As filed with the Securities and Exchange Commission on June 6, 2000
File No. 333-86405
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT 3
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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IFS INTERNATIONAL HOLDINGS, 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
Title of Each Class of Offering Price Aggregate Offering Amount of
Securities to be Registered Amount to be Per Share(2) Price(1) Registration Fee
Registered(1) (3)
------------------------------ -------------------- ------------------- ------------------------ ------------------
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) 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.
(2) 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.
(3) Paid at time of original filing, September 2, 1999.
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 HOLDINGS, INC.
common stock
--------------
Stockholders of IFS International Holdings, Inc., named under the caption
"Selling Stockholders" 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.
Our common stock is traded on the Nasdaq SmallCap Market under the symbol
"IFSH". The closing bid price of our common stock on June 2, 2000 was $3.25.
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 June 6, 2000
<PAGE>
TABLE OF CONTENTS
Page
INTRODUCTION...................................................................2
RISK FACTORS...................................................................4
RECENT DEVELOPMENTS............................................................8
WHERE YOU CAN FIND MORE INFORMATION...........................................12
FORWARD-LOOKING STATEMENTS....................................................13
USE OF PROCEEDS...............................................................13
SELLING STOCKHOLDERS..........................................................14
PLAN OF DISTRIBUTION..........................................................19
DESCRIPTION OF SECURITIES.....................................................21
LEGAL MATTERS.................................................................24
EXPERTS.......................................................................24
<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 marketed under the name TPII which 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.
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 a. NCI
Business Centre a 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 a 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., and has again recently changed its name to IFS International Holdings,
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.
<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 losses in the future.
We incurred a net loss of $703,907 and had a net income of $270,688 for our
fiscal year ended April 30, 1999 and our nine months ended January 31, 2000,
respectively. As of January 31, 2000, we had an accumulated deficit of
$4,312,995. 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 73% and 85% of total revenues for the nine month
periods ended January 31, 1999 and 2000, respectively, from the licensing of
software products to customers outside the United States. 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 products and
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.
<PAGE>
We may be unable to grow and maintain our revenues if we have a need for
additional financing in the future, and are not able to obtain required funds.
We believe that anticipated cash flow from operations, recently received
proceeds from our sale of preferred shares and the $600,000 line of credit
available to us will be sufficient to finance our operating working capital
requirements for the foreseeable future. Our estimate is based upon our ability
to obtain revenues from licensing agreements through our operating subsidiaries,
as currently projected. We 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. Moreover, we may need additional financing if we
underestimate any new development projects or new business. 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 decline and shareholders' percentage interest may be
reduced as a result of the conversion of our outstanding convertible notes and
Series B preferred stock.
We have convertible notes outstanding with a principal amount of $1,075,000 and
have recently issued 200,000 shares of convertible preferred stock. The
conversion of the notes and preferred stock into common stock may result in
substantial dilution and a reduction in the market price of our common stock.
The 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. Each share of the preferred stock is convertible into shares of
common stock calculated by dividing ten dollars ($10.00), by the lower of $5.44
or 90% of the then market value through March 23, 2001 (82% thereafter). Because
the number of shares issued under the note and the preferred stock is dependent
upon our market price, the lower the market price, the greater the number of
shares may be issued. The conversion of a significant number of convertible
notes or preferred shares 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
and the issuance of a significant number of shares of common stock. We have set
forth the number of our shares of common stock issuable upon conversion at
market prices of $3.15 on May 30, 2000 in separate tables for each of the notes
and preferred stock and at lower market prices, assuming in each case, all of
the securities are exercised:
<PAGE>
Number of Shares issuable
Market Price upon conversion of notes
$3.15 (current) 379,189
$2.36 (25% decline) 505,585
$0.79 (75% decline) 1,516,755
Number of Shares issuable Number of Shares issuable
Upon conversion of Upon conversion of`
preferred stock preferred stock
Market Price through 3/23/2001 after 3/23/2001
$ 3.15 (current) 705,467 774,293
$ 2.36 (25% decline) 940,623 1,032,391
$ 0.79 (75% decline) 2,821,869 3,097,174
The market price of our common stock could decline as a result of the issuance
of common 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 6,803,973 shares of common stock,
including debentures and other rights to acquire shares of our common stock with
exercise prices ranging from $1.00 to $15.00 per share. This does not include
the obligation to issue shares of our common stock pursuant to convertible
promissory notes and convertible preferred stock as described in the preceding
risk factors. IFS issued the convertible promissory notes in the amount of
$1,075,000 which are convertible into 379,189 shares of common stock, subject to
adjustment based on current market prices. We also issued preferred stock with a
stated value of $2,000,000 which is convertible into 705,467 shares of our
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 and Global Insight Group
through fiscal year 2002 pursuant to existing merger agreements. The issuance of
all these shares could have an adverse impact upon the market price of our
common stock.
