<PAGE>
As filed with the Securities and Exchange Commission on August 30, 2000
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
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 Industrial Classification Identification No.)
incorporation or Code Number)
organization)
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)
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Copies of Communications to:
Joseph A. Baratta, Esq.
Baratta & Goldstein
597 Fifth Avenue, New York, New York 10017
(212) 750-9700
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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 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 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. |_|
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Maximum Maximum
Each Class of Offering Aggregate Amount of
Securities to Amount to be Price Per Offering Registration
be Registered Registered(1)(3) Share(2) Price(2) Fee
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Common Stock,
par value 218,027 $3.08 $671,523.00 $177.29
$.01 per share
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Common Stock,
par value 402,268 $4.60(4) $1,850,432.80 $488.52
$.01 per share
issuable upon
exercise of
options and
warrants
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(1) Includes 218,027 shares being offered for the accounts of selling
stockholders who acquired such shares in private transactions, 325,000
shares of common stock issuable upon exercise of outstanding options and
77,268 shares of common stock issuable upon exercise of outstanding
warrants. Also includes an indeterminate number of shares that selling
stockholders may acquire as a result of a stock-split, stock dividend or
similar transaction involving the common stock.
(2) Estimated pursuant to Rule 457(c) under the Securities Act of 1933, as
amended, based upon the average high and low trading price of the common
stock reported in the Nasdaq Small Cap Market on August 29, 2000 in
accordance with Rule 457(c) under the Securities Act of 1993, as amended.
(3) Pursuant to Rule 429 under the Securities Act, the prospectus contained in
this Registration Statement is a combined prospectus and also relates to up
to 2,039,970 unsold shares of common stock underlying certain stock options
and 3,500,000 shares of common stock previously reserved for acquisitions
which were registered under Registration No. 333-22187 previously filed with
the Securities and Exchange Commission on Form S-1 and declared effective.
This Registration Statement constitutes post-effective Amendment No. 2 to
Registration Statement No. 333-22187 and such post-effective amendment shall
hereafter become effective concurrently with the effectiveness of this
Registration Statement and in accordance with Section 8(c) of the Securities
Act. Upon the effectiveness of such post-effective amendment, this
Registration Statement will relate to an aggregate of 6,160,265 shares of
common stock. The filing fee associated with the 5,539,970 unsold shares of
common stock under Registration Statement No. 333-22187 included herein was
$4,842.74, and was paid at the time of filing of that Registration
Statement.
(4) Represents the exercise price of options and warrants pursuant to
Rule 457(g).
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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 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>
PRELIMINARY PROSPECTUS DATED August 30, 2000
SUBJECT TO COMPLETION
insci-statements.com, corp.
6,160,265 SHARES
OF
COMMON STOCK
This prospectus relates to the offering for resale of up to 6,160,265
shares of our common stock which are held by some of our current stockholders
and may be offered and sold from time to time by the selling stockholders.
Included in these shares are 1,000,000 shares of common stock that we issued in
connection with our purchase of Internet Broadcasting Company, Inc. and
2,500,000 shares we issued in our acquisition of Lognet 2000, Inc. Of the
2,500,000 shares of common stock we issued in our acquisition of Lognet 2000,
2,374,286 shares are subject to an agreement whereby the selling stockholders
have agreed not to sell their shares in a public sale or an exchange until May
24, 2001. These transactions were exempt from the registration requirements of
the Securities Act of 1933. Additionally, included in this prospectus are 77,268
shares of common stock issuable upon exercise of outstanding warrants and
2,364,970 shares of common stock issuable upon the exercise of stock options. Of
the 2,364,970 shares of our common stock which underlie stock options, 2,039,970
option shares were previously included in our effective Form S-1 Registration
Statement (Reg. No. 333-22187). Also included in our prior effective S-1
Registration Statement were 4,000,000 shares reserved by us for acquisitions.
After our issuance of 1,000,000 shares in our acquisition of Internet
Broadcasting and 2,500,000 shares in our acquisition of Lognet 2000, we have
500,000 registered shares remaining for acquisitions. We intend to de-register,
the remaining 500,000 shares of our common stock previously reserved for
acquisitions which were also included in our S-1.
