As filed with the Securities and
Exchange Commission, August 8, 1997.
Securities Act File No. 333-8531
Exchange Act File No. 0-18034
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3/A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
INDENET, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 68-0158367
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification Number)
16000 Ventura Blvd., Suite 700
Encino, California 91436
(818) 461-8525/FAX (818) 461-8531
(Address, including Zip Code, and Telephone Number,
including Area Code, of Registrant's Principal Executive Offices)
_____________________
RICHARD J. PARENT, Chief Financial Officer
INDENET, INC.
16000 Ventura Blvd., Suite 700
Encino, California 91436
(818) 461-8525/FAX (818) 461-8531
(Name, Address, including Zip Code, and Telephone
Number, including Area Code, of Agent for Service)
____________________
Copies of Communications to:
Roger V. Davidson, Esq.
Nicole A. Elias, Esq.
Cohen Brame & Smith
Professional Corporation
1700 Lincoln Street, Suite 1800
Denver, Colorado 80203
(303) 837-8800
Approximate date of commencement of proposed sale to public: As
soon as practicable after the registration statement becomes
effective.
__________________________
If the only securities being registered on this Form are
being offered pursuant to dividend or interest investment 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]
Title of each Class of Common Stock, $0.001 par value
Securities being Registered
Amount being 392,452 Shares (1)
Registered
Proposed $2.50 (2)(3)
Maximum Offering
Price Per Share
Proposed Maximum $981,130
Aggregate Offering
Price
Amount of $ -0- (4)
Registration Fee
Total. . . . . . . $-0- (4)
(1) This registration statement covers an additional
indeterminate number of shares of Common Stock which may be
issued in accordance with Rule 416.
(2) Closing price on the NASDAQ Stock Market on July 28, 1997.
(3) Estimated solely for the purpose of determining the
registration fee and calculated pursuant to Rule 457(a).
(4) Registration Fee of $1,008.69 paid with initial filing.
_____________________
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.
PROSPECTUS
SELLING SHAREHOLDER OFFERING
IndeNet, Inc.
$.001 Par Value Common Stock
The Company is registering 392,452 shares of $.001 par value
common stock ("Common Stock") from the conversion of 216,667
shares of Series B Preferred Stock previously owned by
InterEquity Capital Partners, L.P. ("InterEquity" or the "Selling
Shareholder"). The shares offered hereby are being sold for the
accounts of InterEquity and the Company will not receive any
proceeds from the sale of shares by InterEquity. The Common
Stock is traded on the Nasdaq Stock Market ("Nasdaq") under the
trading symbol "INDE." The reported closing price on Nasdaq on
July 18, 1997 was $2.50 per share.
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 PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THERE ARE CERTAIN RISKS INVOLVED WITH THE OWNERSHIP OF THE
COMPANY'S SECURITIES, INCLUDING RISKS RELATED TO ITS BUSINESS AND
THE MARKETS FOR ITS SECURITIES. (SEE "RISK FACTORS".)
The Company, pursuant to an agreement with the Selling
Shareholder, has agreed to pay substantially all of the expenses
of any offering and sale hereunder (not including commissions and
discounts of underwriters, dealers or agents), estimated to be
$9,500.
The Securities will be sold directly, through agents,
underwriters, or dealers as designated from time to time, or
through a combination of such methods on terms to be determined
at the time of sale, at market prices obtainable at the time of
sale or otherwise in privately negotiated transactions at prices
determined by negotiation.
The date of this Prospectus is July 28, 1997.
No dealer, salesman or other person has been authorized to
give any information or to make any representation other than
those contained in or incorporated by reference to this
Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized
by the Company, InterEquity or any underwriter, dealer or
agent. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since
the date hereof. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy the securities offered
hereby by anyone in any jurisdiction in which such offer or
solicitation is not authorized 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 in such
jurisdiction.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and in accordance therewith files reports, proxy statements
and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other
information concerning the Company may be inspected and copied at
the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; at the
Commission's Regional Office at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and Seven World Trade Center,
Thirteenth Floor, New York, New York 10048. Copies of such
material can also be obtained upon written request addressed to
the Commission, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Such
material can also be inspected at the offices of the National
Association of Securities Dealers, Inc., 1735 K Street,
Washington, DC 20006. The Commission also maintains a site on
the World Wide Web that contains reports, proxy and information
statements and other information regarding the Company. The
address for such site is http://www.sec.gov.
