As filed with the Securities and Exchange Commission on January 2, 1997.
Registration No. 333-09415
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
----------
POST-EFFECTIVE
AMENDMENT NO. 1
TO
REGISTRATION STATEMENT
ON FORM S-3
UNDER
THE SECURITIES ACT OF 1933
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VISTA INFORMATION SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1293754
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
-----------------
5060 SHOREHAM PLACE, SUITE 300
SAN DIEGO, CA 92122
(619) 450-6100
(Address, including zip code, and
telephone number, including area code, of
registrant's principal executive offices)
----------
THOMAS R. GAY
CHIEF EXECUTIVE OFFICER
5060 SHOREHAM PLACE, SUITE 300
SAN DIEGO, CA 92122
(619) 450-6100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
Copies to:
MARK A. KIMBALL, ESQ.
OPPENHEIMER WOLFF & DONNELLY
3400 PLAZA VII, 45 SOUTH SEVENTH STREET
MINNEAPOLIS, MINNESOTA 55402
(612) 344-9300
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
---------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
The purpose of this Post-Effective Amendment No. 1 is to remove from
registration 54,225 shares of Common Stock, par value $0.01 per share,
registered on the Registration Statement on Form S-3 filed by VISTA Information
Solutions, Inc. (the "Company") with the Securities and Exchange Commission (the
"Commission") on August 1, 1996, as amended on August 15, 1996 (File No.
333-09415) (the "Registration Statement"). The Registration Statement was
declared effective by the Commission on August 15, 1996. Such shares are being
deregistered to correct an inadvertent error in Appendix I to the original
Registration Statement.
PROSPECTUS
3,252,121 SHARES
VISTA INFORMATION SOLUTIONS, INC.
COMMON STOCK
-----------------------
This Prospectus relates to 3,252,121 shares of Common Stock, par value
$.01 per share (the "Common Stock"), of VISTA Information Solutions, Inc.
("VISTA" or the "Company"), that may be offered for sale for the account of
certain shareholders of the Company as stated herein under the heading "Selling
Shareholders" (the "Shares").
The Selling Shareholders have advised the Company that sales of the
Shares may be made from time to time in the over-the-counter market, through
negotiated transactions or otherwise, at fixed prices that may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Shareholders may
effect such transactions by selling the Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders or the purchasers of
the Shares for whom such broker-dealers may act as agent or to whom they may
sell as principal, or both (which compensation to a particular broker-dealer
might be in excess of customary commissions). See "Selling Shareholders" and
"Plan of Distribution."
No period of time has been fixed within which the Shares may be offered
or sold. None of the proceeds from the sale of the Shares will be received by
the Company. The Company will pay all expenses with respect to this offering,
except for brokerage fees, commissions, transfer taxes for, and fees and
expenses of counsel to, the Selling Shareholders, which will be borne by the
Selling Shareholders. See "Plan of Distribution."
THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVE CERTAIN RISKS. SEE
"RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS.
The Company's Common Stock is traded on the Nasdaq SmallCap Market
under the symbol "VINF". On December 28, 1996, the average of the bid and asked
prices of the Common Stock, as reported by Nasdaq SmallCap Market, was $.546875
per share.
-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
-----------------------
No person has been authorized to give any information or to make any
representations not contained or incorporated by reference in this Prospectus in
connection with the offer described in this Prospectus and, if given or made,
such information and representations must not be relied upon as having been
authorized by the Company or the Selling Shareholders. Neither the delivery of
this Prospectus nor any sale made under this Prospectus shall under any
circumstances create any implication that there has been no change in the
affairs of the Company since the date hereof or since the date of any documents
incorporated herein by reference. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any securities other than the
securities to which it relates, or an offer or solicitation in any state to any
person to whom it is unlawful to make such offer in such state.
-----------------------
THE DATE OF THIS PROSPECTUS IS January 2, 1997.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company pursuant to the Exchange Act may be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, New York, New York 10048
and Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois
60661-2511. Copies of such material can also be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act. This Prospectus does not contain all of the
information, exhibits and undertakings set forth in the Registration Statement,
certain portions of which are omitted as permitted by the Rules and Regulations
of the Commission. Copies of the Registration Statement and the exhibits are on
file with the Commission and may be obtained, upon payment of the fee prescribed
by the Commission, or may be examined, without charge, at the offices of the
Commission set forth above. For further information, reference is made to the
Registration Statement and its exhibits.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated by
reference in this Prospectus: (1) the Company's Annual Report on Form 10-K for
the year ended December 31, 1995, as amended on April 29, 1996 and on June 28,
1996 (File No. 0-20312); (2) the Company's Quarterly Reports on Form 10-QSB for
the quarters ended March 31, 1996 and June 30, 1996; (3) the Company's Report on
Form 8-K/A-2 filed on July 22, 1996 and (4) the description of the Company's
Common Stock contained in its Registration Statement on Form 10 (File No. 0-
20312) and any amendment or report filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 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 hereunder shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained herein or in a document all or any
portion of which is incorporated or deemed to be 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 or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide, without charge, to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any or all of
the foregoing documents (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates). Requests should be directed to VISTA Information
Solutions, Inc., 5060 Shoreham Place, Suite 300, San Diego, California 92122,
Attention: E. Steven Hamilton, telephone (619) 450-6100.
PAGE 2
RISK FACTORS
The following factors should be considered in evaluating an investment
in the Common Stock.
CONTINUING OPERATING LOSSES; PROFITABILITY UNCERTAIN. The Company has
experienced significant operating losses during the six months ended June 30,
1996 and during the year ended December 31, 1995. During the six-month period
ended June 30, 1996, the Company incurred a loss of approximately $2,912,000
and has continued to incur losses since that time. Cumulative losses as of June
30, 1996 were approximately $24,103,000 for the Company, excluding cumulative
pre-merger losses of $7,686,000 relating to the merger of the Company's
wholly-owned subsidiary and VISTA Environmental Information, Inc. ("VISTA EII"),
which was acquired by the Company in February 1995 (the "VISTA Merger"). Cash
used in operations was approximately $2,806,000 for the year ended December 31,
1995 and $1,276,000 for the six months ended June 30, 1996. At June 30, 1996,
the Company had working capital of approximately $42,000. The Company expects to
continue to incur operating losses and negative cash flows in the future until
such time as the Company's products and services receive commercial acceptance
in the marketplace and revenues increase sufficiently to offset operating and
development costs. In addition, at June 30, 1996, the Company had a net
tangible deficit of approximately $2,654,000. The realization of intangibles is
subject to the Company's ability to generate positive cash flow and
profitability. There can be no assurance that the Company will obtain additional
financing to fund operations or will ever be able to achieve and maintain
profitable operations and generate positive cash flows.
COMPETITION. Technological advances in computer software and hardware
have reduced the barriers to entry into the environmental and the geographic
information systems industries in which the Company's products compete. These
industries are highly competitive and many of the Company's potential
competitors have substantially greater capital resources, research and
development capabilities, manufacturing and marketing resources and experience
than the Company, particularly with respect to geographic information systems.
No assurance can be given that competing companies will not develop products and
services that may have advantages over, or that may enjoy greater commercial
acceptance than, the Company's products and services. There can be no assurance
that the Company will be able to compete effectively in the marketplace.
DEPENDENCE ON ENVIRONMENTAL BUSINESS; POTENTIAL LACK OF MARKET
ACCEPTANCE. The Company derives approximately 84% of its revenues from its
environmental products and services. The Company's marketing efforts relating to
its Geographic Underwriting System ("GUS(R)") products, which account for
approximately 16% of its revenues, are focused mainly on the insurance industry.
To date, the Company's GUS(R) products and services have not achieved commercial
acceptance in this market at levels that would permit the Company to achieve
profitable operations, based on such GUS(R) sales alone. There can be no
assurance that the Company's GUS(R) products and services will ever receive such
commercial acceptance, or that the Company's environmental products and services
will continue to sell at a rate sufficient to insure profitable operations
despite such lack of acceptance.
