preferred Stock are entitled, after payment of liabilities and
satisfaction of any then existing preferential rights of any holders of capital
stock, to receive up to $5.00 per share of the remaining assets of the Company
before payment is made to the holders of Common Stock. After payment of $5.00
per share to the holders of the Preferred Stock, the holders of the Preferred
Stock are entitled to share with the holders of the Common Stock in the
remaining assets of the Company available for distribution to its stockholders.
All shares of Preferred Stock have equal, non-cumulative voting rights
and have no preemptive or redemption rights.
15
<PAGE>
The remaining 5,000,000 shares of preferred stock, which have not been
designated as Series A Convertible Preferred Stock, may be issued in series, and
such preferred stock of each series will have such rights and preferences as are
fixed by the Board of Directors in the resolutions authorizing the issuance of
that particular series. In designating any series of the remaining preferred
stock, the Board of Directors may fix the number of shares of the remaining
preferred stock constituting that series and fix the dividend rights, dividend
rate, conversion rights, voting rights (which may be greater or lesser than the
voting rights of the Common Stock and Preferred Stock), rights and terms of
redemption (including any sinking fund provisions) and the liquidation
preferences of the series of the remaining preferred stock. It is possible,
without any action of the stockholders of the Company, that the holders of any
series of the remaining preferred stock, when and if issued, will have priority
claims to dividends and to any distributions upon liquidation of the Company and
that they may have other preferences over the holders of the Common Stock. The
Board of Directors may issue series of the remaining preferred stock without
action of the stockholders of the Company, except that no series of the
remaining preferred stock may be issued with liquidation preferences greater
than the liquidation preferences of the Preferred Stock or with dividend rights
on a parity with or having a preference over the dividend rights of the
Preferred Stock without approval of the holders of the Preferred Stock.
The issuance of the remaining preferred stock may be used as an
anti-takeover device without further action on the part of the stockholders.
Furthermore, the issuance of preferred stock may dilute the voting power of
holders of the Common Stock and Preferred Stock (such as by issuing preferred
stock with super-voting rights) and may render more difficult the removal of
current management, even if such removal may be in the stockholders' best
interests. The Company has no current plans to issue any of the remaining
preferred stock.
Delaware Law and Certain Charter Provisions
The Company will be subject to Section 203 of the Delaware General
Corporation Law, which prohibits a Delaware corporation from engaging in a wide
range of specified transactions with any interested stockholder, defined to
include, among others, any person or entity who in the previous three years
obtained 15% or more of any class or series of stock entitled to vote in the
election of directors, unless, among other exceptions, the transaction is
approved by (i) the Board of Directors prior to the date the interested
stockholder obtained such status or (ii) the holders of two-thirds of the
outstanding shares of each class or series owned by the interested stockholder.
The Company's Certificate of Incorporation and By-laws contain certain
additional provisions which may have the effect of delaying or preventing a
change in control of the Company. Such provisions include blank check preferred
stock (the terms of which may be fixed by the Board of Directors without
stockholder approval). Accordingly, the Company's Board of Directors is
empowered, without stockholder approval, to issue preferred stock, other than
the Preferred Stock, with dividend, liquidation, conversion, voting or other
rights that could adversely affect the voting power or other rights of the
holders of the Preferred Stock and/or Common Stock. In the event of issuance,
the preferred stock could be used, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of the Company.
Transfer and Warrant Agent
The transfer agent for the Preferred Stock and Common Stock is American
Stock Transfer & Trust Company.
LEGAL MATTERS
Certain legal matters in connection with the securities being offered
hereby will be passed upon for the Company by Parker Duryee Rosoff & Haft, New
York, New York 10017.
