<PAGE>
As filed with the Securities and Exchange Commission on February 24, 2000
Registration No. 333-94993
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
INSCI-STATEMENTS.COM, CORP.
(Exact name of Registrant as specified in its charter)
DELAWARE 7373 06-1302773
(State or other (Primary Standard (I.R.S. Employer
Jurisdiction of incorporation Industrial Classification Identification No.)
or organization) Code Number)
Two Westborough Business Park, Westborough, Massachusetts 01581
(508) 870-4000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
------------------------------
Dr. E. Ted Prince
Chairman of the Board and Chief Executive Officer
insci-statements.com, corp.
Two Westborough Business Park, Westborough, Massachusetts 01581
(508) 870-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------
Copies of Communications to:
Joseph A. Baratta, Esq.
Baratta & Goldstein
597 Fifth Avenue, New York, New York 10017
(212) 750-9700
------------------------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If any of the 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 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 earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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 Securities and
Exchange Commission (SEC), acting pursuant to said Section 8(a), may
determine.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
SEC. These securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. This
prospectus shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of these securities in any State in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such State.
<PAGE>
INSCI-STATEMENTS.COM, CORP.
1,283,612 SHARES
COMMON STOCK
The prospectus relates to the offering for resale of up to 1,283,612
shares of common stock of insci-statements.com, corp., a Delaware corporation.
On December 17, 1999, insci-statements.com, issued 802,676 shares of common
stock and a warrant to purchase 280,936 shares of its common stock to The Tail
Wind Fund Ltd., a Bahamian corporation, in a transaction exempt from the
registration requirements of the Securities Act of 1933. insci-statements.com
has agreed to register the shares by an agreement dated December 17, 1999
between insci-statements.com and Tail Wind. Also included in this prospectus are
a total of 200,000 shares of insci-statements.com common stock underlying two
warrants issued to Auerbach, Pollak & Richardson, Inc. on April 22, 1999 as
payment for general investment banking and financial advisor services.
The selling stockholders may offer and sell the shares from time to time
according to this prospectus. The term "selling stockholders" refers to Tail
Wind and Auerbach, Pollak & Richardson, together with any other person who
becomes a party to or agrees to be bound by the agreements with
insci-statements.com. The shares may be offered and sold by the selling
stockholders from time to time directly to purchasers or through underwriters,
broker/dealers or agents at fixed prices, at prevailing market prices at the
time of sale, at varying prices determined at the time of sale or at negotiated
prices. See "Plan of Distribution" and "Selling Stockholders." If required, the
names of any underwriters, broker/dealers or agents, any discounts, commissions
and other items constituting compensation from the selling stockholders and any
discounts, commissions or concessions allowed or paid to broker/dealers will be
set forth in an accompanying supplement to this prospectus.
If the Tail Wind warrant to purchase 280,936 shares of common stock is
exercised, we will receive $4.30 for each warrant share exercised. The two
warrants issued to Auerbach, Pollak & Richardson each may be exercised for
100,000 shares of common stock. If the Auerbach, Pollak & Richardson warrants
are exercised, we will receive $3.00 for each of the first 100,000 shares and
$4.00 for each of the second 100,000 shares respectively.
The selling stockholders will receive all of the net proceeds from the
sale of the offered shares and will pay all underwriting discounts and selling
commissions, if any, applicable to any sale. We are responsible for payment of
all other expenses related to the offer and sale of the shares. The selling
stockholders and any underwriters, broker/dealers or agents that participate in
the distribution of shares may be deemed to be "underwriters" within the meaning
of the Securities Act. In addition, any profits on the sale of offered shares by
any selling stockholder and any discounts, commissions, concessions or other
compensation received by any underwriter, broker/dealer or agent may be deemed
to be underwriting commissions or discounts under the Securities Act. See "Plan
of Distribution" for a description of indemnification arrangements.
Prospective investors should carefully consider the matters discussed
under the caption "Risk Factors" beginning on Page 3.
insci-statements.com, corp.'s common stock is listed on the Nasdaq
SmallCap Market under the symbol "INSI" and on The Boston Stock Exchange under
the symbol "INSCI".
Neither the SEC nor any state securities commission has approved or
disapproved of these shares or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is February 24, 2000.
<PAGE>
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY ........................................................ 1
FORWARD-LOOKING STATEMENTS ................................................ 2
RISK FACTORS .............................................................. 3
USE OF PROCEEDS ........................................................... 6
DIVIDEND POLICY ........................................................... 6
DESCRIPTION OF CAPITAL STOCK .............................................. 6
SELLING STOCKHOLDERS ...................................................... 8
PLAN OF DISTRIBUTION ...................................................... 8
WHERE YOU CAN FIND MORE INFORMATION ....................................... 10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE ........................... 10
LEGAL MATTERS ............................................................. 11
EXPERTS ................................................................... 11
-------------------------------------------------------------------------
This prospectus includes or incorporates by reference various trademarks
and service marks owned or licensed by insci-statements.com, corp.
<PAGE>
PROSPECTUS SUMMARY
We develop enterprise-level software for Internet access and viewing as
well as the digital storage and distribution of production print documents. We
participate in the electronic bill presentment and payment market, and are
moving to an Internet-based portal model of doing business in the area of
e-commerce and integration of electronic printing over the Internet. We
currently market a family of integrated document management software products
designed to meet the needs of organizations that rely on a large quantity of
computer-generated documents. We provide our customers with the ability to
electronically capture and store computer output and source documents. We also
enable access and delivery of these documents electronically or via reprints in
a way that lowers cost and improves quality, and service. We market our products
in more than 40 countries through direct sales and reseller channels.