RAPID TECHNOLOGICAL CHANGE AND NEW PRODUCTS AND SERVICES. The market
for the Company's products is characterized by rapidly changing technology,
evolving industry standards and frequent new product introductions. The
Company's success will depend to a substantial degree upon its ability to
develop and introduce in a timely fashion enhancements to its existing products
and new products that meet changing customer requirements and emerging industry
standards. The development of new, technologically advanced products is a
complex and uncertain process requiring high levels of innovation, as well as
the accurate anticipation of technological and market trends. There can be no
assurance that the Company will be able to identify, develop, manufacture,
market or support new products successfully, that such new products will gain
market acceptance or that the Company will be able to respond effectively to
technological changes, emerging industry standards or product announcements by
competitors. There can be no assurance that the Company will be able to
introduce product enhancements or new products on a timely basis. Furthermore,
from time to time, the Company may announce new products, capabilities or
technologies that have the potential to replace or shorten the life cycle of the
Company's existing product offerings. There can be no assurance that
announcements of product enhancements or new product offerings will not cause
customers to defer purchasing existing Company products. Failure to introduce
new products or product enhancements effectively and on a timely basis, customer
delays in purchasing products in anticipation of new product introductions and
any inability
PAGE 3
of the Company to respond effectively to technological changes, emerging
industry standards or product announcements by competitors could have a material
adverse effect on the Company's business, operating results and financial
condition. See "Summary Information Regarding the Company."
INDIRECT SALES; POTENTIAL FOR MARKETING CONFLICTS. The Company markets
its products directly through both a telesales and field sales force and
indirectly through marketing channels such as value-added resellers ("VARs") and
distributors. In particular, the Company has a limited internal sales capability
for its GUS(R) product. The Company markets and sells its GUS(R) services to the
insurance industry though Insurance Services Office, Inc. ("ISO"), and its
environmental products through VARs that are not under the direct control of the
Company. Consequently, the Company is dependent on the viability and financial
stability of ISO and the VARs with which it has a relationship. There can be no
assurance that the Company will be able to attract and retain a sufficient
number of qualified VARs and distributors to successfully market the Company's
products. The failure to attract and retain a sufficient number of VARs and
distributors could have a material adverse effect on the Company's business,
financial condition and results of operations. The relationship with the VARs
and distributors is usually established through a formal reseller agreement. In
many cases, these agreements may be terminated by either party at any time
without cause. Therefore, there can be no assurance that any VAR or distributor
will continue to represent the Company's products. In addition, if the Company
is successful in increasing product sales through these channels, the Company
expects that any material increase in the Company's indirect sales as a
percentage of total revenues will materially adversely affect the Company's
average selling prices and gross margins due to the lower unit prices that the
Company receives when selling through indirect channels. Selling through
indirect channels may limit the Company's contacts with its customers. As a
result, the Company's ability to accurately forecast sales, evaluate customer
satisfaction and recognize emerging customer requirements may be hindered. The
Company's strategy of marketing its products directly to end-users and
indirectly through VARs and distributors may result in distribution channel
conflicts. The Company's direct sales efforts may compete with those of its
indirect channels and, to the extent different resellers target the same
customers, resellers may also come into conflict with each other. Although the
Company has attempted to manage its distribution channels in a manner to avoid
potential conflicts, there can be no assurance that channel conflicts will not
materially adversely affect its relationships with existing VARs or distributors
or adversely affect is ability to attract new VARs and distributors. See
"Summary Information Regarding the Company."
PRODUCT ERRORS. Products as complex as those offered by the Company may
contain undetected software errors when first introduced or as new versions are
released. There can be no assurance that, despite testing by the Company and by
current and potential customers, errors will not be found in new or enhanced
products after delivery of reports. Moreover, there can be no assurance that
once detected, such software errors can be corrected in a timely manner, if at
all. The occurrence of such software errors, as well as any delay in correcting
them, could result in the delay or loss of market acceptance of the Company's
products, additional warranty expense, diversion of technical and other
resources from the Company's product development efforts or the loss of
credibility with ISO, VARs and its other resellers, any of which could have a
material adverse effect on the Company's business, operating results and
financial condition. See "Summary Information Regarding the Company."
REGULATORY CHANGES. The demand for the Company's environmental
compliance products arises primarily as a result of clean up liability and other
governmental regulations in the environmental area. There can be no assurance
that current regulations will continue in the same form and create the same or
increased needs for the Company's products. Any changes in such regulatory
schemes which affect enforcement procedures or the need for reporting could have
a material adverse impact on the revenues generated by the Company's products.
NEED FOR CONTINUED INVESTMENT IN THE COMPANY'S SOFTWARE AND DATABASES.
The Company has proprietary software and databases that may require extensive
maintenance and updating to remain current and to provide new and additional
layers of information to users of the Company's products and services. The
addition of a new layer of information to the Company's databases and the
maintenance and updating of existing layers of information may be costly or
difficult and delay the Company's ability to achieve and maintain profitable
operations in the future. Significant ongoing investment may be required for the
Company's products and services to achieve commercial acceptance in the
marketplace and to remain competitive. There can be no
PAGE 4
assurance that the Company will be able to obtain the financing necessary to
make such an investment it its software and databases or, indeed, that its
current sources of information for such databases will remain available.
DEPENDENCE ON PROPRIETARY TECHNOLOGY. The Company's future success
depends, in large part, upon its proprietary technology. Although management of
the Company believes that the database design and data encoding methodologies
used by the Company in the creation of its GUS(R) and its environmental services
products may have potential for software patent protection, to date the Company
does not hold any patents, has made no patent applications, and currently relies
on a combination of contractual rights, both registered and unregistered trade
and service marks and other copyright laws to establish and protect its
proprietary rights. There can be no assurance that the steps taken by the
Company to protect its intellectual property will be adequate to prevent
misappropriation of its technology or that the Company's competitors will not
independently develop technologies that are substantially equivalent or superior
to the Company's technology. In the event that protective measures are not
successful, the Company's business, operating results and financial condition
could be materially and adversely affected. The Company is also subject to the
risk of adverse claims and litigation alleging infringement of intellectual
property rights of others. There can be no assurance that third parties will not
assert infringement claims in the future with respect to the Company's current
or future products or that any such claims will not require the Company to enter
into license arrangements or result in litigation, regardless of the merits of
such claims. No assurance can be given that any necessary licenses will be
available or that, if available, such licenses can be obtained on commercially
reasonable terms. Should litigation with respect to any such claims commence,
such litigation could be extremely expensive and time consuming and could have a
material adverse effect on the Company's business, operating results and
financial condition regardless of the outcome of such litigation.
SUPERIOR RIGHTS OF PREFERRED SHAREHOLDERS. The Company currently has
outstanding 200,000 shares of its Series B Preferred, 643,940 shares of Series C
Preferred and 187,134 shares of Series D Preferred, all of which provide the
holders of such shares with certain rights and liquidation preferences superior
to those of holders of Common Stock. The holders of the Series B Preferred,
Series C Preferred and Series D Preferred (collectively, "Preferred Stock") are
entitled to dividends and distributions payable with respect to the number of
shares of Common Stock into which the Preferred Stock is convertible, and are
entitled to receive such dividends or distributions prior to payment of any such
dividends or distributions to the holders of Common Stock. The holders of
Preferred Stock (the "Preferred Shareholders") are also entitled to preferential
payment in the event that the Company is liquidated, with the holders of Series
C Preferred and Series D Preferred entitled to receive a preferential amount
equal to the greater of (i) certain specified per-share amounts or (ii) all
dividends or distributions to be paid to such holders. Preferred Shareholders
are entitled to vote as a class with holders of Common Stock, and consent of the
Preferred Shareholders may be required prior to certain events. In addition, the
holders of the Series B Preferred are entitled to elect one director and a board
observer and the holders of the Series C Preferred are entitled to elect two
directors to the Company's Board of Directors. All the shares of Preferred Stock
currently outstanding are convertible into Common Stock at a ratio of ten shares
of Common Stock for each share of Preferred Stock, which ratio is subject to
adjustment upon the occurrence of certain events. These superior rights and
preferences, if exercised, could adversely affect the holders of shares of
Common Stock, including holders of the Shares offered hereby by the Selling
Shareholders.
