RULE NO. 424(b)(3)
PROSPECTUS REGISTRATION NO. 333-60157
INMARK ENTERPRISES, INC.
508,750 Shares of Common Stock
This Prospectus is being used in connection with the offering from time
to time by certain holders (the "Selling Securityholders") of shares (the
"Shares") of common stock, par value $.001 per share (the "Common Stock"), of
Inmark Enterprises, Inc., a Delaware corporation ("Inmark"). The Selling
Securityholders may acquire 508,750 shares of Common Stock from Inmark pursuant
to the exercise of warrants.
The Shares may be sold from time to time to purchasers directly by the
Selling Securityholders. Alternatively, the Selling Securityholders may from
time to time offer the Shares through brokers, dealers or agents who may receive
compensation in the form of discounts, concessions or commissions from the
Selling Securityholders and/or the purchasers of the Shares for whom they may
act as agent. The Selling Securityholders and any such brokers, dealers or
agents who participate in the distribution of the Shares may be deemed to be
"underwriters", and any profits on the sale of the Shares by them and any
discounts, commissions or concessions received by any such brokers, dealers or
agents might be deemed to be underwriting discounts and commissions under the
Securities Act of 1933, as amended (the "Securities Act"). To the extent the
Selling Securityholders may be deemed to be underwriters, the Selling
Securityholders may be subject to certain statutory liabilities of the
Securities Act, including, but not limited to, Sections 11, 12 and 17 of the
Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). See "Plan of Distribution." The Selling
Securityholders and any other person participating in such distribution will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Regulation M, which may
limit the timing of purchases and sales of any of the Shares by the Selling
Securityholders and any other such person and market-making activities with
respect to the particular Shares being distributed. All of the foregoing may
affect the marketability of the Shares and the ability of any person or entity
to engage in market-making activities with respect to the Shares.
The Company will receive proceeds only from the exercise of the
warrants to purchase the Shares (the "Warrants"). Except for the sale of the
Shares upon the exercise of the Warrants, Inmark is not selling any of the
Shares and will not receive any proceeds from the sale of the Shares by the
Selling Securityholders. Inmark has agreed to pay all of the expenses incidental
to the registration, offering and sale of the Shares to the public other than
the cost of counsel to the Selling Securityholders and underwriting discounts
and commissions, except as prohibited by blue sky laws.
On July 28, 1998, the closing price for the Common Stock as quoted on
the National Association of Securities Dealers, Inc. Automated Quotation System
Nasdaq Small Cap Market, under the symbol "IMKE", was $8.625 per share.
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY MATTERS
DISCUSSED UNDER THE CAPTION "RISK FACTORS" ON PAGE 2.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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No dealer, salesman or any other person has been authorized to give any
information or to make any representation other than those contained in this
Prospectus, and, if given or made, such information or representation must not
be relied upon as having been authorized by Inmark. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create any
implication that there has been no change in the affairs of Inmark since the
date hereof.
This Prospectus shall not constitute an offer to sell or a solicitation
of an offer to buy nor shall there be any sale of these securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction.
The date of this Prospectus is August 5, 1998.
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AVAILABLE INFORMATION
Inmark is subject to the informational requirements of the Exchange Act
and, in accordance therewith, files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy and information statements and other information can be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, its Midwest Regional Office, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and at its
Northeast Regional Office, 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such material can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Such material can also be inspected at the Web site of the
Commission located at http://www.sec.gov. The Common Stock trades on the Nasdaq
SmallCap Market under the symbol "IMKE". Reports, proxy and information
statements, and other information concerning Inmark can also be inspected at the
Nasdaq SmallCap Market at 1735 K Street, N.W., Washington, D.C.
20006-1500.
Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete, and reference is made
to the copy of such contract or other document filed as an exhibit to this
Registration Statement of which this Prospectus forms a part, each such
statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or information have been filed by Inmark with
the Commission and are incorporated herein by reference:
Inmark's Annual Report on Form 10-K for the fiscal year ended March 31,
1998.
The portions of the Proxy Statement for the Annual Meeting of
Stockholders of Inmark to be held on September 15, 1998 that have
been incorporated by reference into Inmark's Annual Report on Form
10-K for the fiscal year ended March 31, 1998.
Inmark's Current Report on Form 8-K filed with the Commission on April
13, 1998.
