As filed with the Securities and Exchange Commission on August __, 1999.
Registration No. 333-71179
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
Amendment No. 1
Registration Statement
Under
THE SECURITIES ACT OF 1933
Sims Communications, Inc.
(Exact name of registrant as specified in charter)
Delaware
(State or other jurisdiction of incorporation)
18001 Cowan, Suite C & D
Irvine, CA 92614
65-0287558 (949)261-6665
(IRS Employer I.D. (Address, including zip code, and telephone number
Number) of principal executive offices)
Mark Bennett
18001 Cowan, Suite C & D
Irvine, CA 92614
(949) 261-6665
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications, including all communications sent
to the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen
1624 Washington Street
Denver, Colorado 80203
(303) 839-0061
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date
of this Registration Statement
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
<PAGE>
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 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. [ ]
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Unit (1) Price Fee (5)
- ---------- ---------- ----------- ----------- -----------
Common Stock (2) 2,600,000 $1.15 $2,990,000 $ 832
Common Stock (3) 116,333 $1.15 133,783 38
Common Stock (4) 5,600,000 $1.15 6,440,000 791
--------- ----------- --------
Total 8,316,333 $9,563,783 $2,661
========= ========== ======
(1) Offering price computed in accordance with Rule 457(c). (2) Shares of Common
Stock issuable upon conversion of Company's Series C
Preferred Stock. Includes additional shares which may be issued due to
potential adjustments to conversion rate.
(3) Shares of Common Stock issuable upon the exercise of warrants held by the
Series C Preferred shareholders.
(4) Shares of common stock to be sold by Selling Shareholders. (5) A fee of
$1,626 was paid when this Registration Statement was initially
filed.
Pursuant to Rule 416, this Registration Statement includes such
indeterminate number of additional securities as may be required for issuance
upon the conversion of the Preferred Stock or upon the exercise of the warrants
as a result of any adjustment in the number of securities issuable by reason of
the anti-dilution provisions of the Preferred Stock or the warrants.
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 l933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
SIMS COMMUNICATIONS, INC.
CROSS REFERENCE SHEET
Item in Form S-3 Location in Prospectus
Item 1 Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus ................................. Facing Page; Outside Front
Cover Page
Item 2 Inside Front and Outside Back Cover Inside Front Cover Page;
Pages of Prospectus ........................ Outside Back Cover Page
Item 3 Summary Information, Risk Factors
Ratio of Earnings to Fixed Changes ......... Prospectus Summary;
Risk Factors
Item 4 Use of Proceeds ............................ Not Applicable.
Item 5 Determination of Offering Price ............ Selling Shareholders
Item 6 Dilution ................................... Comparative Share Data
Item 7 Selling Security Holders ................... Selling Shareholders
Item 8 Plan of Distribution ....................... Selling Shareholders
Item 9 Description of Securities to be
Registered ................................. Description of Securities
Item l0 Interest of Named Experts and Counsel ...... Experts
Item 11 Material Changes ........................... Prospectus Summary
Item 12 Incorporation of Certain Information by
Reference .................................. Documents Incorporated by
Reference
Item l3 Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities ................................ Indemnification
<PAGE>
SELLING SHAREHOLDER OFFERING PROSPECTUS
SIMS COMMUNICATIONS, INC.
Common Stock
This prospectus relates to the sale of common stock by certain persons who
either own or have the right to acquire shares of Sims' common stock. These
persons are sometimes referred to in this prospectus as the Selling
Shareholders.
Sims is an electronic transactions processing company with a primary focus
on the healthcare industry. Sims' products include MedCard System, the only
completely paperless insurance billing system designed for use by hospitals,
doctors and other healthcare providers, the One Medical Service System, which
provides one-stop shopping at local pharmacies for a variety of home medical
products and services, and a website through which a consumer can order up to
5,000 home medical products on the Internet and obtain healthcare information.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities offered by this
prospectus or passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
The securities offered by this prospectus are speculative and involve a
high degree of risk. For a description of certain important factors that should
be considered by prospective investors, see "Risk Factors" beginning on page
____ of this prospectus.
On August , 1999 the closing price of Sims' common stock on the NASDAQ
SmallCap Market was $1.03 per share. Sims' NASDAQ symbol is SIMS.
The date of this prospectus is August , 1999
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Sims will provide, without charge, to each person to whom a copy of this
Prospectus is delivered, including any beneficial owner, upon the written or
oral request of such person, a copy of any or all of the documents incorporated
by reference herein (other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference into this Prospectus). Requests
should be directed to:
Sims Communications, Inc.
18001 Cowan, Suite C & D
Irvine, CA 92614
(949) 261-6665
(949) 261-0323 (fax)
The following documents filed with the Commission by Sims (Commission File
No. 0-25474) are hereby incorporated by reference into this Prospectus:
(1) Annual Report on Form 10-K for the fiscal year ended June 30, 1998.