DEPENDENCE ON KEY MANAGEMENT AND TECHNICAL PERSONNEL. The Company's
future success is highly dependent on the continued performance of its key
management and technical personnel. The loss of the services of any of its key
employees could have an adverse effect on the Company. The Company does not
maintain key-man life insurance policies with respect to its key management or
personnel. The Company's future success will also depend in part upon its
ability to attract and retain additional highly qualified management, technical
and marketing personnel.
MANAGEMENT OF CHANGE; NEED TO ENHANCE MANAGEMENT SYSTEMS. Since the
VISTA Merger in February 1995, the Company has experienced significant
integration of its businesses, and a moderate decrease in the number of its
employees due to enhanced efficiencies. These changes have placed and may
continue to place strain on the Company's management, operations and systems.
The Company's ability to compete effectively will depend, in part, upon its
ability to revise, improve and effectively utilize its operation, management,
PAGE 5
marketing, sales and financial systems necessitated by changes in the Company's
business and structure. Any failure of the Company's management to effectively
manage continued changes would have a material adverse effect on the Company's
business, financial condition and results of operations. There can be no
assurance that the Company will continue to effectively manage such change.
LIMITATION OF NET OPERATING LOSS CARRYFORWARD. As of December 31, 1995,
the Company and VISTA EII had net operating loss carryforwards for federal
income tax purposes of approximately $15,592,000 and $6,273,000, respectively.
In addition, the Company had investment tax and research credit carryforwards of
$99,000 as of December 31, 1995. These carryforwards expire in various years
through fiscal 2010. Future utilization of these loss credit carryforwards are
subject to certain limitations under provisions of the Internal Revenue Code
including limitations subject to ss. 382, which relates to a 50% change in
control over a three year period, and are further dependent upon the Company's
attaining profitable operations. Shares issued to acquire VISTA EII and shares
issued in previous private placement transactions, have caused the Company to
exceed the 50% change in control threshold. This will subject the Company to
annual net operating loss and credit carryforward limitations in the future and
may result in the expiration of a portion of these carryforwards before they can
be utilized. In addition, the net operating losses generated by VISTA EII before
the merger can only be used to offset future VISTA EII income.
POTENTIAL LIMITED PUBLIC MARKET. Effective December 7, 1993, the
Company's Common Stock was listed on the Nasdaq SmallCap Market. In order to
maintain the Company's Nasdaq listing, the Company must have at least two active
market makers for its Common Stock, total assets of $2 million, capital and
surplus of $1 million, a minimum bid price for its Common Stock of $1.00 per
share, 300 holders of its Common Stock and 100,000 shares of its Common Stock
held by non-affiliates, having a market value of $200,000. The minimum bid price
for the Company's Common Stock has gone below $1.00 per share in the past. There
can be no assurance that the Common Stock will be quoted on the Nasdaq SmallCap
Market in the future or that the Company will be able to meet the applicable
requirements for maintaining its Nasdaq listing. In the event the Company fails
to maintain the listing criteria, the Common Stock will be subject to delisting,
and trading, if any, in the Common Stock would thereafter be conducted in the
over-the-counter market in what are commonly referred to as the "pink sheets."
As a result, investors may find it more difficult to dispose of, or to obtain
accurate quotations as to the price of, the Common Stock. Delisting may also
result in loss of securities analyst and media coverage of the Company and a
decrease in sales price of the Common Stock due to its impaired liquidity. In
addition, delisting could have a material adverse effect on the Company's
ability to raise additional capital.
SHARES ELIGIBLE FOR FUTURE SALES. Sales of a substantial number of shares
of Common Stock in the public market following the offering of the Shares could
adversely affect the market price for the Common Stock. As
PAGE 6
of July 16, 1996, the Company had 11,109,563 shares of Common Stock outstanding.
Of such outstanding shares, an aggregate of 2,802,573 shares were "restricted
securities" as defined in Rule 144 under the Securities Act, which subsequently
may become eligible for public sale pursuant to and in accordance with Rule 144.
Rule 144 requires that securities acquired from an issuer in a nonpublic
offering must be fully paid for and beneficially owned for two (2) years before
resale by affiliates of the issuer and by three (3) years before resale by
nonaffiliates. In addition to the shares currently outstanding and the shares
being offered hereby, approximately 12,980,308 shares of Common Stock may be
issued upon exercise of outstanding options and warrants or upon exchange or
conversion of other securities of the Company originally issued in private
transactions. Such additional shares, if issued, will become eligible for resale
in the public market without restriction or pursuant to the restrictions of Rule
144 over the next several years. The Company currently has both "piggy-back" and
demand registration rights outstanding with respect to shares of outstanding
Common Stock as well as shares of Common Stock issuable upon the exercise of
warrants to purchase the Company's Series C Convertible Preferred Stock (the
"Series C Preferred") and the subsequent conversion thereof into Common Stock,
and shares of Common Stock issuable pursuant to the conversion of the Company's
Series B Convertible Preferred Stock ("Series B Preferred"), Series C Preferred,
Series D Convertible Preferred Stock ("Series D Preferred") and Subordinated
Convertible Debentures into Common Stock. The registration and public sale of
such shares could adversely affect the market price of the Common Stock.
POSSIBLE VOLATILITY OF STOCK PRICE. The Company's Common Stock is
traded on the Nasdaq SmallCap Market. The market price for the Common Stock has
been and following this offering may continue to be highly volatile depending on
various factors including, among others, the Company's consolidated operating
results, expectations of analysts and other investment groups, general
conditions in the computer and other electronic equipment industries,
announcements of technological innovations or new products by the Company, its
competitors or its customers, and the market for similar securities, which
market is subject to various pressures. In addition, the stock market is subject
to price and volume fluctuations unrelated to operating performance of the
Company.
APPLICABILITY OF "PENNY STOCK RULES." Federal regulations under the
Exchange Act regulate the trading of so-called "penny stocks" (the "Penny Stock
Rules"), which are generally defined as any security not listed on a national
securities exchange or Nasdaq, priced at less than $5.00 per share and offered
by an issuer with limited net tangible assets and revenues. The Company's Common
Stock is currently exempted from the majority of the Penny Stock Rules solely by
virtue of its listing on the Nasdaq SmallCap Market. However, equity securities
listed on the Nasdaq SmallCap Market which are priced at less than $5.00 are
deemed penny stocks for the limited purpose of Section 15(b)(6) of the Exchange
Act. This provision enables the Commission to prohibit or limit the
participation or affiliation of previously sanctioned persons in or with any
offering of penny stocks and makes it unlawful for any broker-dealer to
participate in a distribution of any penny stock without the consent of the
Commission if the broker-dealer is aware of or should have been aware of the
participation of a previously sanctioned person. As of the date of this
Prospectus, the Company's Common Stock is trading at a price below $5.00 per
share, and therefore is subject to these trading restrictions. In the event that
the Company's Common Stock is delisted from the Nasdaq SmallCap Market and the
Company fails to meet other relevant criteria so as to fall within the more
comprehensive definition of "penny stock," trading of the Common Stock would be
subject to the full range of the Penny Stock Rules. Under the Penny Stock Rules,
brokers must undertake certain procedures prior to selling a "penny stock,"
which may make it more difficult for them to sell the Company's Common Stock.