Our revenues may decline if we do not expand 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.
Our common stock price may fluctuate because we may experience significant
fluctuation in quarterly revenues and operating results.
Quarterly revenues and operating results have fluctuated and will continue to
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 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, some of which
have greater resources than us, have developed or 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 a product competes
with major branch automation solution providers.
If the technology of the financial industry changes, our products may become
obsolete.
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 our success in enhancing the performance
of our current TPII software products, such as the ability for TPII to handle
higher volumes of card transactions and the adaptation of our software products
to smart card technology, and developing new software products that address the
increasingly complex needs of customers.
Our revenues may decline if our proprietary rights do not prevent others from
using our 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. If our proprietary rights do not prevent
others from using our technology, then we may face additional competition, and
our revenues may decline. 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.
RECENT DEVELOPMENTS
We have extended our market access program marketing agreement with Continental
Capital and Equity Corporation for two years, with the option of terminating the
agreement after twelve consecutive months. As partial consideration, we have
agreed to issue options to purchase 200,000 shares of our common stock at
various exercise prices. Each option is for 50,000 shares at the following per
share prices; $8.50, $10.00, $12.50, and $15.00. We have also agreed to issue
Continental Capital additional options on the one year anniversary date of the
execution of the contract to purchase 200,000 shares at various exercise prices.
Each option is for 50,000 shares at prices of 125%, 150% 175%, and 200% of the
closing bid on the one year anniversary date of the execution of the contract.
MDB Capital has claimed that it has been damaged by our failure to timely file a
registration statement covering the shares underlying their warrant to purchase
200,000 of our common shares. They have claimed damages in the amount of
$2,200,000 based on the highest price of our common stock subsequent to the time
MDB believes a registration statement would have been effective. We believe that
the registration statement has been delayed because of legal issues relative to
MDB. In addition, we may assert claims against MDB for their failure to perform
under the advisory agreement entered into contemporaneously and as partial
consideration for the warrant issued.
We have also received a claim on behalf of purchasers which acquired their
shares in a private placement in July 1999. The purchasers claim that they are
entitled to liquidated damages in the amount of $175,000 because of alleged
delays in completing registration of their securities. We believe the claim is
without merit as the delay in registering the underlying common shares was
caused by unresolved questions concerning these securityholders and their
inability to timely provide information to us in connection with the
registration statement.
We have entered into an agreement with a corporation controlled by Mr. Frank
Pascuito. This corporation will receive a non-exclusive license from us to
utilize our technology in connection with the operation of a regional internet
processing center for financial institutions. The agreement provides for the
issuance to us of 30% of the stock of this corporation upon the initial
capitalization of the entity. We have permitted this entity to utilize our
premises and will and have advanced amounts to this entity. The entity is
required to repay us from operations for these advances and for the use of our
premises. Mr. Pascuito has agreed to terminate his employment agreement with us.
We have entered into this transaction because we have determined that this
business is not one we desire to enter into at this time and, even if we did, we
do not have the required funds to commence operations.
Pursuant to a securities purchase agreement, the Shaar Fund purchased 200,000
shares of our newly created Series B preferred stock, and warrants to purchase
200,000 shares of our common stock at an exercise price of $5.44 per share. We
received gross proceeds of $2,000,000 in connection with this purchase. Each
share of the preferred stock is convertible into shares of common stock
calculated by dividing ten dollars ($10.00), by the lower of $5.44 or 90% of the
then market value through March 23, 2001 (82% thereafter). The preferred stock
is automatically converted into shares of common stock on March 24, 2003. The
purchase agreement gives the Shaar Fund a three year right of first refusal to
purchase common stock to be offered at prices below market price and discounted
debt securities or debt securities having an effective annual interest rate in
excess of 9.9%. We are also obligated to register the shares issuable upon
conversion of the preferred stock and the shares issuable upon the exercise of
the warrants. In connection with this transaction, we are obligated to issue a
warrant to purchase 100,000 shares of our common stock to a finder.
On January 31, 2000 and March 9, 2000, second and third amendments respectively
were made to the employment agreements for David Hodge, Simon Theobald and the
first amendment to the agreement for services with John Singleton. The first of
these amendments provides for compensation to the executive, irrespective of
whether or not the executives employment or services is terminated, if there is
a (i) change of control; or (ii) transfer or sale of all or substantially all of
the assets of IFS, or (iii) transfer or sale of beneficial ownership of more
than fifty percent (50%) or more of the total combined voting power of our then
outstanding voting securities. We shall pay to Mr. Hodge an amount equal to 3%
of the first $10,000,000 in value received (including cash, securities, debt or
any other form of property) in connection with the transaction, 6% of the next
$10,000,000 in value received and 7% of any value received in excess of
$20,000,000. We shall pay to Mr. Theobald an amount equal to 2% of the first
$10,000,000 in value received, 4% of the next $10,000,000 in value received and
6% of any value received in excess of $20,000,000. We shall pay to Mr. Singleton
an amount equal to 2% of the first $10,000,000 in value received, 4% of the next
$10,000,000 in value and 6% of any value received in excess of $20,000,000.