We have recently focused our attention in four areas:
o expansion of the functionality and performance of our existing Unix computer
operating system based products;
o development of our core technology products to operate on the Windows NT
computer operating platform;
o expansion of sales through relesser channels; and
o expansion of our services infrastructure.
In the past two years, we have added six new software products
o WebCOINS, an Internet product;
o COINSflow, a workflow product;
o Advanced COINSCAN, an imaging product;
o Advanced COINSERV, a document archive and retrieval product;
o COINS Demander, a database interface; and
o Setup Expert, an application set-up interface.
We also released COINSERV for Windows NT, an electronic digital document
repository with Internet access and integrated imaging and workflow. This
software product can archive and retrieve high volumes of documents operating on
the Windows NT platform. The market for our products is businesses that use the
electronic availability of customer-facing documents, source documents and
reports.
Customer-facing documents vary from industry to industry but generally
include invoices, statements, purchase orders, bills, policies, and transaction
confirmation documents that are produced in high volume on high-speed printers.
They require electronic indexing and storage to allow retrieval and viewing for
customer support functions and to satisfy regulatory archiving requirements.
Source documents include new account applications, signature cards,
purchase orders, signed bills of lading, insurance claim forms, and other
paper-based documents which, through the use of our products can be
electronically captured, indexed, stored, routed and displayed. Putting these
document types in electronic form improves efficiency, reduces cost and allows
an organization to more effectively serve its internal and external customers.
Electronic commerce is rapidly becoming a market requirement. New
capabilities such as electronic bill presentment, customer access to statements
and bills and integrated invoicing and marketing extend the value of
conventional printing and distribution of customer-facing documents. Our
products make document-enabled electronic commerce possible.
We offer numerous services including software installation, training,
software maintenance, support and systems integration. Our advanced systems
integration services division works with our customers to integrate these
various technologies into existing technical environments.
Our current business strategy is to develop and provide document
management solutions that allows customers to improve their business operation
and competitive position.
THE OFFERING
The following is a brief summary of the terms of this offering.
Common Stock Offered ........... 1,283,612 shares of common stock $.01 par
value per share
Use of Proceeds ................ insci-statements.com, corp. will not receive
any proceeds from the sale of the offered
shares by the selling stockholders.
Registration Agreement ......... insci-statements.com, has agreed to use its
best efforts to keep effective a registration
statement of which this prospectus forms a
part covering resales of the offered shares
for a period beginning on the date on which
this registration statement becomes effective
and ending on December 17, 2004, or an
earlier date on which all of the offered
shares have been sold or cease to be
registerable.
The 1,283,612 shares of common stock listed above assumes the exercise of
280,936 warrant shares issued to Tail Wind on December 17, 1999 and the exercise
of 200,000 warrant shares issued to Auerbach, Pollak & Richardson on April 22,
1999.
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. Words such as
"anticipates", "plans", "estimates", "expects", "believes", and similar
expressions as used in this prospectus in connection with insci-statements.com
or our management, are intended to identify forward-looking statements. We have
based these forward-looking statements on our current expectations and
projections about future events. However, our actual results, performance, or
achievements may materially differ from those expressed in the forward-looking
statements. Please see "Risk Factors" for a more detailed description of those
conditions and events that could cause our results to differ.
We undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this prospectus might not occur.
RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should consider carefully, the following risks, and consult with your own legal,
tax and financial advisors.
WE HAVE A HISTORY OF LOSSES AND OUR ABILITY TO BE PROFITABLE DEPENDS ON A NUMBER
OF FACTORS WHICH WE MAY BE UNABLE TO CONTROL.
We have had losses since our business began in 1989 and there can be no
guarantee we will ever be profitable. For the fiscal year ended March 31, 1999,
we had a net loss of approximately $451,000 or $0.16 per share. For the fiscal
years ended March 31, 1998 and 1997, we had net losses of approximately
$2,543,000 or $0.73 per share and approximately $936,000 or $0.62 per share,
respectively. Our revenues fluctuate because of a variety of factors including:
o the amount of revenue generated from our alliances with other companies
selling our products;
o the length of the sales cycle for our products;
o demand for our products; and
o the introduction of new products and product enhancements.
BECAUSE WE HAVE EXPERIENCED LOSSES WE MAY NEED ADDITIONAL WORKING CAPITAL FOR
OUR BUSINESS.
We believe that we will need additional financing to operate our business
and for future product development. We have established a bank line for working
capital and equipment financing totaling $1,500,000 with Silicon Valley Bank.
The credit line contains restrictions that we must satisfy to use the bank line.
We also have provided a general pledge of all our assets to guarantee payment to
Silicon Valley Bank.
WE ARE USING A NEW INTERNET BUSINESS STRATEGY THAT CARRIES A HIGH DEGREE OF
RISK.
We recently changed our company name to reflect our new web-based business
model. We are pursuing a new business model that focuses on the electronic
commerce market and includes the establishment of a web portal to provide
electronic storage and management of commercial documents. We believe that our
new strategy will allow us to take advantage of the growing market for digital
documents and commercial transactions on the Internet. However, we are not
certain that our new business strategy will be successful.