Purchasers of the Common Stock offered hereby may likewise have difficulty
selling their shares in the secondary trading market.
PAGE 7
SUMMARY INFORMATION REGARDING THE COMPANY
VISTA Information Solutions, Inc. ("VISTA" or the "Company") provides
environmental risk information and address-based hazard and classification
information to bankers, engineers, insurance companies and corporations
throughout the United States. VISTA is comprised of two primary lines of
business. The first, handled principally in California, provides address and
name based environmental risk information about properties and companies in the
United States to bankers, engineers and corporations. The second, handled
principally in Minnesota, provides information on address-based hazard and
classification information to insurance underwriters.
ENVIRONMENTAL RISK INFORMATION SERVICES
The environmental risk information services portion of VISTA's business
was organized with the goal of meeting the needs of bankers, engineers,
corporations and others for environmental risk information relating to
properties and companies in the United States. VISTA gathers and collects
information from various governmental agencies and stores such information in
proprietary databases. From this information, the Company has developed a
diverse family of products, each tailored for the unique needs of specific
customer markets.
INDUSTRY FOCUS. The need for environmental risk information originated
with the enactment of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (CERCLA) which imposes strict liability for the full cost
of cleanup of environmentally contaminated property regardless of responsibility
for the contamination or fault. The Superfund Amendments and Reauthorization Act
of 1986 (SARA) established an "Innocent Landowner" defense which eliminated
liability provided certain due diligence was performed before acquisition. One
step in the process of satisfying the Innocent Landowners Defense requires
routine, timely and complete searching of government records for notice of
environmental risk. As a result of this legislation and additional enactments of
state and federal environmental laws, banks, corporations, attorneys, insurance
companies and environmental engineering firms have been and are continuing to
seek efficient means to gather environmental information. The consulting
engineering market segment has been serving bankers, developers, corporations
and others by providing Phase I and Phase II site assessments and many other
types of remediation and compliance review services. During 1993, the industry
and its clientele adopted new standards, ASTM-E 1527 and E-1528, which, for the
first time, provided clear guidelines for environmental due diligence in
commercial real estate transactions. These guidelines require a search of
government, environmental records to check the known risks associated with a
property. VISTA provides a set of reports and services that meet the
requirements set out in the standards. VISTA also provides environmental
database reports to help this clientele conduct compliance audits, waste
disposal audits, benchmark reviews, marketing lists and market potential
databases for strategic planning programs.
In addition to using environmental information to establish the
Innocent Landowners Defense, the economic impact of environmental problems on
properties and companies arises in a number of other contexts, all having
potentially destablizing effects on a company's finances. For example, banks are
monitored by the FDIC as to impact of environmental risk on property values and
the subsequent effect this has on the value of collateral and on the banks'
financial stability. Also the federal securities laws require disclosure
regarding the material effects of compliance with federal, state and local
environmental laws and pending legal proceedings, and may require discussion of
the impact of such compliance.
DEVELOPMENT OF THE ENVIRONMENTAL DATABASE. As a result of the enactment
of federal and state environmental laws and regulations during the 1970s and
1980s, various governmental agencies began collecting massive quantities of
information about environmental contamination and the activities of businesses
that could impact the environment. With continuing focus on environmental
issues, these governmental agencies continue to collect, update and enhance this
information. Each governmental agency, however, has different information that
it provides and various media formats for the information collected.
Furthermore, each governmental agency has its own database and communication
process and updates its information on different timelines throughout the year.
As a result of this lack of centralization of environmental information,
environmental engineers, financial institutions and other companies did not have
a cost-effective, timely way to gain access to this information directly from
governmental sources. The need for this information has increased
PAGE 8
since the 1970s and 1980s as a number of judicial, statutory, regulatory and
economic factors have encouraged participants in the real estate markets
(including individual owners, operators, lenders, corporations and insurers) to
demand such information to avoid potentially catastrophic environmental cleanup
liability.
In response to this need, VISTA has developed a national database
containing environmental information on approximately 3.5 million facilities and
properties by gathering information from more than 500 public sources. On an
annual basis, VISTA regularly processes approximately 50 million environmental
records from such sources, with approximately 50,000 facilities or properties
added or deleted each month. VISTA has developed this database using its
proprietary geographic information systems capabilities, and has also created
on-line distribution channels.
PRODUCT LINES. The Company has developed a diverse family of products,
each tailored for the unique needs of specific customer markets. The following
depicts the broad categories of current VISTA products organized by general
application.
REAL ESTATE TRANSACTION SCREEN REPORTS ("RETSR"). RETSRs are
specifically designed to provide easy to understand, basic environmental hazard
data about a specific piece of property and its immediate surrounding area.
RETSRs come in a variety of formats, from a single page screen to a more
detailed data report containing a map depicting the property and risk
discovered. These reports give the client the ability to identify environmental
hazards from public records with a low price screening tool and to add more
layers of detail (and higher prices) as the need therefor is discovered. All
VISTA RETSRs conform to the "Government Records Search" element of the ASTM
standards.
SITE ASSESSMENT REPORTS ("SAR"). The SARs are designed specifically for
the environmental engineering market and are consistent with the ASTM-E 1527
standards. These reports provide a quick and accurate, low cost supplement to
the "Phase I" site assessment process which is the common standard in all
commercial real estate transactions. VISTA supports these clients with
additional information obtained from third parties including Sanborn historical
maps, topographical maps, aerial photos and chain of title records.
COMPLIANCE REPORTS. In addition to map based reports, the RETSR and
SAR, VISTA offers a full line of compliance reports which provide comprehensive
information about operational compliance with all the major pieces of
environmental legislation including the Clean Air Act, as amended, Clean Water
Act, as amended, Resource Conservation and Recovery Act of 1976, Occupational
Safety and Health Act of 1970, Toxic Substances Control Act and several others.
Compliance reports can be prepared for a specific facility or an entire company
including all its facilities. Clients may order these reports to audit their own
facilities, for vendor audits or for acquisition analysis and due diligence.
Pricing is based on the number of facilities and the level of detail the
customer requests. During 1995, VISTA began offering a new line of compliance
reports which allow companies to compare their environmental records with those
of competitors, or other companies in the same geographic area. The studies
normally include comparisons of compliance records, remediation requirements,
Superfund responsibility, toxic release reporting and waste minimization
efforts. Major companies seeking ISO 14000 certification can use this product to
establish a baseline from which to measure future operational improvements.
Others can use it for setting internal goals and management incentives, or for
demonstrating superior performance to regulators, investors and other
constituencies.
ON-LINE SERVICE. In order to facilitate the distribution of the various
transaction reports, including, for example, an electronic image of SARs report,
VISTA has developed an on-line system, "VISTAExpress", that electronically
delivers products directly to customer workstations. The on-line service
provides users the opportunity to order, retrieve, and query the status of their
orders. The on-line service is typically used by customers in all of VISTA's
market segments who prefer faster delivery and the benefits of electronic
interchange with the Company as its principle means of doing business.
STARVIEW. The Company has developed an "off-the-shelf" Windows based
product known as "StarView" that provides reports for the customer including
information on known and potential environmental risks associated with a
specific property and its surrounding area. VISTA provides monthly data updates
for StarView on CD-ROM.
PAGE 9
CUSTOMER BASE. VISTA's customer base for environmental information
services include consulting engineers, financial institutions, law firms, real
estate finance companies, insurance companies and major corporations nationwide.
VISTA's products are sold directly to its customers and through well-established
resellers, including Reed Elsevier's Lexis-Nexis services, Chemical Information
Systems, Inc., Cambridge Scientific Abstracts Limited Partnership, Equifax
Insurance & Special Services, Marshall and Swift Publications Co. and ISO.
VISTA's products have an exclusive endorsement by the American Bankers
Association and many state banking associations.
