As filed with the Securities and Exchange Commission on September 15, 1998
Registration Statement No. 333-63391
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
INTELLICALL, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1993841
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
2155 Chenault, Suite 410
Carrollton, Texas 75006-5023
(972) 416-0022
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------------------------------
Copy to:
John J. McDonald, Jr.
Chief Executive Officer Patrick V. Stark
Intellicall, Inc. Kane, Russell, Coleman & Logan, P.C.
2155 Chenault, Suite 410 3700 Thanksgiving Tower
Carrollton, Texas 75006-5023 1601 Elm Street
(972) 416-0022 Dallas, Texas 75201
(Name, address, including zip code, 214) 777-4200
and telephone number, including
area code, of agent for service)
Approximate date of commencement 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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
Title of Each Class Amount to be Proposed Maximum Proposed Maximum Amount of
of Securities to be registered (1) Offering Price Per Share Aggregate Offering Price Registration Fee (3)
Registered (2) (2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common 4,177,855 $1.56 $1,202,916 $355
Stock, par
value $.01
per share . . . .
. . . . . .
- ------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Includes 1,506,755 shares carried forward from and previously
registered for sale pursuant to Registration Statement No. 333-34985.
Also includes, pursuant to Rule 416 under the Securities Act, as
amended, an indeterminate number of shares issuable to prevent dilution
resulting from stock splits, stock dividends or similar transactions.
The Registrant has previously registered for sale 1,865,152 shares of
Common Stock pursuant to Registration Statement No. 333 - 34985.
(2) Estimated pursuant to Rule 457(c) solely for the purpose of calculating
the amount of the registration fee, based on the average of the high
and low sales prices of the Common Stock, as reported on the New York
Stock Exchange on November 2, 1998.
(3) Calculated in accordance with Rule 457(a) to register an additional
771,000 shares of Common Stock. A registration fee of $2,472 was
previously paid and allocable to the 1,506,755 shares of Common Stock
carried forward from Registration Statement No. 333 - 34985 and a
registration fee of $1,180 was paid in conjunction with the
registration of 1,900,000 shares of Common Stock pursuant to this
Registration Statement.
</FN>
</TABLE>
(ii)
<PAGE>
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, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
In accordance with Rule 429, this Registration Statement includes
1,506,785 shares of Common Stock carried forward from and registered under
Registration Statement No. 333 - 34985.
(iii)
<PAGE>
PROSPECTUS
4,177,855 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 up to 4,177,855 shares issuable upon conversion of 2,690 shares of
the Company's 7% Series A Convertible Preferred Stock (the "Preferred Stock")
currently outstanding. There were originally 4,000 shares of the Preferred Stock
outstanding, 1,310 of which were converted into 358,377 shares of Common Stock
prior to the date of this Prospectus. Each share of Preferred Stock may be
converted into a number of shares of Common Stock equal to (i) 1,000 (plus a
premium equal to 1,000 times the number of days from July 21, 1997 to the date
of conversion, times .07, divided by 365) divided by (ii) a conversion price
equal to the lesser of $5.05 per share 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 is
based upon the Company's contractual agreement to register 200% of the number of
shares which would be issuable upon conversion at the conversion price currently
in effect which, as of October 26, 1998, was $1.40184. If all of the outstanding
shares of Preferred Stock were converted at that price on such date a total of
2,088,688 shares of Common Stock would be issued upon such conversion or 17.39%
of the Common Stock then outstanding. For a complete description of the rights
of holders of Preferred Stock, see 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, 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 thereto. 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 -- Dilution as a Result of Conversion of
Preferred Stock" 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
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
November __, 1998
1
<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 $21,680. 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
November 2, 1998, the closing sale price of the Common Stock on the NYSE was
$1.56.
2
<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 60661-25 11; 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, 1997, filed
with the Commission pursuant to Section 13(a) of the 1934 Act;
2. Form 10-Q for the fiscal quarter ended June 30, 1998, filed
with the Commission pursuant to Section 13(a) of the 1934 Act;
3. The description of the Company's Common Stock registered under
the 1934 Act contained in the Company's Form 8-A filed with
the 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
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<PAGE>
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
Stockholder. 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.