OUR RECENT ACQUISITION OF INTERNET BROADCASTING COMPANY, INC. WHICH HAS ONGOING
LOSSES WILL RESULT IN CASH LOSSES TO US.
We purchased all of the stock of Internet Broadcasting a development stage
company, on December 10, 1999, in exchange for 1,000,000 shares of our common
stock. Internet Broadcasting has not made any profit and continues to lose
approximately $100,000 a month. We cannot be sure that the technology used by
Internet Broadcasting will be successful in achieving future profits.
Additionally, as part of our acquisition of Internet Broadcasting, we agreed to
file a registration statement for the 1,000,000 shares of our common stock
before June 10, 2000.
WE HAVE GIVEN CERTAIN RIGHTS TO THE TAIL WIND FUND LTD. WHICH MAY RESTRICT
FUTURE EQUITY FINANCING.
We believe that we will be required to raise additional financing for the
Internet Broadcasting business as it continues to lose money. Through September
17, 2002 Tail Wind, a selling stockholder has a right of first refusal on any
equity financing we undertake. Additionally, if we sell shares of our common
stock for less than $2.99 per share or $4.30 for each warrant share, then Tail
Wind will receive additional shares of common stock and warrants or cash for the
difference in what Tail Wind paid for its shares and warrants.
WE HAVE A PREFERRED STOCK DIVIDEND OBLIGATION THAT HAS A NEGATIVE EFFECT ON ANY
PROFITS.
We have previously issued 8% convertible redeemable preferred stock which
can be converted into shares of our common stock. We are obligated until
October 1, 2001, or the conversion of all the 8% preferred shares, whichever
happens first, to pay dividends of 11% a year in our preferred stock or in cash.
We can choose the form of dividend payment. The requirement to pay dividends
will reduce any profits we earn.
THE CONVERSION OF PREFERRED SHARES AND EXERCISE OF OPTIONS AND WARRANTS MAY
LOWER THE TRADING PRICE OF OUR COMMON STOCK.
Our continued payment of dividends of preferred stock, which is
convertible to our common stock, and outstanding options and warrants may have
an adverse effect on the market price of our common stock in the open market.
The options and warrants may prevent us from obtaining additional financing on
favorable terms.
THE POTENTIAL ISSUANCE OF ADDITIONAL SHARES OF PREFERRED STOCK MAY NEGATIVELY
AFFECT THE MARKET PRICE OF OUR COMMON STOCK AND SHAREHOLDERS RIGHTS.
Our certificate of incorporation empowers the board of directors with the
right to determine the designations, rights, preferences and privileges of the
holders of one or more series of preferred stock. Accordingly, the board of
directors can issue, without stockholder approval, preferred stock with voting,
dividend, conversion, liquidation or other rights which could adversely affect
the voting power and equity interest of common stock holders. Although we
currently do not intend to issue any additional shares of preferred stock or
create any additional series of preferred stock, we may do so in the future.
Furthermore, if we issue preferred stock in a manner that dilutes the voting
rights of the holders of common stock, our listing on the Nasdaq SmallCap Market
may be impaired.
DIVIDENDS ON OUR COMMON STOCK ARE NOT LIKELY.
We do not anticipate paying any cash dividends on our common stock. We
intend to keep future earnings, if any, to finance the operation and expansion
of our business.
RAPID TECHNOLOGY CHANGES IN OUR INDUSTRY MAY ADVERSELY AFFECT OUR BUSINESS.
Our business is subject to technological advances and possible product
obsolescence. The market for our products is characterized by rapidly changing
technology, intense competition, technological complexity and evolving industry
standards. We must insure that our products are compatible with those products
offered by third-party vendors, including server platforms for our software and
optical disk storage devices. We have no contracts with third-party vendors;
therefore, there is no assurance that we will be able to make our software
products compatible with new products that are introduced by others. Our ability
to provide products and technology at a competitive price will be subject to
potential technological alternative solutions that may be provided by
competitors. In addition, there can be no assurances that products or
technologies developed by others will not render our products or technologies
noncompetitive or obsolete.
WE DEPEND ON PROPRIETARY TECHNOLOGY WHICH IS NOT PROTECTED BY PATENTS.
Our business depends on proprietary software technology for which we have
no patent protection. Although we require our employees and others to whom we
disclose proprietary information to sign non-disclosure agreements, the
protection may not be sufficient. Our business will be adversely affected if
anyone improperly uses or discloses our proprietary software or other
proprietary information.
WE DEPEND ON KEY SUPPLIERS FOR COMPUTER EQUIPMENT USED FOR OUR PRODUCTS.
Optical disk storage devices that are necessary for the use of our
software systems are currently available from a number of third-party vendors.
We do not intend to manufacture optical disk drive systems or optical disks. An
extended interruption of the supply of optical disk drive systems or optical
disks or extended performance problems could adversely affect us. We
also rely on third-party vendors to provide certain industry-standard
communication protocols. We currently do not have any fixed commitments from
suppliers to provide this equipment.
OUR BUSINESS GREATLY DEPENDS ON OUTSIDE SALES LEADS.
We depend upon introductions to potential customers by companies with
which we maintain strategic alliances for a significant percentage of our sales.
