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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 26, 1997
REGISTRATION NO. 333-
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------
VISTA INFORMATION SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-4293754
--------- ----------
(State or other jurisdiction I.R.S. Employer Identification No.
of incorporation)
5060 SHOREHAM PLACE, #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, PRESIDENT AND CHIEF EXECUTIVE OFFICER
VISTA Information Solutions, Inc.
5060 Shoreham Place, #300, San Diego, CA 92122, (619) 450-6100
(Name, address, including zip code, and telephone number, including area code,
of Agent for Service)
-----------------------
Copies of all communications to:
DOUGLAS J. REIN, ESQ.
Gray Cary Ware & Freidenrich
4365 Executive Drive, Suite 1600
San Diego, CA 92121-2189, (619) 677-1400
-----------------------
Approximate date of commencement of proposed sale to the public is
November 26, 1997
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the 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. [ ]
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of each class of Proposed maximum Proposed maximum
securities to be Amount to be aggregate price per aggregate offering Amount of
registered registered unit (1) price (1) registration fee
---------- ---------- -------- --------- ----------------
<S> <C> <C> <C> <C>
Common Stock, 5,756,538 $3.78 per share 21,759,714 6,593.85
$0.01 par value
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933, the registration fee is
based on the average of the closing bid and ask prices on November 21, 1997 as
reported on the Nasdaq SmallCap Market.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
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PROSPECTUS
5,756,538 Shares
VISTA Information Solutions, Inc.
Common Stock
------------------------
This Prospectus relates to 5,756,538 shares (the "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 (collectively, the "Selling Shareholders").
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."
THESE SHARES HAVE NOT BEEN REGISTERED FOR SALE UNDER THE SECURITIES
LAWS OF ANY STATE AS OF THE DATE OF THIS TRANSACTION. BROKERS OF
DEALERS EFFECTING TRANSACTION IN THE SHARES SHOULD CONFIRM THE
EXISTENCE OF EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS BEFORE
EFFECTING TRANSACTIONS ON THE SHARES.
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 November 21, 1997 the average of the bid and asked prices
of the Common Stock, as reported by Nasdaq SmallCap Market, was $3.78 per share.
-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE 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 NOVEMBER 26, 1997
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (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
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 Northwestern Atrium Center
Suite 1400, 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. In addition, the Commission maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. The Common Stock of the Company is traded on the Nasdaq SmallCap
Market. Reports, proxy statements and other information concerning the Company
may be inspected at the offices of the National Association of Securities
Dealers, Inc. located at 1735 K Street, NW Washington, DC 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933 and amended (the "Securities Act"), with
respect to the Shares offered hereby. 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 concerning
the Company and the Shares offered hereby, reference is made to the Registration
Statement and its exhibits.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed (File No. 0-20312) by the Company with the
Commission are incorporated by reference in this Prospectus: (1) the Company's
Annual Report on Form 10-KSB, as amended, for the year ended December 31, 1996;
(2) the Company's Quarterly Reports on Form 10-QSB for the quarters ended March
31, 1997, June 30, 1997 and September 30, 1997; (3) the Company's Current Report
on Form 8-K filed on September 2, 1997; and (4) the description of the Company's
Common Stock contained in its Registration Statement on Form 10 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. Stevens Hamilton, telephone (619) 450-6100.
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RISK FACTORS
The following factors should be considered in evaluating an investment in the
Common Stock. This Prospectus and the information incorporated by reference
contain forward-looking statements, including estimates and expectations, that
involve risks and uncertainties. The Company's actual results may differ
materially from those discussed in forward-looking statements as a result of the
risk factors discussed below and elsewhere in the documents incorporated by
reference herein.
CONTINUING OPERATING LOSSES; PROFITABILITY UNCERTAIN. The Company has
experienced significant operating losses during the nine months ended
September 30, 1997 and during the years ended December 31, 1996, 1995 and 1994.
