SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FORM S-3
USCI, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3702647
(State or other jurisdiction of IRS Employer Identification No.)
incorporation or organization)
6115-A JIMMY CARTER BLVD.
NORCROSS, GEORGIA 30071
(770) 840-8888
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
BRUCE A. HAHN
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
6115-A JIMMY CARTER BLVD.
NORCROSS, GEORGIA 30071
(770) 840-8888
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
COPY TO:
LEONARD R. GLASS, ESQ.
LAW OFFICES OF LEONARD R. GLASS, P.A.
45 CENTRAL AVENUE
TENAFLY, NEW JERSEY 07670
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, check the following
box. / /
If any of the securities being registered on this Form are being 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, 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. / /
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CALCULATION OF THE REGISTRATION FEE
Title of Each
Class of Maximum Maximum Amount of
Securities to Amount To Be Offering Price Aggregate Offering Registration
Be Registered Registered(1) Per Unit(2) Offering Price(2) Fee
- -------------- ------------ ----------- ----------------- ------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.0001 per share (3) 11,420,560 $5.03125 $57,459,693 $17,413
- ----------------------------------------------------------------------------------------
TOTAL REGISTRATION FEE $17,413
- ----------------------------------------------------------------------------------------
<FN>
(1) Pursuant to Rule 416, there are also being registered such indeterminate number
of additional shares as may be issued pursuant to the anti-dilution provisions of
certain options, warrants, 6% Series A Convertible Preferred Stock, 6% Series B
Convertible Preferred Stock and Convertible Notes.
(2) Determined in accordance with Rule 457(c), the registration fee is based on the
average of the high and low prices reported on the Nasdaq National Market on May
14, 1998.
(3) Represents in the aggregate shares of Common Stock and shares of Common Stock
issuable (i) upon the exercise of outstanding options, (ii) upon the exercise of
warrants issued or to be issued (iii) upon conversion of outstanding Convertible
Notes, (iv) upon conversion of 6% Series A Convertible Preferred Stock and 6%
Series B Convertible Preferred Stock (collectively, the "Preferred Stock") issued
or to be issued and (v) as payment of dividends on the Preferred Stock, being
registered for the account of Selling Stockholders.
</FN>
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THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER OR BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH AN OFFER, SOLICITATION OR SALE
WOULD BE CONSIDERED UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAW OF ANY SUCH STATE.
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CROSS-REFERENCE SHEET SHOWING LOCATION IN
PROSPECTUS OF INFORMATION REQUIRED BY ITEMS OF FORM S-3
<TABLE>
<CAPTION>
Form S-3 Registration Statement
Item and Heading Location in Prospectus
<S> <C>
1. Forepart of the Registration Facing Page; Cross-Reference Sheet;
Statement and Outside Front Outside Front Cover Page of
Prospectus
Cover Page of Prospectus
2. Inside Front and Outside Back Inside Front and Outside Back Cover
Pages
Cover Pages of Prospectus of Prospectuses; Available
Information
3. Summary Information, Risk Factors Prospectus Summary; Risk Factors
and Ratio of Earnings to Fixed
Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Outside Front Cover Page of
Prospectus;
Price Risk Factors; Selling Stockholders
6. Dilution Not Applicable
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to Not Applicable
be Registered
10. Interests of Named Experts Interests of Counsel
and Counsel
11. Material Changes
Subparagraph (a) Summary - The Company
Subparagraph (b) Not Applicable
12. Incorporation of Certain Incorporation of Certain Documents
Documents by Reference by Reference
13. Disclosure of Commission Disclosure of Commission Position on
Position on Indemnification for Indemnification for Securities Act
Liabilities
</TABLE>
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PROSPECTUS
11,420,560 Shares
USCI, Inc.
Common Stock
All of the shares of Common Stock of USCI, Inc. (the "Company")
offered hereby ("Shares") will be sold by Selling Stockholders. See
"Selling Stockholders." The Company will not receive any proceeds
from the sale the Shares offered hereby.
The Company's Common Stock is quoted on the Nasdaq National Market
System ("Nasdaq")under the symbol "USCM." On May 14, 1998 the last
sale price of the Common Stock as reported by Nasdaq was $5.03125.
THESE SECURITIES INVOLVE A DEGREE OF HIGH DEGREE OF RISK AND SHOULD BE
PURCHASED ONLY BY THOSE PERSONS WHO CAN AFFORD THE LOSS OF THEIR
ENTIRE INVESTMENT. SEE "RISK FACTORS."
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 OR ANY STATE SECURITIES
COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Selling Stockholders (including their respective pledgees, donees,
transferees or other successors in interest) may, without limitation,
from time to time, sell all or a portion of the Shares on Nasdaq, in
privately 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 market prices or at negotiated prices. See
"Plan of Distribution."
The Company has agreed to bear all expenses (other than selling
discounts, concessions or commissions and certain other fees and
expenses of counsel to the Selling Stockholders. The Company has
agreed to indemnify the Selling Stockholders against certain
liabilities, including liabilities under the Securities Act of 1933,
as amended (the "Securities Act"). To the extent that any Selling
Stockholder is an officer, director and/or controlling person of the
Company, the Company has been informed by the Securities and Exchange
Commission that such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
The Shares being offered hereby by the Selling Stockholders has not
been registered for sale under the securities laws of any state or
jurisdiction as of the date of this Prospectus. Brokers or dealers
effecting transactions in the Shares should confirm the registration
thereof under the securities laws of the state in which such
transactions occur, or the existence of any exemption from
registration.
The date of this Prospectus is May , 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports and other information with the
Securities and Exchange Commission ( the "Commission"). Such reports,
proxy statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, DC
20549, and at the Commission's regional offices at 7 World Trade
Center, New York, New York 10048 and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such materials can also be obtained by written request to the Public
Reference section of the Commission at 450 Fifth Street, N.W.
Washington, DC 20549, at prescribed rates.