The prices at which such stockholders may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions. We have agreed to pay the cost associated with this registration
and will not receive any of the proceeds from the sale of the shares. However,
in the event of the exercise of options and warrants, we will receive proceeds
from the exercise of approximately $5,618,000 if all the options and warrants
relating to the shares offered hereby are exercised. There can be no assurance
that any of the options and warrants will be exercised. In the event that any or
all of the options and warrants are exercised, we intend to use the proceeds we
receive for general corporate purposes.
Our common stock is listed on the Nasdaq SmallCap Market under the
symbol "INSI" and on The Boston Stock Exchange under the symbol "INSCI". On
August 29, 2000, the last reported sale price of our common stock on the Nasdaq
SmallCap Market was $3.0625 per share.
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED
UNDER THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 3.
----------------------------
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 August 30, 2000.
<PAGE>
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY...................................................... 1
THE COMPANY............................................................. 1
THE OFFERING............................................................ 2
FORWARD-LOOKING STATEMENTS.............................................. 2
RISK FACTORS............................................................ 3
USE OF PROCEEDS......................................................... 7
DIVIDEND POLICY......................................................... 7
DESCRIPTION OF CAPITAL STOCK............................................ 8
SELLING STOCKHOLDERS.................................................... 9
PLAN OF DISTRIBUTION.................................................... 12
WHERE YOU CAN FIND MORE INFORMATION..................................... 13
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE......................... 14
LEGAL MATTERS........................................................... 14
EXPERTS................................................................. 14
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This prospectus includes or incorporates by reference various trademarks and
service marks owned or licensed by insci-statements.com, corp.
<PAGE>
PROSPECTUS SUMMARY
Because this is a summary, it does not contain all the information
about us that may be important to you. You should read the more detailed
information and the financial statements and related notes that are incorporated
by reference in this prospectus.
THE COMPANY
We provide Internet-based and on-site enterprise software and services
solutions for electronic statement presentment (ESP), digital document storage,
workflow and electronic commerce. Our solutions incorporate enhanced Internet
and electronic commerce capabilities for managing and securely distributing
large volumes of high-value business transaction documents and reports in
on-site enterprise systems environments or via our wholly-owned
business-to-business Internet Application Service Provider (ASP),
InfiniteSpace.com, Corp.
We have recently changed the focus of our business and have implemented
several key strategic business initiatives. We believe that the investments made
in these areas are vital to attaining sustainable long-term competitive
advantages. The initiatives we have implemented include:
o Repositioning as a leader in the ESP market.
o Launching a new, wholly-owned subsidiary, InfiniteSpace.com, Corp., to offer
ESP services on an outsourced basis as an application service provider.
o Acquiring Internet Broadcasting Corporation, Inc., a technology leader in the
secure distribution of electronic documents.
o Expanding international sales especially in Latin America and Asia.
o Acquiring Lognet 2000, Inc. whose technology in the PC-to-host and print
connectivity industries, and the business of electronic bill presentment and
payment (EBPP) will compliment our current technology.
To further our new business plan, we have separated our two principal
businesses, both operationally and financially, and established our
business-to-business electronic statement presentment application service
provider, InfiniteSpace.com, Corp., as a separate wholly-owned subsidiary. The
initial focus of InfiniteSpace is providing ESP services to the financial
services industry, an area where we currently do approximately 60% of our
business. InfiniteSpace also intends to introduce a range of innovative new
ASP-based products for the rapidly emerging electronic statement/bill
presentment market to service the business-to-business needs of other
industries.
Our software products are designed to provide customers with the
ability to electronically store and manage high volumes of transaction documents
and reports, and to rapidly access these documents for reference, printing or
delivery by the Internet or other electronic means. The use of our software
products typically allows the customer to increase productivity, reduce or
eliminate document warehousing and handling costs, increase the level of
customer service, generate additional revenue sources or gain other competitive
advantages. Our products are based on open client/server architecture capable of
integrating with most computing platforms, data output formats, hardware storage
devices and complementary e-commerce, electronic bill presentment, and on-line
retailing technologies.
Our products typically are found in those areas of an organization
where the electronic availability of customer-facing documents, source documents
and reports is necessary to support the business function. Customer-facing
documents vary by industry but generally include invoices, statements, purchase
orders, policies, and transaction confirmation documents that are produced in
high volume. Source documents may include new account applications, signature
cards, purchase orders, signed bills of lading, insurance claim forms and other
similar documents. These types of documents require electronic indexing and
storage to enable rapid retrieval and viewing for customer support functions,
for adherence to regulatory requirements, for data analysis and report
generation, for inclusion in Enterprise Resource Planning (ERP) implementations,
and for e-commerce applications.
