UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
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TELEPANEL SYSTEMS INC.
(Name of Issuer)
Common Shares, without par value
(Title of Class of Securities)
879434
(CUSIP Number)
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Howard Kailes, Esq.
Krugman Chapnick & Grimshaw LLP
Park 80 West-Plaza Two
Saddle Brook, New Jersey 07663
(201) 845-3434
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
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March 17, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this Schedule
13D, and is filing this schedule because of Sections 13d-1(e),
240.13d-1(f) or 240.13d-1(g), check the following box.
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Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See Section 240.13d-7 for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
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CUSIP NO. 879434
1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF
ABOVE PERSON
Electronic Retailing Systems International, Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a)
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(b)
-----
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
Not applicable
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
See Item 2(d)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
-0-
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8 SHARED VOTING POWER
-0-
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9 SOLE DISPOSITIVE POWER
-0-
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10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions)
(see footnote 1)
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<PAGE>
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
-0-
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14 TYPE OF REPORTING PERSON (See Instructions)
CO
- ----------------------------
(1) On October 29, 1997, Electronic Retailing Systems
International, Inc. and Telepanel Systems Inc. executed a
Combination Agreement dated such date.
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<PAGE>
INTRODUCTORY STATEMENT
----------------------
Pursuant to Reg. Section 240.13d-2, this Amendment No. 1 to
Schedule 13D discloses changes in the Statement on Schedule 13D
dated October 29, 1997 filed by Electronic Retailing Systems
International, Inc. ("ERS"), and therefore does not restate the
items therein in their entirety.
Item 4. Purpose of Transaction.
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On March 17, 1998, ERS announced that the condition to closing
contained in the previously reported Combination Agreement dated as
of October 29, 1997 (the "Combination Agreement") between ERS and
Telepanel Systems Inc. ("Telepanel"), requiring confirmation that
the transaction thereunder (the "Transaction") would qualify for
pooling-of-interests accounting treatment, has failed to be
satisfied following successive discussions by Telepanel with the
U.S. Securities and Exchange Commission addressing the effects of
a debenture financing undertaken by Telepanel in October 1997. ERS'
Board of Directors has determined that it does not intend to waive
the condition to combine regarding qualification for pooling-of-
interests accounting treatment.
Telepanel has stated that it views ERS' position on the
accounting treatment of the transaction as a termination of the
Combination Agreement, which Telepanel accepts, although alleging
that the lack of pooling-of-interests accounting treatment is not
available to ERS as a basis for termination. ERS has communicated
to Telepanel its rejection of Telepanel's position in view of the
terms of the Combination Agreement and recent developments. ERS and
Telepanel are engaged in discussions regarding a mutually
acceptable termination of the Combination Agreement.
Pursuant to the Combination Agreement, in February 1998 ERS
and Telepanel entered into a joint distribution agreement (the
"Joint Distribution Agreement") providing for the creation of a
joint venture (the "Joint Venture") to hold specified distribution
rights until consummation of the Transaction or termination of the
Combination Agreement, or until specified defaults. Under the Joint
Distribution Agreement, ERS has advanced the amount of
U.S.$2,000,000 to the Joint Venture, on a revolving basis, which
accrues interest, payable monthly, at the prime rate plus 2.5% per
annum, is guaranteed by Telepanel and its subsidiaries and is
secured by all of the assets of Telepanel and its subsidiaries
(such collateral subordinated in right to specified bank
indebtedness but prior in right to any other interest). All amounts
advanced by ERS to the Joint Venture, if not earlier repaid from
specified receivables of Telepanel and subsidiaries, were to have
been due within 180 days of termination of the Combination
Agreement (or earlier, in the event of specified defaults). ERS has<PAGE>
<PAGE>
delivered notice to the Joint Venture and Telepanel accelerating
repayment of all outstanding amounts under such facility, as a
result of the failure of the Joint Venture to make payment of
interest when due and notwithstanding attempts to make payment of
interest alone after the due date therefor.
Item 7. Material to be Filed as Exhibits.
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Exhibit A - Press Release of ERS issued March 17, 1998
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SIGNATURE
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After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this statement
is true, complete and correct.
Dated: March 30, 1998 ELECTRONIC RETAILING SYSTEMS
INTERNATIONAL, INC.
By s/Bruce F. Failing, Jr.
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Bruce F. Failing, Jr.
Vice Chairman of the Board
and Principal Executive
Officer
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INDEX TO EXHIBITS
Exhibit A - Press Release of Electronic Retailing
Systems International, Inc. issued March
17, 1998
Exhibit A
Electronic Retailing Systems International, Inc.
Announces Failure of Condition to Combine with
Telepanel Systems Inc.
NORWALK, Conn., March 17/PRNewswire/--Electronic Retailing Systems
International, Inc. (ERS) (Nasdaq:ERSI) announced today that the
condition to closing contained in its combination agreement with
Telepanel Systems Inc. (Nasdaq Small Cap: TLSIF)("Telepanel")
requiring confirmation that the transaction would qualify for
pooling-of-interests accounting treatment has failed to be
satisfied. ERS stated that such failure followed successive
discussions by Telepanel with the U.S. Securities and Exchange
Commission addressing the effects of a debenture financing
undertaken by Telepanel in October 1997. ERS stated that its Board
of Directors did not intend to waive the condition to combine
regarding qualification for pooling-of-interests accounting
treatment.
/CONTACT: Bruce F. Failing, Jr. of Electronic Retailing Systems
International, Inc., 203-849-2500; or Roanne Kulakoff of Kekst and
Company, 212-521-4800, for ERS/