SALES AND MARKETING. VISTA markets its environmental information
services and products through direct sales and through reseller and other
strategic relationships. VISTA has approximately 20 direct sales representatives
in 8 cities. These sales representatives are located in the banking, corporate
and engineering markets and are supported through regional sales centers in
Philadelphia and San Diego. The sales force is supplemented by the resellers
described above and other sales agents.
COMPETITION. The Company believes that the principal competitive
factors in the environmental information services business are price, accuracy
and completeness of data and readability of reports. While the Company competes
on the basis of each of these factors, management believes that the Company's
primary competitive strengths in the environmental information services business
are the accuracy and completeness of its data and the readability of its
reports.
VISTA is aware of only two other firms with national environmental
database services and a host of small local companies focused on a single state
or regional market. These national competitors are Environmental Data Resources,
Inc. ("EDR") and Environmental Risk Information & Imaging Services ("ERIIS").
The Company believes that EDR aims its services primarily at the environmental
consulting market and major corporations by providing database reports similar
to the Company's SARs and other specialized custom reporting. The Company
believes that ERIIS focuses on the environmental engineering and real estate
market and serves as a repository for various environmental databases
nationwide.
In addition to the two national competitors, there are a number of
smaller regional and local competitors found in Boston, Atlanta, Miami, Denver,
Los Angeles, Kansas City and elsewhere. These firms often originate out of an
environmental engineering background, focus on a city, state or small region and
have their strength in understanding the local available data sources.
GEOGRAPHIC INFORMATION SERVICES
The Company's second line of business had its origin in 1975 and has
focused on the development of geographic-demographic data analysis tools for
businesses. Supporting this business line, the Company has developed a
proprietary service known as the Geographic Underwriting System ("GUS(R)") which
delivers address- based hazard and classification information to
property/casualty insurance underwriters. GUS provides insurance underwriters
and loss control groups of insurance companies with on-line or batch access to a
series of reports presenting specific classification and hazard information
about the property to be insured. The Company's geo- demographic information
databases, technological understanding and techniques of geographic information
processing provide the basis for its current products. Additional insurance
information layers can be easily added to the Company's current GUS service
offering due to the application's modular design.
The Company's GUS services are the subject of an exclusive arrangement
with ISO, a non-profit company providing services to 1,200 participating
insurance companies which collectively write approximately 80% of all property
and casualty insurance in the United States. In October 1992, the Company and
ISO entered into a 15-year mutually exclusive contract with a five year
extension option to offer a national system to electronically provide
geographically based information to insurers (the "ISO Agreement"). The GUS
project links the Company's geographic information systems technology with ISO's
insurance underwriting and other insurance information. Under the provisions of
the ISO Agreement, the Company provides its GUS software and support and ISO
provides contract administration and marketing of the product to its customer
base. Generally, the Company and ISO share project revenues equally. Both
companies also equally share the incremental costs of
PAGE 10
GUS project development through the term of the ISO Agreement, which include
costs incurred to date in connection with the development of the Public
Protection Classification Layer (see " -- Product Lines", below).
INDUSTRY FOCUS. In the geographic information service area, the Company
focuses primarily on the property/casualty insurance industry for sales of its
products through ISO. The Company believes that the implementation of GUS
service can improve a property/casualty insurer's underwriting process by
reducing the number of misclassifications due to human error, reduce the amount
of personnel time involved in the underwriting process, and provide an objective
measure which will support the insurer in defending rate determinations before
state insurance commissioners and consumer groups. In addition, GUS services
provide a total package of risk information that the Company believes are not
presently available on-line or in an easily accessible format.
DESCRIPTION OF THE DATABASE. GUS contains two principal databases that
provide information to the Company's customers: (i) insurance hazard data (the
"Hazard Database") and (ii) road, street and postal database (the "Road
Database"). The Hazard Database is structured geographically as well as by the
type of hazard (e.g. crime ratings, auto territories, windstorm, extended
coverage zones, public protection classifications and fire districts) and
includes information for all 50 states and the District of Columbia. The Road
Database contains two sources of "raw data," the digital map of the United
States - TIGER ("Topologically Integrated Geographically Encoded Referencing
System") which is produced by the U.S. Department of Commerce, Census Bureau and
the AMS II database produced and maintained by the United States Postal Service
("USPS").
Both of the GUS databases are updated periodically throughout the
calendar year based on the source of the raw data. For the Hazard Database, much
of the input data is processed on a monthly basis. At a minimum, all "hazard
types" are updated annually. Most of the insurance-specific data is updated
through a process of collection, assessment, classification, normalization,
formatting, dataset archiving, and uploading activities for test and production
systems.
The Road Database is generally updated on an quarterly basis. AMS II is
generated and released monthly by the US Postal Service; however, the processing
of those updates into the Company's Road Database requires significant
integration. To accomplish this integration, the Company has developed a
proprietary system, ZIPR, that integrates both the TIGER files and the USPS
files, automatically normalizing, matching, correcting, filling in, and
inferring information. ZIPR also links the raw databases. This process
ultimately produces a geographically complete, current and consistent data
structure, capable of accurately locating "postal compliant" addresses in the
United States. The complete set of subprocesses that are part of the ZIPR
system, requires five to seven weeks to complete the core set of computations.
Then, ZIPR links the raw databases and performs quality assurance testing. The
Road Database that is uploaded into GUS is, in fact, an extract of the entire
master database created and maintained within ZIPR. With each update, the Road
Database consists of the "most current" road names, street positions and postal
data all optimally structured for the address matching and query process portion
of a GUS transaction.
The Company intends to add additional hazard database layers to GUS to
compliment the existing Hazard Database and the Road Database and thereby
provide "one-stop shopping" for insurance underwriting information. For example,
the Company expects to release an earthquake hazard information layer by the end
of 1996.
DESCRIPTION OF THE UNDERLYING TECHNOLOGY. Central to the development of
the information database is a process called geocoding. Geocoding is the ability
to accurately process a street address and convert this address to a latitude
and longitude coordinate pair. If it is not possible (because of incomplete or
inaccurate raw data from either TIGER or the USPS) to assign unique coordinates
to an individual address, the Company's geocoding process will assign
latitude/longitude coordinates corresponding to its street range, postal carrier
route, zip code or city centroid. The Company believes that the resulting
geocode assignments offer the broadest coverage available of any competitive
geocoding technology. The Company has developed proprietary software that
performs this geocoding function ("Geocoder 2") and which locates more than 97%
of addresses compared to many commercially available geocoding software (which
typically rely only on TIGER or enhanced TIGER files) which locate approximately
75% to 80%.
PAGE 11
GUS is intended to deliver location-specific risk information to
insurance underwriters via the proprietary electronic network operated by ISO
("ISOTEL") and may be accessed by either telecommunication or batch processing.
GUS information can also be accessed by subscribers of the Equifax Insurance
Services information network that has a direct on-line link to the ISOTEL
network. Insurance company subscribers are connected directly to GUS service
through an office terminal utilizing ISOTEL. The process to connect to ISO's
network is easy and is used regularly by many ISO participating companies. In
batch mode, large numbers of property location addresses are submitted for
processing to the Company and are performed during off-peak hours by ISO as they
generally require considerable computer time and produce a large number of
reports. The reports requested are written to tape and returned to the insurance
company. While batch processing generally has a lower per-transaction cost, the
application of batch processing is more limited, often involving industry
analyses or audit functions. The Company believes that the on-line
telecommunication delivery through ISO or through an insurance company's own
software applications will be the predominant form of data interchange for new
policies while batch processing will predominate in the renewal process.
The primary computer system for processing GUS service transactions is
capable of processing up to 15,000 transactions per hour. The primary system
located at ISO's data processing facility has a functionally equivalent back-up
system capable of assuming the transaction load for GUS service within one hour
of a failure of the primary system. VISTA maintains the back-up system at its
Minnesota location and is connected to the ISO network with a dedicated
communication line.
