PROSPECTUS
1,865,152 shares
INTELLICALL, INC.
Common Stock
All of the shares of Common Stock, par value $.01 per share (the "Common
Stock") of Intellicall, Inc., a Delaware Corporation ("Intellicall" or the
"Company"), offered hereby are being offered for resale by certain shareholders
of the Company (the "Selling Stockholders") as described more fully herein. The
Company will not receive any proceeds from the sale of the shares offered
hereby.
The shares of Common Stock offered hereby by the Selling Stockholders
consist of (i) in accordance with Rule 416 of the Securities Act of 1933, as
amended (the "1933 Act"), a presently indeterminate number of shares issued or
issuable upon conversation of or otherwise in respect of 4,000 shares of the
Company's 7% Series A Convertible Preferred Stock (the "Preferred Stock"), and
(ii) 36,580 shares of Common Stock issued to Swartz Investments, LLC as partial
consideration for arranging the sale of the Preferred Stock. For the purposes of
calculating the number of shares of Common Stock beneficially owned by the
Selling Stockholders holding Preferred Stock, the number of shares of Common
Stock calculated to be issuable in connection with the conversion of the
Preferred Stock is based on a price of $2.1875 per share, which price is below
the price per share of $5.6875 as of the date of this Prospectus. The number of
shares available for resale, however, is subject to adjustment and could be
materially less or more than such estimated amount depending on the future
market price of the Common Stock. This presentation is not intended, and should
in no way be construed, to constitute a prediction as to the future market price
of the Common Stock. See "Risk Factors -- Potential Dilution; Shares Eligible
for Future Sales; Possible Effect on Additional Equity Financing" and "Selling
Stockholders."
-------------------------------------------
THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVE A
HIGH DEGREE OF RISK. SEE "RISK FACTORS" AT PAGE 6 OF THE
PROSPECTUS.
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
REPRESENTATIONS TO THE CONTRARY IS A CRIMINAL OFFENSE.
October 3, 1997
3
<PAGE>
All expenses of this offering will be paid by the Company except for
commissions, fees and discounts of any underwriters, brokers, dealers or agents
retained by the Selling Stockholders. Estimated expenses payable by the Company
in connection with this offering are approximately $15,500. The aggregate
proceeds to the Selling Stockholders from the Common Stock will be the purchase
price of the Common Stock sold less the aggregate agents' commission and
underwriters' discounts, if any. The Company has agreed to indemnify the Selling
Stockholders and certain other persons against certain liabilities, including
liabilities under the 1933 Act.
The Common Stock being registered under the Registration Statement of which
this Prospectus is a part may be offered for sale from time to time by or for
the account of such Selling Stockholders in the open market, on the New York
Stock Exchange ("NYSE"), in privately negotiated transactions, in an
underwritten offering, or a combination of such methods, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Stockholders and any agents,
broker-dealers or underwriters that participate in the distribution of the
Common Stock may be deemed to be "underwriters" within the meaning of the 1933
Act and any commission received by them and any profit on the resale of the
Common Stock purchased by them may be deemed to be underwriting discounts or
commissions under the 1933 Act. See "Use of Proceeds" and "Plan of
Distribution."
The Common Stock of the Company is listed on the NYSE (Symbol: ICL). On
October 3, 1997, the closing sale price of the Common Stock on the NYSE was
$5.6875.
4
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy and information statements, and the
information filed by the Company with the Commission can be inspected and
copied, at prescribed rates, during normal business hours at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W. Room
1024, Washington, D.C. 20549, and at the following Regional Offices of the
Commission: Chicago Regional Office, NorthWestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; New York Regional
Office, 75 Park Place, 14th Floor, New York, New York 10007. Electronic filings
of such documents are publicly available on the Commission's Web site at
http://www.sec.gov. Copies of such materials can also be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. The Company's Common Stock is listed on the