Although we have written agreements with UNISYS, Xerox Corporation, Storage
Technology Corporation, Moore Corporation, OCE and our principal value added
resellers, the agreements do not require customer introductions or provide for
minimum required purchases of our products. If any of the companies with which
we maintain strategic alliances decides not to refer potential customers to us,
our sales may be reduced and operating losses increased. In addition, there is
no assurance that we will be able to maintain our strategic alliances on current
terms.
WE MAY EXPERIENCE YEAR 2000 COMPLIANCE RELATED PROBLEMS AND AS A RESULT, MAY
FACE AND BE LIABLE FOR DATA CORRUPTION, COMPUTER FAILURE AND DISRUPTION OF
OPERATIONS.
Many computer systems may have problems handling dates beyond the year
1999. Potential problems may be embedded and may not be experienced until well
beyond January 1, 2000 requiring some computer hardware and software to be
modified to remain functional. We have assessed both internal readiness of our
computer systems and the compliance of our computer software sold to customers
for its ability to process the year 2000 date and we believe that we are
prepared to process year 2000 requirements. The majority of the costs associated
with implementing the Year 2000 compliance has been recognized and is not
material in terms of our financial operating results. We believe there is little
risk associated with year 2000 issues relating to our internal operations or
computer software sold. There can be no assurance, however, that there will not
be a delay in, or increased costs associated with the implementation of such
changes. Our inability to implement changes could adversely effect our future
operations.
WE FACE THE POSSIBILITY OF DELISTING FROM THE NASDAQ SYSTEM.
Our common stock is presently listed on The Nasdaq SmallCap Market, which
requires us to maintain net tangible assets (i.e. total assets less liabilities
and goodwill) of $2 million, or a market capitalization of $35 million or net
income of $500,000 for two of the last three years to maintain our listing. We
also must meet certain corporate governance requirements. Additionally, our
stock must maintain an average bid price of more than $1.00. If the average bid
price is less than $1.00 for 30 consecutive trading days, we may not satisfy the
Nasdaq SmallCap listing requirements, and our stock may be delisted from the
Nasdaq SmallCap Market. If this occurs, any trading in our common stock would
then be conducted on the Nasdaq Bulletin Board. If the common stock is delisted
by Nasdaq, its liquidity could be impaired, not only in the number of securities
which could be bought and sold, but also through delays in the timing of
transactions, reduction in coverage by security analysts' and the news media.
If our common stock were delisted from the Nasdaq SmallCap Market, it may
be subject to additional sales practice requirements on broker-dealers which
sell our securities to persons other than established customers and
institutional accredited investors. If the broker-dealer is subject to these
restrictions, he must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction before the
sale. Consequently, the rule may affect the price of our common stock and your
ability to sell our common stock.
The SEC's regulations define a "penny stock" to be any equity security
that has a market price less than $5.00 per share, subject to certain
exceptions. The penny stock restrictions will not apply to our common stock as
long as it is listed on The Nasdaq SmallCap Market.
THE BOARD OF DIRECTORS OWNS A LARGE PERCENTAGE OF OUR COMMON STOCK AND CAN
INFLUENCE MATTERS REQUIRING THE VOTE OF SHAREHOLDERS.
On December 31, 1999, our directors and officers beneficially owned, as
defined by the SEC, approximately 3,659,555 shares of common stock, representing
32% of the outstanding shares of common stock. Based on their ownership, our
directors and officers have the ability to influence matters requiring a
stockholder vote, including the election of the directors, the amendment of
charter documents, the merger or dissolution of our company and the sale of all
or substantially all of our assets. Their voting power also may discourage or
prevent any proposed takeover.
BECAUSE OF CERTAIN PROVISIONS IN OUR BY-LAWS, CHANGE IN CONTROL MAY BE
DIFFICULT.
Our bylaws and the Delaware General Corporation Law contain provisions
that may make a change in control more difficult or delay attempts by others to
obtain control of us, even when this may be in the interests of stockholders.
The Delaware General Corporation Law also imposes conditions on certain business
combinations with "interested stockholders", as defined by Delaware law. Under
certain agreements with key personnel, we also have provided stock options in
the event of a change of control and a termination of those employment
agreements without cause. Additionally, we have provided that if a change of
control occurs, certain directors will receive immediate vesting of stock
options granted under our 1992 Directors Option Plan.
BECAUSE OF THE HIGH COST, WE LACK PRODUCT LIABILITY INSURANCE.
We develop, market, install and service electronic information and
document management systems. Failure of our products may result in a claim
against us. Because of the high cost of product liability insurance, we do not
maintain insurance to protect against claims associated with the use of our
products. Any claim against us may result in costs to us in defending
litigation. Further, any claim may require management's time and the use of our
resources.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the offered shares by
selling stockholders.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock and
we do not expect to pay cash dividends in the foreseeable future. We are
restricted in paying cash dividends by the terms of our line of credit with
Silicon Valley Bank, see "Risk Factors". Under certain circumstances, we are
required to pay cash dividends on our preferred stock. Please see "Description
of Capital Stock" for further discussion concerning dividend payments on our
preferred stock. We have paid cumulative stock dividends through December 31,
1999 on our 8% convertible redeemable preferred stock as follows:
Stock Dividend Paid
-------------------
8% Convertible Redeemable Preferred Stock 1,273,000
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
We are authorized to issue 40,000,000 shares of common stock, $.01 par
value. As of December 31, 1999, there were 11,785,884 shares outstanding.