4
<PAGE>
THE COMPANY
Intellicall is a diversified telecommunications services and equipment
company. The Company provides one primary service, automated operator services
for the private pay telephone, hospitality, and inmate services industries. 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 Risk
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 Risk Factors set forth below, as well as the other
information contained herein or in the documents incorporated herein by
reference.
5
<PAGE>
RISK FACTORS
Recent History of Losses
The Company incurred net losses of $10,905,000, $4,995,000 and
$6,139,000 for the fiscal years ended December 31, 1997, 1996 and 1995,
respectively. The Company enjoyed a profit of $3,350,000 for the six months
ended June 30, 1998 resulting from a gain of $6,892,000 on the sale of assets.
Without such gain the Company's loss for such six month period would have been
$3,542,000. 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. John J.
McDonald, Jr. became president and chief executive officer of the Company in May
1998 and R. Phillip Boyd became Chief Financial Officer in October 1998. William
0. Hunt, the Company's prior president, has remained as Chairman of the Board.
Mr. McDonald joined the Company in February 1997 and Mr. Boyd joined the Company
in December 1997. 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.
Dilution as a Result of Conversion of Preferred Stock
There are currently 2,690 shares of the Preferred Stock outstanding.
Each share of Preferred Stock may be converted into a number of shares of Common
Stock, equal to (i) 1,000 (plus a premium equal to 1,000 times the number of
days from July 21, 1997 to the date of conversion, times .07, divided by 365)
divided by (ii) a conversion price equal to the lesser of $5.05 per share or
eighty percent (80%) of the volume weighted average fifteen day trading price
preceding the date of conversion. The conversion price, if below $5.05 per
share, fluctuates daily and as of October 26, 1998 was $1.40184. If all of the
outstanding shares of Preferred Stock were converted at that price a total of
2,088,688 shares of Common Stock would be issued upon such conversion, which
would represent 17.39% of outstanding Common Stock based upon the fact that
on November 2, 1998 there were issued and outstanding a total of 9,919,161
shares of Common Stock. All of such shares of Common Stock are covered
by the registration statements containing this prospectus or will be covered
by subsequent registration statements filed by the Company, if necessary. While
no Selling Stockholder is permitted to convert shares of Preferred Stock to the
extent that such conversion would cause it to beneficially own more than 4.9% of
the Common Stock, this restriction does not prevent a Selling Stockholder from
6
<PAGE>
converting and selling shares and then converting more shares. Therefore, a
Selling Stockholder can sell more than 4.9% of the outstanding Common Stock even
though it cannot own more than 4.9% of the Common Stock at any one time. See
"Selling Stockholders." Up to 2,636,197 shares of Common Stock are issuable by
the Company upon conversion of debentures and exercise of warrants issued by the
Company to persons other than the Selling Stockholders. Under the applicable
conversion formula for the Preferred Stock, the number of shares of Common Stock
issuable upon conversion is inversely proportional to the market price of the
Common Stock (i.e. the number of shares to be issued upon conversion increases
as the market price of the Common Stock decreases). Therefore, to the extent the
Selling Stockholders convert and sell their shares of Common Stock, the market
price of the Common Stock may decrease due to the additional shares being
offered in the market, allowing the holders of the Preferred Stock to convert
their Preferred Stock into greater amounts of Common Stock and further
depressing the market price of the Common Stock. For a complete description of
the rights of holders of Preferred Stock, see 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
and the Certificate of Designation of Series A Convertible Preferred Stock of
the Company and the related Securities Purchase Agreement (with exhibits) filed
as exhibits thereto.
Possible Effect on Additional Equity Financing
The conversion of the Preferred Stock and debentures and exercise of
warrants and the sale of the shares of Common Stock received upon such exercise
and conversion could have a significant negative impact on the market price of
the Common Stock and could materially impair the Company's ability to raise
capital through the future sale of equity securities. In addition, certain
holders of outstanding securities of the Company have rights to approve and/or
participate in certain types of future equity financings by the Company. The
availability to the Company of additional equity financing, and the terms of
such financing, may be adversely affected by the foregoing.
