As Filed with the Securities and Exchange Commission on January 22, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington. D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
eSynch Corporation
(Exact name of registrant as specified in its charter)
Delaware 87-0461856
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
4600 Campus Drive, Newport Beach, California 92660
(Address of Principal Executive Offices)
JANUARY 1999 STOCK PLAN
(Full title of the plan)
Tom Hemingway
Chief Executive Officer
eSynch Corporation
4600 Campus Drive
Newport Beach, California 92660
(Name and address of agent for service)
(949) 833-1220
(Telephone number, including area code, of agent for service)
Copy to:
William Vincent Walker, Attorney at Law
1177 West Loop South, Suite 560 Houston TX 77027
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities Amount To Be Offering Price Aggregate Offering Amount of
To Be Registered Registered(1) Per Share (2) Price(2) Registration Fee
------------------- ------------- --------------- ----------------- -------------
<S> <C> <C> <C> <C>
Common Stock. 370,000 $3,9375 $1,456,875 $405.01
$.001 par value shares
-------------------------------------------------------------------------------------
</TABLE>
(1) Includes additional shares of Common Stock that may become issuable
pursuant to the anti-dilution adjustment provisions of the January
1999 Stock Plan (the "Plan").
(2) The aggregate offering price for 370,000 shares of Common Stock
registered hereby, which are to be offered to [the Registrant's
employees] pursuant to the Plan, is estimated solely for the p
purpose of calculating the registration fee, in accordance with Rule
457(h)(1), on the basis of the price of securities of the same
class as determined in accordance with Rule 457(c), using the
last trading price of the Common Stock of the Registrant as
reported on the OTC Market on January 28, 1999.
This document contains ___ pages
Exhibit Index is on Page ___
||| PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated herein by reference:
(a) The Company's Registration Statement on Form S-3 (Registration No.
333-16295) as filed with the Securities and Exchange Commission (the
"Commission") on November 18, 1996, as amended August 4, 1998;
(b) The description of the Registrant's Common Stock that is contained in
the Registrant's Registration Statement on Form 8-A filed under Section 12 of
the Exchange Act, including any amendment or report filed for the purpose
of updating that description;
(c) The Company's Annual Report on Form 10KSB for the fiscal year ended
December 31, 1997, as filed with the Commission on April, 16, 1998, and as
amended on August 4, 1998;
(d) The Company's Quarterly Report on Form 10QSB for the quarter ended
March 31, 1998, as filed with the Commission on May 21, 1998, and as amended on
August 19, 1998;
(e) The Company's Quarterly Report on Form 10QSB for the quarter ended
September 30, 1998, as filed with the Commission on November 25, 1998, and as
amended
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all of such securities then remaining unsold, shall
be deemed to be incorporated herein by reference and to be a part hereof from
the date of filing of such documents, except as to any portion of any
future annual or quarterly report to stockholders or document that is not
deemed filed under such provisions. For the purposes of this registration
statement, any statement in a document incorporated by reference shall be deemed
to be modified or superseded to the extent that a statement contained in this
registration statement modifies or supersedes a statement in such document.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this registration statement.
Item 6. Indemnification of Directors and Officers.
The Company's Bylaws provide that the Company will indemnify its directors
and officers and may indemnify its employees and other agents to the fullest
extent permitted by the General Corporation Law of the State of Delaware (the
"DGCL"). The Company believes that indemnification under its Bylaws covers at
least negligence and gross negligence by indemnified parties, and permits the
Company to advance litigation expenses in the case of stockholder derivative
actions or other actions, against an undertaking by the indemnified party to
repay such advances if it is ultimately determined that the indemnified party
is not entitled to indemnification. The Company maintains liability insurance
for its officers and directors.
In addition, the Company's Certificate of Incorporation provides that,
pursuant to the DGCL, its directors shall not be liable for monetary damages for
breach of the directors' fiduciary duty to the Company and its stockholders.
