PARKER DURYEE ROSOFF & HAFT
A PROFESSIONAL CORPORATION
ATTORNEYS
529 FIFTH AVENUE
NEW YORK, NEW YORK 10017-4608
(212) 599-0500 MICHAEL D. DIGIOVANNA
FAX (212) 972-9487 DIRECT (212) 878-1768
March 9, 2000
United States Securities and Exchange Commission
Washington D.C. 20549
RE: IFS International, Inc.
Amendment No. 1 to Registration Statement on Form S-3
File No. 333-86405
Filed on November 25, 1999
Dear Sir/Madam:
Set forth below are responses to your comment letter of December 7,
1999. The numbered responses correspond to your numbered comments.
General
1. We have filed all supplemental correspondence related to this registration
statement on EDGAR as "corresp", including the letter faxed on October 12,
1999. The accompanying amendment is marked to indicate changes from the
previously filed version of the registration statement.
Risk Factors
2. We have included an appropriately captioned paragraph that concisely
addresses the risks to registrant's shareholders of the convertible
promissory notes the registrant sold in July, 1999. The Risk Factor
discusses the sensitivity of the number of share the registrant would be
required to issue upon conversion of the notes to fluctuations in future
market prices. A table which reflects the number of shares issuable under
conversion of the notes in the event the price remains at its current
level, and if the price declines by 25%, 50% and 75% from the current
level.
Selling Shareholders
3. We have expanded the description of the transaction to include complete
descriptions of the PARKER DURYEE ROSOFF & HAFT
United States Securities and Exchange Commission
March 9, 2000
Page 2
material terms of the Note and Warrant Purchase Agreement of July 2, 1999,
as well as the terms of the convertible notes and warrants sold under that
agreement. The response to this comments 9 and 10 include disclosure
regarding the rights of the holders of those securities, and how those
securities affect other shareholders.
4. The Company appreciates it cannot rely on Rule 416 to automatically cover
additional shares issuable upon conversion of notes or exercise of warrants
due to fluctuations in the conversion price. If the number of shares it is
obligated to issue exceeds the number of shares in the "amount to be
registered" column of the fee table because the market price declines, the
Company understands it must file a new registration statement for the
additional shares.
5. The revised prospectus includes information regarding the transactions in
which Gilston and Colebrooke Capital received their securities based in
large part upon information supplied by Seller. There are no agreements
describing the services. Pursuant to the terms of the Note and Warrant
Purchase Agreement, IFS was obligated to issue 100,000 additional warrants,
to issue an additional $75,000 principal amount of notes and to make a
$25,000 cash payment to Gilston (the "Additional Consideration"). The
agreement did not set forth the purpose of the Additional Consideration.
Initially in connection with the financing we approached Colebrook Capital
with whom we had an agreement to provide advisory services. As a result, we
were introduced to a third party which we subsequently have been advised
was an agent of Gilston. The entire financing including the Additional
Consideration was negotiated with this agent and agreed to in April 1999.
The designation of the purchasers in the Agreement including Gilston, did
not occur until the final drafts of the financing agreements. Gilston has
advised us that the Additional Consideration was for negotiating and
structuring the transaction. We have been advised by Gilston that the
portion of the Additional Consideration paid to Colebrook, was for
Colebrook's introduction of the Company to Gilston.
6. Based on information provided to us, the revised section now disclosures
the natural persons who exercise control over the selling shareholders as
well as the principal business activities and location of each selling
shareholder.
7. Based solely on information provided to us we confirm that Assanzon did not
purchase the securities with a view toward distribution and does not have
an agreement or understand, directly or indirectly, with any person to
resell the securities.
8. The disclosure of this section has been expanded to include the effects of
the market price related conversion features of the convertible notes. We
have included descriptive subheadings to make PARKER DURYEE ROSOFF & HAFT
United States Securities and Exchange Commission
March 9, 2000
Page 3
the information easier to understand. The discussion includes the effect of
the floating rate on the number of shares the holder may receive, the
downward pressure on the price caused by conversion and short sale
pressures and the resulting dilution.
9. We have included the following disclosure in tabular format:
a) A reasonable range of market prices above and below the current market
price, taking into account the recent price history of the common
stock;
b) The resulting conversion of exercise price at each range of market
prices;
c) The resulting number of shares into which the notes would be
convertible;
d) The percentage of the total outstanding common stock these shares
would represent without regard to any contractual or other restriction
on the number of securities a particular selling security holder may
own at any point in time.
Please contact the undersigned if you need any additional information.
Very truly yours,
Michael D. DiGiovanna
<PAGE>
As filed with the Securities and Exchange Commission on March 9, 2000
File No. 333-86405
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
AMENDMENT 2
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------
IFS INTERNATIONAL HOLDINGS, INC.
(FORMERLY 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 10017-4608
(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>
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to be Offering Price Aggregate Offering Registration
Securities to be Registered Registered Per Share(1) Price(1) Fee (2)
- ------------------------------ -------------------- ------------------- ------------------------ ------------------
common stock, par value
<S> <C> <C> <C> <C>
$.001 per share 1,150,531 $2.27 $2,611,705 $727.00
Total Registration Fee $727.00
- ------------------------------ -------------------- ------------------- ------------------------ ------------------
</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 common stock on The Nasdaq SmallCap Market on August 27, 1999.
(2) Paid at time of original filing, September 2, 1999.
(3) Pursuant to Rule 416(a), the Registration Statement also relates to an
indeterminate number of additional shares of IFS' common stock, issuable upon
the exercise of options pursuant to anti-dilution provisions contained therein,
which shares of common stock are registered hereunder.