The Company has filed with the Commission a registration
statement on Form S-3/A (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"). This
Prospectus does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration
Statement which may be inspected and copied in the manner and at
the sources described above. With respect to each such
agreement, instrument or other document filed as an exhibit to
the Registration Statement, reference is made to the exhibit for
a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission pursuant to the Exchange Act (file number 0-18034) are
incorporated herein by reference:
(1) The Company's Annual Report on Form 10-KSB and Form 10-
KSB/A for the year ended March 31, 1997.
(2) The Company's Registration Statement on Form 8-A filed
October 12, 1989 (File No. 0-18034), as amended.
(3) The Company's Report on Form 8-K for the event on April
4, 1997.
(4) The Company's Report on Form 8-K for the event on
July 18, 1997.
Any statement contained herein or in a document incorporated
or deemed to be incorporated herein by reference shall be deemed
to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained in any subsequently filed
document (which 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 a copy of this Prospectus is delivered, on the written or
oral request of such person, a copy of any or all of the
documents incorporated herein by reference (other than exhibits
thereto, unless such exhibits are specifically incorporated by
reference into the information that this Prospectus
incorporates). Written or telephone requests for such copies
should be directed to the Company's principal office: IndeNet,
Inc., 16000 Ventura Blvd., Suite 700, Encino, California 91436,
(818) 461-8525.
PROSPECTUS SUMMARY
The following information is qualified in its entirety by
the detailed information and financial statements found elsewhere
in the Prospectus, the March 31, 1997 Form 10-KSB and Form
10-KSB/A, as well as the other documents referred to herein under
"Incorporation of Certain Documents by Reference." As used in
this Prospectus, the term "the Company" refers to IndeNet, Inc.
and its subsidiaries, unless otherwise stated or indicated by the
context.
The Company
IndeNet, Inc. was originally founded as a Colorado
corporation on April 4, 1988 and was re-organized under the laws
of the State of Delaware on July 17, 1995. The Company's
operations serviced the media and communications industries.
Effective October 31, 1993, the Registrant sold all of its
operating assets. Management's intent was to transition into a
new line of business utilizing the proceeds from the sale.
Completion of the asset sale resulted in a company with
approximately $5.8 million in cash and notes receivable,
liabilities of approximately $1.5 million, and shareholders'
equity of $4.3 million. At December 31, 1994, the Registrant's
asset base consisted primarily of cash and promissory notes
relating to the aforementioned sale of its operating assets.
Effective February 3, 1995, the Company acquired Mediatech, Inc.,
which became the principal operating subsidiary of the Company.
On November 27, 1995, the Company acquired 66.67% of
Channelmatic, Inc. ("Channelmatic") and on February 7, 1996 it
completed the acquisition of Starcom Television Services, Inc.
("Starcom"). On May 16, 1996, the Company acquired Cable
Computerized Management Systems, Inc. ("CCMS") through a merger
and on May 24, 1996, the Company acquired Enterprise Systems
Group Limited ("Enterprise") through a Stock Purchase Agreement.
The Company continues to seek other business combinations.
Earlier this year, the Company merged its Starcom and
Mediatech subsidiaries into Starcom Mediatech, Inc., a Delaware
corporation ("Starcom/Mediatech"). The merger was part of
management's plan to begin consolidating its five subsidiaries
into an integrated single-source vendor to companies in the
television advertising industry. On March 24, 1997, the Company
sold its 66.67% interest in Channelmatic to LIMT Local Insertion
Media Technology AB, a Swedish corporation ("LIMT") for $10.91
million. The total consideration consisted of (i) $5.25 million
in cash; (ii) 237,000 shares of LIMT's shares of capital stock;
(iii) LIMT's Convertible Subordinated Debenture, dated May 1,
1997, in the amount of SEK (Swedish Krona) 10,697,500 ("Note 1");
and (iv) LIMT's Subordinated Debenture, dated May 1, 1997, in the
principal amount of SEK 10,696,494 ("Note 2"). Based on the
conversion rate in effect between the United States dollar and
SEK, Note 1 and Note 2 had an aggregate principal balance of U.S.
$2.8 million at the time of sale. The 237,700 shares of LIMT
stock was valued at $2.84 million, which management believes is
its fair value. The two notes bear interest at a rate of 5.5%
per annum, with interest payable quarterly.