The holders of our common stock are entitled to one vote per share on all
matters to be voted on by stockholders and are entitled to receive dividends, if
any, as may be declared by the board of directors from funds legally available.
Dividends on common stock are subject to any dividend preferences of our
preferred stock. Holders of common stock are not entitled to cumulative voting
rights. Holders of a majority of our common stock are eligible to vote in any
election of directors. Our common stock has no pre-emptive or other subscriptive
rights, and there are no conversion rights or redemption or sinking fund
provisions. All shares of common stock must be fully paid and non-assessable. No
cash dividends have been paid to holders of our common stock since the start of
our business and no dividends are anticipated to be declared or paid in the
foreseeable future. See "Dividend Policy".
PREFERRED STOCK
GENERAL
We are also authorized to issue up to 10,000,000 share of preferred stock
having a par value of $.01 per share. As of December 31, 1999 1,211,668 shares
of our 8% convertible redeemable preferred stock is outstanding.
Our board of directors is authorized subject to limitations prescribed by
law and the provisions of the certificate of incorporation to provide for the
issuance of shares of preferred stock in series. Additionally, our board can
file a certificate pursuant to the law of the State of Delaware, to establish
the number of shares to be included in a series and affix the designation,
powers, preferences and rights of the shares of a series and the qualifications,
limitations or restrictions of preferred shares.
The authority of our board of directors with respect to each series of
preferred stock shall include, but not be limited to, the right to determine:
o the number of shares in a series;
o the dividend rate and, whether dividends shall be cumulative;
o whether the preferred shares in a series will have voting rights, in
addition to the voting rights provided by law, and if so, the terms of the
voting rights;
o whether the preferred shares will have conversion privileges;
o whether the preferred shares will be redeemable;
o whether the preferred shares will have a sinking fund for the redemption or
purchase of the shares of that series;
o the rights of the preferred shares in the event of a liquidation,
dissolution or winding up of our business; and
o any other relative rights, preferences and limitations.
Dividends on preferred stock have a priority in payment before payment of
common stock dividends.
If upon any voluntary or involuntary liquidation, dissolution or winding
up of our company, preferred shareholders shall have priority in payment of
assets of our company.
8% CONVERTIBLE REDEEMABLE PREFERRED STOCK
As of December 31, 1999, we have 1,211,668 shares outstanding of our 8%
convertible redeemable preferred stock.
Each share of 8% preferred stock converts into one share of common stock
at the option of the holder.
Except as expressly provided by the General Corporation Business Law of
the State of Delaware, and our amended Certificate of Incorporation, the 8%
preferred stock shall have no voting rights or pre-emptive rights.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the sale by
the selling stockholders of 1,283,612 shares of common stock in this offering.
None of the selling stockholders has held a position or office or had a
material relationship with insci-statements.com or any of our affiliates within
the past three years other than a result of the ownership of our common stock
and warrants. The address of The Tail Wind Fund Ltd. is Windermere House, 404
East Bay Street, P.O. Box SS-5539, Nassau, Bahamas. The address of Auerbach,
Pollak & Richardson, Inc. is 450 Park Avenue, New York, NY 10022.
Shares Shares
Beneficially Number of Beneficially
Owned Prior Shares Owned After
Selling Stockholders to Offering %(1) Offered Offering %
- --------------------------------------------------------------------------------
The Tail Wind Fund Ltd.(2) 1,083,612 9.36% 1,083,612 0 *
Auerbach, Pollak &
Richardson, Inc.(3) 200,000 1.69% 200,000 0 *
- ----------------
* Represents less than 1% of the outstanding shares of common stock.
(1) Applicable percentages of ownership are based on approximately 11,785,884
shares of common stock outstanding on December 31,1999 adjusted as required
by the rules promulgated by the SEC. Any security that any person named
above has the right to acquire within 60 days is deemed to be outstanding
for purposes of calculating the percentage ownership of the person, but is
not deemed to be outstanding for purposes of calculating the percentage of
any other person.
(2) Represents 802,676 shares of common stock and 280,936 shares of common stock
issuable upon exercise of a warrant which expires December 17, 2004. The
warrant has an exercise price of $4.30 for each warrant share. The common
stock and warrant were issued to Tail Wind in a transaction exempt from the
registration requirements of the Securities Act of 1933.
(3) Represents 200,000 shares of common stock issuable upon exercise of warrants
issued to Auerbach, Pollak & Richardson. The first warrant which is
exercisable for 100,000 warrant shares has an exercise price of $3.00 per
share and expires October 22, 2003. The second warrant which is exercisable
for 100,000 warrant shares has an exercise price of $4.00 per share and can
be exercised from April 22, 2000 and expires April 22, 2004.
The selling stockholders are offering and selling a total of 1,283,612
shares on insci-statements.com common stock under this prospectus.
o An indeterminate number of additional shares as may from time to time become
issuable to the selling stockholders in accordance with the terms of
agreements which are annexed as exhibits to the registration statement to
which this prospectus is made apart thereof; and
o An indeterminate number of additional shares as may from time to time become
issuable to selling stockholders resulting from stock splits, stock
dividends or similar transactions with respect to the registerable common
stock
The selling stockholders may from time to time offer and sell pursuant to
this prospectus any or all of the offered shares. The cover page of this
prospectus sets forth the name and number of shares of common stock to be
offered.