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>
PROSPECTUS
1,150,531 SHARES
IFS INTERNATIONAL, INC.
common stock
--------------
Stockholders of IFS International, Inc., named under the caption "Selling
Stockholder" may offer and sell up to 1,150,531 shares of our common stock.
Investing in our common stock is risky. See "Risk Factors" on page 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is March 9, 2000
<PAGE>
TABLE OF CONTENTS
Page
WHERE YOU CAN FIND MORE INFORMATION............................................2
INTRODUCTION...................................................................3
RECENT DEVELOPMENTS............................................................4
RISK FACTORS...................................................................6
FORWARD-LOOKING STATEMENTS....................................................10
USE OF PROCEEDS...............................................................11
SELLING STOCKHOLDERS..........................................................11
PLAN OF DISTRIBUTION..........................................................16
DESCRIPTION OF SECURITIES.....................................................17
LEGAL MATTERS.................................................................20
EXPERTS.......................................................................21
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
IFS has filed a registration statement on Form S-3 with the Securities and
Exchange Commission in connection with this offering. In addition, IFS files
annual, quarterly and current reports, proxy statements and other information
with the Securities and Exchange Commission. You may read and copy the
registration statement and any other documents filed by IFS at the Securities
and Exchange Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the Securities and Exchange Commission at
1-800-SEC-0330 for further information on the Public Reference Room. IFS'
Securities and Exchange Commission filings are also available to the public at
the Securities and Exchange Commission's Internet site at "http//www.sec.gov."
In addition, reports, proxy statements and other information concerning IFS may
be inspected at the offices of the Nasdaq SmallCap Market, 1735 K Street, N.W.,
Washington, D.C. 20549, on which the common stock is quoted.
This prospectus is part of the registration statement and does not contain all
of the information included in the registration statement. Whenever a reference
is made in this prospectus to any contract or other document of IFS, the
reference may not be complete and you should refer to the exhibits that are a
part of the registration statement for a copy of the contract or document.
The Securities and Exchange Commission allows us to "incorporate by reference"
into this prospectus the information we file with it, which means that we can
disclose important information to you by referring you to those documents.
Information incorporated by reference is part of this prospectus. Later
information filed with the Securities and Exchange Commission will update and
supersede this information.
IFS incorporates by reference the documents listed below and any future filing
made with the Securities and Exchange Commission under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 until this offering is
completed:
Annual Report on Form 10-KSB for fiscal year 1999.
Quarterly Report on Form 10-QSB for quarters ended July 31, 1999 and
October 31, 1999.
You may request a copy of these filings, at no cost, by contacting the Company
at:
IFS International, Inc.
Rensselaer Technology Park
300 Jordan Road
Troy, New York 12180
Attn.: Carmen Pascuito
Tel. No. 518-283-7900
<PAGE>
INTRODUCTION
General
We are a Delaware corporation, engaged in the business of developing, marketing
and supporting software products for electronic funds transfer and retail
banking markets. These markets are served through our two wholly-owned
subsidiaries, IFS International, Inc., a New York corporation and Network
Controls International, Inc., a North Carolina corporation.
Our IFS subsidiary derives revenues principally from the licensing of its family
of software products.
Our IFS' subsidiary's family of software products, marketed under the name TPII,
serves as a UNIX-based manager for electronic funds transfer systems. An
electronic funds transfer 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.
The TPII software products are typically installed at the financial
institution's main processing facility. TPII software products have been
primarily installed in electronic funds transfer systems of banks and other
financial institutions located in emerging countries and former Eastern Bloc
nations.
TPII software is also capable of managing electronic funds transfer 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. Our IFS subsidiary has developed software for Visa
International Service Association. Since the first calendar quarter of 1997, our
IFS subsidiary completed, on behalf of Visa, several pilot programs and
subsequently entered into several license and maintenance agreements for these
sites.
<PAGE>
Our NCI subsidiary 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 (TM). NCI
Business Centre (TM) 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 (TM) 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 and has overseas subsidiaries and branch offices
marketing its products and services internationally.
We provide our 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.
We were 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 25, 2000 we entered into an advisory agreement with Commonwealth
Associates, L.P. The agreement calls for Commonwealth Associates, L.P. to
perform certain strategic advisory services related to corporate finance and
other financial service matters. The term of the agreement is for four months
commencing on January 25, 2000 renewable at the mutual discretion of us and
Commonwealth Associates, L.P. Commonwealth Associates, L.P. received $10,000 as
an advance against expenses and will receive a monthly retainer. There are
provisions in the advisory agreement in which Commonwealth Associates, L.P. will
receive additional compensation in the event of any financing obtained by us
through Commonwealth. Commonwealth Associates, L.P. also received warrants to
purchase 850,000 shares of our common stock.
On December 6th 1999, we entered into a Stock Purchase Agreement to acquire all
of the outstanding shares of Global Insight Group LTD and its three operating
subsidiaries. The consideration is payable entirely in shares of the Company's
common stock. We only issued three shares at closing but are obligated to issue
additional shares based on future performance of the Acquired Company. There are
two components to this additional consideration. First, sellers will receive
shares of our common stock having a market value equal to four times net
earnings of the acquired company as set forth in the agreement.
In addition, for each of the years 2000 through 2002 the sellers will receive
shares of our common stock having a market value equal to fifty (50%) of the
earnings for each year or (thirty (30%) percent if the seller receives stock
having a value of $1,200,000).