16
<PAGE>
EXPERTS
The consolidated financial statements of the Company, as of April 30,
1998, and for each of the two years in the period ended April 30, 1998, included
in the Company's annual report on Form 10-KSB for the fiscal year ended April
30, 1998, which annual report has been incorporated herein by reference, have
been audited by Urbach Kahn & Werlin PC, independent certified public
accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the report of said firm given
upon their authority as experts in accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the Company's estimates of the expenses
to be incurred by it in connection with the Preferred Stock being offered
hereby:
SEC Registration Fee $ 418.00
Printing expenses 5,000.00 *
Legal fees and expenses 10,000.00 *
Accounting fees and expenses 500.00 *
Miscellaneous expenses 500.00 *
-------------------
TOTAL $ 16,418.00
===================
- ------------
* Estimated
Item 15. Indemnification of Directors and Officers.
Article NINTH of the Certificate of Incorporation of IFS International,
Inc. ("Registrant") provides that no director shall have any personal liability
to Registrant or its stockholders for monetary damages for breach of fiduciary
duty as a director, except with respect to (1) a breach of the director's duty
of loyalty to Registrant or its stockholders, (2) acts or omissions not in good
faith which involve intentional misconduct or a knowing violation of law, (3)
liability under Section 174 of the Delaware General Corporation Law or (4) a
transaction from which the director derived an improper personal benefit.
Article TENTH of the Certificate of Incorporation of Registrant provides that
Registrant shall indemnify, to the fullest extent permitted by Section 145 of
the Delaware General Corporation Law, as amended from time to time, any and all
persons whom it shall have power to indemnify under such section.
17
<PAGE>
Item 16. Exhibits and Financial Statement Schedules.
2.1 Plan and Agreement of Merger, dated January 30, 1998, among IFS
International Inc., NCI Holdings, Inc., NCI Acquisition Corp. and Per
Olof Ezelius (1)
4.1 Certificate of Designation of the Series A Convertible Preferred
Stock (2)
4.2 Form of certificate evidencing shares of Preferred Stock (3)
4.3 Form of certificate evidencing Warrants (3)
4.4 Form of certificate evidencing shares of Common Stock (3)
4.5 Warrant Agreement between the Company and Duke (2)
4.6 Form of Warrant Agreement between the Company and American Stock
Transfer and Trust Company, as Warrant agent (3)
4.7 Debenture Investment Agreement, dated July 6, 1989, between the Company
and New York State Science and Technology Foundation, and amendments
thereto (3)
4.8 Loan Agreement, dated January 11, 1989, between the Company and North
Greenbush Industrial Development Agency and amendments thereto (3)
5.1* Opinion of Parker Duryee Rosoff & Haft A Professional Corporation
10.1 Employment Agreement, dated as of May 12, 1998 between the Company and
David L. Hodge. (4)
10.2 Employment Agreement, dated as of May 12, 1998, between the Company and
Frank A. Pascuito. (4)
10.3 Employment Agreement, dated as of May 12, 1998, between the Company and
Simon J. Theobald. (4)
10.4 Extension Agreement, dated as of May 12, 1998 between the Company and
Per Olof Ezelius. (4)
23.1 Consent of Urbach Kahn & Werlin PC
23.2* Consent of Parker Duryee Rosoff & Haft (included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page of Part II of this
Registration)
- -----------------
18
<PAGE>
* To be filed by amendment.
(1) Denotes document filed as an exhibit to the Company's Current Report on Form
8-K, dated January 30, 1998 and incorporated herein by reference.
(2) Denotes document filed as an exhibit to the Company's Quarterly Report on
Form 10-QSB for the quarter ended January 31, 1997 and incorporated herein by
reference.
(3) Denotes document filed as an exhibit to the Company's Registration Statement
on Form SB-2 (File No. 333-11653) and incorporated herein by reference.
(4) Denotes document filed as an exhibit to the Company's Annual Report on Form
10-KSB for the year ended April 30, 1998 and incorporated herein by reference.
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 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, as amended (the "Securities Act"), 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, each filing of the Company's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, that is
incorporated by reference in the Registration Statement, shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
19
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to Item 15 of Part II of the Registration Statement, 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. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company 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 Company 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 Securities
Act and will be governed by the final adjudication of such issue.
20
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Troy, State of New York, on October 30, 1998.
IFS INTERNATIONAL, INC.