This provision in the Certificate of Incorporation does not eliminate the
directors' fiduciary duty, and in appropriate circumstances equitable
remedies such as injunctive or other forms of non-monetary relief will
remain available under the DGCL. In addition, each director will continue to be
subject to liability for breach of the director's duty of loyalty to the Company
for acts or omissions not in good faith or involving intentional misconduct, for
knowing violations of law, for actions leading to improper personal benefit to
the director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under the DGCL. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws.
The Company has entered into separate indemnification agreements with its
directors and officers. These agreements require the Company, among other
things, to indemnify them against liabilities that may arise by reason of
their status or service as directors or officers (other than liabilities
arising from actions not taken in good faith or in a manner the indemnitee
believed to be opposed to the best interests of the Company), and to advance
their expenses incurred as a result of any proceeding against them as to which
they could be indemnified. Insofar as indemnification for liabilities arising
under the Securities Act of 1933, as amended (the "1933 Act"), may be permitted
to directors, officers or persons controlling the Company pursuant to the
foregoing provisions, the Company has been informed that in the opinion of the
Commission, such indemnification is against public policy as expressed in the
1933 Act and is therefore unenforceable.
Item 8. Exhibits.
The following exhibits are filed as part of this Registration Statement:
Number Description
4.1 January 1999 Stock Plan, including 310,000
shares of Esynch Common Stock granted and
issued to individual consultants named on the
attached Corporate Resolutions.
4.2 Corporate Resolutions
5.1 Opinion Special Counsel to the Registrant, William
Vincent Walker.
23.1 Consent of William Vincent Walker, an Attorney at Law
(included in the Opinion filed as Exhibit 5.1).
23.2 Consent of Hanson and Barnett, independent auditors.
24.1 Power of Attorney (included on signature page to the
Registration Statement at page S-1).
Item 9. Undertakings.
(a) The undersigned Registrant 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 Securities Act;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of
this 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;
(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 (a)(1)(i) and (a)(1)(ii) shall not
apply if the information required to be included in a post-effective amendment
by these paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant 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 Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Newport Beach, State of California, on the 22nd
day of January, 1999.
ESYNCH CORPORATION
By: /S/ Thomas Hemingway
-------------------------
Thomas Hemingway
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of eSynch Corporation, do hereby
constitute and appoint Thomas Hemingway or Richard Hutt, or either of them, as
our true and lawful attorneys and agents, to do any and all acts and things in
our name and behalf in our capacities as directors and officers and to execute
any and all instruments for us and in our names in the capacities indicated
below, which said attorneys and agents, or either of them, may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in connection with this Registration
Statement, including specifically, but without limitation, power and authority
to sign for us or any of us in our names and in the capacities indicated below,
any and all amendments (including post- effective amendments) hereto or any
related registration statement that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933, as amended; and we do hereby
ratify and confirm all that the said attorneys and agents, or either of them,
shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
/S/Thomas Hemingway President, Chief Executive January 28, 1999
------------------- Officer and Director
(Principal Executive Officer)
/S/ T. Richard Hutt Secretary, Treasurer January 28, 1999
------------------- Director
/S/ Kirit Goradia Principal Financial and January 28, 1999
----------------- Accounting Officer
/S/ James H. Budd Vice President January 28, 1999
----------------- Director
EXHIBIT INDEX
Exhibit
Number Description
-------- -----------
4.1 January 1999 Stock Plan (the "Plan").
4.2 Corporate Resolutions
5.1 Opinion of William Vincent Walker, special counsel
to the Registrant
23.1 Consent of William Vincent Walker. (included in the
Opinion filed as Exhibit 5.1).
23.2 Consent of Hansen, Barnett and Maxwell, independent
auditors
24.1 Power of Attorney (included on signature page to
the Registration Statement
PROSPECTUS
ESYNCH CORPORATION
4600 CAMPUS DRIVE
NEWPORT BEACH, CA 92660
TELEPHONE: (949) 833-1220
370,000 SHARES OF COMMON STOCK
($.001 PAR VALUE)
This Prospectus relates to the offer and sale of 370,000 shares of
common stock, $.001 par value ("Common Stock"), of Esynch Corporation
(the "Company"), which may be offered hereby from time to time by the
Selling Stockholders named herein for their own benefit. The Company
was incorporated in Delaware on December 21, 1988, as Tri-Nem, Inc. On
October 5, 1994, the Company changed its name to Innovus Corporation.