The Company has filed a Registration Statement under the Securities
Act with the Commission with respect to the Shares offered hereby.
This Prospectus, which constitutes a part of the Registration
Statement, omits certain information contained in the Registration
Statement and the exhibits thereto on file with the Commission
pursuant to the Securities Act and the rules and regulations of the
Commission. Statements contained in this Prospectus, such as the
contents of any contract or any other referenced document are not
necessarily complete and in each instance reference is made to the
copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all
respects by such reference. A copy of the Registration Statement,
including the exhibits thereto, may be inspected without charge at the
Commission's principal office at 450 Fifth Street, N.W. Washington, DC
20549, and copies of all or any part thereof may be obtained from the
Commission upon payment of certain fees prescribed by the Commission.
The Commission also maintains a World Wide Web site that contains
reports, proxy and information statements and other information
regarding registrants, such as the Company, that electronically file
with the Commission. The address of the site is http://www.sec.gov.
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TABLE OF CONTENTS
Forward-Looking Statements 4
Prospectus Summary 4
Risk Factors 7
Use of Proceeds 12
Selling Security Holders 12
Plan of Distribution 15
Interests of Counsel 16
Incorporation of Certain Information by Reference 16
Disclosure of Commission Position on
Indemnification for Securities Act Liabilities 17
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FORWARD-LOOKING STATEMENTS
In addition to historical information, this Prospectus and information
incorporated by reference contain forward-looking statements made in
good faith by the Company pursuant to the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995 including, but
not limited to, those statements regarding the anticipated opening of
additional activation centers in 1997, the Company's intention to
continue to seek additional distribution channels, the proposed
expansion of the Company's reseller operations, and the expected
financial position, business and financing plans of the Company.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance
that such expectations will prove to be correct. The forward-looking
statements contained herein are subject to certain risks and
uncertainties that could cause actual results to differ materially
from those reflected in the forward-looking statements. Factors that
might cause such a difference include, but are not limited to , those
discussed in the section entitled "Risk Factors;" the availability of
financing to fund the Company's operations for the fiscal year ended
December 31, 1998; the number of potential subscribers in a target
market; the existence of strategic alliances and relationships;
technological, regulatory or other developments in the Company's
business; changes in the competitive climate in which the Company
operates; the ability of the Company to operate as a reseller; and the
emergence of future opportunities. Readers are cautioned not to place
undue reliance on these forward-looking statements, which reflect
management's analysis as of the date hereof. The Company undertakes
no obligation to publicly revise these forward-looking statements to
reflect events or circumstances that arise after the date hereof.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus or incorporated by
reference herein.
The Company
On May 15, 1995 U.S. Communications, Inc., a privately held Delaware
corporation, completed a merger (the "Merger") with Trinity Six Inc.,
a publicly owned Delaware corporation ("Trinity"). Prior to the
Merger, Trinity had not conducted any business activities other than
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seeking to effect a merger, exchange of capital stock, asset
acquisition or other similar business combination with an operating
business. Upon completion of the Merger, U.S. Communications, Inc.
became a wholly-owned subsidiary of Trinity, which contemporaneously
changed its name to USCI, Inc. As used herein, all references to the
"Company" shall be deemed to include U.S. Communications, Inc. prior
to the Merger and USCI, Inc. and its subsidiaries subsequent to the
Merger, including Ameritel Communications, Inc., U.S. Communications,
Inc. and Wireless Communication Centers, Inc., unless the context
indicates to the contrary.
The Company is a national reseller of wireless services in the United
States and has created of the largest geographic footprints in the
wireless services industry by entering into contracts with non-
affiliated wireless services carriers covering substantially all of the
continental United States, Alaska, Puerto Rico and the Virgin Islands.
In November 1996, the Company, through its wholly-owned subsidiary,
Ameritel Communications, Inc. ("Ameritel"), initiated a planned
transition from a cellular activation processing agent for major United
States cellular and paging carriers to a reseller of cellular and
paging services through mass market distribution channels including
some of the largest national retailers in the United States. The
Company established Ameritel with the objective of becoming a national
reseller of multiple wireless communications services through mass
merchandising and direct marketing response channels of distribution to
consumers and small and medium-sized businesses.
The Company obtains blocks of cellular telephone numbers and purchases
cellular access and airtime from facilities-based carriers at wholesale
rates, and then resells the cellular access, airtime and related
services to its subscribers at retail rates. The Company also resells
paging services. The Company's subscriber base is expanding rapidly. As
of March 24, 1998, the Company had approximately 56,000 cellular
subscribers (compared to 3,950 as of June 30, 1997) and approximately
20,000 pagers in service (compared to 2,040 as of June 30, 1997). For
the quarter ended December 31, 1997, the Company's monthly average
revenue per unit ("ARPU") was approximately $56.00 and $9.00 for
cellular and paging, respectively.
The Company resells its wireless services under the Ameritel (Service
Mark) brand name principally through a network of national mass
merchandisers. As of March 24, 1998, the Company provided cellular
services and paging services through approximately 1,000 and 3,000
national mass market retail locations, respectively. Many of the
Company's distribution agreements with national retailers contain
exclusivity provisions. The Company also markets its wireless services
through major direct response marketing.
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As a wireless reseller, Ameritel has long-term agreements to purchase,
at contractually agreed upon wholesale rates, cellular telephone and
paging services from operating subsidiaries of certain facilities-based
wireless carriers. As of March 24, 1998, the Company was offering its
Ameritel (Service Mark) cellular services in 372 Metropolitan
Statistical Areas ("MSAs") and Rural Statistical Areas ("RSAs")
covering a population of approximately 214 million people ("POPs"), and
paging services to over 248 million POPs.