Electronic commerce is rapidly becoming a critical business
requirement. New capabilities such as electronic bill presentment, customer
access to statements, bills, and integrated invoicing and marketing extend the
value of conventional printing and distribution of customer-facing documents.
Our software and ASP products provide the core digital document repository and
Web-based access and delivery capabilities that are required for electronic
commerce applications.
We also offer numerous services including consulting, systems
integration, software installation, training, software maintenance and technical
support. Our advanced systems integration services group works with customers to
integrate technologies into their businesses to more effectively leverage
current and future investments in technology.
INFINITESPACE.COM
Last fall, we announced plans to offer our ESP+ products to customers
wishing to use them on an outsourced basis. We believe this ASP delivery method
has great potential for the small to medium enterprises that do not have the
resources or desire to purchase, install and operate our ESP+ software.
InfiniteSpace.com was formed by us to concentrate exclusively on the ASP
business.
InfiniteSpace's Internet-based services are designed to provide a rapid
and cost-effective means for financial services companies and health-care
providers and other businesses to outsource comprehensive Web-based document
management and distribution capabilities. Benefits include significantly reduced
cost of ownership, faster time to market with products and services, minimal
infrastructure support requirements, and improved customer service. Our service
employs sophisticated security, scalability to accommodate high-volume usage,
capabilities to ensure uninterrupted operations, and open system architecture
for easy integration with a customer's existing computing, printing, database,
and portal resources.
We intend to sell our products and services through new distribution
partnerships with back office recordkeepers, and print/mail outsourcing
providers as well as by leveraging existing reseller relationships.
InfiniteSpace charges customers for services on the basis of transactions
processed creating a highly valuable recurring revenue stream. Providing
services on a per-transaction basis allows resellers and customers to enter the
market without having to make large up-front investments in technology and
personnel.
THE OFFERING
The following is a brief summary of the terms of this offering.
Common Stock Offered ... 6,160,265* 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.
* The 6,160,265 shares of common stock listed above assumes the exercise of
2,364,970 stock options and 77,268 warrant shares issued to certain selling
stockholders.
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 is no
guarantee we will ever be profitable. For the fiscal year ended March 31, 2000,
we had a net loss of approximately $9,466,000 or $1.11 per common share. For the
fiscal years ended March 31, 1999 and 1998, we had net losses of approximately
$1,603,000 or $0.32 per share and approximately $4,768,000 or $0.82 per common
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 WILL NEED ADDITIONAL WORKING CAPITAL TO
CONTINUE OUR CURRENT BUSINESS OPERATIONS.
We believe that we will need additional financing to operate our
business and for future product development. As of June 30, 2000, we had
$2,950,000 of cash and working deficit of $78,000 in comparison to $822,000 of
cash and working capital of $137,000 as of June 30, 1999. Our prior bank line
with Silicon Valley Bank expired June 25, 2000. We are currently negotiating to
renew our bank line for working capital and equipment financing with Silicon
Valley Bank. We expect to have a new credit line in place within the next
forty-five days. Additionally, we are also in discussions to secure additional
sources of capital, such as additional equity offerings, which are necessary to
fund our currently proposed activities for future periods. There can be no
assurances, however, that we will be successful in obtaining funds from any such
sources. If additional funds are raised by issuance of equity securities,
dilution to our stockholders may result. If additional funds are not available,
we will be required to modify execution of our business plan.
WE HAVE AN EXISTING AGREEMENT WITH PRUDENTIAL SECURITIES INC, THAT MAY LIMIT OUR
ABILITY TO RAISE ADDITIONAL CAPITAL TO CONTINUE OUR BUSINESS OPERATIONS.
In January 2000, we entered into an investment advising and consulting
agreement with Prudential Securities Inc. Other than through bank financing,
this agreement may restrict our ability to raise additional working capital from
any other source without the payment of fees to Prudential Securities.
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
our business. Through September 17, 2002, Tail Wind 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. The
issuance of additional stock or warrants by us will result in a lower stock
ownership percentage by our existing stockholders.
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 which 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, or that we will
have sufficient capital and cash available to achieve our new business model.