On July 18, 1997, the Company sold all of the issued and
outstanding shares of capital stock of Starcom/Mediatech to
Digital Generation Systems, Inc., a California corporation
("Digital"). Starcom/Mediatech was a wholly owned subsidiary of
the Company engaged in the business of duplicating and
distributing television and radio commercials in the United
States. Digital is not affiliated with the Company, and the
consideration paid by Digital in the transaction was established
in arms'-length negotiations. The consideration paid by Digital
for the Starcom/Mediatech shares consisted of the following: (i)
$13,988,730 in cash; (ii) 324,355 shares of Digital Common Stock
valued at $1,600,000; (iii) Digital Subordinated Promissory Note,
dated July 18, 1997 ("Subordinated Note"), in the principal
amount of $2,243,806.34; and (iv) assumption of an aggregate of
$2,206,193.66 owed by the Registrant to Thomas H. Baur, Chairman
and Chief Executive Officer of Starcom/Mediatech and a director
and stockholder of the Company. The Subordinated Note bears
interest at 9% per annum and is payable in 13 equal quarterly
installments of principal and interest, commencing on October 1,
1997. All unpaid principal and accrued interest on the
Subordinated Note is due and payable on October 1, 2001. Digital
provides electronic distribution services to the broadcast
industry.
The Company's new strategy is to be a leader in providing
information technology to broadcast and cable television
stations. The Company's television station services are provided
by Enterprise and CCMS. Enterprise and CCMS design, develop and
distribute traffic, billing, revenue and program management
software products for television stations and cable operators.
The Company currently provides its software products to over 140
domestic broadcast television and radio stations, and to a total
of over 70 broadcast television stations located in the United
Kingdom, Western Europe, New Zealand, Australia, Southeast Asia
and South Africa. The Company has also installed approximately
240 traffic and billing software systems for cable advertisers,
primarily in the U.S. As of March 31, 1997, Enterprise and CCMS
jointly have a backlog of over $75 million, most of which
consists of software licensing and out-sourcing agreements having
an average life of five years. To date, most of the Company's
broadcast television station clients have consisted of larger
stations in the larger metropolitan markets. The Company's
strategy is to leverage its existing technology, its client base
and its reputation to aggressively pursue additional television
broadcast clients. In addition, the Company also intends to
expand its client base into smaller broadcast stations with its
CCMS products.
Products for Broadcast Television and Radio Stations
(a) Traffic and Billing Management Software Systems. The
Company's traffic and billing management software systems for
broadcast television and radio stations are designed to provide
flexibility and support for television management. The systems
incorporate a comprehensive set of programs which provide the
user with information on a range of areas, including sales
orders, program scheduling, financial data, transmission logs,
invoicing, credit and collections. The systems can be
configured to handle a variety of operations including individual
operations, full networks and multichannel environments.
The Company's software systems enable television and radio
stations' sales teams to identify the inventory of available
advertising spots and support their sales initiatives using sales
history, external market research (for example, ratings data
obtained from A.C. Nielsen Company) and pricing data.
(b) Program Management Software Systems. The Company's
program management software systems for broadcast television and
radio stations give customers complete control with respect to
their inventory of feature films, syndicated series, cartoons,
specials and other programs. The systems provide customers with
extensive search capabilities, leading to better management of
programming decisions. Examples of these capabilities include
searches for a particular actor or theme and searches based on
past ratings or last play date. The systems also provide
information which can assist customers in purchasing programming.
Other features of the systems include monthly amortization
forecasting, comparison of program revenue with the amortized
cost of the program and cash requirements reporting.
(c) Revenue Management Systems. Systems place the inventory
of airtime in a station's sales system, rather than in the
traffic system. This enables customers to manipulate their
inventory from a sales prospective. In addition to traffic and
billing functions, the Landmark system also incorporates the
following features: Yield Management, Deal Management, Audience
Research and Sales Information Base.
Products for Cable Television
The principal product offered by the Company to its cable
industry clients is the Ad Manager 20/20 System, a traffic
management, billing and sales management system designed to
manage all activities of the advertising sales operation. The
system is designed to incorporate the information contained
within a client's advertising contracts, as well as the
advertising spots associated with each contract and the network
programs within which spots are to be scheduled. The Ad Manager
can handle up to 5,000 contracts at any one time. The Company
offers a single-user version of the system, as well as a multi-
user version to allow for access by multiple users
simultaneously. Certain of the features of the Company's systems
include (i) automatic or manual scheduling of advertising spot
data, according to specific client requirements; (ii) maintenance
of client advertising insertion tape libraries and assistance
with tape editing procedures; (iii) generation of an advertising
insertion schedule and (iv) automatic reconciliation of
advertising spots that have aired, and the automatic scheduling
of "make-goods" for spots that were missed.