On November 9, 1998, the Company changed its name to ESYNCH CORPORATION.
All or a portion of the shares of Common Stock offered hereby may
be offered for sale, from time to time, on the over-the-counter
bulletin board, or otherwise, at prices and terms then obtainable, or
in negotiated transactions. All brokers' commissions, concessions or
discounts will be paid by the Selling Stockholders. The Selling
Stockholders and any broker executing selling orders on behalf of the
Selling Stockholders may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933, as amended (the "Securities
Act"), in which event commissions received by such broker may be deemed
to be underwriting commissions under the Securities Act.
The Common Stock of the Company is traded in the over-the-counter
market under the symbol "ESYN." On January 28, 1999, the last reported
sale price of the Company's Common Stock on the over-the-counter
bulletin board was $3.9375.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is January 29, 1999.
TABLE OF CONTENTS
RISK FACTORS 3
AVAILABLE INFORMATION 6
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 7
THE COMPANY 8
USE OF PROCEEDS 9
SELLING STOCKHOLDERS 9
PLAN OF DISTRIBUTION 10
LEGAL MATTERS 10
EXPERTS 10
INDEMNIFICATION OF DIRECTORS AND OFFICERS 11
RISK FACTORS
THIS DOCUMENT CONTAINS CERTAIN FORWARD LOOKING STATEMENTS WITHIN
THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE
EXCHANGE ACT THAT INVOLVE RISKS AND UNCERTAINTIES. IN ADDITION, THE
COMPANY MAY FROM TIME TO TIME MAKE FORWARD LOOKING STATEMENTS ORALLY OR
IN WRITING. THE WORDS "ESTIMATE," "PROJECT," "POTENTIAL," "INTENDED,"
"EXPECT," "BELIEVE" AND SIMILAR EXPRESSIONS OR WORDS ARE INTENDED TO
IDENTIFY FORWARD LOOKING STATEMENTS. ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE PROJECTED OR SUGGESTED IN ANY FORWARD LOOKING
STATEMENTS AS A RESULT OF A WIDE VARIETY OF FACTORS AND CONDITIONS,
INCLUDING, AMONG OTHERS, GENERAL ECONOMIC CONDITIONS, TECHNOLOGICAL
ADVANCES, THE TIMING OF NEW PRODUCT INTRODUCTIONS, POLITICAL AND
ECONOMIC RISKS INVOLVED IN FOREIGN MARKETS AND THE TIMING OF
EXPENDITURES, AS WELL AS THE RISKS DETAILED BELOW OR IN OUR OTHER SEC
FILINGS. BECAUSE OF THESE AND OTHER FACTORS THAT MAY AFFECT THE
COMPANY'S OPERATING RESULTS, INVESTORS SHOULD NOT PLACE UNDUE RELIANCE
ON FORWARD-LOOKING STATEMENTS.
LACK OF OPERATING HISTORY
The combining of the businesses of Intermark, Softkat, Sonoma,
and others, may not create synergies and may be difficult to manage.
Each of these businesses had been unprofitable separately. The
combined financial results of these entities have not yet been reported
in any filing with the SEC.
LACK OF RECENT PROFITS FROM OPERATIONS
The Company has incurred operating losses in all recent years and
quarters. There can be no assurance against operating losses in future
periods, or that the Company's acquisitions will lead to improved
operating results. Results of operations may fluctuate significantly
and will depend upon numerous factors.
POOR FINANCIAL POSITION
The Company has had a very poor financial position, and is seeking
equity investment in unregistered private placements of restricted
shares, the terms of which are not yet determined. This Prospectus is
not offering any Common Stock on behalf of the Company, and the Company
will receive none of the proceeds.