NYSE and such reports, proxy statements and other information concerning the
Company can be inspected and copies can be obtained at the offices of the NYSE,
20 Broad Street, New York, New York 10005.
A registration statement on Form S-3 in respect of the shares of Common
Stock offered by this Prospectus (the "Registration Statement") has been filed
with the Securities and Exchange Commission, Washington, D.C. 20549 under the
1933 Act. This Prospectus does not contain all of the information contained in
the Registration Statement, certain portions of which have been omitted pursuant
to the rules and regulations of the Commission. Accordingly, additional
information concerning the Company and such securities can be found in the
Registration Statement, including various exhibits thereto, which may be
inspected at the Public Reference Section of the Commission.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference into this
Prospectus:
1. Form 10-K for the fiscal year ended December 31, 1996, filed
with the Commission pursuant to Section 13(a) of the 1934 Act;
2. Form 10-Q for the fiscal quarters ended March 31, 1997 and June
30, 1997, filed with the Commission pursuant to Section 13(a) of
the 1934 Act;
3. Form 8-K Current Report dated July 21, 1997, as amended, filed
with the Commission pursuant to Section 13(a) of the 1934 Act;
4. Form 8-K Current Report dated September 2, 1997, filed with the
Commission pursuant to Section 13(a) of the 1934 Act; and
5. The description of the Company's Common Stock registered under
the 1934 Act contained in the Company's Form 8-A filed with the
5
<PAGE>
Commission on August 25, 1987, including any amendments or
reports filed for the purpose of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
into this Prospectus. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any or all of the foregoing
documents incorporated herein by reference (not including exhibits to the
information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into this Prospectus). Requests should be
directed to Intellicall, Inc., 2155 Chenault, Suite 410, Carrollton, Texas
75006, (972) 416-0022, Attention: Investor Relations.
No person has been authorized to give any information or to make any
representation other than those contained in, or incorporated by reference into,
this Prospectus, and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company or any Selling
Stockholders. This Prospectus does not constitute an offer to sell or
solicitation of any offer to buy, nor shall there be any sale of these shares by
anyone, in any state in which such offer, solicitation, or sale would be
unlawful prior to the registration or qualification under the securities laws of
any state, or in which the person making such offer or solicitation is not
qualified to do so, or to any person to whom it is unlawful to make such offer
or solicitation. Neither delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the information herein or the affairs of the Company since the date
hereof.
6
<PAGE>
THE COMPANY
Intellicall is a diversified telecommunications services and equipment
company. The Company provides two primary services: (i) automated operator
services for the private pay telephone, hospitality, and inmate services
industries, and (ii) prepaid calling services. The Company also provides for
resale of direct dial long distance services to the private payphone industry,
and live operator services through its majority owned subsidiary, ILD
Teleservices, Inc. ("ILD").
The Company's primary telecommunications equipment product
offerings are: (i) pay telephones, network equipment, and software for the
United States market which incorporate advanced technology for internally
performing the functions associated with placing a pay telephone call, including
the completion of automated operator assisted calls, (ii) network products and
software for regulated phone companies in the United States ("Local Exchange
Carriers" or "LECs"), (iii) pay telephones and network management systems
compatible with international telecommunications standards, and (iv) call
processing systems for hotels, inmate facilities and other multi-unit users.
The Company's principal executive offices are located at 2155 Chenault,
Suite 410, Carrollton, Texas 75006-5023, telephone (972) 416-0022.
CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR
PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The Common Stock offered hereby involves a high degree of risk. In
addition, this Prospectus and the documents incorporated herein by reference
contain certain "forward-looking statements" within the meaning of Section 27A
of the 1933 Act and Section 21E of the 1934 Act. Such forward-looking
statements, which are often identified by words such as "believes",
"anticipates", "expects", "estimates", "should", "may", "will", and similar
expressions, represent the Company's expectations or beliefs concerning future
events. Numerous assumptions, risks and uncertainties, including the factors set
forth below, some of which may be beyond the control of the Company, could cause
actual results to differ materially from the results discussed in the
forward-looking statements. Prospective purchasers of the Common Stock should
carefully consider the factors set forth below, as well as the other information
contained herein or in the documents incorporated herein by reference.