During the three-month periods ended March 31, June 30 and September 30 1997,
the Company incurred losses of approximately $1,734,000, $1,082,000 and
$2,884,000, respectively and has continued to incur losses since that time. The
Company's cumulative losses as of September 30, 1997 were approximately
$33,390,000. Cash used in operations was approximately $1,234,000 for the year
ended December 31, 1996 and $1,498,000 for the nine months ended September 30,
1997. At September 30, 1997, the Company had working capital of approximately
$446,000. 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.
FLUCTUATION OF QUARTERLY RESULTS. Future operating results may be subject to
quarterly and annual fluctuations based on numerous factors. The Company's
revenue on a quarterly basis can be affected by seasonal characteristics and
certain other factors including the timing and extent of the Company's own sales
and marketing activities. In addition, expenses associated with acquiring data,
maintaining and improving existing products and developing new products, sales
campaigns and other unforeseen costs will also affect operating results.
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. In
particular, the rapid expansion of the Internet creates a substantial new
channel for distributing geographic information to the market, and a new avenue
for future entrants to the environmental information industry. There is no
guarantee that the Company will be successful in this new market. These
industries are highly competitive and many of the Company's potential
competitors have substantially greater capital resources, research and
development capabilities, 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.
Competitive factors may reduce revenues of margins, which would have and adverse
effect on the Company and its operating results and financial condition.
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, produce, 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 of the Company to respond effectively to technological changes,
emerging industry standards or product announcements by competitors could have a
material adverse effect
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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-Registered Trademark- product. The Company markets and
sells its GUS-Registered Trademark- 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 currently has a satisfactory 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 its 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."
PRODUCT LIABILITY. The Company provides information to the insurance,
financial and engineering industries. These customers generally rely upon this
information to assess the risk or scope of work involved in a transaction or
contract. An error or omission in the information provided by the Company could
have an adverse financial impact on customers. There can be no assurance that
the Company could not be held liable for damages if such an error or omission
occurred and that it would not have an adverse effect on the operating results
and financial condition of the Company.
REGULATORY CHANGES. The demand for the Company's environmental compliance
products arises primarily as a result of cleanup 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
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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 assurance that the Company will be able to obtain the financing
necessary to make such an investment in 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-Registered Trademark- 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, 423,459 shares of Series C
Preferred, 187,134 shares of Series D Preferred, 2,500 shares of Series E
Preferred and 2,500 shares of Series F Preferred, all of which provide the
holders of such shares with certain rights and preferences superior to those of
holders of Common Stock. The holders of the Series B Preferred, Series C
Preferred, Series D Preferred, Series E Preferred and Series F Preferred
(collectively, "Preferred Stock") are, or may be entitled to dividends and
distributions payable with respect to the number of shares of Common Stock into
which the Preferred Stock is convertible, and would be 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. Preferred Shareholders are entitled to
vote as a class with holders of Common Stock, and consent of the Preferred
Shareholders as one or separate classes is required prior to certain events. In
addition, the holders of the Series B Preferred are entitled to elect one
director and a board observer, the holders of the Series C Preferred are
entitled to elect two directors, and the holders of Series E Preferred and
Series F Preferred are entitled collectively to elect one director to the
Company's Board of Directors. All the shares of Series B Preferred, Series C
Preferred and Series D Preferred Stock currently outstanding are convertible
into Common Stock at a ratio of 10.6 shares of Common Stock for each share of
Preferred Stock, which ratio is subject to adjustment upon the occurrence of
certain events. All shares of Series E Preferred have a stated value of $1,000
per share and are convertible into Common Stock for $2.75 per share and could
become convertible into Common Stock for $2.00 per share should the Company fail
to meet certain conditions defined in the Stock Purchase Agreement for the sale
of these shares included as an exhibit to the Company's Current Report on Form
8-K, filed on September 2, 1997 and incorporated by reference herein. All
shares of Series F Preferred have a stated value of $1,000 per share and are
convertible into Common Stock at a price equal to 75 percent of the average
closing price of the Company's stock for 20 consecutive trading days preceding
June 30, 1998 or the average closing price of the Company's stock for 20
consecutive trading days preceding a qualified stock offering as defined in the
Stock Purchase Agreement for the sale of these shares included as an exhibit to
the Company's Current Report on Form 8-K incorporated by reference herein.