BUSINESS AND PROPOSED BUSINESSES
The Company abandoned its former business, which was conducted by
Innovus Multimedia, Inc. The businesses of Intermark, Softkat, and
Sonoma are primarily software publishing and distribution. These
businesses had not been profitable historically. The Company may
acquire Kissco Software, Inc. and other potential acquisitions are
considered from time to time.
LACK OF MARKET FOR THE COMMON STOCK
The trading of the Common Stock is thin and sporadic. The Common
Stock is not quoted except on the over-the-counter bulletin board.
Quotations may not reflect actual sales prices. Quotations may include
inter-dealer mark-ups, mark-downs or discounts.
COMPETITION
The market for the Company's products is intensely competitive.
Many of the companies that have developed competing technologies and
that market competing products have significantly greater financial,
technical and marketing resources than the Company.
RAPID TECHNOLOGICAL CHANGE
The technology underlying the Company's products and services is
subject to rapid change. If one or more of the Company's competitors
were to introduce competing products with superior technological
features, such introduction could have a material adverse effect on the
success of the Company's products.
DEPENDENCE ON PROPRIETARY RIGHTS; RISK OF INFRINGEMENT CLAIMS
The Company relies on a combination of trade secrets, copyrights,
trademarks, service marks and contractual rights to protect its
technology and software. The use of trade secrets, copyrights and
contractual protections will not necessarily protect the Company from
the use by other persons of its technology or software, or technology
or software that is similar to that which is embodied in the Company's
trade secrets or copyrights. There can be no assurance that others
will not be able to duplicate the Company's technology and software in
whole or in part. In addition, the laws of certain countries may not
protect the Company's products and intellectual property rights to the
same extent as the laws of the United States. The inability of the
Company to protect its intellectual property and proprietary technology
could have a material adverse effect on its business, operating results
and financial condition.
ABILITY TO MANAGE GROWTH AND EXPANSION
The Company has experienced growth through acquisition over the
past few quarters and plans to continue to expand its operations both
internally and potential future acquisitions. The management of the
Company's growth, if any, will require continued expansion of the
Company's operational and financial control systems, as well as a
significant increase in the Company's costs. In addition, as a result
of the planned expansion, the Company's operating expenses have
increased and the Company's operating results will be adversely
affected if sales do not increase as anticipated.
DEPENDENCE ON KEY RELATIONSHIPS
The Company believes that strategic alliances are important to its
prospects for future success. Alliances may not materialize and may
not be sustainable.
CONTROL BY DIRECTORS, EXECUTIVE OFFICERS AND AFFILIATED ENTITIES
As of December 31, 1998, the officers, directors, principal
stockholders and their affiliates owned approximately 75% of the
outstanding Common Stock. If such stockholders were to act in concert,
they would be able to control substantially all matters requiring
approval by the stockholders of the Company, including the election of
directors. Such concentration of ownership could discourage or prevent
a change in control of the Company.
POSSIBLE VOLATILITY OF STOCK PRICES
The market prices for securities of technology companies,
including the Company, have been volatile. Quarter to quarter
variations in operating results, changes in earnings estimates by
analysts, announcements of technological innovations or new products by
the Company or its competitors, announcements of major contract awards
and other events or factors may have a significant impact on the market
price of the Common Stock. In addition, the securities of many
technology companies have experienced extreme price and volume
fluctuations, which have often been unrelated to the companies'
operating performance. These conditions may adversely affect the
market price of the Company's Common Stock.
ANTI-TAKEOVER PROVISIONS
The Company's Certificate of Incorporation provides for 400,000
authorized but unissued shares of Preferred Stock, the rights,
preferences, qualifications, limitations and restrictions of which may
be fixed by the Company's Board of Directors without any further vote
or action by the stockholders. Further, Section 203 of the General
Corporation Law of Delaware prohibits the Company from engaging in
certain business combinations with interested stockholders. These
provisions may have the effect of delaying or preventing a change in
control of the Company without action by the stockholders and therefore
could adversely affect the price of the Common Stock.