Inmark's Current Report on Form 8-K/A filed with the
Commission on June 8, 1998. The description of the capital stock
contained in Inmark's registration statements on Form 8-A
under the Exchange Act, filed June 10, 1992 (File No. 000-20394).
All documents subsequently filed by Inmark with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering covered by this
Prospectus will be deemed incorporated by reference into this Prospectus and to
be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein modifies or supersedes such statement. Any statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
Inmark hereby undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon the written or oral request of
such person to Inmark Enterprises, Inc., 415 Northern Boulevard, Great Neck, New
York 11021 (Telephone (516) 622-2800), Attention: Secretary, a copy of any or
all of the documents referred to above (other than exhibits to such documents)
which have been incorporated by reference in this Prospectus.
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FORWARD LOOKING STATEMENTS
This Prospectus contains or incorporates by reference forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act that are based on beliefs of the Company's management as
well as assumptions made by and information currently available to the Company's
management. When used in this Prospectus, the words "estimate," "project,"
"believe," "anticipate," "intend," "expect," "plan," "predict," "may," "should,"
"will," the negative thereof or other variations thereon or comparable
terminology are intended to identify forward-looking statements. Such statements
reflect the current views of the Company with respect to future events based on
currently available information and are subject to risks and uncertainties that
could cause actual results to differ materially from those contemplated in those
forward-looking statements. Factors that could cause actual results to differ
materially from the Company's expectations are set forth below under "Risk
Factors", including but not limited to "Dependence on Key Personnel,"
"Competition," "Customers," "Expansion Risk and Risks Associated with
Acquisitions," "Outstanding Indebtedness; Security Interest," "Control by
Executive Officers and Directors," "Shares Eligible for Future Sale," and "Lack
of Dividend History." Other factors may be described from time to time in the
Company's public filings with the Commission, news releases and other
communications. The forward-looking statements contained in this Prospectus
speak only as of the date hereof. The Company does not undertake any obligation
to release publicly any revisions to these forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
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THE COMPANY
Inmark Enterprises, Inc. ("Inmark"), together with its wholly-owned
subsidiaries, Inmark Services, Inc. ("Services"), Optimum Group, Inc.
("Optimum") and North American Holding Corp. (collectively, the "Company"), is a
full service marketing, sales promotion and new age communications organization
which designs, develops and implements customized, national, regional and local
consumer and trade promotion programs principally for Fortune 500 consumer
product manufacturers. The Company's promotional programs are designed to
enhance the value of its clients' budgeted expenditures and achieve, in an
objectively measurable way, its clients' specific marketing and promotional
objectives. The Company's programs in the industry are commonly referred to as
"account specific," as they may target the participation and cooperation of a
specific retail chain or groups of retailers or other sources of distribution to
attain results in the form of increased in-store product displays, related
consumer purchases and enhanced product brand name recognition. In addition to
the traditional marketing and sales promotional services, the Company's services
and programs include new media services consisting of Internet web site
activities, interactive computerization and animation and video production,
thereby affording clients a one-stop shop resource for strategic planning,
creative development, production and implementation.
The Company was initially formed under the laws of the State of
Delaware in March 1992 as Health Image Media, Inc. Its principal offices are
located at 415 Northern Boulevard, Great Neck, New York 11021, and its telephone
number is (516) 622-2800.
The Company began to engage in its current operations on September 29,
1995 upon consummation of its merger transaction (the "Merger") as a result of
which Inmark Services, Inc., a New York corporation, became a wholly-owned
subsidiary of the Company and the management of Inmark Services, Inc. became the
executive management of the Company. Previously, the Company had been engaged in
unrelated activities which were discontinued in June 1993.
On March 31, 1998, Inmark consummated the acquisition (the "Optimum
Acquisition") of the assets of OG Holding Corporation (formerly known as Optimum
Group, Inc.) through its wholly-owned subsidiary Optimum.
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RISK FACTORS
Prospective investors should consider carefully the following factors
relating to the business of Inmark and this offering, in addition to other
information set forth elsewhere in this Prospectus and in Inmark's Annual Report
on Form 10-K and otherwise incorporated herein by reference, before purchasing
the Shares offered hereby.
Dependence on Key Personnel. The Company's business is managed by a
relatively small number of key management and operating personnel, the loss of
certain of whom could have a material adverse impact on the Company's business.