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. Specifically, in the software development and
information technology professions there is a high demand for skilled
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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. Furthermore,
changes in existing technology or customer demand for alternate technologies
could create the need for additional technical 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.
YEAR 2000 COMPLIANCE. Many currently installed computer systems and
software products are coded to accept only two digit entries in the date code
field. Beginning in the year 2000, these date codes fields will need to accept
four digit entries to distinguish 21st century dates from 20th century dates.
As a result, computer systems and/or software used by organizations may need to
be upgraded to comply with the "Year 2000" requirements. There is significant
uncertainty in the software and information services industries concerning the
potential effects associated with such compliance. While the Company believes
that its systems are compatible with Year 2000 applications, there can be no
assurance that all Company systems will function properly in all operating
environments and on all platforms. The failure of a customer's system could
involve the Company in costly repair activities and affect future revenues, both
of which would have an adverse effect on the Company's business, financial
condition and results of operations. Moreover, other software or systems used by
the Company's customers may not be Year 2000 compliant, which could cause system
failures for those or other sources or interactions between the various systems.
As a result, the Company may be involved in disputes with vendors to various
customers concerning the responsibility for any system failures. Additionally,
any revenues associated with the number of uses of the Company's information
services could be adversely affected by operating system failures affecting
those potential customers and users. As a result, the failure to comply with
Year 2000 requirements by systems not designed by the Company may also have a
material adverse effect on the Company's business, financial condition and
results of operations.
DEPENDENCE ON MAJOR CUSTOMERS. The majority of revenue from the GUS product
comes indirectly from significant contracts by ISO with State Farm and
Prudential through the Company's joint services relationship with ISO. These
two contracts are expected to generate quarterly revenues to the Company of
approximately $588,000. An unexpected termination of these two contracts with
ISO would adversely impact the operating results and financial condition of
the Company.
LIMITATION OF NET OPERATING LOSS CARRYFORWARD. As of December 31, 1996,
the Company has net operating loss carryforwards for federal income tax
purposes of approximately $24,236,000 of which $18,400,000 is available at
December 31, 1996 to offset future taxable income and which include
carryforwards from VEI. The loss carry forwards expire in varying amounts
through 2011. In addition, the Company has investment tax and research credit
carryforwards of approximately $126,000. Future utilization of these loss
credit carryforwards are subject to certain limitations under provisions of
the Internal Revenue Code including limitations subject to Section 382, which
relates to a 50% change in control over a three year period, and are further
dependent upon the Company attaining profitable operations. Shares issued to
acquire VEI and shares issued in previous private placement transactions,
have caused the Company to exceed the 50% change in control threshold. This
has subjected the Company to limitations of annual net operating loss and
credit carryforwards and may result in the expiration of a portion of these
carryforwards before they can be utilized. The utilization of $6,600,000 of
the Company's net operating loss carryforwards available to offset future
taxable income is limited to approximately $302,000 in years 1997 through
2001 and $692,000 in years 2002 through 2008. In addition, these net
operating losses, which were losses generated by VEI before the merger, can
only be used to offset future VEI income.
POTENTIAL LIMITED PUBLIC MARKET. The Common Stock is listed on the Nasdaq
SmallCap Market. To maintain that listing, the Company must meet specified
standards relating to its operating results and financial condition. In August
1997, the Company was required to raise capital by issuing equity securities to
avoid delisting from Nasdaq. The standards for continued listing have recently
been raised. 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
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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 would adversely affect the market price for
the Common Stock. As of November 21, 1997, the Company had 18,578,702 shares of
Common Stock outstanding. A substantial majority of these shares are freely
tradable. In addition to the shares currently outstanding and the shares being
offered hereby, approximately 14,024,437 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, would generally be eligible for resale in the
public market without restriction or pursuant to the restrictions of Rule 144.
