As filed with the Securities and Exchange Commission on March 9, 2000
File No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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IFS INTERNATIONAL HOLDINGS, INC.
(Formerly IFS International, Inc.)
(Exact name of Registrant as specified in its charter)
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Delaware 13-3393646
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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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)
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Copies to:
MICHAEL D. Di GIOVANNA, 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. [X] File Number 333-11653
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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>
March 9, 2000
IFS INTERNATIONAL HOLDINGS, INC.
PROSPECTUS
2,678,350 SHARES OF COMMON STOCK
This Prospectus relates to 2,678,350 shares of common stock issuable upon
the exercise of 1,955,000 redeemable stock purchase warrants of IFS
International Holdings, Inc.. A warrant entitles the registered holder thereof
to purchase one and thirty seven hundredths (1.37) shares of common stock at a
price of $6.25 per warrant (or $4.56) per share, subject to adjustment, until
February 21, 2000. The warrants were offered and sold to the public on February
21, 1997 as part of our public offering of our equity securities.
Until April 1, 1999 the Warrants were exercisable into shares of Preferred
Stock.
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<PAGE>
See "Risk Factors" commencing on page 6.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The common stock is quoted on The Nasdaq SmallCap Market. On March 6, 2000, the
closing trading prices of the common stock as reported by The Nasdaq SmallCap
Market was $4.38.
The date of this Prospectus is March 9, 2000
[The following language is located on the left margin of the preliminary
prospectus]
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
<PAGE>
TABLE OF CONTENTS
WHERE YOU CAN FIND MORE INFORMATION......................................... 2
INTRODUCTION................................................................ 3
RECENT DEVELOPMENTS..........................................................4
RISK FACTORS................................................................ 6
USE OF PROCEEDS............................................................ 11
DESCRIPTION OF SECURITIES.................................................. 11
LEGAL MATTERS.............................................................. 14
EXPERTS.....................................................................14
<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.
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 our 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.
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.
<PAGE>
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 value of $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 violates 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 presently
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 and Global Insight
Group through fiscal years 2001 and 2002, respectively as shares pursuant to an
existing merger agreements. The issuance of shares pursuant to warrants, options
and other rights 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.
Nonpayment of dividends
We have never declared or paid a cash dividend on our Common Stock and
do not expect to pay cash dividends in the foreseeable future.
Potential adverse effect of redemption of warrants
The public warrants are redeemable by IFS, in whole or in part, at a price
of $.10 per warrant, commencing February 21, 1998 and prior to their expiration;
provided that (i) prior notice of not less than thirty (30) days is given to the
warrantholders; (ii) the last sale price of the common stock on each of the
twenty (20) consecutive days of trading of the common stock ending on the third
business day prior to the date on which we give notice of redemption has been at
least $8.00 per share; (iii) warrantholders shall have exercise rights until the
close of the business day preceding the date fixed for redemption. Notice of
redemption of the warrants could force the holders to exercise the warrants and
pay the exercise price at a time when it may be disadvantageous for them to do
so, or to sell the warrants at the current market price when they might
otherwise wish to hold them, or to accept the redemption price, which may be
substantially less than the market value of the warrants at the time of
redemption.
USE OF PROCEEDS
Our net proceeds from the exercise of the warrants will be
approximately $12,200,000 if all of the warrants are exercised, as to which no
assurance can be given, and assuming there is no adjustment in the exercise
price of the warrants
The net proceeds will be used for working capital purposes.
DESCRIPTION OF SECURITIES
The following descriptions of our securities are qualified in all
respects by reference to the Certificate of Incorporation and by-laws of IFS.
The Certificate of Incorporation of IFS 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 March 6, 2000, there were 3,944,746 shares of common stock
outstanding. The holders of common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the stockholders of common
stock are entitled to receive ratably such dividends as may be declared by the
board of directors out of funds legally available therefor. In the event of a
liquidation, dissolution or winding up of IFS, 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 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 1.37 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
IFS is subject to Section 203 of the Delaware General Corporation Law,
which prohibits a Delaware corporation from engaging in a wide range of
specified transactions with any interested stockholder, defined to include,
among others, any person or entity who in the previous three years obtained 15%
or more of any class or series of stock entitled to vote in the election of
directors, unless, among other exceptions, the transaction is approved by (i)
the board of directors prior to the date the interested stockholder obtained
such status or (ii) the holders of two-thirds of the outstanding shares of each
class or series owned by the interested stockholder. IFS' Certificate of
Incorporation and By-laws contain certain additional provisions which may have
the effect of delaying or preventing a change in control of IFS. Such provisions
include blank check preferred stock (the terms of which may be fixed by the
board of directors without stockholder approval). Accordingly, the 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 preferred stock and/or common stock. In the event of
issuance, the preferred stock could be used, under certain circumstances, as a
method of discouraging, delaying or preventing a change in control of IFS.
Transfer and Warrant Agent
The transfer and warrant agent for our common stock and our warrants is
American Stock Transfer & Trust Company.
LEGAL MATTERS
Certain legal matters in connection with the securities being offered
hereby will be passed upon for IFS 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 the 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 our estimates of the expenses to be
incurred in connection with the common stock being offered hereby:
Printing expenses 5,000.00 *
Legal fees and expenses 3,500.00 *
Accounting fees and expenses 500.00 *
Miscellaneous expenses 500.00 *
- --------------------------------------------------------------------------------
TOTAL $ 9,500.00
=======================
- ------------
* 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
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 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 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
(1)
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)
(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.
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
