As filed with the Securities and Exchange Commission on May 12, 1997
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INSIGNIA SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1656308
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10801 Red Circle Drive
Minnetonka, Minnesota 55343
(612) 930-8200
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive office)
G.L. Hoffman
President, Chief Executive Officer
Insignia Systems, Inc.
10801 Red Circle Drive
Minnetonka, Minnesota 55343
(612) 930-8200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
Richard D. McNeil, Esq.
Lindquist & Vennum P.L.L.P.
4200 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402
Telephone: (612) 371-3211
Approximate date of commencement of proposed sale to public: From time
to time after this Registration Statement becomes effective.
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 earliest 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
=================================================================================================================
Proposed Proposed
Maximum Maximum
Amount to be Offering Aggregate Amount of
Title of Each Class of Registered Price Offering Price Registration
Securities to be Registered Per Unit Fee
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value............................. 2,064,031(1) $3.75(2) $7,740,116(2) $2,344.48
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Issuable upon exercise of outstanding warrants.
(2) Estimated solely for the purpose of determining the registration fee
based on the average of the closing bid and asked prices of the
Company's Common Stock on the Nasdaq Market on May 12, 1997 pursuant
to Rule 457(c).
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 THAT 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.
SUBJECT TO COMPLETION, DATED MAY 12, 1997
PROSPECTUS
INSIGNIA SYSTEMS, INC.
2,064,031 SHARES OF
COMMON STOCK
This Prospectus relates to the sale of up to 2,064,031 shares (the
"Shares") of Common Stock of Insignia Systems, Inc. (the "Company") which may be
offered from time to time by the shareholders named herein (the "Selling
Shareholders"). Of the Shares being offered, 1,376,020 Shares are now owned by
the Selling Shareholders and 688,011 Shares may be obtained by them by exercise
of stock purchase warrants (the "Warrants") held by the Selling Shareholders
which have an exercise price of $2.125 per Share and expire on January 17, 2000.
The Company will receive proceeds upon the exercise of the Warrants, but will
not receive any of the proceeds from the sale of the Shares by the Selling
Shareholders. See "Use of Proceeds."
The Company will bear all expenses of the offering hereunder other than
underwriting discounts and commissions incurred in connection with the sale of
the Shares by the Selling Shareholders. The Company's Common Stock is traded on
the NASDAQ SmallCap Market under the symbol "ISIG". The closing bid price of the
Company's Common Stock on May 12, 1997 was $3.75 per share, as reported by
NASDAQ.
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE " RISK FACTORS"
BEGINNING ON PAGE 4 OF THIS PROSPECTUS.
The Selling Shareholders have advised the Company that they intend to
sell the Shares from time to time in transactions on the Nasdaq SmallCap Market
at prices prevailing at the time of the sale or otherwise as set forth below.
The Selling Shareholders have also advised the Company that, as of the date
hereof, they have made no arrangement with any brokerage firm for the sale of
the Shares. The Selling Shareholders may be deemed to be "underwriters" within
the meaning of the Act, in which case any commissions received by a broker or
dealer may be deemed to be underwriting commissions or discounts under the Act.
See "Plan of Distribution."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
================================================================================================
Price to Public Underwriting Discounts Proceeds to Proceeds to Selling
and Commissions Issuer Shareholders
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share $3.75(1) (2) None $3.75(1)
- ------------------------------------------------------------------------------------------------
Total $7,740,116(1) (2) None $7,740,116(1)
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated based on a per share price of $3.75 as of May 12, 1997 and
assuming the sale of all Shares by the Selling Shareholders, with no
adjustment for commissions, discounts, brokerage and other fees that
may be paid by the Selling Shareholders, or expenses of the offering to
be paid by the Company.
(2) Commissions, discounts and brokerage fees will be payable to the
Selling Shareholders in such amounts as the Selling Shareholders may
agree to from time to time.
THE DATE OF THIS PROSPECTUS IS MAY 12, 1997
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy and information
statements and other information can be inspected and copied at the public
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C., and the Commission's regional offices located at 7 World Trade
Center, 14th Floor, New York, New York 10048, and Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Electronic
filings made through the Electronic Data Gathering Analysis and Retrieval System
are also publicly available through the Securities and Exchange Commission's Web
Site (http://www.sec.gov).