PLAN OF DISTRIBUTION
insci-statements.com, corp. will not receive any of the proceeds of the
sale of the offered shares. The offered shares may be offered and sold by the
selling stockholders from time to time to purchasers directly. Alternatively,
the selling stockholders may from time to time offer and sell the offered shares
to or through underwriters, broker/dealers or agents, who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the selling stockholders and/or the purchasers of the offered shares for
whom they may act as agents. The selling stockholders and any underwriters,
broker/dealers or agents that participate in the distribution of the offered
shares may be deemed to be "underwriters" within the meaning of the Securities
Act, and any profits on the sale of offered shares by any selling stockholders
and any discounts, commissions, concessions or other compensation received by
any of these underwriters, broker/dealers or agents may be deemed to be
underwriting discounts or commissions under the Securities Act. To the extent
the selling stockholders may be deemed to be underwriters, the selling
stockholders may be subject to certain statutory liabilities, including, but not
limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under
the Exchange Act.
The offered shares may be offered and sold from time to time in one or
more transactions at fixed prices, at prevailing market prices at the time of
sale, at varying prices determined at the time of sale or at negotiated prices.
The sale of the offered shares may be effected in transactions, which may
involve crosses or block transactions:
o on any national securities exchange or quotation service on which the
offered shares may be listed or quoted at the time of sale,
o in the over-the-counter market,
o in transactions otherwise than on these exchanges or services or in the
over-the-counter market, or
o pursuant to Rule 144, assuming the availability of an exemption from
registration.
At the time a particular offering of the offered shares is made, a
prospectus supplement, if required, will be distributed which will set forth the
aggregate amount and type of offered shares being offered and the terms of the
offering, including the name or names of any underwriters, broker/dealers or
agents, any discounts, commissions and other items constituting compensation
from the selling stockholders and any discounts, commissions or concessions
allowed or reallowed or paid to broker/dealers. This prospectus supplement and,
if necessary, a post-effective amendment to the registration statement of which
this prospectus is a part, will be filed with the SEC to reflect the disclosure
of additional information with respect to the distribution of the offered
shares. In addition, the offered shares covered by this prospectus may be sold
in private transactions or under Rule 144 rather than pursuant to this
prospectus.
To the best knowledge of insci-statement.com, corp., there are currently
no plans, arrangements or understandings between any selling stockholders and
any broker/dealer, agent or underwriter regarding the sale of the offered shares
by the selling stockholders. There is no assurance that any selling stockholder
will sell any or all of the offered shares or that any selling stockholder will
not transfer the offered shares by other means not described in this prospectus.
To comply with the securities laws of certain jurisdictions, if
applicable, the offered shares will be offered or sold in jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the offered shares may not be offered or sold unless they have
been registered or qualified for sale in these jurisdictions or any exemption
from registration or qualification is available and is complied with.
The selling stockholders and any other person participating in this
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitations, Regulation
M of the Exchange Act which may limit the timing of purchases and sales of any
of the offered shares by the selling stockholders or any other person.
Furthermore, Regulation M may restrict the ability of any person engaged in the
distribution of the offered shares to engage in market-making activities with
respect to the particular offered shares being distributed for a period of up to
five business days prior to the commencement of that distribution. All of the
foregoing may affect the marketability of the offered shares and the ability of
any person or entity to engage in market-making activities with respect to the
offered shares.
Pursuant to the registration rights agreement entered into in connection
with the registration of the shares by insci-statements.com, corp., and the
selling stockholder, each will be indemnified by the other against certain
liabilities, including certain liabilities under the Securities Act, or will be
entitled to contribution in connection therewith.
The selling stockholders will not pay any expenses incidental to the
registration, offering and sale of the offered and sale of the offered shares to
the public other than commissions, fees and discounts of underwriters, brokers,
dealers and agents.
Pursuant to the registration agreement, the selling stockholders will not
pay any expenses of the registration of the offered shares, including all
registration and filing fees, including, without limitation:
o with respect to filings required to be made with the National
Association of Securities Dealers, Inc. and
o of compliance with federal and state securities or blue sky laws.
WHERE YOU CAN FIND MORE INFORMATION
insci-statements.com, corp. is subject to the informational requirements
of the Securities Exchange Act of 1934 and files annual, quarterly and current
reports and other information with the Securities and Exchange Commission. You
may read and copy any reports, statement or other information on file at the
SEC's public reference room located at 450 Fifth Street, N.W., Washington, D.C.
20549. You can request copies of those documents for a fee by writing to the
SEC. In addition, you can inspect reports, proxy statements and other
information concerning insci-statements.com at the offices of Nasdaq 1735 "K"
Street, N.W., Washington, D.C. 20006-1500.
insci-statements.com has filed with the SEC a registration statement on
Form S-3. This prospectus, which forms a part of that registration statement,
does not contain all of the information included in the registration statement.
Certain information is omitted and you should refer to the registration
statement and its exhibits. References made in this prospectus to any of our
contracts or other documents are not necessarily complete and you should refer
to the exhibits attached to the registration statement for copies of the actual
contracts or documents. You may review a copy of the registration statement and
the exhibits at the SEC's public reference room in Washington, D.C. at the above
location and at the SEC's regional offices in Chicago, Illinois and New York,
New York. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. insci-statements.com's SEC filings and
the registration statement can also be reviewed by accessing the SEC's Internet
site at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings that
we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until the offering of securities under this
prospectus is terminated.