In order to keep pace with the rapidly evolving needs of the
cable advertising industry, the Company recently introduced
Novar, the next generation traffic and billing system for the
television industry.
The Offering
Common Shares Outstanding Prior to,
the Offering and the Conversion of the
InterEquity Preferred Series B Stock . . . . . . 17,181,064
Shares Issued on Conversion of the
InterEquity Preferred Series B Stock. . . . . . . 392,452
Nasdaq Stock Market Symbol. . . . . . . . . . . .INDE
RISK FACTORS
Prior to making an investment decision, prospective
investors should carefully consider, together with the other
information contained in this Prospectus, the following
factors:
1. Short Operating History; Operating Losses. Prior to
the acquisition of Mediatech in February 1995, IndeNet had no
operating business or revenue. From February 1995 through
November 1995, Mediatech was IndeNet's sole business and sole
source of revenue. From November 1995 to May 1996, IndeNet
acquired four other subsidiaries, but recently sold
Mediatech/Starcom and Channelmatic. Although the remaining two
subsidiaries that IndeNet now owns are established companies with
lengthy operating histories, IndeNet has very little history in
operating these companies.
IndeNet has experienced net losses during each of its
last two fiscal years. The net operating losses for the fiscal
year ended March 31, 1997 was $27,700,000, which includes special
charges of $18,400,000. The Company believes that its sale of
Channelmatic and Starcom/Mediatech will allow the Company to
operate profitably in the future, but achieving such
profitability will be dependent upon numerous factors, including
most importantly the Company's ability to maintain and grow its
share of the market for software solutions for broadcast and
cable television stations.
In addition, as a result of the acquisitions of
subsidiaries, as of March 31, 1997 the Company has approximately
$6.8 million of goodwill on its balance sheet as of March 31,
1997. Goodwill is amortized over 20 years, but has been reduced
by the subsequent sale of Starcom/Mediatech. In addition, the
Company has a customer list asset of $14.2 million which is
amortized over 15 years. The amortization of goodwill and
customer list will result in annual charges against earnings (if
any) of approximately $1.2 million per year. Any future
acquisitions by the Company will likely further increase the
amount of goodwill that the Company will have to take as a charge
against any future earnings. There can be no assurance that the
value of such goodwill or customer list will ever be realized by
the Company or that the Company will achieve profitability in any
future period.
2. Competition. Competition in the information technology
business is intense. The Company competes in its business with
numerous competitors and potential competitors, many of whom are
substantially larger in size and have greater financial,
technical, marketing, customer service and other resources
available than the Company. Other companies which are not current
competitors have technological capabilities or other resources
that would allow them to develop alternative products or provide
alternative services which could compete directly with the
Company's products and services.
The Company's principal competitor is Columbine/JDS,
Inc., a provider of traffic and billing management systems. The
Company also competes to a limited extent with the internal data
processing departments of television and radio stations, to the
extent such departments generate traffic and billing systems
in-house.
3. Risks Associated with Technology. The Company's future
success and its ability to remain competitive will depend in
significant part upon the technological quality of its products
and processes relative to those of its competitors and its
ability both to develop new and enhanced products and services
and to introduce such products and processes at competitive
prices and in a timely and cost-effective manner. All of the
Company's current operations are subject to rapid technological
changes. No assurance can be given that the Company will be able
to develop new and enhanced products and services at competitive
prices and in a timely manner.
The markets for the Company's software products are
characterized by evolving industry standards, rapid technological
advances resulting in short product life cycles, price
reductions, significant price/performance improvements and
frequent new product introductions. The Company's future
success will depend at least in part upon its ability to
continually enhance its traffic and billing, revenue management
and other program management software products, and to develop
and introduce new software products and features that meet
changing customer requirements and emerging industry standards on
a timely basis. There can be no assurance that one or more of
the Company's products will not be rendered noncompetitive or
obsolete by technological advances or changing customer
preferences. The Company has from time to time experienced
delays in introducing new products and product enhancements, and
there can be no assurance the Company will not experience
difficulties that could delay or prevent the successful
development, introduction and marketing of new products or
product enhancements in the future. The Company will be required
to continue to invest in research and development to attempt to
maintain and enhance in its existing technologies and products,
and there can be no assurance that it will have the funds
available to do so. Furthermore, new or enhanced products
offered by the Company may contain defects when they are first
introduced or released. There can be no assurance that, despite
the Company's quality control testing, defects will not be found
in new products and product enhancements after commencement of
commercial shipments resulting in delays in or loss of market
acceptance.