The Company has developed proprietary software applications to support
centralized computer-based information and activation processing for
wireless communication services for use by retail mass merchandisers
and direct response marketing companies on a regional and national
basis. The Company's activation and information services, provided
through the Company's Activation Service Network ("ASN"), a
proprietary computer - based automated electronic work flow software
platform, give access to a prospective subscriber concerning the cost
of a variety of wireless communications service plans available for
purchase at a specific retail location. ASN provides information to
the telephone or paging carrier regarding the activation, including a
credit review for cellular and PCS subscribers, the subscriber's
completed service agreement, the mobile or cap code number and the
service plan purchased. The ASN system both expedites and simplifies
the complex administrative functions necessary to initiate, complete
and support activations of wireless telephones and pagers from
multiple locations in the continental U.S., Alaska, Hawaii and Puerto
Rico.
The Company is transitioning to a full-service reseller of paging
services, and is pursuing a strategy similar and complementary to that
of its cellular operations. The Company has signed reseller
agreements with two national facilities-based paging companies. The
Company has developed the "Family Link" paging concept, which targets
families and consists of an off-the-shelf pager bundled with a low fee
and a month-to-month service contract.
As of March 24, 1998, the Company had approximately 20,000 Ameritel
paging subscribers, which represents approximately 10 times its paging
subscriber base of approximately 2,000 as of June 30, 1997.
The Company's Annual Report on Form 10-K for the year ended December
31, 1997 and which was filed with the Commission on March 31, 1998 and
the Company's Quarterly Report on Form 10-Q for the three months ended
March 31, 1998 and which was filed with the Commission on May 15, 1998
are incorporated herein by reference. There have been no material
changes in the Company's affairs since May 15, 1998.
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RISK FACTORS
History of Losses; Uncertain Future Profitability
The Company, which has never operated at a profit, has experienced
increasing losses since its inception in 1991. Such losses continued
in 1997 and are expected to continue in 1998. As of December 31, 1997,
the Company had an accumulated deficit of approximately $43 million.
There can be no assurance that the Company will ever achieve
profitability. The Company expects to continue to incur significant
losses in future periods in connection with the expansion of its
reseller operations, as revenues from the sale of cellular telephone
service are generally insufficient during the early periods of service
to recover the initial costs of acquiring subscribers. In addition, the
Company expects to incur further start-up expenses associated with the
provision of wireless communication services at new or additional
retail locations. There can be no assurance that the Company will
successfully develop as a profitable reseller of wireless services,
that the Company's existing retail mass merchandiser distribution
channels will expand their use of the Company's services, or that the
Company will obtain additional channels of distribution.
Need For Additional Financing
The wireless resale industry is very capital intensive, particularly
for growing resellers, at substantial costs are incurred in connection
with the acquisition of subscribers. The Company will require
substantial additional financing in order to fund operations at current
growth levels and to increase its growth rate. If the additional
capital and/or actual cash flow proves to be insufficient to fund the
Company's operations or expansion requirements (due to unanticipated
expenses, operating difficulties, or otherwise), or the Company's
strategy changes, the assumptions underlying its projections change or
prove to be inaccurate the Company will be required to curtail its
operations. The availability of financing on terms acceptable to the
Company is not assured. Thus, there can be no assurance that the
Company's planned expansion and operation of its reseller business will
be successful.
Continuance as a Going Concern
The Company's significant growth in subscribers has created a working
capital deficiency due to the acquisition costs associated with the
high rate of subscriber growth. The Company currently requires
substantial amounts of capital to fund both current operations and to
expand its subscriber base. Due to recurring losses from operations,
a net capital deficiency and Company's inability to date to obtain
sufficient financing commitments to support current and anticipated
levels of operations, the Company's independent public accountants
audit opinion states that these matters raise substantial doubt about
the Company's ability to continue as a going concern.
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Uncertain Management of Growth
The Company's business plan will, if successfully implemented, result
in rapid expansion of its reseller operations. Rapid expansion of the
Company's operations will significantly strain on the Company's
management, financial and other resources. The Company's ability to
manage future growth, should it occur, will depend upon its ability to
monitor operations, control costs, maintain regulatory compliance,
maintain effective quality controls and significantly expand the
Company's internal management, technical, information and accounting
systems and to attract, assimilate and retain additional qualified
personnel. Furthermore, as the Company's business develops and
expands, the Company will need additional facilities for its growing
work force. There can be no assurance that the Company will
successfully implement and maintain such operational and financial
systems or successfully obtain, integrate and utilize the employees and
management, operational and financial resources necessary to manage a
developing and expanding business in an evolving and increasingly
competitive industry. Any failure to expand these areas and to
implement and improve such systems, procedures and controls in an
efficient manner at a pace consistent with the growth of the Company's
business could have a material adverse effect on the business,
financial condition and results of operations of the Company.
If the Company is unable to hire staff, expand such facilities, retain
labor, increase the capacity of its information systems and/or
successfully manage and integrate such additional resources,
subscribers could experience delays in activation of service and/or
lower levels of customer service. Failure by the Company to meet the
demands of subscribers and to manage the expansion of its business and
operations could have a material adverse effect on the Company's
business, financial condition and results of operations.
Development of Wireless Reseller Operations
A crucial component of the Company's strategy is its ongoing
development as a national wireless reseller. Since November 1996, the
Company has been operating as a reseller of the services of a number
of cellular carriers and two national paging carriers, and is
continuing to negotiate agreements with other carriers. The success
of the Company's expansion plan is subject to certain risks. These
risks include the Company's ability to negotiate additional reseller
agreements on commercially reasonable terms, the increasingly
competitive nature of the wireless telecommunications industry,
including the effect of the development and introduction of new
technologies, the ability to attract additional management personnel,
and the overall effects of the trend toward deregulation of the
telecommunications industry. These regulatory changes include the
possible elimination of the obligation of facilities-based wireless
carriers to make their services available for resale.
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Dependence on Wireless Carriers
The Company is dependent upon facilities-based cellular telephone and
paging service providers for the supply of service to be resold to the
Company's subscribers. The Company would be adversely affected if its
suppliers failed to provide adequate service or if they experienced
financial, technical or regulatory difficulties, or if future demand
for service exceeds current service capabilities. Further, an increase
in the wholesale rates charges by the carriers would inhibit the
Company's ability to control operating costs.