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 certain warrants and the
subsequent conversion thereof into Common Stock, and shares of Common Stock
issuable pursuant to the conversion of the Company's Preferred Stock and
Subordinated Convertible Debentures. The registration and public sale of such
shares could adversely affect the market price of the Common Stock.
VOLATILITY OF STOCK PRICE. During the current fiscal year the Common Stock
has traded at less than $0.50 per share. 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 the operating performance
of the Company.
APPLICABILITY OF "PENNY STOCK RULES." Federal regulations under the
Securities 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.
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<PAGE>
SUMMARY INFORMATION REGARDING THE COMPANY
VISTA 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
product lines. The first, conducted 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, conducted
principally in Minnesota, provides information on address-based hazard and
classification information to property/casualty 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
hundreds of federal, state, and local 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.
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, Equifax Insurance &
Special Services and Marshall and Swift Publications Co. 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 value-added resellers and other
strategic relationships mentioned above. VISTA has approximately 15 direct
sales representatives in 10 cities. These sales representatives target 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 value-added 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, readability of reports and the speed and ease of delivery.
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, the
readability of its reports and the speed and ease of delivery particularly
through the STARVIEW suite of products.
VISTA is aware of only two other firms with national environmental database
services and numerous 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").
In addition to the two national competitors, there are a number of smaller
regional and local competitors. 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-Registered Trademark-") 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 added to the Company's current GUS service offering
due to the application's modular design.
-10-
<PAGE>
The Company's GUS services are the subject of an exclusive arrangement with
ISO, a company providing services to approximately 1,400 participating
property/casualty companies which collectively write approximately 80 percent 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 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.
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 is 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
services 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 employment 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.
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<PAGE>
SELLING SHAREHOLDERS
Appendix A to this Prospectus sets forth certain information regarding the
Selling Shareholders. The Shares are being registered to permit public sales 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 (i) the
conversion of Series C Preferred into Common Stock; (ii) the conversion of debt
acquired during 1994, 1995 and 1997; and (iii) the exercise of warrants to
purchase Common Stock issued in connection with Secured Promissory Notes to
SIRROM Capital in 1996 and 1997. In each case, the Company granted certain
registration rights, pursuant to which register such shares for resale under the
Securities Act 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.
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 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, the agreements pertaining to the filing
of the Registration Statement 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.
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<PAGE>
VALIDITY OF COMMON STOCK
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Gray Cary Ware & Freidenrich, a professional
corporation, San Diego, CA.
EXPERTS
The consolidated balance sheets of VISTA Information Solutions, Inc. as of
December 31, 1996 and 1995 and the related consolidated statements of
operations, changes in stockholders' equity and cash flows for each of the
three years in the period ended December 31, 1996 have been audited by
McGladrey & Pullen, LLP, independent auditors, and are incorporated by
reference herein in reliance upon the report of such firm given upon its
authority as an expert in accounting and auditing.