As an alternative to receiving access to GUS through the ISO electronic
network, the Company has developed a "flat file version" of GUS to market to
insurance companies that have developed their own application software. The flat
file version of GUS, or ZIP+GUS, is a pre-processed geographic file to which the
Company appends all of the hazard layer ratings and classifications found in the
standard on-line GUS. Using standard database look up software or the insurance
company's own application software, the user can submit addresses to the system
and obtain GUS ratings and classifications. ZIP+GUS converts GUS information
into a database that can be incorporated into the insurance company's internal
MIS operations. Development of the "flat file version" of GUS for a customer
requires customization to the customer's specific needs as each customer
typically requests different GUS layers for its system. VISTA is currently
building a ZIP+GUS application for a large midwest insurance company covering at
least 23 states.
PRODUCT LINES. GUS currently provides the following information layers
to insurance companies:
PUBLIC PROTECTION CLASSIFICATION LAYER (AVAILABLE IN 47 STATES)
("PPC"). The PPC reports provide the following information to the insurance
company: (i) ISO standard protection classification; (ii) fire district name;
(iii) nearest fire station (measured in tenths of miles); (iv) water supply
type; and (v) revision dates for all data and confidence factors for measured
distances.
AUTO LAYER (AVAILABLE IN 50 STATES). The Company's Auto Layer provides
the following information: (i) ISO territory classification; (ii) drive
distances for up to two work addresses; and (iii) revision dates for all data
and confidence factors.
WIND LAYER (AVAILABLE IN 50 STATES). The Company's Wind Layer provides
the following information: (i) ISO extended coverage zone (residential and
commercial); (ii) ISO extended territory code (residential and commercial);
(iii) wind pool eligibility; (iv) distance to nearest large body of water, ocean
or gulf; (v) five historical wind storm events closest to the insured property,
date of occurrence and measured wind speed; and (vi) revision dates for all data
and confidence factors for measured distances.
CRIME LAYER (AVAILABLE IN 50 STATES). The Company's Crime Layer
provides the following information: (i) composite crime rating factor; (ii)
arson rating; (iii) motor vehicle theft rating; (iv) robbery rating; (v)
aggravated assault rating; (vi) burglary rating; (vii) personal crime index;
(viii) property crime index; and (ix) revision dates for all data.
PAGE 12
MISCELLANEOUS LAYERS. The Company also provides an information layer
that identifies California property that is located in brush fire zones and an
information layer providing windpool data in 8 states, and is developing an
information layer providing earthquake data that is anticipated to be completed
in November 1996.
CUSTOMER BASE AND SALES AND MARKETING. GUS is currently being marketed
to the insurance industry exclusively through the ISO Agreement. Under the terms
of the ISO Agreement, a national sales force employed by ISO and by Commercial
Risk Services (a wholly-owned subsidiary of ISO) are responsible for sales of
the Company's GUS services to members of ISO. The Company supports ISO's sales
efforts by providing sales and technical training presentations for ISO
personnel, assisting ISO field sales representatives in preparing proposals,
participating in joint field sales calls and sharing resources with ISO at
industry trade shows and conferences.
The Company estimates that the selling and implementation cycle for GUS
service to a typical insurance company takes approximately six to nine months.
Implementation of GUS requires an insurance company to make a commitment to
alter its current way of doing business. For example, a majority of insurance
companies do not currently collect work addresses on auto policy applications
therefore making it difficult to calculate drive distances.
COMPETITION. Given the exclusive nature of the ISO Agreement, the
Company believes that it does not have any direct competitors for sales through
ISO utilizing the GUS software. Certain of the GUS layers, or subfiles, do have
competitors, however, the Company does not believe that there are any
competitors that presently offer an on-line hazard and risk data service
comparable to that offered by GUS. No assurance can be given, however, that
competing services will not be developed in the future. Geographic Data
Technology ("GDT") is the significant competitive rival to the Company's
geocoding services and is currently the market leader. Geocoding can also be
accomplished using commercially available software, but the Company believes
that the geocoding produced by these commercially available products cannot
compete with VISTA or GDT for accuracy and completeness.
PAGE 13
SELLING SHAREHOLDERS
Appendix A to this Prospectus sets forth certain information regarding
the Selling Shareholders. The Shares are being registered to permit public
secondary trading of the Shares, and the Selling Shareholders may offer the
Shares for resale from time to time. See "Plan of Distribution".
Except as indicated below, the Shares being offered by the Selling
Shareholders hereunder were acquired from the Company in connection with the
VISTA Merger or upon conversion of securities received by Selling Shareholders
in connection with the VISTA Merger. Under the terms of the Merger Agreement,
the former VISTA EII shareholders were granted certain registration rights with
regard to shares of Common Stock received in the VISTA Merger, shares of Common
Stock to be received upon conversion of the shares of Series C Preferred issued
in the VISTA Merger or shares of Common Stock to be received upon the exercise
of warrants to purchase the Series C Preferred issued in the VISTA Merger and
the subsequent conversion thereof. These rights require the Company, under
certain circumstances, to register such shares of Common Stock for resale under
the Securities Act. In connection with these registration rights and certain
conversion rights with regard to the Series C Preferred, the Company has agreed
to convert shares of Series C Preferred held by certain of the Selling
Shareholders into Common Stock and to register such shares for resale under the
Act together with shares of Common Stock currently held by certain Selling
Shareholders, and has prepared a Registration Statement on Form S-3, of which
this Prospectus forms a part (the "Registration Statement") in connection with
such registration.
Other Shares being offered by the Selling Shareholders hereunder result
from the conversion of debentures acquired during October and November of 1995,
when the Company completed a private placement of $446,000 of its Subordinated
Convertible Debentures (the "Debentures"). In connection with the issuance of
the Debentures, the Company granted the Debenture holders certain piggy-back and
demand registration rights. The Company has agreed to register the shares
underlying the Debentures (the "Debenture Shares") and will include them in the
Registration Statement referred to above.
In connection with the above transactions, each of such Selling
Shareholders represented to the Company that it was acquiring the Shares for
investment and with no present intention of distributing such Shares. In
recognition of the fact that investors, even though purchasing Common Stock
without a view to distribution, may wish to be legally permitted to sell their
shares when they deem appropriate, the Company has filed with the Commission
under the Securities Act a Registration Statement on Form S-3, of which this
Prospectus forms a part, with respect to the resale of the Shares from time to
time and has agreed to prepare and file such amendments and supplements to the
Registration Statement as may be necessary to keep the Registration Statement
effective until the Shares are no longer required to be registered for the sale
thereof by the Selling Shareholders.
PLAN OF DISTRIBUTION
The Company has been advised that the Selling Shareholders may sell
Shares from time to time in transactions in the over-the-counter market, through
negotiated transactions or otherwise, at fixed prices that may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Sales may be made pursuant to this Prospectus to or through
broker-dealers who may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders or the purchasers of
Common Stock for whom such broker-dealer may act as agent or to whom they may
sell as principal, or both (which compensation as to a particular broker-dealer
may be in excess of customary commissions). The Selling Shareholders and any
broker-dealers or other persons acting on their behalf in connection with the
sale of Shares may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions received by them and any profit realized by
them on the resale of the Shares as principals
PAGE 14
may be deemed to be underwriting commissions under the Securities Act. No period
of time has been fixed within which the Shares may be offered or sold.
The Company will not receive any part of the proceeds of any sales of
Shares pursuant to this Prospectus. The Company will pay all the expenses of
registering the Shares, except for selling expenses incurred by the Selling
Shareholders in connection with this offering, including any fees and
commissions payable to broker-dealers or other persons, which will be borne by
the Selling Shareholders. In addition, such agreements provide for certain other
usual and customary terms, including that the Company and the Selling
Shareholders indemnify each other against certain liabilities, including
liabilities arising under the Securities Act.