The following documents are incorporated by reference into this
prospectus:
(1) Our Annual Report on Form 10-KSB for the fiscal year ended March 31,
1999.
(2) Our Quarterly Report on Form 10-QSB for the fiscal quarter ended June
30, 1999.
(3) Our Quarterly Report on Form 10-QSB for the fiscal quarter ended
September 30, 1999.
(4) Our Quarterly Report on Form 10-QSB for the fiscal quarter ended
December 31, 1999
(5) Our Current Report on Form 8-K filed with the SEC on December 6, 1999.
(6) Our Current Report on Form 8-K filed with the SEC on December 27,
1999.
(7) Our Current Report on Form 8-K filed with the SEC on January 4, 2000.
(8) Our Current Report on Form 8-K filed with the SEC on January 4, 2000.
(9) Our Current Report on Form 8-K/A (No.1) filed with the SEC on January
12, 2000.
(10) Our Proxy Statements in connection with our 1999 Annual Meeting of
Shareowners held on November 9, 1999.
(11) The description of the common stock set forth in our registration
statement on Form S-1, which became effective on October 6, 1997.
(12) All other reports filed by us pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act since February 24, 2000 and prior to the
termination of this offering of the shares offered by this prospectus.
Information incorporated by reference is considered to be part of this
prospectus. Any statement contained in a document incorporated by reference in
this prospectus will be modified or superseded by any statement in this
prospectus. In addition, any subsequently filed document which also is
incorporated by reference in this prospectus modifies or supersedes the
statements made in this prospectus. Any statement modified or superseded will
not be deemed, a part of this prospectus.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
insci-statements. com, corp.
Two Westborough Business Park
Westborough, Massachusetts 01581
Attention: Roger Kuhn, Chief Financial Officer
Telephone number: (508) 870-4000
LEGAL MATTERS
The validity of the securities being offered hereby is being passed upon by
Baratta & Goldstein, 597 Fifth Avenue, New York, New York 10017.
EXPERTS
The supplemental financial statements of insci-statements.com, corp. as of
March 31, 1999 and for each of the two years ended March 31, 1999 which are
included in insci-statements.com, corp. 8-K/A filed on January 12, 2000 which is
incorporated by reference herein, except as to the supplemental financial
statements as they relate to The Internet Broadcasting Company, Inc. as of June
30, 1999 and 1998 and for each of the two years ended June 30, 1999, have been
audited by Pannell Kerr Forster, PC, independent accountants, whose reports have
been incorporated by reference herein upon the authority of said firms as
experts in auditing and accounting.
The financial statements of insci-statements.com, corp. as of March 31, 1999
and 1998, and for each of the two years ended March 31, 1999 which are included
in the insci-statements.com, corp. Annual Report on Form 10-K SB for the year
ended March 31, 1999, which is incorporated by reference herein, have been
audited by Pannell Kerr Forster PC, independent accountants, whose report
thereon has been incorporated by reference herein upon the authority of said
firm as experts in auditing and accounting.
The consolidated financial statements of The Internet Broadcasting Company, Inc.
as of June 30, 1999 and 1998 and for each of the two years ended June 30, 1999
which are included in insci-statements.com, corp's 8-K/A filed on January 12,
2000, which is incorporated by reference herein, have been audited by Goldstein
Lewin and Co. independent accountants, whose report has been incorporated by
reference herein upon the authority of said firm as experts in auditing and
accounting.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
An itemized statement of the estimated amount of the expenses, other than
underwriting discounts and commissions, incurred and to be incurred in
connection with the distribution of the shares registered pursuant to this
registration statement follows. Except for the Securities and Exchange
Commission registration fee, all amounts are estimates.
Securities and Exchange Commission registration fee ... $ 2,319.33
Printing and engraving expenses ....................... $ 1,000
Accounting fees and expenses .......................... $25,000
Legal fees and expenses ............................... $15,000
Miscellaneous ......................................... $12,500
Total ........................................... $55,819.33
Item 15. Indemnification of Directors and Officers
Reference is made to Section 102(b)(7) of the Delaware General Corporation
Law (the "DGCL"), which permits a corporation in its certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for violations of the director's fiduciary duty, except
(i) for any breach of the director's fiduciary duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the DGCL (providing for liability of directors for
unlawful payment of dividends or unlawful stock purchases or redemptions), or
(iv) for any transaction from which the director derived an improper personal
benefit. The Registrant's Restated Certificate of Incorporation, as amended,
contains provisions permitted by Section 102 (b)(7) of the DGCL.
Reference is made to Section 145 of the DGCL which provides that a
corporation may indemnify any persons, including directors and officers, who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person is or was serving at the
request of such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such director, officer, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, with respect to any criminal actions or
proceedings, had no reasonable cause to believe that his conduct was unlawful. A
Delaware corporation may indemnify directors and/or officers in an action or
suit by or in the right of the corporation under the same conditions, except
that no indemnification is permitted without judicial approval if the director
or officer is adjudged to be liable to the corporation. Where a director or
officer is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him or her against the
expenses which such director or officer actually and reasonably incurred.
The Registrant's Restated Certificate of Incorporation, as amended,
provides indemnification of directors and officers of the Registrant to the
fullest extent permitted by the DGCL.