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<PAGE>
APPENDIX A
SELLING SHAREHOLDERS
<TABLE>
<CAPTION>
Shares of Common
Stock and Common
Stock Equivalents Shares Owned After Completion
Owned Prior to Number of Shares of the Offering (2)
Selling Shareholder the Offering (1) Being Offered Number Percent (3)
- ------------------- ------------ ------------- ------ -------
<S> <C> <C> <C> <C>
Ally Capital Corporation 105,931 105,931 (4) 0 0.0%
Bankers Insurance Group 202,831 202,831 (5) 0 0.0%
Century Capital 1,178,150 (9) 209,311 (5) 968,839 5.4%
Cox Enterprises, Inc. Pension Plan 251,164 (10) 44,012 (6) 207,152 1.1%
Edward Kaminsky 17,035 17,035 (5) 0 0.0%
First Century Partnership III 234,500 (11) 194,916 (6) 39,584 0.2%
Frank Nowaczek 67,500 67,500 (7) 0 0.0%
(4)
Gary Mertz 123,331 (12) 106,165 (7) 17,166 0.1%
(5)
(13) (6)
Gilbraltar Trust 757,348 431,387 (7) 325,961 1.8%
(6)
Mapleleaf Capital Ltd. 589,817 (14) 563,965 (8) 25,852 0.1%
Melvin Seid 67,413 67,413 (7) 0 0.0%
Patrick and Yvonne Rivelli 12,669 (15) 12,669 (8) 0 0.0%
(5)
Paul S. Bachow 231,537 (16) 231,537 (7) 0 0.0%
Robert Ivanoff 11,037 11,037 (7) 0 0.0%
Robert Moeller 87,120 (17) 10,254 (5) 76,866 0.4%
Sirrom Capital Corporation 2,983,249 (18) 1,343,032 (4) 1,640,217 9.1%
(5)
Sunwestern Investment Company (7)
(1988) Ltd. 479,556 (19) 390,063 (8) 89,493 0.5%
(5)
(7)
Sunwestern Investment Fund III 500,877 (20) 375,667 (8) 125,210 0.7%
(4)
Technology for Information & (6)
Publishing, L.P. 701,548 701,548 (8) 0
0.0%
(5)
(7)
Thomas Gay 2,517,031 (21) 670,265 (8) 1,846,766 9.9%
</TABLE>
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<PAGE>
(1) Based on the records of the Company as of November 21, 1997.
(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 18,578,702 shares of Common Stock outstanding at November 21,
1997.
(4) Represents shares acquired through the exercise of warrants in 1997.
(5) Represents shares acquired through the conversion of Subordinated
Convertible Debentures issued by the Company in 1997.
(6) Represents shares acquired through the conversion of Subordinated
Convertible Debentures issued by the Vista Environmental Information, Inc.
in 1994.
(7) Represents shares acquired through the conversion of Subordinated
Convertible Debentures issued by the Company in 1995.
(8) Represents shares acquired through the conversion of Convertible Series C
Preferred issued by the Company in 1995.
(9) Includes 15,000 shares Century Capital has the right to acquire upon the
exercise of outstanding options, 160,953 shares upon exercise of
outstanding warrants and 792,886 upon conversion of Series D Preferred
Stock.
(10) Includes 8,936 shares Cox Enterprises has the right to acquire upon
exercise of outstanding warrants and 198,216 shares upon conversion of
Series D Preferred Stock.
(11) Includes 39,584 shares First Century Partnership has the right to acquire
upon the exercise of outstanding warrants.
(12) Includes 5,519 shares Mr. Mertz has the right to acquire upon the exercise
of outstanding warrants and 10,000 upon the exercise of options.
(13) Includes 325,961 Gibraltar Trust has the right to purchase upon the
exercise of outstanding warrants.
(14) Includes 25,852 shares Mapleleaf Capital Ltd. has the right to acquire upon
exercise of outstanding warrants. Does not include 89,493 shares Sunwestern
Investment Company (1988) Ltd. has the right to acquire upon exercise of
outstanding warrants, 125,210 shares Sunwestern Investment Fund III has the
right to acquire upon exercise of outstanding warrants, 390,063 and 375,667
shares included in this prospectus for Sunwestern Investment Company (1988)
Ltd. and Sunwestern Investment Fund, respectively, referred to in notes
(5), (7) and (8).
(15) Does not include 89,493 shares Sunwestern Investment Company (1988) Ltd.
has the right to acquire upon exercise of outstanding warrants, 125,210
shares Sunwestern Investment Fund III has the right to acquire upon
exercise of outstanding warrants, 25,852 shares Mapleleaf Capital Ltd. has
the right to acquire upon exercise of outstanding warrants and 390,063,
375,667 and 563,965 shares included in this prospectus for Sunwestern
Investment Company (1988) Ltd., Sunwestern Investment Fund III and
Mapleleaf Capital Ltd,, respectively, referred to in notes (5), (7) and
(8). Mr. Rivelli is President and a director of Sunwestern Managers Inc.,
the management company of Sunwestern Limited Fund and Mapleleaf Capital and
has served as a director of the Company since February 1995.