The Company believes that its future success will depend in large part on its
continued ability to attract and retain highly skilled and qualified personnel.
Each of the Company's key executives is a party to an employment agreement that
expires in either 2001 or 2002 and thereafter renews for an additional term of
one year unless either party thereto elects to terminate the agreement upon at
least 60 days notice prior to the expiration of the then current term.
Competition. The market for promotional services is highly competitive,
with hundreds of companies claiming to provide various services in the promotion
industry. In general, the Company's competition is derived from two basic groups
(which market their services to consumer product manufacturers): (a) other full
service promotion agencies and (b) companies which specialize in one specific
aspect or niche of a general promotional program. Other full service promotion
agencies may be a part of or affiliated with larger general advertising agencies
such as the Cato Johnson relationship with Young & Rubicam and J. Brown/LMC with
Grey Advertising, which have greater financial and marketing resources available
than the Company. Niche competitors include Don Jagoda, Inc., which specializes
in sweepstakes; Act Media, Inc., a subsidiary of Heritage Media, Inc., which
specializes in a broad range of in-store programs; and Catalina Marketing, Inc.,
which specializes in cash register couponing programs. Certain of these niche
companies may have greater financial and marketing resources than those
available to the Company. The Company competes on the basis of the quality and
the degree of comprehensive service which it provides to its clients. There can
be no assurance that the Company will be able to continue to compete
successfully with existing or future industry competitors.
Customers. The Company's principal clients are packaged goods and other
consumer product manufacturers, generally among the Fortune 500, which are
actively engaged in promoting their products both to specific retail chains,
groups of retailers or other sources of distribution and to consumers. Inmark's
clients include, among others, Colgate-Palmolive Company, The Pillsbury Company,
The Minute Maid Company, Bestfoods Specialty Products, Novartis Consumer Health,
Inc., Bayer Corporation, Lamb Weston Inc., Menley & James Laboratories, Inc.,
Hunt Foods Company, Perdue Farms, Inc., The Quaker Oats Company, American Home
Products Corporation, Fender Musical Instruments Corporation and Duracell
Corporation. For the fiscal year ended March 31, 1998, before giving effect to
the Optimum Acquisition and on a pro forma basis giving effect to the Optimum
Acquisition by including the revenues of the predecessor of Optimum for the year
ended December 31, 1997, the Company had one client, Colgate-Palmolive Company,
which accounted for approximately 34.4% and 24.5% of its revenues, respectively.
For the fiscal year ended March 31, 1996, Colgate-Palmolive Company accounted
for approximately 51.6% of the Company's revenues. To the extent the Company
continues to have a heavily weighted sales concentration with one or more
clients, significant fluctuations in revenues, results of operations and
liquidity could arise should such client or clients reduce their budgets
allocated to the Company's activities.
Unlike traditional general advertising firms, which are engaged as
agents of record on behalf of consumer product manufacturers, promotional
companies, including the Company, typically are engaged on a product-by-product,
or project-by-project basis. Although the relationship of the Company and its
predecessors with certain of their clients has continued for in excess of 20
years, because the Company's contracts with its clients are executed on a
project-by-project basis, there is no guarantee that such relationships will
continue on a long-term basis. In addition, there can be no assurance that the
budgets of the Company's clients will continue to permit the engagement of
outside promotional companies such as the Company or that such clients will
continue to utilize the type of promotional services and means of advertising
provided by the Company.
Expansion Risk and Risks Associated with Acquisitions. The Company is
experiencing a period of rapid expansion which management expects will increase
in the near future. This growth has increased the operating complexity of the
Company as well as the level of responsibility for both existing and new
management personnel. The Company's ability to manage its expansion effectively
will require it to continue to implement and improve its operational and
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financial systems and to expand, train and manage its employee base. The
Company's inability to effectively manage its expansion could have a material
adverse effect on its business.
A portion of the Company's expansion may occur through acquisitions as
an alternative to direct investments in the assets required to implement the
expansion. Consistent with its strategy, the Company is currently evaluating,
has made offers with respect to, and is engaged in discussions regarding,
various acquisition and strategic relationship opportunities. These acquisitions
or strategic relationships could be funded by cash on hand, Inmark's securities
and/or additional borrowings. It is possible that one or more of such possible
future acquisitions or strategic relationships, if completed, could adversely
affect the Company's funds from operations or cash otherwise available, in the
short term or the long term or both, or increase the Company's debt, or such an
acquisition could be followed by a decline in the market value of Inmark's
securities. No assurance can be given that suitable acquisitions can be
identified, financed and completed on acceptable terms, or that the Company's
future acquisitions, if any, will be successful or will not impair the Company's
ability to service its outstanding obligations.