OUR RECENT ACQUISITION OF LOGNET 2000, INC. AND OUR PRIOR ACQUISITION OF
INTERNET BROADCASTING COMPANY, INC., BOTH OF WHICH WERE DEVELOPMENT STAGE
COMPANIES THAT DID NOT HAVE SIGNIFICANT REVENUES, HAVE INCREASED OUR NET CASH
OUTLAYS.
We purchased all of the stock of Lognet 2000, Inc. on May 24, 2000, in
exchange for 2,500,000 shares of our common stock. The shares exchanged with the
former Lognet 2000 stockholders are included in this registration statement. We
believe that the products, technology and employees of Lognet 2000 will
complement our new web-based business model. Lognet 2000 has sustained
substantial cash losses since the start of its business and continues to be a
significant cash outlay to us. We agreed to use our best efforts to file a
registration statement by September 15, 2000 for the 2,500,000 shares of our
common stock exchanged in the purchase of Lognet 2000.
Additionally, we purchased all of the stock of Internet Broadcasting 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 contribute to our
losses and operating expenses. As a result, we have decided to restructure our
Internet development program and reduce a portion of its operating expenses. We
cannot be sure that the technology used by Internet Broadcasting will be
successful in achieving future profits. Additionally, we agreed to file a
registration statement for the 1,000,000 shares of our common stock exchanged in
the acquisition of Internet Broadcasting before June 10, 2000. We have not filed
a registration statement for the 1,000,000 shares prior to June 10, 2000,
however the shares are included in this registration statement.
Although we believe that the recent acquisitions fit within our new
web-based business plan, the new business combinations create risks such as:
o difficulty assimilating the operations, technology and personnel of the
combined companies,
o disruption of our ongoing business,
o problems retaining key technical and managerial personnel,
o additional operating losses and expenses of acquired businesses,
o impairment of relationships of existing employees, customers and business
partners, and
o increased amounts of cash for payment of operating expenses.
OUR WHOLLY-OWNED SUBSIDIARY INFINITESPACE.COM, CORP. HAS SUSTAINED LOSSES SINCE
ITS INCEPTION.
Following our acquisition of Internet Broadcasting we formed a
wholly-owned subsidiary InfiniteSpace.com, Corp. in January 2000.
InfiniteSpace.com has had losses of approximately $600,000 per month since its
formation. InfiniteSpace is characterized as a development stage company and we
expect operating losses to continue for the foreseeable future as we continue to
incur large operating costs and capital expenditures. As a result, we will need
to generate significant additional revenues to achieve and maintain
profitability. The future of InfiniteSpace is dependent on our being able to
raise additional equity funding or substantial bank financing to continue with
the InfiniteSpace business plan. If we are unable to do so, we will be required
to consider other options which may not result in obtaining maximum stockholder
value of the InfiniteSpace technology.
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 ISSUANCE AND REGISTRATION OF ADDITIONAL SHARES OF OUR COMMON STOCK IN OUR
RECENT ACQUISITIONS OF LOGNET 2000 AND INTERNET BROADCASTING ALONG WITH
CONVERSION OF PREFERRED SHARES AND EXERCISE OF OPTIONS AND WARRANTS MAY LOWER
THE TRADING PRICE OF OUR COMMON STOCK.
In our recent acquisitions of Lognet 2000 and Internet Broadcasting, we
issued a total of 3,500,000 shares of our common stock. Additionally, our
continued payment of dividends on preferred stock, which is convertible to our
common stock, and outstanding options and warrants may have a negative 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 SHAREHOLDER 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. 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. 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, this
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, Fuji-Xerox,
Moore North American Corporation, Moore Emerging Technologies, PFPC; 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 DEPEND UPON CERTAIN KEY EMPLOYEES TO DEVELOP OUR PRODUCTS.
We do not have the financial resources to compete with larger more
established companies to attract and retain certain key technological employees.
The loss of current technological employees or our inability to recruit and
retain employees with certain key technology skills will have an adverse effect
on product development and our business.
WE MAY 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 Over the Counter 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 March 31, 2000, our directors and officers beneficially owned, as
defined by the SEC, approximately 4,431,531 shares of common stock, representing
29% 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 by-laws and the Delaware General Corporation Law contain provisions
including a shareholders rights plan 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
The proceeds from the sale of the common stock offered pursuant to this
prospectus are solely for the account of the selling stockholders. We will not
receive any proceeds from the sale of the shares by the selling stockholders. We
will receive, however, proceeds from the exercise of options and warrants of
approximately $5,618,000 if all the options and warrants relating to the shares
offered hereby are exercised. There can be no assurance that such options and
warrants will be exercised. In the event that any or all of the options and
warrants are exercised, the proceeds will be used for general corporate
purposes.