(16) Does not include 991,102 shares Bachow and Associates has the right to
acquire upon conversion of Series D Preferred Stock, 2,118,600 shares upon
conversion of Series B Preferred Stock, 115,886 upon the exercise of
warrants and 94,988 upon the exercise of options.
(17) Includes 12,714 shares owned by Moeller and Associates, 55,000 shares
Moeller and Associates has the right to acquire upon the exercise of
options and 9,152 upon the exercise of warrants. Mr. Moeller is President
of Moeller and Associates and has been a director of the Company since
1992.
-15-
<PAGE>
(18) Includes 64,550 Sirrom Capital Corporation has the right to acquire upon
the exercise of warrants and approximately 1,575,667 shares Tandem Capital
has the right to acquire upon the conversion of Series E and Series F
Preferred Stock. Pursuant to the Stock Purchase Agreement for Series E and
Series F Preferred Stock, Tandem Capital has observer rights to all
meetings of the Company's Board of Directors and its committees. Tandem
Capital also has the right to approve one additional director, but has not
yet exercised that right.
(19) Includes 89,493 shares Sunwestern Investment Company (1988) Ltd. has the
right to acquire upon exercise of outstanding warrants. Does not include
125,210 shares Sunwestern Investment Fund III has the right to acquire upon
exercise of outstanding warrants, 25,852 shares Mapleleaf Capital Ltd. has
the right to acquire upon exercise of outstanding warrants and 375,667 and
563,965 shares included in this prospectus for Sunwestern Investment Fund
III and Mapleleaf Capital Ltd,, respectively, referred to in notes (5), (7)
and (8).
(20) Includes 125,210 shares Sunwestern Investment Fund III has the right to
acquire upon exercise of outstanding warrants. Does not include 89,493
shares Sunwestern Investment Company (1988) Ltd. has the right to acquire
upon exercise of outstanding warrants, 25,852 shares Mapleleaf Capital Ltd.
has the right to acquire upon exercise of outstanding warrants and 390,063,
and 563,965 shares included in this prospectus for Sunwestern Investment
Company (1988) Ltd., and Mapleleaf Capital Ltd,, respectively, referred to
in notes (5), (7) and (8).
(21) Includes 1,195,180 shares owned by Mr. Gay, 329,538 shares Mr. Gay has the
right to acquire upon the exercise of options and 266,957 upon the exercise
of warrants. Does not include 149,537 shares owned by Mr. Gay's children.
Mr. Gay has served as Chief Executive Officer of the Company and a member
of the Board of Directors of the Company since February 1995.
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<PAGE>
PART II
INFORMATION NOT REQUIRED
IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The table below sets forth the estimated expenses (except the SEC registration
fee and Nasdaq listing fee, which is an actual amount) expected to be incurred
by the Company in connection with the offer and sale of the Shares covered by
this Registration Statement.
To be paid by
the Registrant
SEC registration fee $ 0.00
Nasdaq listing fee 24,000.00
Fees and expenses of counsel for the Company 3,000.00
Fees and expenses of accountants for the Company 19,000.00
*Fees and expenses of Counsel for the Selling Shareholders 0.00
*Total $46,000.00
*Except for fees and expenses of counsel to the Selling Shareholders, none of
the expenses listed above will be borne by the Selling Shareholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 6 of the Company's Restated Articles of Incorporation limits the
liability of its directors to the fullest extent permitted by the Minnesota
Business Corporation Act (the "MBCA"). Specifically, directors of the Company
will not be personally liable for monetary damages for breach of fiduciary duty
as directors, except liability for (i) any breach of the duty of loyalty to the
Company or its shareholders, (ii) acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii) dividends or
other distributions of corporate assets that are in contravention of certain
statutory or contractual restrictions, (iv) violations of certain Minnesota
securities laws, or (v) any transaction from which the director derives an
improper personal benefit. Liability under federal securities law is not limited
by the Restated Articles.