Dependence on Major Channel of Distribution
Of the Company's approximately 56,000 cellular subscribers at March 24,
1998, approximately 70% were enrolled at RadioShack stores, the
Company's principal channel of distribution. There can be no assurance
that the Company's distribution contract with RadioShack will remain in
effect or be renewed when it expires in October 1998. The Company's
growth would be materially and adversely affected if RadioShack
terminates or elects not to renew its contract with the Company or
reduces the number of its retail locations at which the Company
provides its services.
Seasonality
The Company's revenue and operating income tends to fluctuate over the
course of the year, and increases notably in the fourth quarter of the
calendar year. This is primarily attributable to increased retail sales
during the holiday season in November and December. This seasonal
pattern may place pressure on the Company's cash and working capital
positions, which may have an adverse effect on the Company's financial
liquidity.
Maintenance of Subscriber Base
The Company does not enter into contracts greater than one year in
duration with most of its cellular and paging subscribers. As its
subscriber base grows, there can be no assurance that substantial
numbers of its subscribers will continue to purchase wireless services
from the Company. In the event that a significant percentage of its
subscribers choose to purchase cellular telephone or paging service
from another carrier or otherwise cease to purchase service from the
Company, there can be no assurance that the Company will be able to
replace its subscribers with new cellular and paging subscribers.
Exposure to Fraudulent Use of Wireless Services
The cellular industry has been subject to telecommunications fraud and,
in particular, "cloning" of legitimate phone numbers leading to the
illegal use of such numbers. Although the various cellular carriers
have taken steps to prevent fraud, including requiring or recommending
the use of PIN numbers and/or authenticated phones, as well as
implementing the rollout of digital cellular service which is more
difficult to clone, there is no certainty that fraud will not continue
to be a significant problem in the wireless telecommunications
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industry. Under its agreements with certain carriers, the Company may
be liable for a portion of charges incurred for fraud occurring in the
carriers' home and roaming markets.
Dependence on Key Personnel
The Company's future success will depend upon the continued service of
several key personnel, particularly Bruce A. Hahn, the Company's
Chairman and Chief Executive Officer, as well as its ability to attract
and retain highly qualified managerial and operational personnel.
Competition for such personnel is intense, and there can be no
assurance that the Company will retain its existing key managerial,
technical or other personnel or that it will attract and retain such
employees in the future. The loss of key personnel or the inability to
hire or retain qualified personnel in the future could have a material
adverse effect upon the Company's results of operations. Mr. Hahn's
employment agreement expired in December 1997 and the Company is
currently negotiating a new agreement with him. The Company does not
maintain key man life insurance on any of its personnel.
Potential Adverse Effect of Competition
The wireless communications industry is highly competitive and rapidly
changing. The Company's principal competitors are cellular, PCS and
paging service providers (both facilities and non-facilities-based) who
market their services directly to the public and through non-exclusive
agents and resellers such as the Company. Most wireless service
providers, particularly facilities-based carriers, have substantially
greater financial, marketing and technological resources than the
Company and have been marketing their services for a substantial period
of time in the geographical areas in which the Company provides its
services.
Competition in the wireless communications industry is expected to
continue to intensify. Due to the rapid introduction of PCS, enhanced
specialized mobile radio ("ESMR") and the growth in the number of
facilities-based wireless carriers, many areas of the country which
previously were covered by two licensed cellular carriers are now, or
will soon be, served by several wireless providers. The trend toward
consolidation within the telecommunications industry, accelerated by
deregulation at the federal level, can also be expected to exert
increased competitive pressures on companies that remain independent.
Accordingly, there can be no assurance that the Company can operate
successfully in the increasingly competitive wireless
telecommunications market.
Rapid Technological Change
The market for the Company's telecommunications services is
characterized by rapid technological change and evolving industry
standards. The introduction of services embodying new technology and
the emergence of new industry standards can rapidly erode the
competitive position of existing telecommunications services. The
Company's success will be substantially dependent upon its ability to
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anticipate changes in technology and industry standards and
successfully introduce new and enhanced services on a timely basis. If
the Company is unable for technological or other reasons to introduce
new services in a timely manner, it could have a material adverse
effect on the Company's business.
Government Regulation
The resale of interstate and intrastate cellular mobile telephone
service is subject to federal and state regulation as a common carrier
radio telephone service. Although these regulations do not currently
have a material impact on the operation of the Company's reseller
business, there can be no assurance that changes in government
regulation will not have an adverse impact on the Company's business or
results of operations.
Lack of Patent Protection
The Company relies on copyrights, trade secret protection and non-
disclosure agreements to establish and protect its rights relating to
its proprietary software platform and other technology. The Company
does not hold any patents. Despite the Company's efforts to safeguard
and maintain its proprietary rights, there can be no assurance that it
will be successful in doing so, or that its competitors will not
independently develop or patent computer software and hardware that is
substantially equivalent or superior to the Company's Activation
Services Network ("ASN") system, which could have a material adverse
effect on the Company's business. (The Company has also been advised
that its use of the name "Ameritel" may infringe on trademarks and
service marks of others in certain states.
Equipment Failure; Natural Disaster
The Company maintains its centralized platform for subscriber
activation, subscriber care, and billing at two sites in Georgia.
Although the platform has redundancies, a major equipment or software
failure or a natural disaster could have a material, adverse effect on
the Company's operations.
Possible Volatility of Stock Price
In recent years, the stock market in general, and the market for shares
of small capitalization companies (such as the Company) in particular,
have experienced extreme price fluctuations which have been unrelated
to changes in the operating performance of the affected companies. Over
the past 12 months, the Company also has experienced significant
volatility in its stock price, and there can be no assurance that such
fluctuations will not adversely affect the market price of the
Company's Common Stock in the future.