Pursuant to a board resolution, we shall also pay each outside directors DuWayne
Peterson and C. Rex Welton 1/2% of the first $10,000,000 in value received, 3/4%
of the next $10,000,000 in value received and 1% of any value received in excess
of $20,000,000.The third amendment to each employment agreement and the second
amendment to the services agreement compensates the executives in the form of
stock appreciation rights. We shall grant to Mr. Hodge, Mr. Theobald, and Mr.
Singleton, stock appreciation rights based on 100,000, 50,000 and 50,000 shares
of our common stock, respectively, in the year 2000 and on each anniversary date
of the execution of the amendment.
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 strategic advisory services related to corporate finance and other
financial service matters. The term of the agreement is for an initial term of
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 receives 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 an aggregate of 850,000 shares of our common stock at exercise prices
ranging from $2.00 per share to $3.50 per share.
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 our common
stock. We initially issued three shares at closing and are obligated to issue
additional shares based on future financial performance of the acquired company.
There are two components to this additional consideration. Initially, the
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).
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>
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 and
Amendment thereto on Form 10-KSB/A dated February 25, 2000.
Quarterly Report on Form 10-QSB for quarter ended July 31, 1999.
Quarterly Report on Form 10-QSB for quarter ended October 31, 1999.
Quarterly Report on Form 10-QSB for quarter ended January 31, 2000.
You may request a copy of these filings, at no cost, by contacting the
Company at:
IFS International Holdings, Inc.
Rensselaer Technology Park
300 Jordan Road
Troy, New York 12180
Attn.: Carmen Pascuito
Tel. No. 518-283-7900
<PAGE>
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:
o Those pertaining to the implementation of our growth strategy; o Our projected
capital expenditures.
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" and "Business" of our
Securities and Exchange Commission File. 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:
o general economic conditions;
o competitive market influences;
o the development of the capacity to accommodate additional and larger
contracts;
o establishing the ability of TPII software products to process transactions
for larger electronic funds transfer systems;
o continued acceptance of our software products by a significant number of
new customers;
o our continued relationship with computer manufacturers; and
o acceptance of NCI Business Centre a 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 a note and warrant purchase agreement, we paid Gilston Corporation,
Ltd., one of the purchasers, $25,000, we issued a note in the principal amount
of $50,000 and warrants to purchase 50,000 shares. We also issued to Colebrooke
Capital, Inc., (as provided in the agreement) 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. The cash and principal amount of these
notes constitute ten percent of the gross proceeds of our private sale. We also
paid Gilston an additional $10,000 (1% of gross proceeds) for expenses and
reimbursed them $25,000 for additional expenses. We have been advised that the
additional consideration was for Gilston's structuring and negotiation of the
transaction on behalf of the purchasers and that Gilston directed that a portion
of the shares be issued to Colebrooke because Colebrooke introduced Gilston to
us. Colebrooke has previously entered into an agreement with us pursuant to
which Colebrooke would provide advice to us concerning possible financing and
acquisitions. It received a fee and would receive additional fees based on any
financing or acquisition. In this instance we paid no fee to Colebrooke pursuant
to our agreement with it.
Gilston is not a registered broker-dealer and we are advised that it does not
believe its action in this transaction requires registration. If, however, it is
determined that Gilston's actions' required it to be a broker-dealer, we may be
subject to claims, including claims of rescission by the purchasers, and a claim
by our shareholders to recover the consideration made to Gilston and Colebrooke.
The July 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. At the time
of the sale, the purchasers also entered into a registration rights agreement
which required us to register the resale by holders of underlying shares subject
to warrant or convertible note. We are to bear the costs and expenses of this
registration statement and are required to keep the registration statement
effective until the securities are sold. The agreement requires us to use our
best efforts to cause the registration statement to become effective. If the
registration statement is not effective within four months after the sale, we
may be liable for damages. The selling stockholders have alleged damages in the
amount of $175,000 because of alleged delays in completing registration of their
securities. We believe the claim is without merit as the delay in registering
the underlying common shares was caused by unresolved questions concerning these
securityholders and their inability to timely provide accurate information to us
in connection with the registration statement.The selling stockholders are
offering for sale the shares of our common stock that these persons have a right
to acquire upon conversion of the convertible promissory notes and 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. If we sell shares below the exercise price of the
warrants then we are obligated to reduce the warrant price. This adjustment
generally does not apply to warrants and other convertible securities issued
prior to the date of purchase to the holders.