By: /s/ David L. Hodge
______________________
David L. Hodge
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Frank A. Pascuito and David L. Hodge, and
each of them, with full power to act without the other, 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
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and the documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or 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
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.
Signature Title Date
_______________________ _____________________________________ ________________
/s/ David L. Hodge President and Chief Executive Officer, October 30, 1998
_______________________ Director (Principal Executive Officer)
David L. Hodge
/s/ John P. Singleton Chairman of the Board, Director October 30, 1998
_______________________
John P. Singleton
/s/ Frank A Pascuito Executive Vice President, Director, October 30, 1998
_______________________ Founder
Frank A Pascuito
/s/ Simon J. Theobald Executive Vice President, Director October 30, 1998
_______________________
Simon J. Theobald
/s/ Carmen A Pascuito Controller October 30, 1998
_______________________
Carmen A Pascuito
/s/ Per Olof Ezelius Director October 30, 1998
_______________________
Per Olof Ezelius
/s/ Arnold Wells Director October 30, 1998
_______________________
Arnold Wells
/s/ DuWayne J. Peterson Director October 30, 1998
_______________________
DuWayne J. Peterson
<PAGE>
EXHIBIT INDEX
Exhibit Number Description of Exhibit
- -------------- ----------------------------------------------------------------
2.1 Plan and Agreement of Merger, dated January 30, 1998, among
IFS International Inc., NCI Holdings, Inc., NCI Acquisition Corp.
and Per Olof Ezelius (1)
4.1 Certificate of Designation of the Series A Convertible Preferred
Stock (2)
4.2 Form of certificate evidencing shares of Preferred Stock (3)
4.3 Form of certificate evidencing Warrants (3)
4.4 Form of certificate evidencing shares of Common Stock (3)
4.5 Warrant Agreement between the Company and Duke (2)
4.6 Form of Warrant Agreement between the Company and American Stock
Transfer and Trust Company, as Warrant agent (3)
4.7 Debenture Investment Agreement, dated July 6, 1989, between the
Company and New York State Science and Technology Foundation,
and amendments thereto (3)
4.8 Loan Agreement, dated January 11, 1989, between the Company and
North Greenbush Industrial Development Agency and amendments
thereto (3)
5.1* Opinion of Parker Duryee Rosoff & Haft A Professional Corporation
10.1 Employment Agreement,dated as of May 12, 1998 between the Company
and David L. Hodge. (4)
10.2 Employment Agreement, dated as of May 12, 1998, between the
Company and Frank A. Pascuito. (4)
10.3 Employment Agreement, dated as of May 12, 1998, between the
Company and Simon J. Theobald. (4)
10.4 Extension Agreement, dated as of May 12, 1998 between the Company
and Per Olof Ezelius. (4)
23.1 Consent of Urbach Kahn & Werlin PC
23.2* Consent of Parker Duryee Rosoff & Haft (included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page of Part II of
this Registration
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* To be filed by amendment.
(1) Denotes document filed as an exhibit to the Company's Current Report on Form
8-K, dated January 30, 1998 and incorporated herein by reference.
(2) Denotes document filed as an exhibit to the Company's Quarterly Report on
Form 10-QSB for the quarter ended January 31, 1997 and incorporated herein by
reference.
(3) Denotes document filed as an exhibit to the Company's Registration
Statement on Form SB-2 (File No. 333-11653) and incorporated herein by
reference.
(4) Denotes document filed as an exhibit to the Company's Annual Report on Form
10-KSB for the year ended April 30, 1998 and incorporated herein by reference.
<PAGE>
Consent of Independent Certified Public Accountants
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated July 14, 1998 on our audits of the
consolidated financial statements of IFS International, Inc. and subsidiaries as
of April 30, 1998, and for each of the two years in the period ended April 30,
1998, which appears on page F-2 of the annual report on Form 10-KSB of IFS
International, Inc. for the year ended April 30, 1998, and to the reference to
our firm under the caption "Experts" in the prospectus.
/s/ URBACH KAHN & WERLIN PC
Albany, New York
October 29, 1998