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Dilution
Stockholders may suffer dilution as a result of future financings, the
exercise of existing options and warrants or those granted in the
future, and other transactions.
No Anticipated Dividends on Common Stock
The Company has never paid cash dividends on its Common Stock, and it
does not anticipate paying such dividends in the foreseeable future.
The Company intends to reinvest any funds that might otherwise be
available for the payment of such dividends in the further development
of its business.
USE OF PROCEEDS
The Company will not receive any proceeds from the sales of the Shares
offered hereby. The purpose of this offering is to fulfill contractual
commitments of the Company to one or more of the Selling Stockholders.
Although the Company will not receive any proceeds from the sales of
the Shares offered hereby, to the extent that the options and warrants
are exercised into Shares offered hereby, the Company will receive
cash proceeds from such exercise, which proceeds, if any, will be used
for working capital. There can be no assurance and no representation
is made that the options and warrants will be exercised since the
exercise prices, in most cases, exceed the current market price of the
Company's common stock.
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
Selling Stockholders. The Company will not receive any proceeds from
the sale of the Shares by the Selling Stockholders.
<TABLE>
<CAPTION>
Name of Number of Shares Amount and Percentage of
Selling Stockholder of Common Stock Number of Shares Beneficial Ownership of
and Relationship Owned on of Common Stock Shares of Common Stock
with the Date Offered for After Completion of
Company Hereof Sale (1) Offering
- ----------------- --------------- ---------------- -----------------------
<S> <C> <C> <C>
Ace Foundation(2) 150,000 150,000 -
A.R. Dresher & Co., L.P.(3) 191,304 191,304 -
Alan Baron(4) 192,391 92,391 -
Bulldog Capital Partners(5) 255,000 250,000 5,000
Bulldog Investment
Partners, L.P.(6) 25,000 25,000 -
Decameron Partners(7) 100,000 100,000 -
Jerry Dennis(8) 19,739 19,739 -
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Huberfeld Bodner Family
Foundation(9) 825,000 825,000 -
JNC Opportunity
Fund Ltd. 2,816,596(10) 5,317,126(11) -
George Karfunkel(12) 1,250,000 1,250,000 -
Michael Karfunkel(13) 1,100,000 1,100,000 -
Laura Huberfeld/Naomi
Bodner Partnership(14) 1,375,000 1,375,000 -
PaineWebber Inc.(15) 600,000 600,000 -
Wharton Capital
Partners Ltd.(16) 125,000 125,000 -
<FN>
(1) Also includes an indeterminate number of shares of Common Stock that may become
issuable to prevent dilution resulting from stock splits, stock dividends and
conversion price or exercise price adjustments, which are included pursuant to Rule
416 under the Securities Act of 1933, as amended.
(2) Includes 150,000 shares issuable upon conversion of convertible notes privately
issued to the Selling Stockholder by the Company prior to the date hereof at an
initial conversion price of $5.00 per share, which is subject to adjustment. The
Selling Stockholder has agreed that no conversion of any Convertible Note shall occur
to the extent it causes the Selling Stockholder to then be the "beneficial owner", as
defined in Section 13(d) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), of more than 4.99% of the then outstanding Common Stock of the
Company.
(3) Includes 17,391 shares issuable upon exercise of warrants privately issued to the
Selling Stockholder by the Company prior to the date hereof at an exercise price of
$7.1875 per share.
(4) Includes 92,391 shares issuable upon exercise of warrants privately issued to the
Selling Stockholder by the Company prior to the date hereof at exercise prices of
$7.1875 per share (42,391 shares) and $6.00 per share (50,000 shares). Shares Owned
also include 100,000 shares issuable upon exercise of warrants at an exercise price
of$6.00 per share owned by Decameron Partners, of which Alan Baron is a principal(see
footnote 7).
(5) Includes 25,000 shares issuable upon exercise of warrants privately issued to the
Selling Stockholder by the Company prior to the date hereof at an exercise price of
$7.1875 per share.
(6) Bulldog Investment Partners, L.P. is an affiliate of Bulldog Capital Partners.
(7) Includes 100,000 shares issuable upon exercise of warrants privately issued to
the Selling Stockholder by the Company prior to the date hereof at an exercise price
of $6.00 per share. Alan Baron is a principal of Decameron Partners (see footnote
4).
(8) Includes 19,739 shares issuable upon exercise of options privately issued to the
Selling Stockholder by the Company prior to the date hereof at an exercise price of
$1.58 per share.
13
<PAGE>
(9) Includes 875,000 shares issuable upon exercise of warrants at an exercise price
of $5.00 per share and 150,000 shares issuable upon conversion of convertible notes
at an initial conversion price of $5.00 per share (subject to adjustment), which
warrants and notes were privately issued to the Selling Stockholder by the Company
prior to the date hereof. The Selling Stockholder has agreed that no conversion of
any convertible note and/or exercise of any warrant shall occur to the extent it
causes the Selling Stockholder to then be the "beneficial owner", as defined in
Section 13(d) of the Exchange Act, of more than 4.99% of the then outstanding Common
Stock of the Company.
(10) Includes 353,271 shares issuable upon exercise of warrants at an exercise price
of $6.89 per share (149,522 shares) and $5.85 per share (203,749 shares). Also
includes (i) 1,222,494 shares issuable upon conversion of 6% Series A Convertible
Preferred Stock ("Series A Stock") valued at $5 million at an assumed conversion
price of $4.09 per share (subject to adjustment), (ii) 1,222,494 shares issuable upon
conversion of 6% Series B Convertible Preferred Stock at an assumed conversion price
of $4.09 per share (subject to adjustment)(collectively with the Series A Stock, the
"Preferred Stock"), and (iii) 18,337 shares representing accrued dividends on the
Series A Stock for the first quarter of a three year period valued at $75,000 at an
assumed conversion price of $4.09 per share (subject to adjustment). The Preferred
Stock and warrants were privately issued by the Company to the Selling Stockholder
prior to the date hereof. Because the number of shares of Common Stock issuable upon
conversion of the Preferred Stock is dependent in part upon the market price of the
Common Stock prior to conversion, the number of shares of Common Stock that will be
beneficially owned by the Selling Stockholder will fluctuate daily and cannot be
determined at this time. However, the Selling Stockholder has agreed to restrict its
ability to convert the Preferred Stock and exercise warrants so that the number of
shares of Common Stock held by it and its affiliates after such conversion and/or
exercise will not exceed 4.999% of the then issued and outstanding shares of Common
Stock following such conversion and/or exercise.