Convertible Notes
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 exceptions, issue securities for
consideration 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 8.4%
$2.50 $2.25 477,778 10.4%
$1.50 $1.35 796,296 16.2%
$1.00 $.90 1,194,444 22.5%
<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>
Gilston Corporation, Ltd. 354,654 8% None -0-
Charlotte House 354,654
Charlotte Street
Nassau, Bahamas
Assanzon Development Corp 459,840 10% 459,840 None -0-
3501 Bamboo Grove
76 Kennedy Road
Mid-levels, Hong Kong
Manchester Asset Management 229,920 5% 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 the 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 to Notes Shares Subject 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:
o on the over-the-counter market
o on foreign securities exchange
o in privately negotiated transactions or otherwise
o in a combination of transactions at prices and terms then prevailing
o at prices related to the then current market price
o 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.
<PAGE>
o 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;
o an exchange distribution in accordance with the rules of such exchange;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o 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. However,
they may not do so for a short position created prior to the date of this
prospectus because such a transaction may be deemed a sale of registered
securities.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 if at any time, they are 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.
<PAGE>
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 4,125,503 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 therefore. 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. All of the then
outstanding shares of the preferred stock were converted to common stock on
April 1, 1999. 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.
The Company has recently authorized and issued 200,000 shares of its newly
created Series B preferred stock having the terms set forth below;
o Liquidation Preferences. Upon liquidation the Series B preferred stock has
a preference of $11.50 per share plus the amount of accrued and unpaid
dividends before any distributions to holders of junior securities. At the
election of the holders of Series B preferred stock certain changes
relating to us may be deemed to be a liquidation for the purposes of Series
B preferred stock entitling the holder to receive an amounts equal to the
liquidator preference. These changes include a merger in which we are not
the survivor or a transaction in which 50% of the voting power of IFS is
disposed of.
o Dividend. Each holder is entitled to receive a $.50 per annum dividend
payable in quarterly installments as declared by the board of directors out
of funds legally available thereof. We may issue shares at market value in
lieu of a cash.
o Conversion. Each share of the preferred stock is convertible into shares of
common stock calculated by dividing ten dollars ($10.00), by the lower of
$5.44 or 90% of the then market value through March 23, 2001 (82%
thereafter). If the Company's shares are not listed on NASDAQ then the
shares are convertible at the lower of $5.44 or 65% of current market.
o Redemption. Provided our market price is $7.00 or greater we may redeem the
Series B preferred stock at $6.00 per share until December 24, 2000 and
thereafter at $6.25 per share plus accrued dividend.
o Voting rights. The holder of the Series B preferred stock have no rights
except as otherwise provided by Delaware law or with respect to any matter
which may adversely effect the rights of holder Series B preferred stock.
o Additional Rights. We may not issue any shares senior to the Series B
preferred stock.
Public 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.
Each warrant now entitles the registered holder to purchase one and thirty three
hundredths (1.33) shares of common stock at a price of $6.25 per warrant (or
$4.71 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
$8.80 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 dividends 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 1.33 shares (or $4.71 per share), except in certain circumstances.
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.
<PAGE>
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 agent of our common stock 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 then ended have been incorporated by reference in this
document in reliance upon the report of Urbach Kahn & Werlin PC, independent
auditors, incorporated by reference in this document, 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 2, 1999.
** Estimated
Item 15. Indemnification of Directors and Officers.
Article NINTH of the Certificate of Incorporation of IFS International Holdings,
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 16. Exhibits and Financial Statement Schedules.
See Exhibit Index
<PAGE>
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 June 6, 2000.
IFS INTERNATIONAL HOLDINGS, 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 John P. Singleton 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.
<PAGE>
Signature Title Date
President and Chief Executive Officer,
/s/ David L. Hodge Director (Principal Executive Officer) June 6, 2000
-----------------------
David L. Hodge
/s/ John P. Singleton Chairman of the Board, Director June 6, 2000
-----------------------
John P. Singleton
/s/ Frank A. Pascuito Director June 6, 2000
-----------------------
Frank A Pascuito
/s/ Simon J. Theobald Director, Executive Vice President June 6, 2000
-----------------------
Simon J. Theobald
/s/ Carmen A. Pascuito CFO, Secretary and Controller June 6, 2000
-----------------------
Carmen A. Pascuito
/s/ Per Olof Ezelius Director June 6, 2000
-----------------------
Per Olof Ezelius
/s/ DuWayne J. Peterson Director June 6, 2000
-----------------------
DuWayne J. Peterson
/s/ C. Rex Welton Director June 6, 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 (9)
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) (9)
* Management contract or compensatory plan or arrangement.
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.
9 Denotes document filed as an exhibit to the Company's Amendment on Form
S-3, dated March 9, 2000 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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June 6, 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.