4. Future Operation; Risks Associated with Possible Future
Acquisitions. The Company believes the television advertising
industry is undergoing dramatic changes due to rapidly evolving
technologies and changing market demands, particularly the demand
for more efficient integrated management functions. The Company
is attempting to anticipate the future needs of the industry by
developing products and services to meet these needs. In
addition, the Company's plan is to acquire existing companies in
this industry and to convert or integrate such companies'
existing operations and products to meet this anticipated demand.
No assurance can be given that the Company has correctly
predicted the future needs of the industry or that its new
products or services will meet the evolving needs of the
industry. Furthermore, no assurance can be given that the
Company will be able to acquire companies that it believes are
necessary to meet the anticipated need for integrated management
solutions, or if such acquisitions occur, that any or all of them
will enhance the consolidated financial position or operating
performance of the Company. If the changes in the industry do
not occur as anticipated by the Company or at such time as
anticipated by the Company, the Company's future success would be
materially and adversely affected.
The consideration to be paid by the Company for any
potential future acquisitions may involve cash, notes and/or a
significant number of shares of Common Stock, depending on the
size of the acquisition. Although the Company will endeavor to
evaluate the risks inherent in any particular acquisition, there
can be no assurance that the Company will properly ascertain all
such risks. The Company will have virtually unrestricted
flexibility in identifying and selecting prospective acquisition
candidates and in establishing the terms of any such future
acquisitions. The Company does not intend to seek stockholder
approval for any acquisitions unless required by applicable law
or regulations, and stockholders will most likely not have an
opportunity to consider or approve the transactions.
5. Substantial Indebtedness; Working Capital Deficit. At
March 31, 1997, IndeNet had total consolidated liabilities of
approximately $35.1 million, of which $29.3 million was current.
There are certain limitations on the ability of the Company's
subsidiaries to use their individual resources for the payment of
the parent corporation's obligations. Claims of the creditors of
IndeNet's subsidiaries may have priority with respect to the
assets and earnings of such subsidiaries over the claims of the
creditors of IndeNet. To the extent the parent company's
obligations cannot be paid from resources available for such
purpose, the Company must find alternative sources to pay these
revenues. There can be no assurance that such alternative
sources will be available.
At March 31, 1997, the Company had a working capital
deficit of $12.5 million. As a result of the sale of
Starcom/Mediatech, the Company's working capital position has
improved substantially. Also as a result of that sale, the
Company believes cash flow from operations will improve over the
next twelve months. If the Company's were to experience a
shortage of working capital, it would, if necessary, attempt to
liquidate certain long-term assets for cash and liquidate certain
liabilities with the Company's Common Stock. The Company also
believes it could raise additional funds through a private
placement of equity securities. The Company believes it will be
successful in its plans to meet cash requirements over the next
twelve months. However, there can be no assurances that the
Company will meet its cash requirements with existing resources
or be successful in raising additional financing.
6. Protection of Patent, Trademarks, Copyrights and Other
Proprietary Information. The Company considers its patents,
trademarks, copyrights, tradenames and know-how to be of value
and important to its business. The Company relies on a
combination of patent, trade secret, copyright and trademark laws
and confidentiality and other arrangements to protect its
proprietary rights. Despite the Company's efforts to protect its
proprietary rights, unauthorized parties may attempt to copy or
obtain and use information that the Company regards as
proprietary. There can be no assurance that the steps taken by
the Company to protect its proprietary information will prevent
misappropriation of such information and such protection may not
preclude competitors from developing products and services
similar to those of the Company.
7. Dependence on Key Personnel. The Company's success
depends to a significant degree upon the continuing contributions
of, and on its ability to attract and retain, qualified
management, sales, operations, marketing and technical personnel.
The former Chief Executive Officer of the Company recently
resigned, and such resignation could have an adverse effect on
the continuity of the Company's operations. The competition for
qualified personnel is intense, and the loss of any such persons
or the inability to recruit additional key personnel in a timely
manner could adversely affect the Company. Although the Company
has entered into multi-year employment agreements with its
principal executives and with most of the key officers of its
subsidiaries, there can be no assurance that the Company will be
able to continue to attract and retain qualified management,
sales and technical personnel for the development of its
business. The Company does not maintain key man life insurance
on the lives of its key personnel.
8. Effect of Certain Selling Shareholders' Sales. INDE
has on file additional effective registration statements in which
it has registered, for offer and sale, up to 11,492,364 shares
of Common Stock, some of whom are or were for officers and
directors of INDE. These other shareholders may concurrently
elect to sell their shares into the public market, which could
have a depressing or overhanging effect on the market price for
the securities offered by this Prospectus.