Outstanding Indebtedness; Security Interest. In connection with the
Optimum Acquisition, Inmark, Services, and Optimum entered into a loan agreement
dated as of March 31, 1998, with PNC Bank, National Association (the "Loan
Agreement"), providing for a $5,000,000 five-year term loan and a $5,000,000
revolving loan credit facility. The prompt and full payment and other
performance of all of the obligations of Services and Optimum under the Loan
Agreement or otherwise to the lender or any affiliate of the lender are
guaranteed by Inmark. As security for all of its obligations under the Loan
Agreement, (a) Inmark, Services and Optimum granted the lender a first priority
lien on and security interest in all of the assets of Inmark, Services and
Optimum, including the stock of Services and Optimum and (b) Inmark and Services
pledged their shares of Services and Optimum, respectively, to the lender. In
the event that an event of default under the Loan Agreement occurs, at the
lender's option, (i) the revolving line of credit shall terminate, (ii) the
principal and interest of all loans and all other obligations under the Loan
Agreement shall be immediately due and payable, and (iii) the lender shall be
entitled to exercise any and all rights and remedies provided for in the Loan
Agreement and in any document delivered to the lender in connection with the
Loan Agreement, all rights and remedies of a secured party under the Uniform
Commercial Code, and all other rights and remedies that may otherwise be
available to the lender by agreement or at law or in equity.
Control by Executive Officers and Directors. The executive officers of
the Company collectively beneficially own a significant percentage of the voting
stock of Inmark and, in effect, have the power to influence strongly the outcome
of all matters requiring stockholder approval, including the election or removal
of directors and the approval of significant corporate transactions. Such voting
could also delay or prevent a change in control of Inmark in which the holders
of the Inmark common stock could receive a substantial premium. In addition, the
Loan Agreement requires the executive officers of Inmark to maintain a minimum
percentage of beneficial ownership of Inmark's Common Stock during the term of
the Loan Agreement.
Shares Eligible for Future Sale. Future sales of shares by officers,
directors and certain shareholders under Rule 144 of the Securities Act, or
through the exercise of outstanding registration rights or the issuance of
shares of Common Stock upon the exercise of options or warrants or conversion of
convertible securities could materially adversely affect the market price of
shares of Common Stock and could materially impair Inmark's future ability to
raise capital through an offering of equity securities. Substantially all of
Inmark's outstanding shares, other than those held by affiliates, are
transferable without restriction under the Securities Act. No predictions can be
made as to the effect, if any, that market sales of such shares or the
availability of such shares for future sale will have on the market price of
shares of Common Stock prevailing from time to time.
Lack of Dividend History. Inmark has never declared or paid any cash
dividends on its Common Stock and does not expect to declare any such dividends
in the foreseeable future. Payment of any future dividends will depend upon
earnings and capital requirements of the Company, the Company's debt facilities
and other factors the Board of Directors considers appropriate. The Company
intends to retain earnings, if any, to finance the development and expansion of
its business, and therefore does not anticipate paying any dividends in the
foreseeable future. In addition, the terms of the Loan Agreement impose
limitations on the payment of dividends on the Shares.
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USE OF PROCEEDS
The Company will receive proceeds only from the exercise of the
Warrants. Such proceeds will total approximately $445,250, unless some or all of
the Shares which Messrs. William J. Barrett and Herbert M. Gardner have a right
to acquire pursuant Warrants registered in their names are acquired pursuant to
a cashless exercise provision contained in such Warrants, in which event the
proceeds to the Company will be reduced.
Except for the sale of the Shares upon the exercise of the Warrants,
Inmark is not selling any of the Shares and will not receive any proceeds from
the sale of the Shares by the Selling Securityholders. Any proceeds received by
Inmark upon the exercise of the Warrants will be used for general corporate
purposes.
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THE SELLING SECURITYHOLDERS
The following table sets forth, as of July 29, 1998 certain information
regarding the Selling Securityholders' ownership of Inmark's Common Stock.