Section 6.1 of the Company's Restated Bylaws provide that directors,
officers, committee members and other persons and agents, past or present, of
the Company, shall be indemnified by the Company to the fullest extent permitted
by the MBCA.
The MBCA requires that the Company indemnify any director, officer or
employee made or threatened to be made a party to a proceeding, by reason of the
former or present official capacity of the person, against judgments, penalties,
fines, settlements and reasonable expenses incurred in connection with the
proceeding if certain statutory standards are met. "Proceeding" means a
threatened, pending or completed civil, criminal, administrative, arbitration or
investigative proceeding, including a derivative action in the name of the
Company. Reference is made to the detailed terms of the Minnesota
indemnification statute (Minn. Stat. ss. 302A.521) for a complete statement of
such indemnification rights. The Company's Restated Articles of Incorporation
also require the Company to provide indemnification to the fullest extent of the
Minnesota indemnification statute.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company is aware that in the opinion
of the Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable.
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<PAGE>
ITEM 16. EXHIBITS
4.1 (1) Restated Articles of Incorporation, as amended to date.
4.2 (2) Restated By-Laws of the Company, as amended to date.
4.3 (3) Certificate of Designation of the Rights and Preferences of the
Company's Series B Convertible Preferred Stock.
4.4 (4) Certificate of Designation of the Rights and Preferences of the
Company's Series C Convertible Preferred Stock.
4.5 (4) Certificate of Designation of the Rights and Preferences of the
Company's Series D Convertible Preferred Stock.
4.6 (5) Certificate of Designation of the Rights and Preferences of the
Company's Series E and F Convertible Preferred Stock..
5.1 (6) Opinion and Consent of Gray Cary Ware & Freidenrich, a professional
corporation.
23.1 (6) Consent of McGladrey & Pullen, LLP.
24.1 (6) Power of Attorney (See Signature Page).
(1) Incorporated by reference to the exhibits to the Company's Registration
Statement on Form SB-2, as amended on Form S-3, filed October 29, 1995.
(2) Incorporated by reference to the exhibits to the Company's Form 10-KSB for
the fiscal year ending June 30, 1993 (File No. 0-20312).
(3) Incorporated by reference to the exhibits to the Company's Form 10-QSB for
the quarter ended September 30, 1993 (File No. 0-20312).
(4) Incorporated by reference to the exhibits to the Company's Form 8-K filed
March 7, 1995 (File No. 0-20312).
(5) Incorporated by reference to the exhibits to the Company's Form 8-K filed
September 2, 1997 (File No. 0-20312).
(6) Filed electronically.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
price range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in
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<PAGE>
periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act, each filing of
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes to deliver of cause to be
delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to
be presented by Article 3 of Regulation S-X are not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
(d) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under
Item 15 above, or otherwise, the registrant has been advised that in the
opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
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<PAGE>
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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on November 26, 1997.
VISTA INFORMATION SOLUTIONS, INC.
By: /s/ Thomas R. Gay
Thomas R. Gay
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Thomas R. Gay and E. Stevens Hamilton and each or any
one of them, his true and lawful attorneys-in-fact and agents, each acting
alone, with full powers of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, each acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, each acting alone, or his substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons on November 26, 1997 in the
capacities indicated.