(11) Includes (a) 353,271 shares issuable upon exercise of warrants owned by the
Selling Stockholder at an exercise price of $6.89 per share (149,522 shares) and
$5.85 per share (203,749 shares) (b) 4,819,277 shares, representing 200% of the
shares of Common Stock issuable upon conversion of Preferred Stock (valued at $10
million) at an assumed conversion price of $4.15 per share (subject to adjustment),
and (c) 144,578 shares issued and/or to be issued as payment of dividends on the
Preferred Stock owned by the Selling Stockholder valued at $600,000 at an assumed
conversion price of $4.15 per share (subject to adjustment), which dividends may also
be paid in cash by the Company. Because the number of shares of Common Stock that
are issuable upon conversion of the Preferred Stock is determined in part upon the
market price of the Common Stock prior to such conversion, the number of shares of
Common Stock that will be issued upon such conversion and, consequently, offered for
sale under this Registration Statement, cannot be determined at this time. In order
to provide a cushion for any such fluctuations, the Company has agreed to include
herein 200% of the number of shares of Common Stock as would be issuable upon
conversion in full of the Preferred Stock (plus payment of dividends), assuming such
conversion occurred on March 24, 1998.
(12) Shares Owned include 900,000 shares issuable upon exercise of warrants at an
exercise price of $5.00 per share and 350,000 shares issuable upon conversion of
convertible notes at an initial conversion price of $5.00 per share (subject to
adjustment), which warrants and notes were privately issued to the Selling
Stockholder by the Company prior to the date hereof. The Selling Stockholder has
agreed that no conversion of any convertible note and/or exercise of any warrant
shall occur to the extent it causes the Selling Stockholder to then be the
"beneficial owner", as defined in Section 13(d) of the Exchange Act, of more than
4.99% of the then outstanding Common Stock of the Company.
14
<PAGE>
(13) Shares Owned include 900,000 shares issuable upon exercise of warrants at an
exercise price of $5.00 per share and 200,000 shares issuable upon conversion of
convertible notes at an initial conversion price of $5.00 per share (subject to
adjustment), which warrants and notes were privately issued to the Selling
Stockholder by the Company prior to the date hereof. The Selling Stockholder has
agreed that no conversion of any convertible note and/or exercise of any warrant
shall occur to the extent it causes the Selling Stockholder to then be the
"beneficial owner", as defined in Section 13(d) of the Exchange Act, of more than
4.99% of the then outstanding Common Stock of the Company.
(14) Shares owned Include 1,125,000 shares issuable upon exercise of warrants at an
exercise price of $5.00 per share and 250,000 shares issuable upon conversion of
convertible notes at an initial conversion price of $5.00 per share (subject to
adjustment), which warrants and notes were privately issued to the Selling
Stockholder by the Company prior to the date hereof. The Selling Stockholder has
agreed that no conversion of any convertible note and/or exercise of any warrant
shall occur to the extent it causes the Selling Stockholder to then be the
"beneficial owner", as defined in Section 13(d) of the Exchange Act, of more than
4.99% of the then outstanding Common Stock of the Company.
(15) Includes 600,000 shares issuable upon exercise of options privately issued to
the Selling Stockholder by the Company prior to the date hereof at an exercise price
of $6.00 per share.
(16) Includes 125,000 shares issuable upon exercise of warrants privately issued to
the Selling Stockholder by the Company prior to the date hereof at exercise prices of
$6.89 per share (62,500 shares) and $5.85 per share (62,500 shares).
</FN>
</TABLE>
PLAN OF DISTRIBUTION
The Selling Stockholders (including pledgees, transferees and other
successors in interest may, from time to time, sell all or a portion
of the Shares on the Nasdaq National Market, in privately 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 market prices or at negotiated prices. The Shares may be sold by
the Selling Stockholders (including pledgees, donees, transferees or
other successors in interest) by one or more of the following methods,
without limitation: (a) block trades in which the broker or dealer so
engaged will attempt to sell the Shares as agent but may position and
resell a portion of the block as principal to facilitate the
transaction, (b) purchases buy a broker or sealer as principal and
resale by such broker or dealer for its account pursuant to this
Prospectus, (c) an exchange distribution in accordance with the rules
of such exchange, (d) ordinary brokerage transactions and transactions
in which the broker solicits purchasers, (e) privately negotiated
transactions, (f) short sales and (g) a combination of such methods of
sale.
In effecting such sales, brokers and sealers engaged by Selling
Stockholders (or, if any such broker-dealer acts as agent for the
15
<PAGE>
purchaser of such shares, from such purchaser) in amounts to be
negotiated which are not expected to exceed those customary in the
types of transactions involved. Broker-dealers may agree with one or
more Selling Stockholders to sell a specified number of such Shares at
a stipulated price per share, and, to the extent such broker-dealer is
unable to do so acting as agent for said Selling Stockholders to
purchase as principal any unsold Shares at the price required to
fulfill the broker-dealer commitment to the Selling Stockholders.