Our board of directors recently authorized the payment of bonuses to certain of
its officers and directors if we successfully complete a financing. Pursuant to
this authorization we would pay a total of 8% of the gross proceeds for a
financing up to $10,000,000, 15.5% for a financing between $10,000,001 and
$20,000,000 and 22% for financing above $20,000,000. Mr. David Hodge and Mr.
Simon Theobald, CEO and COO of IFS would receive the following percentages,
respectively; a) of the 8%, 3% and 2%; b) of the 15.5%, 6% and 4%; and c) of the
22%, 7% and 6%.
In December, 1999, the Company changed its corporate name to IFS International
Holdings, Inc.
In October, 1999 we issued 1,051,716 shares of our common stock to Per Olof
Ezelius, one of our directors and president of our NCI subsidiary. The shares
were issued as additional contingent consideration pursuant to the terms of the
plan and merger agreement dated January 30, 1998. Mr. Ezelius may receive
additional contingent shares in future years based on the financial performance
of NCI through fiscal year 2001 pursuant to the plan and merger agreement.
<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.
We have incurred operating losses and may incur these losses in the future.
We incurred a net loss of $703,907 and had a net income of $185,289 for our
fiscal year ended April 30, 1999 and our six months ended October 31, 1999,
respectively. As of October 31, 1999, we had an accumulated deficit of
$4,398,397. There can be no assurance as to our future profitability.
We are dependent on revenues from foreign sources and are subject to the risks
of doing business abroad.
We derived approximately 67% and 90% of total revenues for the six month periods
ended October 31, 1998 and 1999, 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 us in United States currency, but if future customers pay in
foreign currencies, we would be subject to fluctuations in exchange rates. There
can be no assurance that we will be able to continue to manage the risks related
to selling our services in foreign markets.
We are dependent on the electronic funds transfer and the bank automation
markets.
Our IFS subsidiary derives its revenues from sales for the electronic funds
market. Therefore, we are susceptible to adverse events in that market. For
example, a decrease in the number of electronic funds transfer transactions by
the general public or in spending by financial institutions for software for
electronic funds transfer and bank automation and related services could result
in a smaller overall market for electronic funds transfer software. These
factors, as well as others negatively affecting the electronic funds transfer
market, could have a material adverse effect on our financial condition and
results of operations.
We may have a possible need for additional financing and may not be able to
raise any required funds.
We believe that anticipated cash flow from operations and the $600,000 line of
credit available to us will be sufficient to finance our working capital
requirements for the foreseeable future. The Company's estimate is based upon
its ability to obtain revenues from licensing agreements through our IFS
subsidiary as currently projected. The Company may need additional financing if
these revenues are not received. Moreover, a portion of TPII software contracts
are not paid until acceptance by the customer. As a result, we are required to
fund a portion of the costs of these installations from available capital. Any
substantial increase in the number of installations or delay in payment could
create a need for additional financing. In these events, there can be no
assurance that additional financing will be available on terms acceptable to us
or at all.
Our common stock price may be adversely affected by our outstanding convertible
notes.
We have outstanding convertible notes with aggregate principal amounts of
$1,075,000 which when converted into common stock may result in substantial
dilution. These notes may be converted into shares of common stock at a price
equal to the lesser of (1) $3.00 per share or (2) 90% of market price as
determined in the agreement. Because the number of shares issued under the note
is dependent upon our market price, the lower the market price, the greater the
number of shares that may be issued (assuming a market price of less than $3.00
per share). The conversion of a significant number of convertible notes may
depress the price of our common stock. This in turn would result in a lower
conversion price and a greater number of shares issued upon a subsequent
conversion leading to possible further price declines. We have set forth the
number of our shares issuable upon conversion at market prices of $4.25 on March
6, 2000 and at lower market prices, assuming in each case, all of the notes are
exercised:
Market Price Number of Shares
$4.25 (current) 358,333 *
$3.18 (25% decline) 374,728
$1.06 (75% decline) 1,124,183
* calculation based on minimum of $3.00 per share
It is possible that the number of shares issuable violate NASDAQ policy
requiring shareholder approval of the issuance of 20% of the outstanding shares
without stockholder approval. Because a violation could lead to delisting of our
shares on NASDAQ. Provisions in the agreement prohibit the Note from being
converted if the conversion results in the issuance of twenty percent of the
outstanding shares.
Our market price may be affected by the issuance of shares pursuant to warrants,
options, and other rights.
As of this date, including our public warrants there were options and warrants
outstanding to purchase an aggregate of 6,483,601 shares of common stock,
including debentures and other rights to acquire shares of our common stock with
exercise prices ranging from $1.00 to $6.50 per share. This does not include the
obligation to issue shares of our common stock pursuant to convertible
promissory notes as described in the preceding risk factor. IFS issued the
convertible promissory notes in the amount of $1,075,000 which are convertible
into 358,333 shares of common stock, subject to adjustment based on current
market prices. In addition, we may be obligated to issue a substantial number of
shares based on the financial performance of NCI through fiscal year 2001 as
shares pursuant to an existing merger agreement. The issuance of all these
shares could have an adverse impact upon the market price of our common stock.
Our growth is dependent on expanding our customer base.
We receive additional revenues from existing customers as a result of providing
ongoing maintenance services in support of licensed software. We may also
receive additional revenues for enhancements of the software products. We
generally will not receive significant license revenues in a subsequent period
from these customers. Although we usually generate significant repeat business
from our customers, we will still be required to continually attract new
customers in order to increase revenues in the future. As a result, we will
incur higher marketing expenses generally associated with attracting new
customers as compared to marketing expenses associated with attracting
additional business from existing customers. Moreover, our inability to generate
additional business upon completion of existing contracts would also have a
material adverse effect on our financial condition and results of operations.