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, which
number of shares is less than the total number of shares being offered by this
Prospectus. As of the date of this Prospectus, 1,310 shares of Preferred Stock
have been converted into an aggregate of 358,377 shares of Common Stock. The
actual number of shares of Common Stock to be issued upon conversion of the
remaining 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.
At the $1.40184 conversion price in effect on October 26, 1998 2,088,688 shares
of Common Stock would be issuable upon conversion of all of the outstanding
shares of Preferred Stock. The redemption price in effect on October 26, 1998
for any shares of Preferred Stock which could not be converted due to the New
York Stock
7
<PAGE>
Exchange limitation was $1,361 per share. 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.
Possible Need for Additional Financing
Although the Company anticipates that the net proceeds of the recent
sale of assets 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 the fiscal
year ending December 31, 1998. 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 Eighth Circuit, which court ruled in July 1997 that the FCC's basis for
determining DialAround 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'
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<PAGE>
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.
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
On August 31, 1998 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 (i) 2,690 shares are currently issued
and outstanding and (ii) 1,310 shares have been converted from Preferred Stock
to Common Stock. 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 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 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
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<PAGE>
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 October 26, 1998, 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.
The information included below is based upon information provided by
the Selling Stockholders as of the date of this Prospectus. 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 $1.40184 and
that all shares of Common Stock offered under this Prospectus will be sold.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Name(1) Shares of Common Shares of
Stock Beneficially Shares of Common Stock
Owned Prior to Common Stock Owned After
Offering (2) Offered Hereby The Offering
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CC Investments,
LDC 511,081 (3) 1,553,106 -0-
- ----------------------------------------------------------------------------------------------------------------------------
Marshall Capital
Management,
Inc.
511,081 (4) 1,071,643 -0-
- ----------------------------------------------------------------------------------------------------------------------------
Canadian Imperial
Holdings, Inc. 511,081 (5) 1,553,106 -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 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 is based on a
contractual agreement between the Selling Stockholder and the Company. As the
conversion price is variable, the number of shares registered for sale by each
designated Selling Stockholder may
10
<PAGE>
be substantially more or less than the number of shares into which its shares of
Preferred Stock are ultimately converted. In accordance with the terms of the
Preferred Stock, 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. Pursuant to a
securities purchase agreement, the Company agreed to register the shares of
Common Stock at its cost and 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. For a complete
description of the rights of holders of Preferred Stock, see 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 and 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 thereto.
(3) Consists of 511,081 shares of Common Stock issuable upon conversion of
shares of Preferred Stock owned by such Selling Shareholder which are
convertible into shares of Common Stock subject to the 4.9% ownership limitation
described above. CC Investments, LDC beneficially owns 1,000 shares of Preferred
Stock. Absent the 4.9% limitation those shares would be convertible into 776,553
shares of Common Stock, or 7.3% of the outstanding shares of Common Stock, at
the $1.40184 conversion price in effect on October 26, 1998. Castle Creek
Partners, LLC is the investment advisor to CC Investments, LDC and consequently
may be deemed to have voting control and investment discretion over the
securities held by CC Investments, LDC. Castle Creek Partners, LLC disclaims
beneficial ownership of all securities owned by CC Investments, LDC. Daniel
Asher and John Ziegelman may be deemed to be the beneficial owners of the Common
Stock and Preferred Stock held by CC Investments, LDC. Mr. Asher and Mr.
Ziegelman disclaim such beneficial ownership.
(4) Consists of 511,081 shares of Common Stock issuable upon conversion of
shares of Preferred Stock owned by such Selling Shareholder which are
convertible into shares of Common Stock subject to the 4.9% ownership limitation
described above. Marshall Capital Management, Inc. beneficially owns 511,081
shares of Preferred Stock. Absent the 4.9% limitation those shares would be
convertible into 535,582 shares of Common Stock, or 5.12% of the outstanding
shares of Common Stock, at the $1.40184 conversion price in effect on October
26, 1998. Marshall Capital Management, Inc. is an indirect wholly-owned
subsidiary of Credit Suisse First Boston Group, which entity disclaims
beneficial ownership over the securities owned by Marshall Capital Management,
Inc..