Broker-dealers who acquire Shares as principals may thereafter resell
such Shares from time to time in transactions (which may involve block
transactions and sales to and through other broker-dealers, including
transactions of the nature described above) in the over-the-counter
market or otherwise at prices and on terms then prevailing at the time
of sale, at prices then related to the then current market price or in
negotiated transactions and, in connection with such resales, may pay
to or receive from the purchasers of such Shares commissions as
described above. The Selling Stockholders may also sell Shares in
accordance with Rule 144 under the Securities Act, rather than
pursuant to this Prospectus.
The Selling Stockholders and any broker-dealers or agents that
participate with the Selling Stockholders in sales of the Shares may
be deemed to be "underwriters" within the meaning of the Securities
Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale
of the Shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
From time to time the Selling Stockholders may engage in short sales,
short sales against the box, puts and calls and other transactions in
securities of the Company or derivatives thereof, and may sell and
deliver the Shares in connection therewith or in settlement of
securities loans. From time to time the Selling Stockholders may
pledge their Shares pursuant to a broker's margin provisions contained
in customer agreements. Upon a default by a Selling Stockholder, a
broker may offer and sell the pledged Shares from time to time.
INTERESTS OF COUNSEL
Certain legal matters with respect to the validity of the Common Stock
offered hereby will be passed upon for the Company by The Law Offices
of Leonard R. Glass P.A., 45 Central Avenue Tenafly, New Jersey 07670.
Family members of Mr. Glass own 230,000 shares of the Company's Common
Stock amounting to approximately 2% of the Common Stock outstanding.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
2. The Company's Quarterly Report on Form 10-Q for the three months
ended March 31, 1998.
3. The description of the Company's Common Stock, $.0001 par value per
share, as set forth in the Company's Registration Statement on Form
16
<PAGE>
S-1 on Form S-4. (Reg. No. 33-88828) as filed with the Commission and
declared effective on May 15, 1995.
All reports and other documents filed by the Company pursuant to
section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of this Prospectus and prior to the termination of this
offering shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing of such reports and
documents. Any statement incorporated herein shall be deemed to be
modified or suspended for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed
document which is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus. The Company hereby
undertakes to provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been
delivered, upon written or oral request of such person, a copy of any
or all of the foregoing documents incorporated herein by reference
(other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents). Requests
for such documents should be submitted to the Executive Vice President
and Chief Financial Officer of the Company, at the Company's executive
offices located at 6115-A Jimmy Carter Blvd., Norcross, Georgia 30071
(telephone: (770) 840-8888).
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Article Seventh of the Company's Certificate of Incorporation
provides, with respect to the indemnification of directors and
officers, that the Company shall indemnify to the fullest extent
permitted by Sections 102(b)(7) and 145 of the Delaware General
Corporation Law, as amended from time to time, each person that such
sections grant the Company the power to indemnify. Article Seventh of
the Certificate of Incorporation also provides that no director shall
be liable to the Company or to any of its stockholders for monetary
damages for breach of fiduciary duty as a director, except with
respect to (1) a breach of the director's duty of loyalty to the
company or its stockholders, (2) acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law,
(3) liability under Section 174 of the Delaware General Corporation
Law or (4) a transaction from which the director derived an improper
personal benefit, it being the intention of the foregoing provision to
eliminate the liability of the Company's directors to the Company or
its stockholders to the fullest extent permitted by section 102(b) of
the Delaware Corporation Law, as amended from time to time. Insofar
as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the
company 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.
17
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses which will be
incurred by the Registrant in connection with the Offering. With the
exception of the registration fee, all amounts shown are estimates.
SEC Registration Fee $17,413
Printing and Engraving Expenses 5,000
Legal Fees and Expenses 25,000
Accounting Fees and Expenses 5,000
Miscellaneous Expenses 2,500
Total $54,913
None of the Selling Stockholders whose shares are included in this
registration statement will bear any of the foregoing expenses,
although such stockholders will be responsible for any commissions
payable to their respective brokers (if any) in connection with the
sale of their respective shares.
Item 15. Indemnification of Officers and Directors
Article Seventh of the Company's Certificate of
Incorporation provides with respect to the indemnification of
directors and officers that the Company shall indemnify to the
fullest extent permitted by Sections 102(b)(7) and 145 of the
Delaware General Corporation Law, as amended from time to time,
each person that such Sections grant the Company the power to
indemnify. Article Seventh of the Certificate of Incorporation
of the Company also provides that no director shall be liable to
the Company or any of its stockholders for monetary damages for
breach of fiduciary duty as a director, except with respect to
(1) a breach of the director's duty of loyalty to the Company or
its stockholders, (2) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (3) liability under Section 174 of the Delaware General
Corporation Law or (4) a transaction from which the director
derived an improper personal benefit, it being the intention of
the foregoing provision to eliminate the liability of the
Company's directors to the Company or its stockholders to the
fullest extent permitted by Section 102(b)(7) of Delaware General
Corporation Law, as amended from time to time.
II-1
<PAGE>
Article XIII of the bylaws of the Company provides for the
indemnification of directors, officers, employees, and agents of
the Company, as well as others serving at the Company's request
in such capacity for another entity, in certain specific
instances in accordance with the Delaware General Corporation
Law. In an action brought by or in the right of the Company, the
individual is entitled to indemnification of expenses of defense
or settlement if he acted in good faith, and in a manner
reasonably believed to be in or not opposed to the best interests
of the Company, except that no indemnification may be afforded in
instances where the individual has been adjudged liable to the
Company, unless the court hearing such action determines that
despite the adjudication of liability the individual is fairly
and reasonably entitled to indemnity. In all other actions, the
individual is entitled to indemnification of expenses, judgments,
fines, and amounts paid in settlement if the individual acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, in criminal
proceedings, if he had no reasonable cause to believe his conduct
was unlawful. The indemnification for any such action (other
than as ordered by a court) may be made by the Company only upon
a determination that indemnification is proper in the
circumstances because the individual met the applicable standard
of conduct. Such determination must be made by a majority vote
of disinterested directors or, in certain specific instances, by
independent legal counsel or by the stockholders.