We have had 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. Our IFS subsidiary may 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 our subsidiary of the financial institution's personnel in the use
of the software products take an average of six to twelve months. Accordingly,
our 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 electronic funds transfer.
We must attract and retain key and technical personnel.
Our success depends on the retention of our principal executives including David
Hodge, Frank Pascuito, Simon Theobald, John Singleton and Per Olof Ezelius, our
President and CEO, Executive Vice President, Chief Operating Officer, Chairman,
and President and CEO of NCI, a subsidiary of IFS, respectively. Most of our key
executives have employment or consulting agreements with us. We believe that our
future success also depends on our 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 we will be successful in attracting and retaining the personnel
we require.
We may not be able to compete against our competitors, many of whom have greater
resources.
The development and marketing of software for financial institutions is highly
competitive. Many of our competitors have greater financial resources than we
do. In addition, many of the larger financial institutions have developed their
own systems internally. However, we believe our current 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
smart card market, other financial institutions and companies including certain
institutions and companies which have greater resources than us, have developed
and are developing their own smart card technology. We are unable to predict
which technology, if any, will become the industry standard.
NCI has limited direct competition with most of its legacy products as we are
unaware of any equivalent products offered by competitors. There are several
competitors for NCI's other products. The NCI Business Centre (TM) product
competes with major branch automation solution providers.
We may be adversely effected by 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, we would be
adversely affected if we could not adapt TPII software products to whatever
operating system becomes dominant. We believe that our 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.
We are dependent on our proprietary technology.
We rely on a combination of trade secret and copyright laws, non-disclosure and
other contractual and technical measures to protect our proprietary rights in
our software products. There can be no assurance that these provisions will be
adequate to protect such 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 we believe that our 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 us.
FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus and in the information incorporated
by reference contains forward-looking statements within the meaning of the
federal securities laws. These statements include, among others, the following:
Those pertaining to the implementation of our growth strategy;
Our projected capital expenditures; and
These statements may be found in this prospectus and in the information
incorporated by reference under "Risk Factors", "Management's Discussion and
Analysis of Financial Condition and Results of Operations". Forward-looking
statements typically are identified by use of terms such as "may," "will,"
"expect," "anticipate," "estimate," and similar words, although some
forward-looking statements are expressed differently. You should be aware that
our actual results could differ materially from those contained in
forward-looking statements due to a number of factors including:
general economic conditions;
competitive market influences;
the development of the capacity to accommodate additional and larger
contracts;
establishing the ability of TPII software products to process transactions
for larger electronic funds transfer systems;
continued acceptance of our software products by a significant number of
new customers;
our continued relationship with computer manufacturers;
and acceptance of NCI Business Centre (TM) by a significant number of new
customers.
You should also consider carefully the statements under "Risk Factors" and other
sections of this prospectus, which address additional factors that could cause
our actual results to differ from those set forth in the forward-looking
statements.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares hereby. Any
proceeds received upon exercise of warrants will be utilized as working capital.
SELLING STOCKHOLDERS
Purchase by Selling Stockholders
On July 6, 1999 we entered into a Note and Warrant Purchase Agreement with
several purchasers, each a selling stockholder. Pursuant to the agreement, we
sold an aggregate of $1,000,000 principal amount of notes to the purchasers.
Each purchaser received warrants described below to purchase 10,000 shares of
our common stock for each $100,000 principal amount of notes purchased or a
total of warrants to purchase 100,000 shares. Pursuant to the Note and Warrant
Purchase Agreement we paid Gilston Corporation, Ltd. ("Gilston"), one of the
purchasers, received $25,000, a note in the principal amount of $75,000 and
warrants to purchase 50,000 shares. We also issued to Colebrooke Capital, Inc.,
(at the direction of Gilston) a selling stockholder but not a purchaser, a note
in the principal amount of $25,000 and warrants to purchase 50,000 of our shares
of common stock. We have been advised that the additional consideration was for
Gilston's structuring and negotiation of the transaction and that Gilston
directed that a portion of the shares be issued to Colebrooke because Colebrooke
introduced Gilston to us. As a result of the transaction we issued $1,075,000
principal amount of notes and 200,000 warrants and received net proceeds of
$965,000. This private placement was a transaction exempt from the registration
requirements of the Securities Act of 1933 pursuant to section 4(2) of this act
and regulation D adopted by the Securities and Exchange Commission. The holders
of the notes and warrants received certain registration rights. The selling
stockholders are offering for sale the shares of our common stock that these
persons have a right to acquire upon exercise of the convertible promissory
notes. In addition, all the selling stockholders are offering for sale shares
they have a right to acquire upon exercise of the warrants issued with the
notes.
Securities Acquired
Warrants
The warrants are exercisable at a price of $3.07 per share during the five year
period ending on July 6, 2004. The number of shares subject to the Warrant and
the warrant exercise price are subject to dilution if we issue shares or
convertible securities or options, with several exceptions below the exercise
price of the warrant.
Convertible Note
General
The notes are due in July 2001 and accrue interest at 10% per year. Interest
does not accrue for the first three months and does not accrue for a given month
if the weighted average stock price for the previous month was at or above $3
per share. We have a right to redeem the notes in certain circumstances at
redemption prices ranging from 107% of the principal amount of notes to 119% of
the principal amount, plus any accrued but unpaid interest.