VALIDITY OF COMMON STOCK
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Oppenheimer Wolff & Donnelly, Minneapolis,
Minnesota.
EXPERTS
The balance sheets of VISTA Information Solutions, Inc. as of December
31, 1995 and 1994 and the statements of operations, changes in stockholders'
equity (deficit) and cash flows for the twelve month periods ended December 31,
1995 and 1994, the six month period ended December 31, 1993 and the twelve month
period ended June 30, 1993, are all incorporated herein in reliance on the
report of McGladrey & Pullen, LLP, independent auditors. Such financial
statements are included herein and incorporated by reference in reliance on the
reports of such firm given upon its authority as an expert in accounting and
auditing.
The financial statements of VISTA Environmental Information, Inc.
(defined herein as "VISTA EII"), incorporated in this prospectus by reference
from the Company's Annual Report on Form 10-K as of December 31, 1994 and 1993
and for each of the three years in the period ended December 31, 1994 have been
audited by Deloitte and Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference (which report expresses an
unqualified opinion on the financial statements and includes an explanatory
paragraph relating to substantial doubt about VISTA Environmental Information,
Inc.'s ability to continue as a going concern), and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
PAGE 15
<TABLE>
<CAPTION>
APPENDIX A
SELLING SHAREHOLDERS
SHARES OF COMMON SHARES OWNED AFTER
STOCK AND COMMON COMPLETION OF
STOCK EQUIVALENTS NUMBER THE OFFERING (2)
OWNED PRIOR TO OF SHARES ------------------
SELLING SHAREHOLDER THE OFFERING (1) BEING OFFERED NUMBER PERCENT (3)
- ------------------- ------------------ ------------- ------ -------
<S> <C> <C> <C> <C>
Mark S. and Loraine H. Ashley 10,040 10,040 (4) 0 0
Blythe P. Ashmore (5) 6,250 6,250 (4) 0 0
Blythe P. and Robert Walter Ashmore, 6,250 6,250 (4) 0 0
as Co-Trustees of the Trust of the
Will of Jack Pearce Ashmore, Jr. (6)
Becky N. Bender, Custodian for
Jessica D. Bender 2,690 2,690 (4) 0 0
Becky N. Bender, Custodian for T.
Jackson Bender IV 2,690 2,690 (4) 0 0
Theodore J. Bender, Shearson as IRA
Rollover Custodian 5,380 5,380 (4) 0 0
Eliot O. and Greta Ann
Brandy, JTWROS 4,180 4,180 (4) 0 0
Clifford Brundage 523,382 523,382 (4) 0 0
Martha M. Bynum 7,470 7,470 (4) 0 0
Anthony C. Canonie (7) 26,910 26,910 (4) 0 0
Anthony C. Canonie, Custodian
for Lindsey E. Canonie (8) 13,450 13,450 (4) 0 0
Gary F. and Leora D. M. Conner,
JTWROS (9) 42,467 12,560 (4) 29,907 *
Eric C. Day, Shearson as IRA
Rollover Custodian 590 590 (4) 0 0
Robert T. Dickson 1,495 1,495 (4) 0 0
Henrietta L. Dodd 7,610 7,610 (4) 0 0
James W. Dodds, Trustee under Trust
Agreement dated May 12, 1992 27,420 27,420 (4) 0 0
William L. Effinger, III, Shearson
as IRA Rollover Custodian 13,450 13,450 (4) 0 0
PAGE A-1
SHARES OF COMMON SHARES OWNED AFTER
STOCK AND COMMON COMPLETION OF
STOCK EQUIVALENTS NUMBER THE OFFERING (2)
OWNED PRIOR TO OF SHARES -----------------
SELLING SHAREHOLDER THE OFFERING (1) BEING OFFERED NUMBER PERCENT (3)
- ------------------- ------------------ ------------- ------ -------
Marietta M. Forlaw 12,510 12,510 (4) 0 0
Thomas R. Gay (10) 1,960,303 1,086,902 (4)(30) 873,401 7.3%
Robert S. Goodroe 26,910 26,910 (4) 0 0
Walter M. Grant 6,430 6,430 (4) 0 0
Raymond Greenhill 598,151 598,151 (4) 0 0
Brian Reid and Elizabeth
McDonald Harriman, JTWROS 2,680 2,680 (4) 0 0
Dean R. Harriman (11) 34,786 890 (4) 33,896 *
Dean R. and Deanne M. Harriman,
JTWROS (12) 41,324 41,324 (4) 0 0
Deanne Michelle Harriman, Shearson
as IRA Rollover Custodian (13) 4,121 1,130 (4) 2,991 *
Frank B. Harriman Revocable Trust 64,294 64,294 (4) 0 0
Philip C. and Sue R. Henry,
JTWROS 13,450 13,450 (4) 0 0
Edwin C. Hill 5,000 5,000 (4) 0 0
Arnold Jensen (14) 278,853 92,296 (4)(30) 186,557 *
Richard N. King, Shearson as
IRA Rollover Custodian 13,710 13,710 (4) 0 0
George C. Krivsky 14,950 14,950 (4) 0 0
John R. Lanigan, Trustee
Lanigan Insurance Agency
Profit Sharing Plan 1,190 1,190 (4) 0 0
Brenda S. Linskey, Shearson
as IRA Custodian (15) 2,090 2,090 (4) 0 0
Matthew A. Linskey, Shearson
as IRA Custodian (16) 890 890 (4) 0 0
Henry A. Mann (17) 20,023 20,023 (4) 0 0
PAGE A-2
SHARES OF COMMON SHARES OWNED AFTER
STOCK AND COMMON COMPLETION OF
STOCK EQUIVALENTS NUMBER THE OFFERING (2)
OWNED PRIOR TO OF SHARES ------------------
SELLING SHAREHOLDER THE OFFERING (1) BEING OFFERED NUMBER PERCENT (3)
- ------------------- ------------------ ------------- ------ -------
Henry A. Mann, Custodian for Lindsey E.
Mann and Elizabeth B. Mann (18) 10,011 10,011 (4) 0 0
Thomas O. Marshall 12,510 12,510 (4) 0 0
Ivey Lewis Nix 7,470 7,470 (4) 0 0
Robert & Company Savings and
Investment Plan 12,510 12,510 (4) 0 0
Robert D. Pannell 9,810 9,810 (4) 0 0
William A. Pope 5,150 5,150 (4) 0 0
Archy M. Roper, Jr. 14,050 14,050 (4) 0 0
Carey Roper 3,730 3,730 (4) 0 0
Joseph William Roper 10,460 10,460 (4) 0 0
Stephen William Roper 6,130 6,130 (4) 0 0
E. Major Schutt 5,000 5,000 (4) 0 0
Sargent E. Schutt 2,500 2,500 (4) 0 0
Sheila Schwartz 10,460 10,460 (4) 0 0
Charles U. Slick 8,970 8,970 (4) 0 0
Jeffrey M. Smith 13,450 13,450 (4) 0 0
Michael S. Smith, Shearson
as IRA Rollover Account (19) 16,440 16,440 (4) 0 0
Phyllis D. Smith, Custodian for
Adam J. Smith (20) 2,690 2,690 (4) 0 0
Phyllis D. Smith, Custodian for
Jennifer L. Smith (21) 2,690 2,690 (4) 0 0
James E. Thomas, Jr. 156,707 156,707 (4) 0 0
Lawrence E. Travis 10,980 10,980 (4) 0 0
Isai and Alisa V. Trejo, JTWROS 7,470 7,470 (4) 0 0
PAGE A-3
SHARES OF COMMON SHARES OWNED AFTER
STOCK AND COMMON COMPLETION OF
STOCK EQUIVALENTS NUMBER THE OFFERING (2)
OWNED PRIOR TO OF SHARES ------------------
SELLING SHAREHOLDER THE OFFERING (1) BEING OFFERED NUMBER PERCENT (3)
- ------------------- ------------------ ------------- ------ -------
Albert G. and Rosalie A. Van Vooren,
JTWROS 34,090 34,090 (4) 0 0
Gerald W. Williams (22) 7,170 7,170 (4) 0 0
Gerald W. and Dorothy J. Williams,
JTWROS (23) 18,490 18,490 (4) 0 0
James W. Willmer 10,160 10,160 (4) 0 0
Brian C. Flynn (24) 73,582 57,026 (30) 16,556 *
Samuel Schwartz (25) 48,781 37,744 (30) 11,037 *
Louis A. Toth (26) 9,759 7,552 (30) 2,207 *
Matthew Vettel (27) 24,398 18,880 (30) 5,518 *
Moeller & Associates (28) 2,961 1,857 (30) 1,104 *
Hudson Trust (29) 1,064,982 53,327 (30) 1,011,655 8.5%
3,252,121
=========
</TABLE>
* Less than 1%.