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 may be
restricted in paying cash dividends by the terms of our proposed 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
June 30, 2000 on our 8% convertible redeemable preferred stock as follows:
Stock Dividend Paid
-------------------
8% Convertible Redeemable Preferred Stock $1,864,000
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
We are authorized to issue 40,000,000 shares of common stock, $.01 par
value. As of August 11, 2000, there were 15,837,014 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. Other than our recently adopted
Shareholder's Rights Plan, our common stock has no pre-emptive or other
subscription 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
We are also authorized to issue up to 10,000,000 shares of preferred
stock having a par value of $.01 per share.
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 stock.
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 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.
Upon any voluntary or involuntary liquidation, dissolution or winding
up, preferred shareholders shall have priority in payment of assets of our
company.
8% CONVERTIBLE REDEEMABLE PREFERRED STOCK
As of August 11, 2000, 665,114 shares of our 8% convertible redeemable
preferred stock were outstanding. 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 the number of shares of common stock
beneficially owned by each of the selling stockholders as of the date hereof,
the number of shares owned by them covered by this prospectus and the amount and
percentage of shares to be owned by each selling stockholder after the sale of
all the shares offered by this prospectus. The table also sets forth the number
of shares of common stock certain selling stockholders will receive upon
exercise of options and warrants, as well as any material relationship with
insci or any of insci's affiliates within the past three years other than a
result of the ownership of our common stock. The information included below is
based on information provided by the selling stockholders. Because the selling
stockholders may offer some or all of their shares, no definitive estimate as to
the number of shares that will be held by the selling stockholders after such
offering can be provided and the following table has been prepared on the
assumption that all shares of common stock offered hereby will be sold.
<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
SHARES INCLUDED IN S-3 REGISTRATION
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Number of
Shares which Shares which Shares of
may be may be Common
Shares acquired acquired Stock Sold Shares
Beneficially upon upon Pursuant to Owned After Percentage
Owned prior Shares exercise of exercise of this Offering(2) of Shares
Names to Offering(1) Offered Options Warrants Prospectus Owned
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Adams, Harkness & Hill(3) 20,000 20,000 20,000 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Albert Elbaz(4) 95,171 95,171 95,171 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Alex Vainberg(4) 4,865 4,865 4,865 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Alexander Poltorak(4) 251,907 251,907 251,907 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Alon Shnaper(4) 3,842 3,842 3,842 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Amos Simantov(4) 49,744 49,744 49,744 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Andre Daniel-Dreyfus(5) 13,334 13,334 13,334 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Andrew Simon(6) 957 957 957 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Anna Rapoport(4) 1,441 1,441 1,441 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Antonio & Elisa Verde Jt. Ten.(6) 536 536 536 0 -
-----------------------------------------------------------------------------------------------------------------------------------
ASI Gates Computers and 1,268 1,268 1,268 0 -
Communication Products, Ltd. (4)
-----------------------------------------------------------------------------------------------------------------------------------
Auerbach, Pollak & Richardson, 50,000 50,000 50,000 0 -
Inc.(8)
-----------------------------------------------------------------------------------------------------------------------------------
Aviram Shubeli(4) 1,479 1,479 1,479 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Benjamin Bension(4) 1,037 1,037 1,037 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Boris Rakhlin(4) 2,426 2,426 2,426 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Bradley M. Levine(6),(7) 93,931 93,931 93,931 0 -
-----------------------------------------------------------------------------------------------------------------------------------
CDP Communications Inc.(9) 190,000 190,000 190,000 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Charlie Pearlman(6) 7,157 7,157 7,157 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Chris Pernicano(6) 9,842 9,842 9,842 0 -
-----------------------------------------------------------------------------------------------------------------------------------
CIP Capital, L.P.(4) 420,079 420,079 420,079 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Cort A. Neimark(6) 29,369 29,369 29,369 0 -
-----------------------------------------------------------------------------------------------------------------------------------
D. Weckstein & Co., Inc.(10) 25,000 25,000 25,000 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Daniel Agababayev(4) 1,860 1,860 1,860 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Dominick & Dominick LLC(11) 200,000 200,000 200,000 0 -
-----------------------------------------------------------------------------------------------------------------------------------
E. Ted Prince(12) 1,531,787 1,200,000 1,200,000 331,787 .02%
-----------------------------------------------------------------------------------------------------------------------------------
Edmund Allen Tubbs(6) 30,063 30,063 30,063 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Einar P. & Joyce L. Robsham(6) 110,049 110,049 110,049 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Emerging Ventures 350,000 350,000 350,000 0 -
Technologies, Inc.(13)
-----------------------------------------------------------------------------------------------------------------------------------
Francis X. Murphy (13),(14) 186,666 120,000 120,000 66,666 .01%