The notes may be converted into shares at the lower of $3.00 per share or 90% of
the market value as defined in the note upon conversion. At no time may a seller
convert the note if the conversion results in (i) the seller owning more than
4.99% of our common stock or (ii) the issuance of more than 20% of the
outstanding shares in violation of the rules of NASDAQ. The aforesaid minimum
amount of $3.00 per share may be reduced if we, with some exception, issue
securities for consideration, exercise price or conversion below $3.00.
The convertible notes may be converted at a price related to market. Therefore,
the lower the market price the greater the number of shares which may be issued.
This in turn may depress the price of stock significantly leading to a lower
conversion price and the introduction of short selling all of which further
depress the stock price and could lead to significant dilution. The outstanding
convertible notes may be convert at a floating rate based on a discount to the
market price of the common stock. As a result, the lower the stock price at the
time of conversion, the more shares the selling stockholder receives and the
greater the dilution to us. The possible adverse effect of the foregoing is
discussed below.
Partial Conversion. To the extent the selling stockholders convert
and then sell their common stock, the common stock price may decrease due to the
additional shares in the market. This could allow the selling shareholders to
convert their convertible notes into greater amounts of common stock, the sale
of which would further depress the stock price.
Downward Pressure by Holders and Unrelated Short Sales. The
significant downward pressure on the price of the common stock as the selling
stockholders convert and sell material amounts of common stock could encourage
short sales by the selling shareholders or others. This could place further
downward pressure on the price of the common stock.
Substantial Dilution. The conversion of the convertible notes may
result in substantial dilution to the interests of other holders of common stock
since each holder of convertible notes may ultimately convert and sell the full
amount issuable on conversion.
The conversion feature is illustrated by the following table:
Shares Issuable Percentage of
Market Price Conversion Price Upon Conversion Outstanding Shares
$3.50 $3.00 358,333 8.3%
$2.50 $2.25 477,778 10.8%
$1.50 $1.35 796,296 16.8%
$1.00 $.90 1,194,444 23.2%
<PAGE>
Information Concerning Selling Stockholders
The following table contains information concerning the beneficial ownership of
our common stock by the selling stockholders as adjusted for sales by each
selling stockholder.
<TABLE>
Before the Offering After the Offering
- ---------------------------------- ---------------- ------------------- ----------- -------------- ------------------
Identity of Shares Shares Percent of
Stockholder or Group Beneficially Percent of Shares Shares Beneficially Shares
Owned Outstanding Offered Owned Outstanding
- ---------------------------------- ---------------- ------------------- ----------- -------------- ------------------
<S> <C> <C> <C> <C>
Gilston Corporation, Ltd. 354,654 8% 354,654 None -0-
Charlotte House
Charlotte Street
Nassau, Bahamas
Assanzon Development Corp 459,840 11% 459,840 None -0-
3501 Bamboo Grove
76 Kennedy Road
Mid-levels, Hong Kong
Manchester Asset Management 229,920 6% 229,920 None -0-
Charlotte House
Charlotte Street
Nassau, Bahamas
Colebrooke Capital, Inc. 106,117 3% 106,117 None -0-
11 East 44th Street
Fourteenth Floor
New York, New York 10017
- ---------------------------------- ---------------- ------------------- ----------- -------------- ------------------
</TABLE>
Assanzon is organized under the laws of Hong Kong and is an investment vehicle
of Alan Woods, an Australian citizen residing in Hong Kong. Each of Gilston and
Manchester is organized in the Bahamas. Ms. Deidre M. McCoy and Anthony L. M.
Inder Rieden exercise control over Gilston and Manchester respectively.
Colebrooke is incorporated in the state of New York. Each of Assanzon, Gilston
and Manchester is an institutional investor and its principal business is
investing in public and private securities issued by companies in the United
States, Canada, Europe and Latin America. Assanzon also invests in Asian
companies. Colebrooke advises private companies regarding acquisitions,
strategic planning and financing. Mr. Sean C. Kenlon exercises control over
Colebrooke. All information concerning the selling shareholders has been
provided by a representative of the respective selling shareholder.
The above assumes all of the shares being offered will be sold. Because the
selling stockholders may sell all, some or none of the shares that it holds, the
actual number of shares that will be sold by the selling stockholders upon or
prior to termination of this offering may vary. 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 common
stock in transactions exempt from the registration requirements of the
Securities Act. Additional information concerning the selling stockholders may
be set forth from time to time in prospectus supplements to this prospectus.
As required by the agreement with the original placement purchasers, the above
shares include 175% of the number of shares each holder may acquire upon
conversion of the notes assuming a conversion price of $2.35 as of July 6, 1999
and exercise of all warrants. This number of shares represents the number
required to be registered under our agreement with investors. The number of
shares also represents our good faith estimates of the number of shares we may
be required to register to meet our obligation in light of the volatility of the
price of our common shares and other factors. The actual number of shares
ultimately issued may be substantially lower than the number of shares listed
above.
Shares subject Shares subject
to Notes to Warrants
- --------------------------------------------------------------------------------
Gilston Corporation, Ltd. 127,660 75,000
Assanzon Development Corp 212,766 50,000
Manchester Asset Management 106,383 25,000
Colebrooke Capital, Inc. 10,638 50,000
- --------------------------------------------------------------------------------
<PAGE>
PLAN OF DISTRIBUTION
Sale 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. These sales may be made:
on the over-the-counter market
on foreign securities exchange
in privately negotiated transactions or otherwise in a combination of
transactions at prices at terms then prevailing at prices related to the
then current market price 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 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 purchases by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to
this Prospectus; an exchange distribution in accordance with the rules of
such exchange; ordinary brokerage transactions and transactions in which
the broker solicits purchasers; and 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 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.