9. Dividends. No dividends have been paid on the Common
Stock since INDE's inception and none are contemplated at any
time in the foreseeable future.
USE OF PROCEEDS
All of the proceeds to be realized from this Offering will
be paid to InterEquity. The Company will not receive any of such
proceeds.
SELLING SHAREHOLDERS
The following table shows for InterEquity, (i) the number of
shares of Common Stock beneficially owned by it as of July 28,
1997, (ii) the number of Shares covered by this Prospectus, and
(iii) the number of Shares to be retained after this Offering, if
any.
Selling InterEquity
Shareholder Capital
Partners, L.P.
Common Stock
Beneficially Owned
Prior to the
Offering 555,038 shares(1)
Common Stock
Covered by This
Prospectus 392,452 shares
Common Stock
Retained
Subsequent to
This Offering(2) 162,586 shares(1)
_________________
(1) Includes 162,586 shares of Common Stock underlying currently
exercisable warrants.
(2) The Selling Shareholder will own less than one percent of
the issued and outstanding Common Stock after the Offering.
InterEquity had no material relationship with the Company
during the past three years other than its arms'-length
investments in the Company.
Information set forth in the tables regarding the securities
owned by each Selling Shareholder is provided to the best
knowledge of the Company based on information furnished to the
Company by the respective Selling Shareholder and/or available to
the Company through its stock transfer records.
PLAN OF DISTRIBUTION
The shares of Common Stock offered hereby (the "Shares") may
be sold by InterEquity or by pledgees, donees, transferees or
other successors-in-interest. Such sales may be made in the
over-the-counter market through the Nasdaq Stock Market, in
privately negotiated transactions, or otherwise, at prices and at
terms then prevailing, at prices related to the then current
market prices or at negotiated prices. The Shares may be sold by
one or more of the following methods: (a) a block trade in which
the broker or dealer so engaged will attempt to sell the Shares
as agent but may position and resell a portion of the block as
principal in order to consummate the transaction; (b) a purchase
by a broker or dealer as principal, and the resale by such broker
or dealer for its account pursuant to this Prospectus, including
resale to another broker or dealer; or (c) ordinary brokerage
transactions and transactions in which the broker solicits
purchasers. In effecting sales, brokers or dealers engaged by
the Selling Shareholder may arrange for other brokers or dealers
to participate. Any such brokers or dealers will receive
commissions or discounts from the Selling Shareholder in amounts
to be negotiated immediately prior to the sale. Such brokers or
dealers and any other participating brokers or dealers may be
deemed to be "underwriters" within the meaning of the Securities
Act. Any gain realized by such a broker or dealer on the sale of
Shares which it purchases as a principal may be deemed to be
compensation to the broker or dealer in addition to any
commission paid to the broker by the Selling Shareholder.
The securities covered by this Prospectus may in the future
also be sold under Rule 144 instead of under this Prospectus.
Rule 144 provides an exemption from registration for the resale
of securities by persons other than the issuer after the
securities have been held by persons for at least one year
from original issuance, and such securities are sold in strict
compliance with Rule 144 "Manner of Sale" requirements and
maximum number of shares requirements. The Company will not
receive any portion of the proceeds of the securities sold by
InterEquity. There is no assurance that InterEquity will sell
any or all of the Shares offered hereby.
InterEquity has been advised by the Company that during the
time it is engaged in distribution of the securities covered by
this Prospectus, it must comply with Rules 10b-5 and 10b-6
under the Exchange Act, as amended, and pursuant thereto: (i) it
must not engage in any stabilization activity in connection with
the Company's securities; (ii) it must furnish each broker
through which securities covered by this Prospectus may be
offered the number of copies of this Prospectus which are
required by each broker; and (iii) it must not bid for or
purchase any securities of the Company or attempt to induce any
person to purchase any of the Company's securities other than as
permitted under the Securities Exchange Act of 1934, as amended.
The Company has agreed to indemnify InterEquity against certain
liabilities, including certain liabilities under the Securities
Act, and, to the extent any indemnification by an indemnifying
party is prohibited or limited by law, the Company has agreed to
make the maximum contribution with respect to extent permitted by
law.
LEGAL MATTERS
Certain legal matters with respect to the shares offered
hereby have been passed upon for the Company by Cohen Brame &
Smith Professional Corporation, Denver, Colorado. Roger V.
Davidson, a shareholder of the firm is a former Director of the
Company.