Unless otherwise disclosed in the footnotes to the table, no Selling
Securityholder has held any position, office or had any other material
relationship with Inmark, its predecessors or affiliates during the past three
years. To the extent of Inmark's knowledge, except as disclosed below, the
Selling Securityholders own all of the Shares and do not own, nor have any
rights to acquire, any other shares of Common Stock as of the date of this
Prospectus.
<TABLE>
<S> <C> <C> <C>
Beneficially Owned Prior Offered Beneficially Owned
Name of Selling Securityholder to This Offering(1) for Sale After This Offering(1)
- ------------------------------ ------------------------ -------- ----------------------
Number of Percent of
Shares Shares
---------- ----------
William J. Barrett (2) 37,500(5) * 37,500 0
Herbert M. Gardner (3) 77,530(6) 1.71% 37,500 40,030
Robert F. Hussey (4) 344,743(7) 7.59% 281,250 63,493
Miles M. Stuchin 152,500(8) 3.29% 152,500 0
*Less than one percent. Based on 4,480,326 shares of common stock outstanding on July 29, 1998.
(1) Under the rules of the Commission, a person is deemed to be the
beneficial owner of a security if such person has or shares the power
to vote or direct the voting of such security or the power to dispose
or direct the disposition of such security. A person is also deemed to
be a beneficial owner of any securities if that person has the right to
acquire beneficial ownership within 60 days. Accordingly, more than one
person may be deemed to be a beneficial owner of the same securities.
Unless otherwise indicated by footnote, the named individuals have sole
voting and investment power with respect to the securities beneficially
owned.
(2) Mr. Barrett is a Senior Vice President of Janney Montgomery Scott Inc.,
an investment banking firm which provides financial advisory services
to the Company.
(3) Mr. Gardner is a Director of Inmark and a Senior Vice President of
Janney Montgomery Scott Inc., an investment banking firm which provides
financial advisory services to the Company.
(4) Mr. Hussey was a Director of Inmark from May 1992 until March 3, 1997,
Chairman of the Board of Inmark from May 1994 until October 16, 1996,
and President and Chief Executive Officer of Inmark (then known as
Health Image Media, Inc.) from June 1993 until September 29, 1995. Mr.
Hussey has pledged to Bear Stearns Securities Corp. ("Bear Stearns"),
the clearing agent for Josephthal & Co., Inc. ("Josephthal"), the
281,250 Shares being offered for sale by Mr. Hussey pursuant to this
Prospectus. The 281,250 Shares have been pledged as collateral for
margin loans with full recourse to Mr. Hussey. In the event of a
default by Mr. Hussey, Bear Stearns or Josephthal may offer or sell all
or a portion of the 281,250 pledged Shares in accordance with the "Plan
of Distribution" section of the Prospectus.
(5) Represents 37,500 Warrant Shares which Mr. Barrett has the right to
acquire at an exercise price of $4.00 per share.
(6) Represents 14,718 shares of Common Stock held directly by Mr. Gardner,
7,500 shares of Common Stock held in an individual retirement account
for the benefit of Mr. Gardner, 7,500 shares of Common Stock owned by
Mr. Gardner's wife (as to which Mr. Gardner disclaims beneficial
ownership), 10,312 shares of Common Stock issuable upon exercise of
options held by Mr. Gardner, and 37,500 Warrant Shares which Mr.
Gardner has the right to acquire at an exercise price of $4.00 per
share. Excludes 2,500 shares of Common Stock owned by The Gardner
Family Foundation, a charitable organization, of which Mr. Gardner is
President and a board member.
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(7) Represents 282,243 shares of Common Stock and 62,500 Warrant Shares
which Mr. Hussey has the right to acquire at an exercise price of $0.86
per share.
(8) Represents 152,500 Warrant Shares which Mr. Stuchin has the right to
acquire at an exercise price of $0.60 per share.
</TABLE>
The 508,750 Shares to be offered by the Selling Securityholders
represent all of the securities covered by this Registration Statement of which
this Prospectus is a part. The Warrants require Inmark to file a registration
statement covering the Shares and to use its reasonable efforts to keep such
registration statement continuously effective until (a) the earlier of one year
following the date on which it is declared effective or (b) the completion of
the period of distribution of the Shares. Inmark has filed this Registration
Statement to fulfill its obligations under the Warrants.