The Company has filed with the Commission a registration statement
under the Securities Act of 1933 with respect to the shares offered hereby. This
Prospectus does not contain all information set forth in such registration
statement. For further information with respect to the Company and the shares
offered hereby, reference is made to such registration statement, including the
exhibits and financial schedules filed as part thereof. Such information may be
inspected at the Chicago regional office of the Commission at Northwestern
Atrium Center, 500 West Madison, Suite 1400, Chicago, Illinois 60661 and at the
public reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies thereof may be obtained from the Commission at prescribed prices.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission, are incorporated by reference in this Prospectus: (i) the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996; (ii) the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997;
(iii) the Company's Proxy Statement dated April 4, 1997 for the 1997 Annual
Meeting of Shareholders on May 8, 1997; and (iv) the description of the
Company's Common Stock contained in the Company's Form S-18 Registration
Statement, Registration No. 33-40765-C. All documents filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15 of the 1934 Act after the date of
this Prospectus and prior to the termination of the offering of securities
contemplated hereby shall also be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded hereby to the extent that a
statement contained 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 has been delivered, upon the written or oral request of such
person, a copy of any or all of the documents which are incorporated by
reference into this Prospectus, other than exhibits to such documents (unless
such exhibits are specifically incorporated by reference in such documents.)
Requests for such copies should be directed to G.L. Hoffman, Insignia Systems,
Inc., 10801 Red Circle Drive, Minnetonka, Minnesota 55343, telephone number
(612) 930-8200.
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS AND
IN DOCUMENTS INCORPORATED HEREIN BY REFERENCE.
THE COMPANY
Insignia Systems, Inc. (the "Company") markets software, hardware and
services for production of point-of-purchase signs by retailers. The Company's
SIGNright production systems are used primarily by independent retailers and
small retail chains to quickly and easily produce high quality point-of-sale
signs for their stores. The Company's Stylus software is used by retail stores
to produce signs and posters by importing information from a computer database
and then electronically transmitting it to store-level printers. The Company has
recently developed and introduced a new service, called the Insignia POPS
program, in which the Company enters into agreements with manufacturers of brand
name consumer products under which the Company is paid to collect, organize and
format product messages and art provided by the manufacturer and to transmit
that information to the retailer, who combines it with the retailer's logo,
designs, color and pricing information and produces point-of-purchase signs.
The Company was incorporated in 1990 under the laws of the State of
Minnesota. Its principal executive offices are located at 10801 Red Circle
Drive, Minnetonka, Minnesota 55343 and its telephone number is (612) 930-8200.
THE OFFERING
The 2,064,031 Shares being offered by the Selling Shareholders consist
of 1,376,020 Shares now owned by the Selling Shareholders and an additional
688,011 Shares which may be purchased in whole or in part by the Selling
Shareholders pursuant to Warrants which have an exercise price of $2.125 per
Share and expire on January 17, 2000. The 1,376,020 Shares and the Warrants were
issued by the Company on January 17, 1997 in a private placement of 1,376,020
units, each consisting of one Share and a Warrant to purchase one-half of one
Share, for a purchase price of $2.125 per unit. The closing bid price of the
Company's common stock on the NASDAQ SmallCap Market on January 17, the date the
units were issued was $3.063 per share. The reason that resales of the Shares
are being registered is to permit the Shares to be resold by the Selling
Stockholders in the public market.
Common Stock offered by Selling Shareholders.................... 2,064,031
Common Stock outstanding after offering (1)..................... 7,548,092
NASDAQ Symbol................................................... ISIG
(1) Assumes the exercise of the Warrants. Excludes 651,600 shares of common
stock issuable upon exercise of outstanding warrants and outstanding stock
options granted pursuant to the Company 1990 Stock Plan.
USE OF PROCEEDS
If all of the Warrants are exercised, the gross proceeds to the Company
will be $1,462,000, though there is no assurance that any of the Warrants will
be exercised. After payment of the Company's expenses relating to this offering,
which are estimated to be approximately $12,000, any remaining net proceeds will
be added to the Company's working capital and used for general corporate
purposes. The Company will not receive any proceeds from sales of the Shares by
the Selling Shareholders. See "USE OF PROCEEDS."
RISK FACTORS
This offering involves substantial investment risk and the Shares
should be purchased only by persons who can afford the loss of their entire
investment. See "RISK FACTORS."