7
<PAGE>
RISK FACTORS
Recent History of Losses
The Company incurred net losses of $4,995,000, $6,139,000 and
$14,466,000 for the fiscal years ended December 31, 1996, 1995 and 1994,
respectively, and a net loss of $3,097,000 for the six months ended June 30,
1997. Such losses are primarily attributable to profit margins on the Company's
hardware products which have been insufficient to meet selling, marketing,
sustaining engineering, and other general and administrative costs of the
Company. The Company's historical losses have required the Company to seek
various sources of financing, including the sale of assets of the Company and
the sale of debt and equity securities including the Preferred Stock purchased
by certain of the Selling Stockholders. While the Company believes operations of
the Company are improving, there can be no assurance that the Company will be
able to return to profitability.
Changes in Management
The Company has recently made various management changes as a result of
one of the Company's prior senior executive moving to the Company's majority -
owned subsidiary, ILD Teleservices, Inc., and the retirement of its former Chief
Financial Officer. John J. McDonald, Jr. has become president and chief
operating officer of the Company and John M. Carradine has become Chief
Financial Officer. William O. Hunt, the Company's prior president, has remained
as Chairman of the Board and Chief Executive Officer. Mr. McDonald joined the
Company in February 1997 while Mr. Carradine has been with the Company for seven
years in roles of ever-increasing responsibility. While the Company believes
these management changes are beneficial to the Company, there can be no
assurance that the new senior management team will be able to implement the
Company's strategy.
Potential Redemption of Preferred Stock
Pursuant to the regulations of the NYSE, in the absence of shareholder
approval, the Company may not issue, in the aggregate, more than 1,860,500
shares of Common Stock upon conversion of all of the Preferred Stock. The actual
number of shares of Common Stock to be issued upon conversion of the Preferred
Stock will depend on the average closing price of the Common Stock prior to
conversion. The Company is obligated to redeem any shares of Preferred Stock
which may not be converted into Common Stock as a result of such regulatory
limitation, unless the Company timely obtains shareholder approval. The cash
demands to fund such a redemption may adversely affect the Company's ability to
make future capital expenditures and fund the development and launch of new
products and/or services. Furthermore, there can be no assurance that the
Company will have cash available to fund such a redemption.
8
<PAGE>
Possible Need for Additional Financing
Although the Company anticipates that the net proceeds of its recent
placement of Preferred Stock and its cash flow from operations will be
sufficient to fund the Company's operations during the short term, there can be
no assurance that the Company will not require additional financing prior to the
end of such period. The Company's future liquidity will depend on spending
levels, working capital turnover and the volume and timing of equipment sales
and gross margins related thereto.
Recent Telecommunications Act
The Company's pay telephones in the United States are principally sold
to independent payphone providers. In 1996 Congress passed the
Telecommunications Act of 1996 (the "Telecom Act") pursuant to which the Federal
Communications Commission (the "FCC") was authorized to evaluate and adjust the
amount of the compensation paid by long-distance carriers to independent
payphone companies when consumers access a long-distance carrier directly by
dialing an access or an 800 number or by using a calling card which is
non-billable by the payphone provider and thereby "dial-around" the payphone
provider's long-distance carrier (from whom the payphone provider receives
compensation) in order to reach another long-distance carrier (from whom the
payphone provider would not receive compensation) ("Dial Around"). In November
1996, the FCC issued an order to increase compensation to payphone providers for
Dial-Around; however such order was appealed to the U.S. Court of Appeals for
the D.C. Circuit, which court ruled in July 1997 that the FCC's basis for
determining Dial- Around compensation was inappropriate. The Court of Appeals
ordered the FCC to re-examine the Dial-Around compensation structure. The
Company's customers will be impacted by the FCC's final determination on
Dial-Around compensation. If such compensation is reduced, the determination
could have an adverse impact on the Company's sales of pay telephones.
Competition
The industry in which the Company operates is intensely competitive.