(5) Consists of 511,081 shares of Common Stock issuable upon conversion of
shares of Preferred Stock owned by such Selling Shareholder which are
convertible into shares of Common Stock subject to the 4.9% ownership limitation
described above. Canadian Imperial Holdings, Inc. beneficially owns 511,081
shares of Preferred Stock. Absent the 4.9% limitation those shares would be
convertible into 776,553 shares of Common Stock, or 7.3% of the outstanding
shares of Common Stock, at the $1.40184 conversion price in effect on October
26, 1998.
11
<PAGE>
Canadian Imperial Holdings, Inc. is a wholly-owned subsidiary of Canadian
Imperial Bank of Commerce, which entity disclaims beneficial ownership
over the securities owned by Canadian Imperial Holdings, Inc..
</FN>
</TABLE>
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 1933
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 for sale or an exemption from
registration or qualification requirements is available and is complied with
under applicable state securities laws.
12
<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 1933 Act.
LEGAL MATTERS
Certain legal matters have been 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, 1997, have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses (other than underwriting
discounts and commissions) which, other than the SEC registration fee, are
estimates, payable by the Company in connection with the sale and distribution
of the shares of Common Stock registered hereby.
SEC registration fee $ 4,324
Blue Sky fees and expenses (including legal fees) $ 1,500*
Legal fees and expenses $10,000*
Accounting fees and expenses $ 4,000*
Printing expenses $ 1,000*
Miscellaneous $ 856*
Total $21,680
=======
- -------------
* Estimated
Item 15. Indemnification of Directors and Officers.
Delaware General Corporation Law
Section 145(a) of the General Corporation Law of the State of Delaware
(the "DGCL") provides that a corporation may indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
II-1
<PAGE>
Section 145(b) of the DGCL provides that a corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
Section 145(c) of the DGCL provides that to the extent that a director,
officer, employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
Section 145(d) of the DGCL provides that any indemnification under
subsections (a) and (b) of Section 145 (unless ordered by the court) shall be
made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in subsections (a) and (b) of Section 145. Such determination
shall be made (1) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or proceeding,
or (2) if such a quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested directors so directs, by independent legal counsel in a written
opinion, or (3) by the stockholders.
Section 145(e) of the DGCL provides that expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in Section 145. Such
expenses (including attorneys' fees) incurred by other employees and agents may
be so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
II-2
<PAGE>
Certificate of Incorporation
Article Tenth of the Company's Certificate of Incorporation provides
that a director of the Company shall not be personally liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL or (iv) for any transaction in which
the director derived an improper personal benefit.
Article Tenth of the Company's Certificate of Incorporation further
provides that the Company shall indemnify to the full extent authorized or
permitted by law any person made, or threatened to be made, a party to any
action or proceeding (whether civil or criminal or otherwise) by reason of the
fact that he, his testator or intestate, is or was a director or officer of the
Company, or is or was serving any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, in any capacity.
Bylaws
Article I of the Company's Bylaws provides that the Company shall
indemnify to the same extent as provided in its Certificate of Incorporation any
person made, or threatened to be made, a party to any action or proceeding
(whether civil or criminal or otherwise) by reason of the fact that he, his
testator or intestate, is or was a director or officer of the Company, or is or
was serving any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, in any capacity.
Indemnification Agreements
The Company has entered into Indemnification Agreements (the
"Indemnification Agreements") pursuant to which it has agreed to indemnify
certain of its directors and officers against judgments, claims, damages, losses
and expenses incurred as a result of the fact that any party thereto is, was or
has agreed to become a director, officer, employee or agent of the Company or is
or was serving or has agreed to serve in any capacity, at the request of the
Company, in any other corporation, partnership, joint venture, employee benefit
plan, trust or other enterprise, to the fullest extent permitted by applicable
law and in accordance with the terms and conditions set forth therein. The
Indemnification Agreements also provide for the advancement of certain expenses
to the directors and officers party thereto and authorize such directors and
officers to commence litigation in a court of competent jurisdiction to seek an
initial determination as to whether indemnification is proper or to challenge
any action of the Board of Directors of the Company denying them
indemnification. The Indemnification Agreements also provide that, in the event
that the indemnification provided for thereunder is for any reason unavailable,
the Company shall contribute to the amount incurred by the directors and
officers party thereto in such proportion as is fair and reasonable in light of
all the circumstances.