RISK FACTORS
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY IS HIGHLY SPECULATIVE
AND INVOLVES A HIGH DEGREE OF RISK. INVESTORS COULD LOSE THEIR ENTIRE
INVESTMENT. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING
FACTORS, ALONG WITH THE OTHER INFORMATION SET FORTH OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS, IN EVALUATING THE COMPANY, ITS BUSINESS AND PROSPECTS BEFORE
PURCHASING THE SECURITIES OFFERED HEREBY. THIS PROSPECTUS CONTAINS
FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S
ACTUAL RESULTS OF OPERATIONS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN
THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE
SET FORTH IN THE FOLLOWING RISK FACTORS AND ELSEWHERE IN THIS PROSPECTUS.
OPERATING LOSSES
The Company was incorporated in January 1990 and has an accumulated
deficit of ($5,975,137) as of December 31, 1996. For 1992, 1993, 1994, 1995 and
1996 the Company experienced profit or (net losses) of $517,000, $366,000,
$(909,000), $(1,451,000) and ($999,000), respectively. The Company anticipates
that it will continue to experience losses through the second quarter of 1997,
but there is no assurance that the Company will achieve profitability at that or
any other point in time.
COSTS AND RISKS OF NEW PRODUCT INTRODUCTION
The Company has only recently introduced the Insignia POPS Program. In
order to achieve and maintain profitability, this service needs to achieve
national program status through use at approximately 4,000 retail locations. If
Insignia POPS is successful, it will not reach profitability until approximately
the third quarter of 1997. There is no assurance that the Company will be
successful in introducing Insignia POPS or that it will achieve marketplace
acceptance or profitability.
RELIANCE ON LICENSED PROPRIETARY RIGHTS
All patents on or other proprietary rights to the SIGNright System, and
the associated bar-codes on the sign cards, are held by a third-party developer
(the "Developer"), which is independent of the Company. The Company has a
non-exclusive license to market and sell (but not manufacture) the SIGNright
System. A patent covering certain aspects of the SIGNright System has been
obtained in the Developer's name by the Company and a patent application
covering certain aspects of the SIGNright product has been applied for in the
Developer's name by the Company. There is no assurance that any such patents
would offer the Company a meaningful competitive advantage, since competitors
might employ non-infringing technology, and such patents may be subject to
challenge by third parties. Any disruption in the Company's relationship with
the Developer or termination of the Company's license with the Developer could
have a serious adverse effect on the Company.
SINGLE SOURCE SUPPLIER OF SIGNRIGHT MACHINES
The Company does not have, and has no plans to develop, any in-house
manufacturing capability. The Company obtains the SIGNright machine from a
Japanese supplier (the "Supplier") which was designated by the Developer. Any
significant disruption in the Company's relationship with the Supplier, or
failure by the Supplier to make timely deliveries of quality product, could have
a serious adverse effect on the Company.
SIGN CARD REVENUE
The Company derives a significant portion of its revenue from the sale
of the bar coded sign cards required by the SIGNright machines. If competitors
are able to reproduce the barcode and successfully market sign cards bearing it,
there could be a serious adverse effect on the Company's revenue.
SIGN CARD SUPPLIERS
The thermal paper used by the Company in its sign cards is purchased
exclusively from one supplier. While the Company believes that an alternative
supplier would be available if necessary, any disruption in the relationship
with or deliveries by the current supplier could have a serious adverse effect
on the Company.
COMPETITION
The Company's SIGNright product faces competition from numerous
sources, including from handmade signs, from large computer systems using
customized software, and from personal computers with sign-making software and
laser printers. For the Stylus product the Company's two major competitors are
dESIGN, Inc. (a privately-held company based in Seattle, WA) and Electronic
Label Technology, Inc. (a privately-held company based in Oklahoma City, OK).
The Insignia POPS Program will be competing for the marketing expenditures of
branded product manufacturers, who use various forms of point of purchase
marketing methods, such as displays, coupons, in-store samples, etc. There is no
assurance that the Insignia POPS Program will compete successfully with these
traditional marketing methods.
DEPENDENCE ON KEY EMPLOYEES
The Company is highly dependent upon the services of its present
officers, and the loss of any of them could have a material adverse effect on
the Company. None of the Company's officers are bound by employment or
noncompetition agreements with the Company. The success of the Company will also
depend on its ability to attract and retain capable sales and marketing
personnel.