YEAR 2000 COMPLIANCE
Many existing software programs use only two digits to identify
the year in the date field. If such programs are not corrected, date
data concerning the Year 2000 could cause many computer applications to
fail, lock-up or generate erroneous results. The Company is in the
process of identifying and assessing its mission-critical systems
related to the Year 2000 and will commit the resource necessary to
resolve any potential Year 2000 issues. Although the Company is
addressing such issues in what it considers sufficient time prior to
century rollover, there can be no assurance that there will be no
interruption of operations or other limitations of system
functionality, or that the Company will not incur substantial costs to
avoid such occurrences. The Company is currently assessing the cost to
remediate its Year 2000 issues. Although the actual costs to remediate
these issues is not yet fully known, based upon information to date, it
is expected that the remediation will not have a material impact on the
Company's financial condition or operating results. However, failure
to identify the mission-critical systems related to Year 2000 or
failure to commit the resources necessary to resolve the Year 2000
issues on a timely basis, could have a material impact on the Company's
financial condition or operating results.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS. SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON.
AVAILABLE INFORMATION
The Company files annual reports, quarterly reports, current
reports, and proxy statements and other information with the Securities
and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the
public reference facilities maintained by Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. Such materials may be obtained
electronically by visiting the Commission's Web site on the Internet at
http://www.sec.gov/. The Company maintains a Web site at
http://www.intermarkcorp.com/.
The Company has filed with the Commission a Registration Statement
on Form S-8 (the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to their Common
Stock offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement and the schedules
and exhibits thereto, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. Statements contained
in this Prospectus as to the contents of any contract or other document
are not necessarily complete and in each instance reference is made to
the copy of such contract or other documents filed as an exhibit to a
document incorporated by reference herein. Additional updating
information with respect to the Company may be provided in the future
by means of appendices of supplements to this Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company with the
Commission under the Exchange Act and are incorporated by reference
herein:
Annual Report on Form 10-KSB/A filed on August 4, 1998 for the
fiscal year ended December 31, 1997;
Form NT 10-K filed March 31, 1998;
Form 8-K filed on April 9, 1998;
Form 8-K filed on May 12, 1998;
Form NT 10-Q filed May 15, 1998;
Form 10-QSB filed on May 21, 1998 for the fiscal quarter ended
March 31, 1998
Form 8-K filed on June 8, 1998;
Form NT 10-Q filed August 17, 1998;
Form 10-QSB/A filed on August 19, 1998 for the fiscal quarter
ended March 31, 1998;
Form 8-K filed on August 20, 1998;
Form 10-QSB filed on August 31, 1998 for the fiscal quarter ended
June 30, 1998;
Preliminary Proxy Statement on Schedule 14A filed September 25, 1998;
Definitive Proxy Statement filed on October 7, 1998;
Form 8-K/A filed on October 19, 1998;
Form NT 10-Q filed on November 16, 1998;
Form 10-QSB filed on November 25, 1998 for the quarter ended
September 30, 1998;
Form 10-QSB/A filed on December 16, 1998 for the quarter ended
September 30, 1998; and
The description of the Company's Common Stock contained in the
Definitive Proxy Statement filed on October 7, 1998.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which
de-registers all securities then remaining unsold, shall be deemed to
be incorporated by reference in this Prospectus and to be part hereof
from the date of filing such documents.
Any statement contained in this Prospectus or in a document
incorporated by reference shall be deemed to be modified by any
inconsistent statement in the documents filed subsequently.
The Company will provide, without charge, to each person to whom a
copy of this Prospectus is delivered, upon written or oral request of
such person, a copy of any and all of the information that has been or
may be incorporated by reference herein. Such requests should be
directed to Secretary, Esynch Corporation, 4600 Campus Drive, Newport
Beach, CA 92660, telephone number (949) 833-1220.
THE COMPANY
Esynch Corporation (OTC BB:ESYN), formerly a developer and publisher of
MultiMedia software, recently acquired Intermark Corporation, SoftKat,
Inc., and Sonoma Publishing Inc., which are software publishers and
distributors.