-----------------------------------------------------------------------------------------------------------------------------------
George Calhoun(4) 25,674 25,674 25,674 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Gerry Oliveretti(6) 1,789 1,789 1,789 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Gershon Cohen(4) 3,905 3,905 3,905 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Gnome Partners, LLC(4) 499,338 499,338 499,338 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Harry V. Keefe, Jr.(6) 152,052 152,052 152,052 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Hobel Florido(6) 537 537 537 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Hugo & Lorraine Florido Jt. 537 537 537 0 -
Ten.(6)
-----------------------------------------------------------------------------------------------------------------------------------
Itamar Ban(4) 346 346 346 0 -
-----------------------------------------------------------------------------------------------------------------------------------
J. Michael Reisert Securities 25,000 25,000 25,000 0 -
Inc.(15)
-----------------------------------------------------------------------------------------------------------------------------------
James W. Dwyer(6) 21,469 21,469 21,469 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Jerry Sterner(6) 40,224 40,224 40,224 0 -
-----------------------------------------------------------------------------------------------------------------------------------
John Gillis(16) 45,636 45,636 45,636 0 -
-----------------------------------------------------------------------------------------------------------------------------------
John H. Biggs(6) 51,237 51,237 51,237 0 -
-----------------------------------------------------------------------------------------------------------------------------------
John O. Hoffman(6) 537 537 537 0 -
-----------------------------------------------------------------------------------------------------------------------------------
John W. & Sharon B. Tubbs Jt. 1,789 1,789 1,789 0 -
Ten.(6)
-----------------------------------------------------------------------------------------------------------------------------------
Jose Fermin(4) 240 240 240 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Kelly Byron(6) 25,914 25,914 25,914 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Kendrick Pierce & Company(3),(6) 9,120 1,852 7,268 9,120 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Kevin Schacket(6) 5,835 5,835 5,835 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Krishan Canekeratne(17) 106,000 106,000 106,000 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Larry F. VanDusseldorp, Sr.(6) 8,590 8,590 8,590 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Larry Gabriel(6) 63,043 63,043 63,043 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Leonard Gartner1(18) 100,000 100,000 100,000 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Leonard Simon(6),(19) 162,470 162,470 162,470 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Leonard Weiner(4) 5,613 5,613 5,613 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Maria Kondracki(6) 15,207 15,207 15,207 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Martin Grinfeld(4) 23,764 23,764 23,764 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Mary Ann Pernicano(6) 1,789 1,789 1,789 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Maya Toledano(4) 1,680 1,680 1,680 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Michael P. Latterner(6) 10,769 10,769 10,769 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Michael Shwarts(4) 5,825 5,825 5,825 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Mitchell Klein(20) 5,000 5,000 5,000 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Myra Mahoney(6) 5,288 5,288 5,288 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Nicole Schacket(6) 5,835 5,835 5,835 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Raviv Shefet(4) 1,441 1,441 1,441 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Revital Galinsky(4) 2,401 2,401 2,401 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Richard Gerstner(21) 100,000 100,000 100,000 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Richard Stierwalt(6) 45,294 45,294 45,294 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Robert G. Isbell(6) 6,617 6,617 6,617 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Ron K. Bailey(6) 16,543 16,543 16,543 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Roxanne Beilly(6) 1,789 1,789 1,789 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Roy Gurion(6) 11,043 11,043 11,043 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Ruthy Saban(6) 178 178 178 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Selway Partners, LLC(4) 833,558 833,558 833,558 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Shay Assets Management, Inc.(6) 7,554 7,554 7,554 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Sherry Borushok(4) 13,621 13,621 13,621 0 -
-----------------------------------------------------------------------------------------------------------------------------------
SIT Investment Associates, 48,969 48,969 48,969 0 -
Inc.(6)
-----------------------------------------------------------------------------------------------------------------------------------
Stephan John Hoczak(6) 537 537 537 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Stephen J. MacQuarrie(6) 2,515 2,515 2,515 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Tammy Farabaugh(6) 894 894 894 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Tower Hill Capital Group, LLC(4) 14,696 14,696 14,696 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Tower Hill Securities, Inc.(4) 216,869 216,869 216,869 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Ute Egozi(4) 1,441 1,441 1,441 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Vitaly Sharinov(4) 2,401 2,401 2,401 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Xcel Associates, Inc.(22) 100,000 100,000 100,000 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Yael Gat(4) 1,680 1,680 1,680 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Yechiam Yemini(4) 5,613 5,613 5,613 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Yigal Goodman(4) 7,202 7,202 7,202 0 -
-----------------------------------------------------------------------------------------------------------------------------------
(1) Assumes all shares the selling stockholder has the right to obtain within 60 days of the date of this prospectus.