Many of the Company's existing and potential competitors have far more extensive
financial, engineering, product development, manufacturing and marketing
resources than the Company. The Company's products and services compete on the
basis of a number of factors, including, (i) in the case of the equipment
business, price, quality, features and functions, reliability, service and
support and (ii) in the case of the services business, amount of compensation
paid to payphone providers and pricing of long-distance services. There can be
no assurance that competitors will not introduce products and/or services
incorporating technology as advanced or more advanced than the Company's or that
changes in the telecommunications environment will not render competitors'
product solutions more attractive to customers than the Company's solutions.
Competitive pressures often necessitate price reductions which the Company may
not be able to achieve or which could adversely affect profit margins which, in
turn, could adversely affect operating results. There can be no assurance that
the Company will be able to compete successfully with existing or new
competitors or that competitive pressures faced by the Company will not
materially and adversely affect its business, results of operations, or
financial condition.
9
<PAGE>
Potential Dilution; Shares Eligible for Future Sales;
Possible Effect on Additional Equity Financing
A substantial number of shares of Common Stock are or will be issuable
by the Company upon the conversion of the Preferred Stock, upon conversion of
debentures previously issued by the Company and upon the exercise of warrants
that the Company has issued, which could result in dilution of a shareholder's
percentage ownership interest in the Company and could adversely affect the
market price of the Common Stock. Under the applicable conversion formulas of
the Preferred Stock, the number of shares of Common Stock issuable upon
conversion is inversely proportional to the market price of the Common Stock at
the time of conversion (i.e., the number of shares increases as the market price
of the Common Stock decreases); and except with respect to certain redemption
rights of the Company for the Preferred Stock, there is no cap on the number of
shares of Common Stock that may be issued. In addition, the number of shares
issuable upon the conversion of the debentures and the exercise of warrants is
subject to adjustment upon the occurrence of certain dilutive events. For a
complete description of the rights of holders of Preferred Stock, see the
Company's Current Report on Form 8-K/A dated July 21, 1997, including the
exhibits thereto.
On August 15, 1997, there were issued and outstanding a total of
9,339,201 shares of Common Stock. If all the Preferred Stock (assuming a
conversion price of $2.1875) and convertible debentures which the Company has
issued were converted into shares of Common Stock and if all warrants
outstanding were exercised, there would be outstanding 13,943,254 shares of
Common Stock. Of these, the Company currently has registered for resale
1,865,152 shares of Common Stock as contemplated in this Prospectus. The sale or
availability for sale of a significant number of shares of Common Stock in the
public market could adversely affect the market price of the Common Stock. In
addition, certain holders of outstanding securities of the Company have rights
to approve and/or participate in certain types of future equity financing by the
Company. The availability to the Company of additional equity financing, and the
terms of any such financing, may be adversely affected by the foregoing.
Dividend Policy
The Company has never paid cash dividends on its Common Stock.
Furthermore, the Company currently intends to retain any future earnings for use
in its business and does not expect to pay any cash dividends on its Common
Stock in the foreseeable future. The Company's senior secured loan agreements
prohibit the Company from paying dividends. Any future change in the Company's
dividend policy will depend upon the earnings and financial position of the
Company, the nature of any restrictions on the payment of dividends contained in
debt agreements which the Company has entered into or may enter into in the
future and such other factors as the Board of Directors of the Company may deem
appropriate.
Preferred Stock; Anti-Takeover Provisions
The Company's authorized but unissued capital stock includes
1,000,000 shares of preferred stock, par value $.01 per share ("Authorized
Preferred Stock"), of which 4,000 shares are currently issued and outstanding.
The rights of the holders of shares of Common Stock may be adversely affected by
the preferential rights afforded to the holders of the Preferred Stock
10
<PAGE>
currently outstanding and any shares of Authorized Preferred Stock that may from
time to time be issued by action of the Board of Directors. In addition, the
Company's Certificate of Incorporation and Bylaws, as well as the General
Corporation Law of the State of Delaware ("DGCL"), contain certain provisions
that may have the effect of discouraging an unsolicited acquisition proposal.
Furthermore, upon a change in control of the Company, options granted under the
Company's stock option plans become immediately exercisable.
USE OF PROCEEDS
The proceeds from the sale of the shares of Common Stock offered hereby
are solely for the account of the Selling Stockholders. Accordingly, the Company
will receive none of the proceeds from the sale thereof.