* Intermark is a computer software publisher. Its principal products
are --
eSynch(TM) -- eSynch(TM) is a proprietary sophisticated
electronic software distribution ("ESD") system that allows a software
product to be wrapped in a secure digital envelope and distributed
across the Internet to online stores, malls, and other commerce
locations including Intermark's online malls. The ESD system automates
an optimized electronic delivery, security, tracking, and
accountability protocol. Our target customers include dealers,
resellers and end-users.
WebSnake - WebSnake automates Web searching, filters Web data
and retrieves specified information, so you can review it later at PC
speeds, bypassing Web bottlenecks.
CoolCat - CoolCat is an easy-to-use HTML editor, with
professional features such as tag sets for every flavor of HTML, WebTV,
Cold Fusion and JavaScript; comprehensive project-wide document
management with integrated FTP; a built-in preview browser, and
extended support for every significant HTML layout feature. It has
pop-up property windows for links, font sizing and colors, horizontal
rules, text formatting, and easy table and image layout handling.
ESD Wrapper -eSynch Corporation has developed a sophisticated
proprietary ESD solution that provides all of the benefits that ESD
promises. Plus, eSynchESD addresses the pitfalls of predecessor
technologies.
In the eSynchESD solution, software to be downloaded is: digitally
packaged; embedded with security, manufacturer, and dealer information;
scanned and optimized for delivery, and then; wrapped in a secure
digital envelope. Once digitally packaged, software is sent across the
net to its destination, all completed securely, accurately, and with
accountability. Plus, the process is automated using proprietary
software that does not require human intervention. Literally, within
minutes of receiving the "latest" from a developer/publisher, consumers
are reaping the benefits
* Softkat is a computer software distributor.
* Sonoma Publishing is a computer software publisher. Its products
include several entertainment software titles.
USE OF PROCEEDS
The proceeds from the sale of each Selling Stockholder's Common
Stock will belong to the Selling Stockholder. The Company will not
receive any proceeds from such sales of the Common Stock.
SELLING STOCKHOLDERS
The shares offered hereby were issued to the Selling Stockholders
pursuant to individual written consulting agreements with the Company,
pursuant to which the Selling Stockholders provided bona fide services
for the Company. The Company will receive no part of the proceeds of
sales made hereunder. All expenses of registration incurred in
connection with this offering are being borne by the Company, but all
selling and other expenses incurred by the Selling Stockholders will be
borne by such Selling Stockholders. None of the shares offered
pursuant to this Prospectus have been registered prior to the filing of
the Registration Statement of which this Prospectus is a part. The
following table sets forth the name of each Selling Stockholder; the
number of shares of Common Stock owned by each such Selling Stockholder
prior to the offering, and the number of shares and (if one percent or
more) the percentage of the class to be owned by each such Selling
Stockholder after the offering.
<TABLE>
<S> <C><C> <C><C> <C><C>
Shares Owned
After Offering
------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C><C> <C><C> <C><C> <C><C>
Name Shares Number Percent
Prior to Shares
%
Steve Bazsuly 210000 210000 0 0%
Ian Nuttall 100000 100000 0 0%
Brad Bacon 97500 30000 57500 58.9%
Tom Kirk 65000 30000 35000 53.8%
%
%
%
%
%
TOTAL 472500 370000 92500 25%
</TABLE>
* less than 1%
PLAN OF DISTRIBUTION
All or a portion of the shares of Common Stock offered hereby may
be offered for sale, from time to time, on the over-the-counter
bulletin board, or otherwise, at prices and terms then obtainable, or
in negotiated transactions. In addition, the shares of Common Stock
offered hereby may be sold by one or more of the following: (a) a
block trade in which the broker or dealer so engaged will attempt to
sell the shares of Common Stock as agent, but may position and resell a
portion of the block as principal to facilitate the transaction; (b)
purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this Prospectus; and (c) ordinary
brokerage transactions and transactions in which the broker solicits
purchasers. In effecting sales, brokers or dealers engaged by the
Selling Stockholders may arrange for other brokers or dealers to
participate. All brokers' commissions, concessions or discounts will
be paid by the Selling Stockholders. The Company will receive none of
the proceeds from such sales.