(1) Based upon questionnaires received from each Selling Shareholder, or a
representative of the Selling Shareholder, in connection with the
preparation of the Registration Statement on Form S-3, of which this
Prospectus is a part.
(2) This assumes all Shares being offered and registered hereunder are
sold, although no Selling Shareholder is obligated to sell any Shares.
(3) Based upon 11,109,563 shares of Common Stock outstanding at July 16,
1996, and upon 785,121 shares of Common Stock subsequently issued upon
conversion of Series C Preferred and the Debentures.
(4) Represents shares acquired in connection with the VISTA Merger. See
"Selling Shareholders."
(5) Does not include 6,250 shares of Common Stock held by Ms. Ashmore and
Robert Walter Ashmore as Co-Trustees of the Trust of the Will of Jack
Pearce Ashmore, Jr.
(6) Does not include 6,250 shares of Common Stock held by Blythe P.
Ashmore.
(7) Does not include 13,450 shares of Common Stock held by Mr. Canonie as
Custodian for Lindsey E. Canonie.
(8) Does not include 26,910 shares of Common Stock held by Mr. Canonie
individually.
PAGE A-4
(9) The shares shown include 29,907 shares of Common Stock that Mr. Conner
has the right to acquire within 60 days upon the exercise of options.
(10) Mr. Gay is a director and Chief Executive Officer of the Company. The
shares shown include (i) 149,537 shares of Common Stock held by Mr.
Gay's children as to which Mr. Gay disclaims beneficial ownership, (ii)
238,334 shares of Common Stock that Mr. Gay has the right to acquire
within 60 days upon the exercise of options and warrants, (iii) 478,520
shares of Common Stock that Mr. Gay has the right to acquire within 60
days upon the conversion of 47,852 shares of Series C Convertible
Preferred Stock, and (iv) 7,010 shares of Common Stock that Mr. Gay has
the right to acquire within 60 days upon the exercise of warrants
representing the right to receive 701 shares of Series C Convertible
Preferred Stock and the subsequent conversion thereof into Common
Stock.
(11) The shares shown include 35,888 shares of Common Stock that Mr.
Harriman has the right to acquire within 60 days upon the exercise of
options. Does not include 41,324 shares of Common Stock held by Mr.
Harriman and Deanne M. Harriman as joint tenants with right of
survivorship. Does not include 4,120 shares of Common Stock held by
Shearson as IRA Rollover Custodian on behalf of Deanne Michelle
Harriman.
(12) Does not include 34,786 shares of Common Stock held by Mr. Harriman
individually. Does not include 4,121 shares of Common Stock held by
Shearson as IRA Rollover Custodian on behalf of Ms. Harriman.
(13) The shares shown include 2,991 shares of Common Stock that Ms. Harriman
has the right to acquire within 60 days upon the exercise of options.
Does not include 34,786 shares of Common Stock held by Dean R.
Harriman. Does not include 41,324 shares of Common Stock held by Ms.
Harriman and Dean R. Harriman as joint tenants with right of
survivorship.
(14) The shares shown include 155,519 shares of Common Stock that Mr. Jensen
has the right to acquire within 60 days upon the exercise of options
and 11,038 shares of Common Stock that Mr. Jensen has the right to
acquire within 60 days upon the exercise of options. Mr. Jensen is a
Vice-President of the Company.
(15) Does not include 890 shares of Common Stock held by Shearson as IRA
Custodian on behalf of Matthew A. Linskey.
(16) Does not include 2,090 shares of Common Stock held by Shearson as IRA
Custodian on behalf of Brenda S. Linskey.
(17) Does not include 10,011 shares of Common Stock held by Mr. Mann as
Custodian for Lindsey E. and Elizabeth B. Mann.
(18) Does not include 20,023 shares of Common Stock held by Mr. Mann
individually.
(19) Does not include 2,690 shares of Common Stock held by Phylis D. Smith
as Custodian for Adam J. Smith. Does not include 2,690 shares of Common
Stock held by Phylis D. Smith as Custodian for Jennifer L. Smith.
(20) Does not include 16,440 shares of Common Stock held by Michael S.
Smith, Shearson as IRA Rollover Account. Does not include 2,670 shares
of Common Stock held by Ms. Smith as Custodian for Jennifer L. Smith.
(21) Does not include 16,440 shares of Common Stock held by Michael S.
Smith, Shearson as IRA Rollover Account. Does not include 2,670 shares
of Common Stock held by Ms. Smith as Custodian for Adam J. Smith.
(22) Does not include 18,490 shares of Common Stock held by Mr. Williams and
Dorothy J. Williams as joint tenants with right of survivorship.
PAGE A-5
(23) Does not include 7,170 shares of Common Stock held by Mr. Williams
individually.
(24) Includes 16,556 Shares of Common Stock that Mr. Flynn has the right to
acquire within 60 days upon the exercise of warrants.
(25) Includes 11,037 Shares of Common Stock that Mr. Schwartz has the right
to acquire within 60 days upon the exercise of warrants.
(26) Includes 2,207 Shares of Common Stock that Mr. Toth has the right to
acquire within 60 days upon the exercise of warrants.
(27) Includes 5,518 Shares of Common Stock that Mr. Vettel has the right to
acquire within 60 days upon the exercise of warrants.
(28) Includes 1,104 Shares of Common Stock that Moeller & Associates has the
right to acquire within 60 days upon the exercise of warrants. Robert
J. Moeller, the President of Moeller & Associates, has been a director
of the Company since 1992.
(29) Includes 948,730 Shares of Common Stock that Hudson Trust has the right
to acquire upon the conversion of 94,873 Shares of Series C Preferred,
30,310 Shares of Common Stock that Hudson Trust has the right to
acquire upon the conversion of 3,031 Shares of Series C Preferred that
Hudson Trust has the right to acquire upon the exercise of warrants,
and 32,615 Shares of Common Stock issuable upon exercise of warrants.
(30) Includes Shares of Common Stock converted from Subordinated Convertible
Debentures issued by the Company in 1995.
PAGE A-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Post-
Effective Amendment No. 1 to the registration statement on Form S-3 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of San
Diego, State of California, on December 29, 1996.
VISTA INFORMATION SOLUTIONS, INC.
By: /s/ Thomas R. Gay
Thomas R. Gay
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement on Form S-3 has been signed by the
following persons on August 15, 1996 in the capacities indicated.
Signature Title
- --------- -----
/s/ Thomas R. Gay President, Chief Executive Officer
Thomas R. Gay (Principal Executive Officer) and Director
* Chief Financial Officer
E. Steven Hamilton (Principal Financial Officer)
* Controller (Principal Accounting Officer)
Brian Conn
* Chairman of the Board
Martin F. Kahn
* Director
James E. Hovis
* Director
Robert J. Moeller
* Director
Jay D. Seid
* Director
Patrick A. Rivelli
/s/ Thomas R. Gay Attorney-in-fact
Thomas R. Gay