SELLING STOCKHOLDERS
The Selling Stockholders are certain persons who provided or
facilitated equity financing to the Company. The shares of Common Stock covered
by this Prospectus are being registered to permit secondary trading and so that
the Selling Stockholders may offer the shares for resale from time to time. See
"Plan of Distribution." Except as described below, none of the Selling
Stockholders has had a material relationship with the Company within the past
three years other than as a result of the ownership of the Common Stock and
other securities of the Company.
The following table sets forth the names of the Selling Stockholders,
the number of shares of Common Stock owned beneficially by each of the Selling
Stockholders as of September 2, 1997, and the number of shares which may be
offered for resale pursuant to this Prospectus regardless of whether such
Selling Stockholder has a present intent to sell. For the purposes of
calculating the number of shares of Common Stock beneficially owned by the
Selling Stockholders holding Preferred Stock, the number of shares of Common
Stock calculated to be issuable in connection with the conversion of the
Preferred Stock is based on a conversion price of $2.1875 per share. The
calculation of the total number of shares of Common Stock to be offered by the
holders of such Preferred Stock, however, is an estimate based on a hypothetical
conversion at the price set forth in the preceding sentence, which price is
below the closing market price of the Common Stock as of October 3, 1997,
which price is $5.6875. If the $5.6875 per share price were used instead of the
per share prices listed above, the number of shares of Common Stock issuable
upon conversion of the Preferred Stock would decrease to a total of 879,121
shares. The registration statement of which this Prospectus is a part includes,
in accordance with Rule 416 of the 1933 Act, an indeterminate number of shares
issuable upon conversion of the Preferred Stock as a result of the floating rate
conversion features thereof. The use of such hypothetical conversion prices is
not intended, and should in no way be construed, to constitute a prediction as
to the future market price of the Common Stock.
The information included below is based upon information provided by
the Selling Stockholders. Because the Selling Stockholders may offer all, some
or none of their shares of Common Stock, no definite estimate as to the number
of shares thereof that will be held by the Selling Stockholders after such
offering can be provided and the following table has been prepared on the
assumption that the conversion price is $2.1875 and that all shares of Common
Stock offered under this Prospectus will be sold.
11
<PAGE>
<TABLE>
<CAPTION>
Name(1) Shares of Common Shares of
- ------- Stock Beneficially Shares of Common Stock
Owned Prior to Common Stock Owned After
Offering Offered Hereby The Offering
-------- -------------- ------------
<S> <C> <C> <C>
CC Investments,
LDC (2) 731,428 731,428 - 0 -
Proprietary
Convertible
Investment Group,
Inc. (2) 571,429 571,429 - 0 -
Canadian Imperial
Holdings, Inc. (2) 457,143 457,143 - 0 -
The Matthew Funds,
N.V. (2) 68,571 68,571 - 0 -
Swartz Investments,
LLC (3) 36,580 36,580 - 0 -
<FN>
(1) Unless otherwise indicated in the footnotes to this table, the persons and
entities named in the table have sole voting and sole investment power with
respect to all shares beneficially owned.