The Company is presently aware of no arrangements or
understandings, formal or informal, pertaining to the distribution of
the shares of Common Stock described herein. The Company may file a
supplemented Prospectus, pursuant to Rule 424(b) under the Securities
Act, if it is required to do so and if it is notified by a Selling
Stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares of Common Stock bought through a
block trade, special offering, exchange distribution or secondary
distribution.
The Selling Stockholders and any broker executing selling orders
on behalf of the Selling Stockholders may be deemed to be an
"underwriter" within the meaning of the Securities Act, in which event
commissions received by such broker may be deemed to be underwriting
commissions under the Securities Act. Each Selling Stockholder may
indemnify any broker-dealer that participates in transactions involving
sales of the shares against certain liabilities, including liabilities
arising under the Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Nick Yocca, Jr., counsel for the Company.
EXPERTS
The consolidated financial statements of the Company for the year
ended December 31, 1997 appearing in its Annual Report on Form 10-KSB/A
and financial statements of Intermark Corporation for the period ended
September 30, 1997 appearing in its Form 8-K/A, have been audited by
Hansen Barnett & Maxwell, independent accountants, as set forth in
their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements and schedule are
incorporated herein by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Restated Certificate of Incorporation provides that
to the fullest extent permitted by Delaware law, a director will not be
liable for monetary damages for breach of the director's fiduciary duty
of care to the Company and its stockholders. This provision in the
Restated Certificate of Incorporation does not eliminate a director's
fiduciary duty of care, and, in appropriate circumstances, equitable
remedies such as an injunction or other forms of non-monetary relief
would remain available under Delaware law. Each director will continue
to be subject to liability for (i) breach of the director's duty of
loyalty to the Company or its stockholders for acts or omissions not in
good faith or involving intentional misconduct or knowing violations of
law, (ii) acts or omissions that the director believes to be contrary
to the best interests of the Company or its stockholders, (iii) any
transaction from which the director derives an improper personal
benefit, (iv) acts or omissions involving reckless disregard for the
director's duty to the Company or its stockholders when the director
was aware or should have been aware of the risk of serious injury to
the Company or its stockholders, (v) acts or omissions that constitute
an unexpected pattern of inattention that amounts to an abdication of
the director's duty to the Company or its stockholders, (vi) improper
transactions between a director and the Company, and (vii) improper
distributions and loans to directors and officers. This provision does
not affect a director's responsibilities under any laws, such as the
federal securities laws or state or federal environmental laws.
In addition, the Company's Bylaws provide that the Company will
indemnify its directors and executive officers and may indemnify its
other officers, employees and other agents to the fullest extent
permitted by Delaware law. The Company is also empowered under its
Bylaws to enter into indemnification contracts with its directors and
officers and to purchase insurance on behalf of any person whom the
Company is required or permitted to indemnify. The Company has entered
into agreements with its directors and executive officers, which
requires the Company to indemnify them to the fullest extent permitted
by law against certain losses they may incur in legal proceedings
arising in connection with their services to the Company.
Insofar as indemnification for liabilities under the Securities
Act may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been
informed that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is
therefore unenforceable.
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-8
of eSynch Corporation of our report dated June 30, 1998, relating to
the balance sheets of Innovus Corporation as of December 31, 1997 and
1996 and the related statements of operations, stockholders' deficit
and cash flows for the years ended December 31, 1997 and 1996, which
report is included in the Annual Report on Form 10-K for the year ended
December 31, 1997. We also consent by incorporation by reference in
this Registration Statement of our report dated January 29, 1999,
relating to the balance sheet of Intermark Corporation, as of September
30, 1997 and the related statements of operations, stockholders'
deficit, and cash flows for the year ended September 30, 1997, and for
the period from October 3, 1995 (date of inception) through September
30, 1996, which report is included in the current report on Form 8-K/A
Amendment No. 2 dated August 5, 1998.
HANSEN, BARNETT & MAXWELL
January 29, 1999