II-3
<PAGE>
Item 16. Exhibits.
Description of
Exhibit Numbers Document
--------------- --------
5.1 Opinion of Kane, Russell, Coleman & Logan, P.C.,
filed herewith
23.1 Consent of PricewaterhouseCoopers LLP, previously
filed
24.1 Power of Attorney of certain officers and directors
(included in Part II of this Registration Statement
on the signature page hereto)
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act"), may be permitted to directors, officers,
and controlling persons of the Company pursuant to provisions described in Item
15, 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 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 Act and will
be governed by the final adjudication of such issue.
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:
(i) To include any prospectus required by Section
10(a)(3) of the Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement; and
II-4
<PAGE>
(iii) 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.
Provided, however, that paragraphs (1)(i) and (1)
(ii) do not apply if the information required to be included in a post
effective amendment by these paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Company pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Act, each post-effective amendment that contains a form of prospectus 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
Act, each filing of the Company's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in the Registration Statement shall be deemed to be
the 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement 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.
II-5
<PAGE>
SIGNATURES
Pursuant to 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 for filing on Form S-3 and has duly caused this Amendment
No. 1 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dallas, State of Texas on November 5,
1998.
INTELLICALL, INC.
By:/s/ John J. McDonald, Jr.
John J. McDonald, Jr., President and Chief
Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to Registration Statement has been signed by the following
persons in the capacities and on the dates indicated. Each person whose
signature to this Amendment No. 1 to Registration Statement appears below has
appointed each of John J. McDonald, Jr. and John M. Carradine as his
attorney-in-fact to sign on his behalf individually and in the capacity stated
below and to file all amendments and post effective amendments, supplements to
this Registration Statement, and any and all instruments or documents filed as
part of or in connection with this Registration Statement or any amendment or
supplement thereto, and any such attorney-in-fact may make such changes and
additions to this Registration Statement as such attorney-in-fact may deem
necessary or appropriate.
II-6
<PAGE>
NAME TITLE DATE
/s/ William O. Hunt* Chairman of the Board November 5, 1998
- ---------------------------
William O. Hunt
/s/ R. Phillip Boyd Vice President; Principal November 5, 1998
R. Phillip Boyd Financial and Accounting Officer
/s/ B. Michael Adler* Director November 5, 1998
- ---------------------------
B. Michael Adler
- -------------------------- Director -----------------
Thomas J. Berthel
- --------------------------- Director -----------------
Lewis E. Brazelton, III
/s/ Arthur Chavoya* Director November 5, 1998
- ---------------------------
Arthur Chavoya
/s/ Richard B. Curran* Director November 5, 1998
- ---------------------------
Richard B. Curran
/s/ John J. McDonald Director November 5, 1998
- ---------------------------
John J. McDonald
*/s/ John J. McDonald
John J. Mcdonald,
Attorney-In-Fact
II-7
EXHIBIT 5.1
November 4, 1998
Intellicall, Inc.
2155 Chenault, Suite 410
Carrollton, Texas 75006-5023
Re: Registration Statement on Form S-3
Dear Sirs:
We have acted as counsel to Intellicall, Inc., a Delaware corporation
(the "Company"), in connection with the preparation and filing with the
Securities and Exchange Commission under the Securities Act of 1933 of a
Registration Statement on Form S-3 (the "Registration Statement") relating
to the registration of 4,177,855 shares (the "Shares") of the Company's Common
Stock, par value of $.01 per share.
In so acting, we have examined originals, or copies otherwise
identified to our satisfaction, of such corporate records, documents,
certificates and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below.
We are of the following opinion:
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware.
2. The Shares have been duly authorized and, when issued upon
conversion of the Company's Preferred Stock, will be validly issued,
fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and to the use of our name under the "Legal Matters"
in the Registration Statement.
Very truly yours,
KANE, RUSSELL, COLEMAN & LOGAN, P.C.
By: ________________________________
Patrick V. Stark, Vice President
PVS:sg