Brokers, dealers or agents may receive compensation in the form of commissions,
discounts or concessions from the selling stockholders in amounts to be
negotiated in connection with the sale. These brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act.
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. Any dealer or
broker participating in any distribution of the Shares may be required to
deliver a copy of this prospectus, including a prospectus supplement, if any, to
any person who purchasers any of the Shares from or through such dealer or
broker.
Each of the selling shareholders has executed an agreement pursuant to which
they confirm the method of distribution set forth herein, agree not to sell the
shares if the registration statement is not current.
We have advised the selling stockholders that during if at any time they may be
engaged in a distribution of the shares they are required to comply with
Regulation M promulgated under the Exchange Act. The selling shareholders have
acknowledged such advice by separate agreement and agree therein to comply with
such regulation. 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.
DESCRIPTION OF SECURITIES
The following descriptions of our securities are qualified in all respects by
reference to our certificate of incorporation and by-laws. Our Certificate of
Incorporation authorizes us 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 3,944,746 shares of our 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 our liquidation, dissolution or winding, 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.
Preferred Stock
We have authority to issue 25,000,000 shares of preferred stock. Since the
preferred stock automatically converted to common stock on April 1, 1999 we have
no shares of preferred stock outstanding. Our board of directors may issue the
authorized preferred stock in one or more series and to fix the number of shares
of each series of preferred stock. The board of directors also has the authority
to set the voting powers, designations, preferences and relative, participating,
optional or other special rights of each series of preferred stock, including
the dividend rights, dividend rate, terms of redemption, redemption price or
prices, conversion and voting rights and liquidation preferences. Preferred
stock can be issued and its terms set by the board of directors without any
further vote or action by our stockholders.
Warrants
The following description of the warrants is qualified by reference to the
warrant agreement, dated February 21, 1997, between IFS, American Stock Transfer
& Trust Company and Duke & Company, a prior underwriter, copy of this agreement
is filed as an exhibit to this registration statement of which this prospectus
is a part.
Each warrant originally entitled the registered holder to purchase one
(1.0) share of common stock at a price of $6.25, subject to adjustment as set
forth below, for a period of three years ending on February 21, 2002. As a
result of provisions in the warrant agreement, each warrant now entitles the
registered holder to purchase one and thirty seven hundredths (1.37) shares of
common stock at a price of $6.25 (or $4.56) per share.
The warrants are redeemable by IFS, with the prior consent of Duke, at a
price of $.10 per warrant, provided that the last sale price of the common
stock, for a period of 20 consecutive days trading of the common stock ending
not more than three days prior to the date of any redemption notice equals or
exceeds at least $8.00 per share, subject to adjustment. The warrants shall be
exercisable until the close of the business day preceding the date fixed for
redemption. Any notice of redemption will be mailed between thirty (30) days,
and forty-five (45) days prior to the redemption date. Since Duke is no longer
in business, we have taken the position that the consent of Duke is no longer
required.
The exercise price of the warrants and the number of shares of common stock
or other securities and property issuable upon exercise of the warrants are
subject to adjustment in certain circumstances, including stock dividend on, or
a stock split, subdivision, combination or recapitalization of the common stock,
and will also be subject to adjustment upon the sale or issuance of common stock
or securities convertible into or exchangeable for common stock at less than
$6.25 per 1.37 shares (or $4.56 per share), except in certain circumstances.
The warrants do not confer upon the holder any voting or any other rights
of a stockholder of IFS.
Warrants may be exercised upon surrender of the warrant certificate
evidencing those warrants on or prior to the expiration date (or earlier
redemption date) of the warrants at the offices of the transfer agent with the
form of "Election to Purchase" on the reverse side of the warrant certificate
completed and executed as indicated, accompanied by payment of the full exercise
price (by certified check payable to the order of the transfer agent) for the
number of warrants being exercised.
No warrant will be exercisable or redeemable unless a the time of exercise
the prospectus covering the shares of common stock issuable upon exercise of the
warrant is current and the issuance of shares has been registered or qualified
or is deemed to be exempt from registration or qualification under the
securities laws of the state of residence of the holder of the warrant. We have
undertaken to use its best efforts to maintain a current prospectus relating to
the issuance of shares of common stock upon the exercise of the warrants until
the expiration of the warrants, subject to the terms of the warrant agreement.
While it is our intention to maintain a current prospectus, there is no
assurance that it will be able to do so. See "Risk Factors" - Need for Current
Prospectus; Non-Registration in Certain Jurisdictions of Shares Underlying IPO
Warrants".
We had agreed, in connection with the exercise of the warrants pursuant to
solicitation by Duke, to pay to Duke a fee of five (5%) percent of the exercise
price for each warrant exercised in certain circumstances. Since Duke is no
longer conducting business, we do not believe this provision is enforceable.
No fractional shares will be issued upon exercise of the warrants. However,
if a warrantholder exercises all warrants then owned of record by him or her, we
will pay to that warrantholder, in lieu of the issuance of any fractional share
which is otherwise issuable, an amount in cash based on the market value of the
common stock on the last trading day prior to the exercise date.
Delaware Law and Certain Charter Provisions
We are 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. An interested stockholder is
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. These rules do not apply if the transaction in which
the stockholder became an interested stockholder receives prior approval by the
Board of Directors or the holders of two-thirds of the outstanding shares of
each class or series not owned by the interested stockholder. Our 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, our 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 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 and warrant agent of our common stock and our warrants is American
Stock Transfer & Trust Company.
LEGAL MATTERS
Certain legal matters in connection with the securities offered will be passed
upon for the Company by Parker Duryee Rosoff & Haft, New York, New York 10017.