Pursuant to the registration rights agreement entered into with the
Registrant, the selling stockholders have agreed to indemnify directors and
officers of the Registrant against certain liabilities, including liabilities
under the Securities Act.
The Registrant maintains liability insurance for each director and officer
for certain losses arising from claims or charges made against them while acting
in their capacities as directors or officers of the Registrant.
Item 16. Exhibits
(a) List of Exhibits.
*4.01 -- Purchase Agreement dated as of December 17, 1999 between
insci-statements.com, corp. and The Tail Wind Fund, Ltd.
*4.02 -- Registration Rights Agreement dated as of December 17, 1999 between
insci-statements.com, corp. and The Tail Wind Fund, Ltd.
*4.03 -- Warrant Agreement dated as of December 17, 1999 between
insci-statements.com, corp. and The Tail Wind Fund, Ltd.
*4.04 Advisor Warrant Agreement, Warrant Certificate and Registration
Rights Agreement between Auerbach, Pollak & Richardson, Inc. and
INSCI Corp. now known as insci-statements.com, corp.
*5.01 -- Opinion of Baratta & Goldstein.
+23.01 -- Consent of Pannell Kerr Forster PC.
+23.02 -- Consent of Goldstein, Lewin & Co.
23.03 -- Consent of Baratta & Goldstein (included in Exhibit 5.01)
*24.01 -- Powers of Attorney of certain officers and directors of
insci-statements.com, corp. (included on the signature pages
hereof).
+ filed herewith
* previously filed
Item 17. Undertakings
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. Notwithstanding the foregoing,
any increase or decrease in volume of shares offered (if the total
dollar value of shares offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
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 if the information required to be included in a
post-effective amendment by paragraphs (1)(i) and (ii) above is contained in
periodic reports filed with or furnished to the SEC by the registrant pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934, paragraphs (1)(i)
and (ii) shall not apply.
(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 shares offered therein,
and the offering of such shares 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 shares being registered which remain unsold at the
termination of the offering.
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 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement relating to shares offered therein, and the
offering of such shares at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
insci-statements.com, corp. pursuant to the foregoing provisions, or
otherwise, insci-statements.com, corp. 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 insci-statement.com,
corp. of expenses incurred or paid by a director, officer or controlling
person of insci-statements.com, corp. in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the shares being registered,
insci-statements.com, corp. will, unless in opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
insci-statements.com, corp. 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 Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Westborough, Commonwealth of
Massachusetts, on this 24th day of February, 2000.
insci-statements.com, corp.
By: /s/ E. Ted. Prince
-----------------------
Name: E. Ted. Prince
Title: Chief Executive Officer and Chairman
of the Board
POWER OF ATTORNEY
The registrant and each person whose signature appears below constitutes
and appoints E. Ted Prince, Roger Kuhn and any agent for service named in this
Registration Statement and each of them, his, true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and his
place and stead, in any and all capacities, to sign and file (i) any and all
amendments (including post-effective amendments) to this Registration Statement,
with all exhibits thereto, and other documents in connection therewith, and (ii)
a registration statement, and any and all amendments thereto, relating to the
offering covered hereby filed pursuant to Rule 462(b) under the Securities Act
of 1933, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their 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 IN THE
CAPACITIES AND ON THE DATES INDICATED.
Signature Title Date
--------- ----- ----
/s/ E. Ted. Prince
- ---------------------- Chief Executive Officer January 19, 2000
E. Ted Prince (Principal Executive
Officer); Chairman of the
Board.
/s/ Roger Kuhn
- ---------------------- Vice President and Chief January 19, 2000
Roger Kuhn Financial Officer (Principal
Financial Officer and
Principal Accounting Officer)
/s/ Thomas Farkas
- ---------------------- Director January 19, 2000
Thomas Farkas
/s/ Robert Little
- ---------------------- Director January 19, 2000
Robert Little
/s/ John A. Lopiano
- ---------------------- Director January 19, 2000
John A. Lopiano
/s/ Francis X. Murphy
- ---------------------- Director January 19, 2000
Francis X. Murphy
/s/ Leonard Simon
- ---------------------- Director January 19, 2000
Leonard Simon
<PAGE>
Exhibit 23.01
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 1 to the
registration statement on Form S-3 of insci-statements.com, corp. of (1) our
report dated December 10, 1999 relating to the supplemental financial statements
of insci-statements.com, corp as of March 31, 1999 and for each of the two years
in the period ended March 31, 1999 which report appears in Form 8-K of
insci-statements.com, corp. filed on January 12, 2000 and (2) our report dated
May 18, 1999, relating to the financial statements of insci-statements.com,
corp. (formerly INSCI Corp.) as of March 31, 1999 and for each of the two years
ended March 31, 1999 which appears in the Company's fiscal 1999 Form 10KSB
filing.
We also consent to the reference made to our firm under the caption Experts in
the prospectus.
Pannell Kerr Forster PC
New York, NY
February 24, 2000
<PAGE>
Exhibit 23.02
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of our report dated October 24, 1999, relating to the consolidated
statements of The Internet Broadcasting Company, Inc., which appears on page F3
of Form 8K of insci-statements.com, corp. dated January 12, 2000, and to the
reference to our Firm under the caption "Experts" in the Prospectus.
GOLDSTEIN LEWIN & CO.
Boca Raton, Florida
February 23, 2000