The bylaws of the Company provide that the Company may
purchase and maintain insurance on behalf of directors, officers,
employees, and agents, as well as others serving at the Company's
request in such capacity for another entity, against any
liabilities asserted against such persons whether or not the
Company would have the power to indemnify such directors,
officers, employees, or agents against such liability under the
Delaware General Corporation Law. The Company has purchased and
maintains such insurance pursuant to such authorization for the
officers and the directors of the Company.
Item 16. Exhibits
NUMBER DESCRIPTION OF EXHIBIT
3.1 Certificate of Incorporation, as amended, including Certificates
of Designation for 6% Series A Convertible Preferred Stock and 6%
Series B Convertible Preferred Stock.(1)
3.3 By-Laws. (2).
4.1 Form of Certificate evidencing shares of Common
Stock (3).
5. Opinion of Law Offices of Leonard R. Glass, P.A., as to
the legality of the shares being registered. (4)
II-2
<PAGE>
23.1 Consent of Law Offices of Leonard R. Glass, P.A.
(included in Exhibit 5 to this Registration Statement)
23.2 Consent of Arthur Andersen LLP (4)
24.1 Power of Attorney (included on the signature
page of Part II of this Registration Statement)(4).
- ----------------------------
(1) Incorporated by reference to an Exhibit filed as part of
the Registrant's Form 10-Q for the three months ended
March 31, 1998.
(2) Incorporated by reference to an Exhibit filed as part of
Trinity's Registration Statement on Form S-1 (File No. 33-64489).
(3) Incorporated by reference to an Exhibit filed as part of
Post-Effective Amendment No. 1 on Form S-3 to the Registrant's
Registration Statement on Form S-1 on Form S-4 (File No. 33-88828).
(4) Filed herewith.
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 material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change in such information
in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the 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 purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities
and Exchange Act of 1934) 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.
Item 18. Financial Statements and Schedules
Financial Statements and Schedules have been omitted because the conditions
requiring their filing do not exist.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
the registrant, USCI, Inc., 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 Norcross, State of
Georgia, on the 20th day of May, 1998.
USCI, Inc.
Registrant
By: /s/ Bruce A. Hahn
---------------------------
Bruce A. Hahn,
Chairman of the Board and
Chief Executive Officer
II-4
<PAGE>
POWER OF ATTORNEY
Know All Men By These Presents, that each person whose
signature appears below constitutes and appoints Bruce A. Hahn
and Robert J. Kostrinsky, or either of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution,
and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and 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, and each of
them, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof. This Power of Attorney may be signed in several
counterparts.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
- ----------------------------------------------------------------------------
[S] [C] [C]
/s/ Bruce A. Hahn Chairman of the Board May 20, 1998
- ------------------------- and Chief Executive
Bruce A. Hahn Officer, Director
/s/ Robert J. Kostrinsky Chief Financial Officer May 20, 1998
- ------------------------- and Principal
Robert J. Kostrinsky Accounting Officer
/s/ Edgar Puthuff
- ------------------------- Director May 20, 1998
Edgar Puthuff
/s/ Jerome S. Baron
- ------------------------- Director May 20, 1998
Jerome S. Baron
/s/ Salvatore T. DiMascio
- -------------------------- Director May 20, 1998
Salvatore T. DiMascio
/s/ Stephen Pazian
- -------------------------- Director May 20, 1998
Stephen Pazian
II-5
EXHIBIT 5
LAW OFFICES OF LEONARD R. GLASS, P.A.
45 Central Ave.
Tenafly, New Jersey 07670-0579
(201) 894-9300
May 20, 1998
USCI, Inc.
6115-A Jimmy Carter Boulevard
Norcross, Georgia 30071
Re: Registration Statement on Form S-3 Under the Securities Act of 1933
Gentlemen:
We are counsel to USCI, Inc., a Delaware corporation (the "Company"),
who has been requested that we render an opinion in connection with a
Registration Statement on Form S-3, filed by the Company with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the
"Registration Statement"), covering 11,420,560 shares (the "Shares") of
common stock par value $.0001 per share ("Common Stock"), which, in the
aggregate, are outstanding, issuable upon the exercise of warrants issued or
to be issued, issuable upon the conversion of outstanding convertible notes,
issuable upon conversion of 6% Series A and Series B Convertible Preferred
Stock ("Preferred Stock") issued or to be issued, and issued or issuable as
payment of dividends on the Preferred Stock.
In that connection, we have examined the Certificate of Incorporation,
as amended, the Certificate of Designation for the Preferred Stock, and the
By-laws of the Company, the Registration Statement, corporate proceedings of
the Company relating to the issuance of the shares, warrants, convertible
notes and Preferred Stock, and such other instruments and documents as we
have deemed relevant under the circumstances.
In making the aforesaid examinations, we have assumed the genuineness of
all signatures and the conformity to original documents of all copies
furnished to us as original or photostatic copies. We have also assumed that
the corporate records furnished to us by the Company include all corporate
proceedings taken by the Company to date.
Based upon and subject to the foregoing, we are of the opinion that
the Shares have been duly authorized and reserved for issuance and, when
issued and paid for in accordance with the terms of the warrants convertible
notes and Certificate of Designation for the Preferred Stock, will be validly
issued, fully paid and non-assessable.
Family members of Leonard R. Glass, Esq. beneficially own approximately
two (2) percent of the outstanding shares of the Company's Common Stock.
We hereby consent to the use of our opinion as herein set forth as an
exhibit to the Registration Statement and to the use of our name under Item
10, Interests of Counsel, in the Registration Statement.
Very truly yours,
/s/ LAW OFFICES OF LEONARD R. GLASS, P.A.
LAW OFFICES OF LEONARD R. GLASS, P.A.
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 26, 1998
included in USCI, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1997.
/s/ ARTHUR ANDERSEN LLP
----------------------------
ARTHUR ANDERSEN LLP
Atlanta, Georgia
May 15, 1998.