Signature Title
- ------------------------ -------------------------------------------------
/s/ Thomas R. Gay President, Chief Executive Officer
Thomas R. Gay (Principal Executive Officer) and Director
/s/ E. Stevens Hamilton Chief Financial Officer
E. Steven Hamilton (Principal Financial Officer)
/s/ Brian Conn Controller (Principal Accounting Officer)
Brian Conn
/s/ Jay D. Seid Chairman of the Board
Jay D. Seid
/s/ Richard J. Freeman Director
Richard J. Freeman
/s/ Robert J. Moeller Director
Robert J. Moeller
/s/ Martin F. Kahn Director
Martin F. Kahn
/s/ Patrick A. Rivelli Director
Patrick A. Rivelli
/s/ Robert Boscamp Director
Robert Boscamp
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<PAGE>
INDEX TO EXHIBITS
4.1 Restated Articles of Incorporation, Incorporated by reference to the
as amended to date. exhibits to the Company's
Registration Statement on Form
SB-2, as amended on Form S-3, filed
October 29, 1995.
4.2 Restated By-Laws of the Company, Incorporated by reference to the
as amended to date. exhibits to the Company's Form
10-KSB for the fiscal year ending
June 30, 1993 (File No. 0-20312).
4.3 Certificate of Designation of the Incorporated by reference to the
Rights and Preferences of the exhibits to the Company's Form
Company's Series B Convertible 10-QSB for the quarter ended
Preferred Stock. September 30, 1993 (File No.
0-20312).
4.4 Certificate of Designation of the Incorporated by reference to the
Rights and Preferences of the exhibits to the Company's Form 8-K
Company's Series C Convertible filed March 7, 1995 (File No.
Preferred Stock. 0-20312).
4.5 Certificate of Designation of the Incorporated by reference to the
Rights and Preferences of the exhibits to the Company's Form 8-K
Company's Series D Convertible filed March 7, 1995 (File No.
Preferred Stock. 0-20312).
4.6 Certificate of Designation of the Incorporated by reference to the
Rights and Preferences of the exhibits to the Company's Form 8-K
Company's Series E and F Convertible filed September 2, 1997 (File No.
Preferred Stock.. 0-20312).
5.1 Opinion and Consent of Gray Cary Filed electronically.
Ware & Freidenrich, a professional
corporation.
23.1 Consent of McGladrey & Pullen, LLP. Filed electronically.
24.1 Power of Attorney (See Signature Page). Filed electronically.
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<PAGE>
EXHIBIT 5.1
November 24, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Vista Information Solutions, Inc.
Registration Statement on Form S-3
Ladies and Gentlemen:
As legal counsel for Vista Information Solutions, Inc., a Minnesota
corporation (the "Company"), we are rendering this opinion in connection with
the preparation and filing of a registration statement on Form S-3 (the
"Registration Statement") relating to the registration under the Securities Act
of 1933, as amended, of 5,756,538 shares (the "Shares") of Common Stock, par
value $.0l per share, of the Company (the "Common Stock").
We have examined such instruments, documents and records as we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. As to
provisions of Minnesota law, we have based this opinion solely on unofficial
compilations of corporate statutes. We have also relied upon written and oral
representations of the Company and its officers. In such examination, review and
reliance, we have assumed the genuineness of all signatures and the authenticity
of all documents submitted to us as originals and the conformity to the
originals of all documents submitted to us as copies.
Based on such examination, we are of the opinion that the 5,756,538 shares
of Common Stock of the Company being registered pursuant to the Registration
Statement and to be sold by the selling shareholders are duly authorized shares
of Common Stock and are validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above and the use of our name wherever it
appears in said Registration Statement. This opinion is to be used only while
the Registration Statement is in effect.
Respectfully submitted,
GRAY CARY WARE & FREIDENRICH
A Professional Corporation
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<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
VISTA Information Solutions, Inc.
San Diego, California
We hereby consent to the use in this Registration Statement on Form S-3 filed on
or about November 24, 1997 of our report, dated March 18, 1997, except for Note
15 as to which the date is August 29, 1997, relating to the consolidated
financial statements of VISTA Information Solutions, Inc., and to the reference
to our Firm under the Caption "Experts" in the Prospectus.
McGLADREY & PULLEN, LLP
San Diego, California
November 24, 1997
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