EXPERTS
The Company's consolidated financial statements incorporated
by reference in this Prospectus have been audited by BDO Seidman,
LLP, independent certified public accountants, to the extent and
for the periods set forth in their report incorporated herein by
reference, and are incorporated herein in reliance upon such
report given upon the authority of said firm as experts in
auditing and accounting.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses of the offering, all of which are to
be borne by the Company, are as follows:
Total
Total Registration Fee Under
Securities Act of 1933. . . . . . . . . . $1,008.69
Printing and Engraving . . . . . . . . . . . 200.00*
Accounting Fees and Expenses . . . . . . . . .3,000.00*
Legal Fees and Expenses. . . . . . . . . . .3,000.00*
Blue Sky Fees and Expenses
(including related legal fees) . . . . . . . . 500.00*
Transfer Agent Fees . . . . . . . . . . . .1,000.00*
Miscellaneous . . . . . . . . . . . . . . 992.10
Total . . . . . . . . . . . . . . $9,500.00
*Estimated
Item 15. Indemnification of Directors and Officers.
Article X of Company's Certificate of Incorporation provides
that the Company may indemnify each director, officer and
any employee or agent of the Company, his heirs, executors
and administrators, against expenses reasonably incurred or any
amounts paid by him in connection with any action, suit or
proceeding to which he may be made a party by reason of his being
or having been a director, officer, employee or agent of the
Company in the same manner as is provided by the laws of the
State of Delaware as summarized below.
The Delaware General Corporation Law gives each corporation
the power to indemnify against liability any current or former
directors, officers, employees and agents. Del. Gen. Corp. Law
Section 145. As provided in section 145, a director must show
that (1) he conducted himself in good faith, (2) that his conduct
was not opposed to the corporation's best interests, or if acting
in his official capacity, that his conduct was in the
corporation's best interests and (3) that in a criminal
proceeding, he had no reasonable cause to believe his conduct was
unlawful. The Delaware General Corporation Law also gives each
corporation the power to eliminate or limit the personal
liability of a director to the Corporation or its shareholders
for monetary damages for breach of fiduciary duty as a director
unless the breach of fiduciary duty involves breach of loyalty to
the corporation or its shareholders, acts or omissions involving
intentional misconduct or a knowing violation of law, acts
specified in sections 172 and 174 (improper distribution of
assets, dividends or share repurchase) or any transaction whereby
the director derived an improper personal benefit. Del. Gen.
Corp. Law section 102(b)(7).
Item 16. Exhibits
The following Exhibits are filed as part of this Form S-3
Registration Statement pursuant to Item 601 of Regulation S-B by
incorporation by reference to other filings:
3.1 IndeNet, Inc. Certificate of Incorporation
(Incorporated by reference to Exhibit 3.1 of the
Registration Statement on Form S-3/File No. 333-1205.)
3.2 IndeNet, Inc. Bylaws (Incorporated by reference to
Exhibit 3.2 of the Registration Statement on Form
S-3/File No. 333-1205.)
4.1 Certificate of Designation of Series A Preferred Stock
(Incorporated by reference to Exhibit 4.1 of
Registration Statement on Form S-3/File No. 333-1205.)
5.1 Opinion of Cohen Brame & Smith Professional
Corporation*
10.1 Mediatech Stock Purchase Agreement (Incorporated by
reference to Exhibit 10.1 of Registration Statement on
Form S-3/File No. 333-1205.)
10.2 Channelmatic Stock Purchase Agreement (Incorporated
by reference to Exhibit 10.1 and 10.2 to Form 8-K
dated December 12, 1995.)
10.3 Starcom Stock Exchange Agreement (Incorporated by
reference to Exhibit II to the Form 10-QSB dated
December 31, 1995.)
10.4 Robert Lautz Employment Agreement (Incorporated by
reference to Exhibit 10.4 of Registration Statement on
Form S-3/File No. 333-1205.)
10.5 Registration Rights Agreement (Incorporated by
reference to Exhibit I to the Form 8-K for event
which occurred on February 29, 1996.)
10.6 Note Purchase Agreement (Incorporated by
reference to Exhibit II to the Form 8-K for event
which occurred on February 29, 1996.)
10.7 Cable Computerized Management Systems Agreement and
Plan of Merger (Incorporated by reference to Exhibit 99
to Report on Form 8-K for event dated May 16, 1996.)
10.8 Enterprise System Group Ltd. Share Purchase Agreement
(Incorporated by reference to Exhibit 99 to Report on
Form 8-K for event dated May 24, 1996.)