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PLAN OF DISTRIBUTION
The Company will not receive any proceeds from the sale of the Shares
offered hereby except for up to approximately $445,250, which may be received
upon the exercise of the Warrants. The Shares may be sold from time to time to
purchasers directly by the Selling Securityholders. Alternatively, the Selling
Securityholders may from time to time offer the Shares through brokers, dealers
or agents who may receive compensation in the form of discounts, concessions or
commissions from the Selling Securityholders and/or the purchasers of the Shares
for whom they may act as agent. The Selling Securityholders and any such
brokers, dealers or agents who participate in the distribution of the Shares may
be deemed to be "underwriters", and any profits on the sale of the Shares by
them and any discounts, commissions or concessions received by any such brokers,
dealers or agents might be deemed to be underwriting discounts and commissions
under the Securities Act. To the extent the Selling Securityholders may be
deemed to be underwriters, the Selling Securityholders may be subject to certain
statutory liabilities under the Securities Act, including, but not limited to,
Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange
Act.
The Shares offered hereby may be sold by the Selling Securityholders
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 Shares may be sold by one or more of the
following methods, without limitation: (a) a block trade in which the broker or
dealer so engaged will attempt to sell the Shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction; (b)
purchases by a broker or dealer as principal and resale by such broker or dealer
for its account pursuant to this Prospectus; (c) ordinary brokerage transactions
and transactions in which the broker solicits purchasers; (d) an exchange
distribution in accordance with the rules of such exchange; (e) face-to-face
transactions between sellers and purchasers without a broker-dealer; (f) through
the writing of options; and (g) other methods. At any time a particular offer of
the Shares is made, a revised Prospectus or Prospectus Supplement, if required,
will be distributed which will set forth the aggregate amount and type of
securities being offered and the terms of the offering, including the name or
names of any underwriters, dealers or agents, any discounts, commissions and
other items constituting compensation from the Selling Securityholders and any
discounts, commissions or concessions allowed or reallowed or paid to dealers.
Such 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 Commission to reflect the disclosure of additional information with respect
to the distribution of the Shares. In addition, the Shares covered by this
Prospectus may be sold in private transactions or under Rule 144 rather than
pursuant to this Prospectus.
To the extent of the Company's knowledge, there are currently no plans,
arrangements or understandings between any Selling Securityholders and any
broker, dealer, agent or underwriter regarding the sale of the Shares by the
Selling Securityholders. There is no assurance that any Selling Securityholder
will sell any or all of the Shares offered by it hereunder or that any such
Selling Securityholder will not transfer, devise or gift such Shares by other
means not described herein.
The Selling Securityholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Regulation
M, which may limit the timing of purchases and sales of any of the Shares by the
Selling Securityholders and any other such person and market-making activities
with respect to the particular Shares being distributed. All of the foregoing
may affect the marketability of the Shares and the ability of any person or
entity to engage in market-making activities with respect to the Shares.
Pursuant to the Warrants entered into in connection with the offer and
sale of the Shares by the Company, each of the Company and the Selling
Securityholders will be indemnified by the other against certain liabilities,
including certain liabilities under the Securities Act. The Company has agreed
to pay substantially all of the expenses incidental to the registration,
offering and sale of the Shares to the public other than the cost of counsel to
the Selling Securityholders and underwriting discounts and commissions, except
as prohibited by blue sky laws.
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LEGAL MATTERS
The legality of the securities offered hereby has been passed upon for
Inmark by Kronish, Lieb, Weiner & Hellman LLP, 1114 Avenue of the Americas, New
York, New York 10036-7798. Joseph S. Hellman, a partner of Kronish, Lieb, Weiner
& Hellman LLP and a director of Inmark, beneficially owns 4,000 shares of the
Common Stock. Kronish, Lieb, Weiner & Hellman LLP owns of record and
beneficially, and Mr. Hellman may be deemed to own beneficially, an immediately
exercisable option to purchase 6,875 shares of Common Stock at an exercise price
of $4.00 per share and an option to purchase 6,875 shares of Common Stock at an
exercise price of $10.00 per share (which is immediately exercisable as to 3,437
shares and which becomes exercisable as to the remaining 3,438 shares on April
30, 1999).
EXPERTS
The consolidated financial statements of Inmark appearing in Inmark's
Annual Report (Form 10-K) for the year ended March 31, 1998, have been audited
by KPMG Peat Marwick LLP, independent certified public accountants, as set forth
in their report thereon included therein and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
8