MARKET OVERHANG FROM WARRANTS AND OPTIONS
In addition to the Warrants for the purchase of 688,011 Shares, the
Company has outstanding options and warrants for the purchase of an additional
651,600 shares of common stock. The exercise of a significant portion of the
Warrants and existing stock options and resale of the common stock thereby
obtained could depress the trading price of the Company's common stock.
ABSENCE OF DIVIDENDS
The Company has never paid, and does not plan to pay, any dividends on
its Common Stock in the foreseeable future.
USE OF PROCEEDS
If all of the Warrants are exercised, the gross proceeds to the Company
will be $1,462,000, though there is no assurance that any of the Warrants will
be exercised. After payment of the Company's expenses relating to this offering,
which are estimated to be approximately $12,000, any remaining net proceeds will
be added to the Company's working capital and used for general corporate
purposes. The Company will not receive any proceeds from sales of the Shares by
the Selling Shareholders.
SELLING SHAREHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by the Selling Shareholders
as of April 1, 1997, and as adjusted to reflect the sale of Shares obtained by
the Selling Shareholders through the exercise of the Warrants.
<TABLE>
<CAPTION>
Name Number of Shares Maximum Number of Shares to be Beneficially
---- Beneficially Owned Shares to be Sold(1)(2) Owned After the Offering(1)(2)
Prior to Offering ----------------- ------------------------
------------------
Number Percent
------- -------
<S> <C> <C> <C> <C>
Dain Bosworth, Inc. as Custodian FBO: 1,036,800 37,500 999,300 14.5%
George L. Hoffman IRA.......................
The Provident Bank as Custodian for The 750,000 750,000 -0- *
Perkins Opportunity Fund....................
Pyramid Partners, LP........................ 297,500 187,500 110,000 1.6%
Paul A. Moquist............................. 187,458 3,540 183,918 2.7%
Bruce E. Hendry............................. 150,000 150,000 -0- *
Larry Arnold................................ 100,000 75,000 25,000 *
Richard C. Perkins.......................... 55,000 30,000 25,000 *
Robert G. Allison........................... 52,500 37,500 15,000 *
Scott J. Simcox............................. 50,407 6,000 44,407 *
Daniel S. & Patrice M. Perkins JTWROS....... 50,000 37,500 12,500 *
Ellis Limited Partnership................... 50,000 30,000 20,000 *
Piper Jaffray as Custodian FBO Michael L. 47,500 37,500 10,000 *
Bochert IRA.................................
David R. Weir............................... 42,000 30,000 12,000 *
Richard W. Perkins Trustee UA 37,500 37,500 -0- *
FBO Richard W. Perkins (#1).................
Piper Jaffray as Custodian FBO Mark T 37,500 37,500 -0- *
Donahoe IRA.................................
Piper Jaffray as Custodian FBO Anne M. 37,500 37,500 -0- *
Donahoe IRA.................................
Scott Drill................................. 37,500 37,500 -0- *
Piper Jaffray as Custodian FBO John 37,205 15,000 22,205 *
Whisnant IRA................................
Dave M. Westrum............................. 31,000 22,500 8,500 *
Perkins Capital Management, Inc., Profit 30,000 30,000 -0- *
Sharing Plan & Trust UA.....................
Harold Roitenberg Trustee FBO Harold 30,000 30,000 -0- *
Roitenberg Trust U/A........................
Gerald M. Johnson........................... 24,865 3,750 21,115 *
John F. Rooney.............................. 22,500 22,500 -0- *
Strickland Family Limited Partnership....... 22,500 22,500 -0- *
James F. Lyons.............................. 22,500 22,500 -0- *
Dorothy J. Hoel............................. 22,500 22,500 -0- *
Gary C. Gustavson........................... 22,500 7,500 15,000 *
Vincent M. Palyan........................... 22,287 20,028 2,259 *
Lee S. Chapman.............................. 21,180 21,180 -0- *
Michael T. Mulligan......................... 18,000 18,000 -0- *
C. McKenzie Lewis III....................... 17,625 17,625 -0- *
American Enterprise FBO John Leighton Rock.. 15,880 10,589 5,291 *
Perkins & Partners, Inc..................... 15,000 15,000 -0- *
Pamela L. Brown, Trustee UA 15,000 15,000 -0- *
FBO Pamela L. Brown........................