EXPERTS
Our consolidated financial statements, as of April 30, 1999, and for each
of the two years in th period then ended have been incorporated by reference in
this document in reliance upon the report of Urbach Kahn & Werlin PC,
independent auditors, given on the authority of said firm as experts in
accounting and auditing.
<PAGE>
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 common stock being offered hereby:
SEC Registration Fee $727.00 *
Printing expenses 3,500.00 **
Legal fees and expenses 7,000.00 **
Accounting fees and expenses 500.00 **
Miscellaneous expenses 500.00 **
- --------------------------------------------------------------------------------
TOTAL $10,227.00
==========================
- ------------
* Paid at time of original filing, September 1, 1999.
** 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.
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.
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.
<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, hereunto duly
authorized, in the City of Troy, State of New York, on March 9, 2000.
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 March 9, 2000
- ------------------ Executive Officer,
David L. Hodge Director (Principal Executive Officer)
/s/ John P. Singleton Chairman of the Board, Director March 9, 2000
- ----------------------
John P. Singleton
/s/ Frank A Pascuito Executive Vice President, Director, March 9, 2000
- --------------------
Frank A Pascuito Founder
/s/ Simon J. Theobald Chief Operating Officer, Director March 9, 2000
- ---------------------
Simon J. Theobald
/s/ Carmen A. Pascuito CFO, Secretary and Controller March 9, 2000
- ----------------------
Carmen A. Pascuito
/s/ Per Olof Ezelius Director March 9, 2000
- --------------------
Per Olof Ezelius
/s/ DuWayne J. Peterson Director March 9, 2000
- -----------------------
DuWayne J. Peterson
/s/ C. Rex Welton Director March 9, 2000
- -----------------
C. Rex Welton
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
3.1 Certificate of Incorporation and amendments thereto of the Company (1)
(8)
3.2 By-laws, as amended, of the Company (1)
4.1 Certificate of Designation of the Series A Convertible preferred stock
(2)
4.1b Certificate of Amendment of Certificate of Designation of the Series A
Convertible preferred stock (5)
4.3 Form of certificate evidencing Warrants (1)
4.4 Form of certificate evidencing shares of common stock (1)
4.5 Warrant Agreement between the Company and the Underwriter (2)
4.6 Form of Warrant Agreement between the Company and American Stock
Transfer and Trust Company, as Warrant agent (1)
4.7 Debenture Investment Agreement, dated July 6, 1989, between the
Company and New York State Science and Technology Foundation, and
amendments thereto (1)
4.8 Loan Agreement, dated January 11, 1989, between the Company and North
Greenbush Industrial Development Agency and amendments thereto (1)
4.9 Warrant Agreement, dated November 6, 1998, between the Company and MDB
Capital Group LLC. (7)
4.10 Investment Banking Agreement, dated November 6, 1998, between the
Company and MDB Capital Group LLC. (7)
4.11 Form of Convertible Promissory Note Agreements, dated July 6, 1999,
between the Company and Gilston Corporation, Ltd., Manchester Asset
Management, Ltd., Headwaters Capital, and Colbrooke Capital. (7)
4.12 Form of Warrant Agreements, dated July 6, 1999, between the Company
and Gilston Corporation, Ltd., Manchester Asset Management, Ltd.,
Headwaters Capital, and Colbrooke Capital. (7)
4.13 Registration Rights Agreement, dated July 2, 1999, between the Company
and Gilston Corporation, Ltd., Manchester Asset Management, Ltd., and
Headwaters Capital. (7)
4.14 Note And Warrant Purchase Agreement, dated July 2, 1999, between the
Company and Gilston Corporation, Ltd., Manchester Asset Management,
Ltd., and Headwaters Capital. (7)
4.15 Market Access Program Marketing Agreement, dated as of April 29, 1999,
between the Company and Continental Capital & Equity Corporation. (7)
5.1 Opinion of Parker Duryee Rosoff & Haft A Professional Corporation
10.1 * 1998 Stock Plan (5)
10.2 * 1996 Stock Option Plan (1)
10.3 * 1988 Stock Option Plan (1)
10.4 Lease Agreement, dated October 1, 1986 between the Company and
Rensselaer Polytechnic Institute and amendments thereto (the "Lease
Agreement") (1)
10.5 Addendum A to the Lease Agreement, dated January 7, 1997. (1)
10.6 Digital Prime Contracting Agreement, dated June 6, 1994, between the
Company and Digital Equipment International BV (1)
10.7 Software Development and License Agreement, dated July 8, 1996,
between the Company and Visa International Service Association (1)
10.8 * Employment Agreement, dated as of May 12, 1998 between the Company
and David L. Hodge. (6)
10.8b* Amendment to Employment Agreement, dated as of January 22, 1999
between the Company and David L. Hodge. (7)
10.9 * Employment Agreement, dated as of May 12, 1998, between the Company
and Frank A. Pascuito. (6)
10.9b* Amendment to Employment Agreement, dated as of January 22, 1999,
between the Company and Frank A. Pascuito. (7)
10.10* Employment Agreement, dated as of May 12, 1998, between the Company
and Simon J. Theobald. (2)
10.10b* Amendment to Employment Agreement, dated as of January 22, 1999,
between the Company and Simon J. Theobald. (7)
10.11*Extension Agreement, dated as of May 12, 1998 between the Company
and Per Olof Ezelius. (6)
10.12Purchase and Sale Agreement, dated as of December 17, 1996, between
the Company and Trustco Bank, National Association. (1)
10.13Form of Consulting and Investment Banking Agreement between the
Company and the Underwriter. (1)
10.14Promissory Note, dated March 14, 1997, between the Company and Key
Bank of New York. (3)
10.15*Consulting agreement, dated April 9, 1997, between the Company and
Jerald Tishkoff. (6)
10.16Plan and Merger Agreement, dated as of January 30, 1998, between the
Company and NCI Holdings, Inc. (4)