(2) Assumes the sale of all shares offered by this prospectus.
(3) Includes warrant shares issued in consideration for consulting services provided to insci. The warrants have an exercise price
of $4.13 per warrant share. The warrants expire December 9, 2002.
(4) Includes shares of common stock issued in connection with the acquisition of Lognet 2000, Inc. All shares issued in the
acquisition of Lognet 2000, except for 125,714 shares issued to Tower Hill Securities, Inc. are subject to a lock-up agreement
whereby the selling stockholders have agreed not to sell their shares in a public sale or exchange until May 24, 2001.
(5) Includes 13,334 stock option shares exercisable at $2.25 per share. The options expire November 9, 2001. Mr. Dreyfus is a
former director of insci.
(6) Includes shares of common stock issued in connection with the acquisition of Internet Broadcasting Company, Inc.
(7) Mr. Levine is a manager of business development for insci. Included in Mr. Levine's shares of common stock are 3,000 shares
issued in consideration for services provided to insci.
(8) Includes 50,000 warrant shares. The warrants have an exercise price of $5.63 per warrant share. The warrants expire January 14,
2004. The warrants contain a cashless exercise feature.
(9) Includes 190,000 shares of common stock issued in consideration for license rights granted to insci to use source codes of
32-bit version of CDP Communication, Inc. AFP/Metacode conversion and viewing software.
(10) Includes 25,000 vested stock option shares exercisable at $2.34 per option share. The options expire January 1, 2002.
(11) Includes 200,000 option shares exercisable at $5.00 per option share. The options expire on July 7, 2004.
(12) Includes 950,00 vested stock options exercisable at $1.66 per share. Also includes 250,000 vested stock options exercisable at
$2.00 per share. The options expire on August 25, 2005. Dr. Prince is the Chief Executive Officer and Chairman of the Board of
insci.
(13) Includes 242,201 stock option shares exercisable at $2.29 per share. Also includes 93,537 stock option shares exercisable at
$2.31 per share and 14,262 stock option shares exercisable at $5.09 per share. The options expire October 19, 2002. The
principal shareholder of Emerging Ventures Technologies, Inc. is Mr. Francis X. Murphy, a director of insci and a member of
the insci compensation committee.
(14) Includes 100,000 stock option shares exercisable at $1.44 per option share and 20,000 stock options exercisable at $2.25 per
option share. The options expire September 29, 2005 and October 7, 2002 respectively.
(15) Includes 25,000 shares of common stock issued in consideration for consulting services.
(16) Includes 45,636 stock option shares exercisable at $1.66 per option share. The options expire on March 31, 2001. Mr. Gillis is
a former director and officer of insci.
(17) Includes 106,000 stock option shares exercisable at $1.66 per option share. The options expire on September 30, 2000. Mr.
Canekeratne is a former officer of insci.
(18) Includes 100,000 stock option shares exercisable at $1.44 per option share. The options expire on June 18, 2001. Mr. Gartner
is a former director of insci.
(19) Mr. Simon is a director and member of the audit committee of insci.
(20) Includes 5,000 stock option shares exercisable at $2.25 per option share. The options expire on June 18, 2001. Mr. Klein is a
former director of insci.