Perkins Foundation......................... 15,000 15,000 -0- *
Richard W. Perkins Trustee UA 15,000 15,000 -0- *
FBO Richard W. Perkins (#2)................
James E. & Barbara J. Bonneville JTWROS.... 15,000 15,000 -0- *
Piper Jaffray as Custodian FBO Richard C. 15,000 15,000 -0- *
Perkins SEP/IRA............................
Dain Bosworth, Inc. as Custodian FBO: 15,000 15,000 -0- *
Thomas D. Spaeth, Jr. IRA..................
Kenneth Searl.............................. 14,893 14,118 775 *
Dr. Lee S. Chapman Profit Sharing Plan & 14,115 14,115 -0- *
Trust......................................
Carl J. Olsen.............................. 10,801 7,059 3,742 *
Brian Siedlecki............................ 10,500 10,500 -0- *
Piper Jaffray as Custodian FBO Timothy K. 8,500 7,500 1,000 *
Linblad IRA................................
David M. Hyduke............................ 7,500 7,500 -0- *
Elizabeth J. Hyduke........................ 7,500 7,500 -0- *
Stephen P. Hyduke.......................... 7,500 7,500 -0- *
Bradley A. Erickson........................ 7,500 7,500 -0- *
Piper Jaffray as Custodian FBO Catherine 7,059 7,059 -0- *
A. Studt IRA...............................
Judith G. Vars............................. 6,750 3,750 3,000 *
Piper Jaffray as Custodian FBO Mark 6,038 6,038 -0- *
Pruszinske.................................
Julie R. & Kennard B. McAdam JTWROS........ 4,638 3,600 1,038 *
Kevin M. Fischer........................... 4,016 3,540 476 *
Douglas D. Neitzel......................... 3,540 3,540 -0- *
TOTALS..................................... 3,605,557 2,064,031 1,541,526
(1) Includes Shares to be acquired by the Selling Shareholders upon exercise of the Warrants.
(2) Assumes the sale of all Shares offered hereunder.
* Less than 1%.
</TABLE>
PLAN OF DISTRIBUTION
The Company has been advised that the Selling Shareholders may sell
Shares from time to time in one or more transactions (which may include block
transactions) on the NASDAQ SmallCap System at market prices prevailing at the
time of the sale or at prices otherwise negotiated.
The Shares may, without limitation, be sold by one or more of the
following: (i) a block trade in which the broker or dealer so engaged will
attempt to sell the securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (ii) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; and (iii) ordinary brokerage transactions and
transactions in which the broker solicits purchasers.
The Company has been advised that, as of the date hereof, the Selling
Shareholders have made no arrangement with any broker for the sale of the
Shares. Underwriters, brokers or dealers may participate in such transactions as
agents and may, in such capacity, receive brokerage commissions from the Selling
Shareholders or purchasers of such securities. Such underwriters, brokers or
dealers may also purchase Shares and resell such Shares for their own account in
the manner described above. The Selling Shareholders and such underwriters,
brokers or dealers may be considered "underwriters" as that term is defined by
the Securities Act of 1933, although the Selling Shareholders disclaim such
status. Any commissions, discounts or profits received by such underwriters,
brokers or dealers in connection with the foregoing transactions may be deemed
to be underwriting discounts and commissions under the Securities Act of 1933.
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Lindquist & Vennum P.L.L.P., Minneapolis,
Minnesota.
EXPERTS
The financial statements of Insignia Systems, Inc. incorporated by
reference in Insignia Systems, Inc.'s Annual Report (form 10-K) for the year
ended December 31, 1996, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report incorporated herein by reference in
reliance upon such report given upon the authority of said firm as experts in
accounting and auditing.
INDEMNIFICATION
The Company's Articles of Incorporation eliminate or limit certain
liabilities of its directors and the Company's Bylaws provide for
indemnification of directors, officers and employees of the Company in certain
instances. Insofar as exculpation of, or indemnification for, liabilities
arising under the Securities Act of 1933 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 Securities and Exchange
Commission such exculpation or indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14: OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC registration fee .................................... $ 2,344
Accounting fees and expenses ............................ 2,000
Legal fees and expenses ................................. 7,500
Miscellaneous ........................................... 156
Total .............................................. 12,000
Except for the SEC fee, all of the foregoing expenses have been
estimated.