10.17Amended and Restated Note, dated as of April 15, 1999, between the
Company and Hudson River Bank and Trust Company. (7)
10.18Amended and Restated Note, dated as of April 15, 1999, between the
Company and Hudson River Bank and Trust Company. (7)
10.19Note And Mortgage Consolidation, Modification, Spreader, Extension
And Security Agreement, dated as of April 15, 1999, between the
Company, the Town of North Greenbush Industrial Development Agency and
New York Business Development Corporation. (7)
10.20Note And Mortgage Consolidation, Modification, Spreader, Extension
And Security Agreement, dated as of April 15, 1999, between the
Company, the Town of North Greenbush Industrial Development Agency and
New York Business Development Corporation. (7)
10.21Mortgage And Security Agreement, dated as of April 15, 1999, between
the Company, the Town of North Greenbush Industrial Development Agency
and New York Business Development Corporation. (7)
10.22Mortgage Note, dated as of April 15, 1999, between the Company and
New York Business Development Corporation. (7)
10.23Amended And Restated Mortgage Note, dated as of April 15, 1999,
between the Company New York Business Development Corporation. (7)
10.24General Security Agreement, dated as of April 15, 1999, between the
Company and Hudson River Bank and Trust Company. (7)
21.1 Subsidiaries of the Company (1)
23.1 Consent of Urbach Kahn & Werlin P.C.
23.2 Consent of Parker Duryee Rosoff & Haft (included in Exhibit 5.1)
* Management contract or compensatory plan or arrangement.
** To be filed by amendment.
1 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.
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 Current Report,
dated March 14, 1997 and incorporated herein by reference.
4 Denotes document filed as an exhibit to the Company's Current Report,
dated January 30, 1998 and incorporated herein by reference.
5 Denotes document filed as an exhibit to the Company's Proxy Statement,
dated February 1, 1999 and incorporated herein by reference.
6 Denotes document filed as an exhibit to the Company's Annual Report,
dated April 30, 1998 and incorporated herein by reference.
7 Denotes documents filed as an exhibit to the Company's annual report
on Form 10-KSB, for the year ended April 30, 1999 and incorporated
herein by reference.
8 Denotes document filed as an exhibit to the Company's Proxy Statement,
dated October 28, 1999 and incorporated herein by reference.
<PAGE>
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IFS INTERNATIONAL HOLDINGS, INC.
1,150,531 Shares
common stock
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PROSPECTUS
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March 9, 2000
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You should rely only on the information contained in this prospectus. No dealer,
salesperson or other person is authorized to give information that is not
contained in this prospectus. This prospectus is not an offer to sell nor is it
seeking an offer to buy these securities in any jurisdiction where the offer or
sale is not permitted. The information contained in this prospectus is correct
only as of the date of this prospectus, regardless of the time of the delivery
of this prospectus or any sale of these securities.
EXHIBIT 5.1
PARKER DURYEE ROSOFF & HAFT
A PROFESSIONAL CORPORATION
ATTORNEYS
529 FIFTH AVENUE
NEW YORK, NEW YORK 10017- 4608
(212) 599-0500
FAX (212) 972-9487
March 9, 2000
IFS International, Inc.
Rensselaer Technology Park
300 Jordan Road
Troy, New York 12180
Re: Registration Statement on Form S-3 under the Securities Act of 1933
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Ladies and Gentlemen:
In our capacity as counsel to IFS International, Inc. (the "Company"),
a Delaware corporation, we have been asked to render this opinion in connection
with a Registration Statement on Form S-3 filed by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
covering an aggregate of 1,150,531 shares (the "Shares") of Common Stock, to be
issued upon conversion of notes and exercise of warrants (the"Unissued Shares").
In connection with, and as the basis for, the opinion we render herein,
we have examined the Certificate of Incorporation and the By-Laws of the
Company, both as amended to date, the Registration Statement, corporate
proceedings of the Company and such other instruments and documents as we have
deemed relevant under the circumstances.
In making the aforesaid examinations, we have assumed the genuineness
of all signatures and the conformity to original documents of all copies
furnished us as original or photostatic copies. We have also assumed that the
corporate records furnished to us by the Company include all corporate
proceedings taken by the Company to date.
Based upon and subject to the foregoing, we are of the opinion that:
(1) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(2) The Unissued Shares, when duly issued in accordance with the
respective agreements to which such Unissued Shares are subject, will be duly
and validly authorized and fully paid and non-assessable.
We hereby consent to the use of our opinion as herein set forth as an
exhibit to the Registration Statement and to the use of our name under the
caption "Legal Matters" in the prospectus forming a part of the Registration
Statement.
Very truly yours,
/s/ PARKER DURYEE ROSOFF & HAFT, P.C.
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the registration
statement of IFS International Holdings, Inc. on Form S-3 of our report dated
July 2, 1999, except for Note 7, as to which the date was August 11, 1999, on
our audits of the consolidated financial statements of IFS International
Holdings, Inc. (formerly IFS International, Inc.) and subsidiaries as of April
30, 1999, and for the years ended April 30, 1999 and 1998, which report is
included in the Annual Report on Form 10-KSB.
URBACH KAHN & WERLIN PC
Albany, New York
March 9, 2000