10.9 Certificate of Designation of Series C Preferred Stock
(Incorporated by reference to Exhibit 99 to Report on
Form 8-K for event dated May 24, 1996.)
10.10 Channelmatic Stock Purchase Agreement and First
Amendment (Incorporated by reference to Exhibit 99
to Report on Form 8-K for event dated March 24,
1997.)
10.11 Starcom/Mediatech Stock Purchase Agreement
(Incorporated by reference to Exhibit 10.1 to
Report on Form 8-K for event dated July 18, 1997.)
10.12 Subordinated Promissory Note of Digital Generation
Systems, Inc. (Incorporated by reference to
Exhibit 10.2 to Report on Form 8-K for event dated
July 18, 1997.)
23.1 Consent of Cohen Brame & Smith, Professional
Corporation (included in Exhibit 5.1 above.)
23.2 Consent of BDO Seidman, LLP*
_________________
* Filed herewith.
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Company pursuant to the foregoing
provisions, 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 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, 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 the purposes of determining any liability
under the Securities Act of 1933, each filing of the
Company'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 be 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Company 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 Form S-3/A Registration Statement, to be
signed on its behalf by the undersigned thereunto duly
authorized, in the City of Los Angeles, State of California on
the 8th day of August, 1997.
INDENET, INC.
/s/ Richard J. Parent
By: Richard J. Parent
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933,
this Form S-3/A Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Andre A. Blay Chairman of the Aug. 8, 1997
Andre A. Blay Board, Chief
Executive Officer
and Director
/s/ Thomas H. Baur Director Aug. 8, 1997
Thomas H. Baur
/s/ Richard J. Parent Chief Financial Aug. 8, 1997
Richard J. Parent Officer and
Secretary
/s/ William B. Kunkel Director Aug. 8, 1997
William B. Kunkel
/s/ Cary S. Fitchey Director Aug. 8, 1997
Cary S. Fitchey
/s/ Richard L. Schleufer Director Aug. 8, 1997
Richard L. Schleufer
/s/ H. Bradley Eden Director Aug. 8, 1997
H. Bradley Eden
SEC File Nos. 333-8531
0-18034
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBIT 5.1
OPINION OF COHEN BRAME & SMITH PROFESSIONAL CORPORATION
COHEN BRAME & SMITH
Professional Corporation
Attorneys at Law
One Norwest Center Suite 1800
1700 Lincoln Street
Denver, Colorado 80203
August 6, 1997
Richard J. Parent, Chief Financial Officer
IndeNet, Inc.
16000 Ventura Blvd., Suite 700
Encino, California 91436
RE: Form S-3 Registration Statement relating to shares
of $.001 Par Value Common Stock for a Selling
Shareholder
Dear Mr. Parent:
We have acted as counsel for IndeNet, Inc. ("INDE") in
connection with the Form S-3/A Registration Statement to be filed
by INDE with the Securities and Exchange Commission relating to
the shares of INDE $.001 par value Common Stock (the "Common
Stock") being offered for sale by a certain selling shareholder.
As such counsel, we have examined and relied upon such records,
documents, certificates and other instruments as in our judgment
are necessary or appropriate to form the basis for the opinions
hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
(i) INDE is a corporation duly incorporated and validly
existing in good standing under the laws of the State of
Delaware.
(ii) The shares of Common Stock being offered, when sold in
accordance with the terms set forth in the Registration
Statement, will be validly issued and outstanding, fully paid and
nonassessable.
We consent to the filing of this opinion as an Exhibit to
the Registration Statement and to the reference to us under the
caption "Legal Matters" in the Registration Statement.
Very truly yours,
/s/ Roger V. Davidson
Roger V. Davidson
Cohen Brame & Smith,
Professional Corporation
EXHIBIT 23.2
CONSENT OF BDO SEIDMAN, LLP
COHEN BRAME & SMITH
Professional Corporation
Attorneys at Law
One Norwest Center Suite 1800
1700 Lincoln Street
Denver, Colorado 80203
August 6, 1997
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
IndeNet, Inc.
Los Angeles, CA
We hereby consent to the incorporation by reference in the
Prospectus constituting a part of the Registration Statement on
Form S-3/A of our report dated June 18, 1997, relating to the
consolidated financial statements of IndeNet, Inc. appearing in
the Company's Annual Report on Form 10-KSB for the year ended
March 31, 1997.
We also consent to the reference to us under the caption
"Experts" in the Prospectus.
/s/ BDO SEIDMAN, LLP
Los Angeles, CA
August 6, 1997