ITEM 15: INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 302A.521 of the Minnesota Statutes requires, among other
things, the indemnification of persons made or threatened to be made a party to
a proceeding by reason of acts or omissions performed in their official capacity
as an officer, director, employee or agent of the corporation against judgments,
penalties and fines (including attorneys' fees) if such person is not otherwise
indemnified, acted in good faith, received no improper benefit, reasonably
believed that such conduct was in the best interests of the corporation, and, in
the case of criminal proceedings, had no reason to believe the conduct was
unlawful. In addition, Section 302A.521, subd. 3, of the Minnesota Statutes
requires payment by the corporation, upon written request, of reasonable
expenses in advance of final disposition in certain instances if a decision as
to required indemnification is made by a disinterested majority of the Board of
Directors present at a meeting at which a disinterested quorum is present, or by
a designated committee of the Board, by special legal counsel, by the
Shareholders or by a court.
The Company's Bylaws provide for the indemnification of its directors,
officers, employees, and agents in accordance with, and to the fullest extent
permitted by, the provisions of the Minnesota Business Corporation Act, as
amended from time to time.
ITEM 16. EXHIBITS
Exhibit No. Description
- ----------- -----------
5.1 Opinion and Consent of Lindquist & Vennum P.L.L.P., counsel to
the Company
23.1 Consent of Ernst & Young LLP, independent auditors
23.2 Consent of Lindquist & Vennum P.L.L.P. (see Exhibit 5.1 above)
24 Powers of Attorney (included on signature page hereof)
ITEM 17. 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 of 1933;
(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
(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) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference 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 herein, 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 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 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
of 1933 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 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 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 it meets all of
the requirements for filing a Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Minnetonka, State of Minnesota, on the 21st day of
April, 1997.
INSIGNIA SYSTEMS, INC.
By /s/ G.L. Hoffman
------------------------------------
G.L. Hoffman, President and
Chief Executive Officer
POWER OF ATTORNEY
The undersigned officers and directors of Insignia Systems, Inc. hereby
constitute and appoint G.L. Hoffman our true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution for us and in our
stead, in any and all capacities, to sign any or all amendments to this
registration statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as
such person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully 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 on April 21,
1997 in the capacities indicated.
Signature Title
--------- -----
/s/ G.L. Hoffman President, Chief Executive
- ------------------------------ Officer, and Director (principal executive
G.L. Hoffman officer)
/s/ John R. Whisnant Vice President, Finance (principal financial
- ------------------------------ and accounting officer)
John R. Whisnant
/s/ Erwin A. Kelen Director
- ------------------------------
Erwin A. Kelen
/s/ Gordon F. Stofer Director
- ------------------------------
Gordon F. Stofer
/s/ Frank D. Trustman Director
- ------------------------------
Frank D. Trustman
Exhibit 5.1
May 12, 1997
Insignia Systems, Inc.
10801 Red Circle Drive
Minnetonka, Minnesota 55343
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 to be filed
by Insignia Systems, Inc. (the "Company") with the Securities and Exchange
Commission on May 12, 1997 relating to an offering of up to 2,064,031 shares of
Common Stock, par value $.01 per share, to be offered by the Selling
Shareholders, please be advised that as counsel to the Company, upon examination
of such corporate documents and records as we have deemed necessary or advisable
for the purposes of this opinion, it is our opinion that:
1. The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State
of Minnesota.
2. The shares of Common Stock being offered by the Selling
Shareholders have been validly issued and are fully paid and
nonassessable, or, if such shares will be sold upon exercise
of outstanding warrants, will be legally issued, fully paid
and nonassessable when issued and paid for as contemplated by
the respective warrants.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the heading
"Legal Matters" in the Prospectus comprising a part of the Registration
Statement.
Very truly yours,
LINDQUIST & VENNUM P.L.L.P.
Exhibit No. 23.1
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Insignia Systems,
Inc. for the registration of 2,064,031 shares of its common stock and to the
incorporation by reference therein of our report dated January 24, 1997, with
respect to the financial statements and financial statement schedule of Insignia
Systems, Inc. incorporated by reference in its Annual Report (Form 10-K) for the
year ended December 31, 1996, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
May 12, 1997