(21) Includes 100,000 stock option shares exercisable at $2.25 per option share. The options expire on June 18, 2001. Mr. Gerstner
is a former director of insci.
(22) Includes 100,000 stock option shares exercisable at $3.94 per option share. The options expire July 1, 2002.
</TABLE>
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 certain registration rights agreements entered into in
connection with the registration of the shares by insci-statements.com, corp.,
and certain selling stockholders; certain selling stockholders and/or insci 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 shares to the public other than
commissions, fees and discounts of underwriters, brokers, dealers and agents.
Pursuant to certain registration agreements, 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 with respect to 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 report, 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, 2000.
(2) Our Quarterly Report on Form 10-QSB for the quarter ended
June 30, 2000.
(3) Our Current Report on Form 8-K/A filed with the SEC on
January 12, 2000
(4) Our Current Report on Form 8-K/A filed with the SEC on
August 7, 2000.
(5) Our Proxy Statements in connection with our 2000 Annual Meeting of
Shareowners to be held on September 26, 2000.
(6) The description of the common stock set forth in our registration
statement on Form S-1, which became effective on October 6, 1997.
(7) All other reports filed by us pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act since August 29, 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: 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 financial statement of insci-statements.com, corp. as of March 31,
2000 and for the year ended March 31, 2000 which is included in
insci-statements.com, corp. 8-K/A filed on August 7, 2000 which is incorporated
by reference herein, have been audited by Arthur Andersen LLP, independent
accountants, whose report has been incorporated by reference herein upon the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements of Lognet 2000, Inc. as of
December 31, 1999 and December 31, 1998 which are included in
insci-statements.com corp.'s 8-K/A filed on August 7, 2000, which is
incorporated by reference herein, have been audited by Freeman & Davis LLP
independent accountants whose report has been incorporated by reference herein
upon the authority of said firm as experts in auditing and accounting.
The financial statement of insci-statements.com, corp. for the year
ended March 31, 1999 which is included in the insci-statements.com, corp. Annual
Report on Form 10-KSB for the year ended March 31, 2000, which is incorporated
by reference herein, has 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. Pannell Kerr
Forster PC's report, insofar as it relates to the amounts included in the
consolidated financial statements for The Internet Broadcasting Company, Inc. is
based solely on the report of Goldstein Lewin and Co.
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 ... $ 5,009.04
Printing and engraving expenses ....................... $ 1,000.00
Accounting fees and expenses .......................... $25,000.00
Legal fees and expenses ............................... $25,000.00
Miscellaneous ......................................... $12,500.00
Total ........................................ $68,509.04
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, certain 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 Internet Broadcasting Company Inc. Share Exchange Agreement.
* 4.02 Registration Rights Agreement dated as of December 10, 1999
between insci-statements.com, corp. and.
Internet Broadcasting Company Inc. stockholders.
* 4.03 Lognet 2000, Inc. Share Exchange Agreement.
* 4.04 Registration Rights Agreement dated as of May 24, 2000
between insci-statements.com corp. and Lognet 2000, Inc.
stockholders.
/ 5.01 Opinion of Baratta & Goldstein.
+ 23.01 Consent of Arthur Andersen LLP,
+ 23.02 Consent of Pannell Kerr Forster PC.
+ 23.03 Consent of Freeman & Davis LLP
+ 23.04 Consent of Goldstein Lewin & Co.
23.05 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
/ to be filed by amendment
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 29th day of August, 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
re-substitution, 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
--------- ----- ----
Chief Executive Officer
(Principal Executive
/s/ E. Ted Prince Officer); Chairman of
--------------------- the Board. August 29, 2000
E. Ted Prince
Vice President and Chief
Financial Officer
(Principal Financial
/s/ Roger Kuhn Officer and Principal
--------------------- Accounting Officer) August 29, 2000
Roger Kuhn
/s/ Yaron I. Eitan
--------------------- Director August 29, 2000
Yaron I. Eitan
--------------------- Director August , 2000
Thomas Farkas
/s/ Robert Little
--------------------- Director August 28, 2000
Robert Little
/s/ John A. Lopiano
--------------------- Director August 28, 2000
John A. Lopiano
/s/ Francis X. Murphy
--------------------- Director August 28, 2000
Francis X. Murphy
/s/ Leonard Simon
--------------------- Director August 29, 2000
Leonard Simon