(2) Each of the designated Selling Stockholders holds shares of Preferred Stock
which are convertible into shares of Common Stock. Each share of Preferred Stock
may be converted into a number of shares of Common Stock, at the option of each
selling Stockholder, at a conversion price equal to the lesser of $5.05 per
share (the "Fixed Conversion Price") or eighty percent (80%) of the volume
weighted average fifteen day trading price preceding the date of conversion. The
number of shares of Common Stock being offered by each Selling Stockholder
(except for the shares of Common Stock described in footnote 3 below) is based
on shares issuable upon conversion of the Preferred Stock at a conversion price
of $2.1875. As the conversion price is variable, the actual numbers of shares to
be sold by each designated Selling Stockholder may be substantially more or less
than the number of shares indicated in the table. Notwithstanding the foregoing,
each listed Selling Stockholder can convert into shares of Common Stock only to
the extent that the number of shares issued thereby, combined with the number of
shares of Common Stock held by such Selling Stockholder, would not exceed 4.9%
of the then outstanding Common Stock, as determined in accordance with Rule
13d-3 of the 1934 Act. Accordingly, the number of shares of Common Stock set
forth in the table for certain of the Selling Stockholders exceeds the number of
shares of Common Stock that they could beneficially own at any given time
through their ownership of Preferred Stock. In that regard, beneficial ownership
of those Selling Stockholders set forth in the table is not determined in
accordance with Rule 13d-3. Pursuant to a securities purchase agreement, the
Company agreed
</FN>
</TABLE>
12
<PAGE>
to register the shares of Common Stock at its cost to remove the restriction on
free transferability. The Company has no knowledge as to when or if any of the
Selling Stockholders will convert any of their shares of Preferred Stock or
desire to offer shares of Common Stock upon such conversion for sale upon the
open market once registration is completed. For a complete description of the
rights of holders of Preferred Stock, see the Certificate of Designation of
Series A Convertible Preferred Stock of the Company and the related Securities
Purchase Agreement (with exhibits) filed as an exhibit to the Company's Current
Report on Form 8-K dated July 21, 1997 as amended by the Form 8-K/A dated July
21, 1997.
(3) Swartz Investments, LLC received 36,580 shares of Common Stock as partial
consideration for arranging the sale of the Preferred Stock.
PLAN OF DISTRIBUTION
The Company is registering the shares of Common Stock offered by the
Selling Stockholders hereunder pursuant to contractual registration rights.
The shares of Common Stock offered hereunder may be sold from time to
time by the Selling Stockholders, or by pledgees, donees, transferees or other
successors in interest. Such sales may be made on the New York Stock Exchange,
on any exchange or market on which the Common Stock is listed for trading, in
the over-the-counter market, in privately negotiated transactions or otherwise
at prices and on terms then prevailing or related to the then current market
price, or such other prices as the Selling Stockholders determine from time to
time. The shares of Common Stock may be sold to or through one or more
broker-dealers, acting as agent or principal in underwritten offerings, block
trades, agency placements, exchange distributions, brokerage transactions or
otherwise, or in any combination of transactions. The shares of Common Stock
hereunder may be used to settle short sales of Common Stock or options held by a
selling Stockholder.
In connection with any transaction involving the Common Stock,
broker-dealers or others may receive from the Selling Stockholders, and may in
turn pay to other broker-dealers or others, compensation in the form of
commissions, discounts or concessions in amounts to be negotiated at the time.
Broker-dealers and any other persons participating in a distribution of the
Common Stock may be deemed to be "underwriters" within the meaning of the Act in
connection with such distribution, and any such commissions, discounts or
concessions may be deemed to be underwriting discounts or commissions under the
1933 Act.
Any and all of the sales or other transactions involving the Common
Stock described above, whether effected by the Selling Stockholders, any broker
dealer or others, may be made pursuant to this Prospectus. In addition, any
shares of Common Stock that qualify for sale pursuant to Rule 144 under the 1933
Act may be sold under Rule 144 rather than pursuant to this Prospectus. There
can be no assurances that all or any of the shares of Common Stock offered
hereby will be issued to, or sold by, the Selling Stockholders.
To comply with the securities laws of certain states, if applicable,
the Common Stock may be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, shares of Common Stock may not be sold
unless they have been registered or qualified
13
<PAGE>
for sale or an exemption from registration or qualification requirements is
available and is complied with under applicable state securities laws.
14
<PAGE>
The Company and the Selling Stockholders have agreed, and hereafter may
further agree, to indemnify each other and certain persons, including
broker-dealers or others, against certain liabilities in connection with any
offering of the Common Stock, including liabilities arising under the Act.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by
Kane, Russell, Coleman & Logan, P.C., Dallas, Texas.
EXPERTS
The consolidated financial statements incorporated in this Prospectus
by reference to the Annual Report on Form 10-K of Intellicall, Inc. for the
fiscal year ended December 31, 1996, have been so incorporated in reliance on
the report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
15