(2) Quarterly report on Form 10-Q for the quarter ending March 31, 1999.
(3) 8-K report dated December 14, 1998.
(4) 8-K report dated January 20, 1999.
All documents filed with the Commission by Sims pursuant to Sections
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 the offering registered hereby shall
be deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of the filing of such documents. Any statement contained in
a document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for the purposes of this Prospectus to
the extent that a statement contained herein or in any subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
<PAGE>
PROSPECTUS SUMMARY
Sims
Sims generates revenue through the following divisions:
One Medical
Sim's One Medical Division provides a financial processing and
communications network for the Home Medical Equipment (HME) industry. In
addition to processing information and verifying insurance medical cards, this
network connects HME buyers with a network of HME vendors. This proprietary
network has been designated for the medical and managed healthcare market, but
Sims' primary focus at the present time is the retail pharmacy industry.
The One Medical network allows any pharmacy to be more competitive in the
HME marketplace by being able to offer over 23,000 products through an automated
catalogue process and a direct connection to local providers of oxygen,
appliance repair, nursing care, and other such services. Pharmacies in the
network are able to provide their customers with medical supplies and equipment
along with product information without sending the customer to another location
and thus losing control of the customer. As a result, the network provides
pharmacies with the opportunity to capture a greater percentage of the managed
healthcare market, generate additional revenues, and simultaneously provide
greater service and convenience to their customers.
JustMed.com
The JustMed.com division involves three components:
- The Medcard health insurance verification and billing system - The
JustMed.com website - The Med Store
MedCard System
In November 1998 Sims acquired an exclusive world wide license to software
programs and related technology known as the MedCard system. The MedCard system
is an electronic processing system which consolidates insurance eligibility
verification and processes medical claims and approvals of credit card and debit
card payments in under 30 seconds through a single, small terminal.
<PAGE>
As of July 31, 1999 the MedCard system was able to retrieve on-line
eligibility and authorization information from 77 medical insurance companies
and electronically process and submit billings for its healthcare providers to
over 1650 companies. These insurance providers include CIGNA, Prudential, Oxford
Health Plan, United Health Plans, Blue Cross, Medicaid, Aetna, Blue Cross/Blue
Sheild and Metrahealth. Using the MedCard system, patients are relieved from the
problems associated with eligibility confirmation and billings, healthcare
providers' reimbursements are accelerated and account receivables are reduced.
The time it takes to collect payments from insurance providers decreases from
months to days. Sims obtains revenues from the sale or lease of its processing
terminals and from fees received from every transaction processed by means of
the terminals.
Website
The JustMed.com website is an internet website which began functioning on
July 1, 1999. The website advertises healthcare products and services which are
available to the general public and provides medical information to the general
public. Persons in need of healthcare products and services can access the
website and order products or transfer to the more detailed websites maintained
by the companies which provide the products and services. Sims expects to
generate revenues from this website by charging providers of healthcare products
and services fees for advertising on the website. Sims will also receive fees
when a person transfers from Sims' website to the websites maintained by a
provider of healthcare products or services. Sims expects that advertisers on
its website will include distributors of healthcare equipment and products,
hospitals, physician practice groups, and clinics.
Med Store
The Med Store is a feature of Sims' website which allows consumers to use
their computers to purchase a variety of healthcare products and services. Items
available for purchase include canes, crutches, walkers, bath chairs, blood
pressure units, cold therapies, exercise equipment and hot and cold packs.
Movie Vision
Movie Vision rents video cassettes, primarily containing motion pictures,
through automated dispensing units in hotels. Movie Vision currently has video
cassette dispensing machines in approximately 140 hotels in the United States.
Sims' executive offices are located at 18001 Cowan, Suite C & D, Irvine
California 92614. Sims' telephone number is (949) 261-6665.
The Offering
This prospectus relates to the sale of shares of Sims' common stock:
- issuable upon the conversion of Sims' Series C preferred stock, -
issuable upon the exercise of warrants held by the Series C
preferred shareholders
- issuable upon the exercise of warrants and options which were
previously issued by Sims, and
- held by certain persons who either purchased the shares from Sims in
private offerings, received the shares for services provided to Sims,
or received the shares in settlement of amounts owed to these persons
by Sims.
<PAGE>
The holders of the preferred shares, warrants and options, to the
extent they convert their preferred shares into shares of common stock or
exercise the warrants or options, and the owners of the common stock described
above are referred to in this prospectus as the Selling Shareholders. Sims will
not receive any funds upon the conversion of the preferred shares since Sims
received $1,700,000 when the preferred shares were sold. If all warrants and
options held by the Selling Shareholders are exercised, Sims will receive
approximately $1,586,000 which will be used to fund Sims' operations. Sims will
not receive any proceeds from the sale of the shares by the Selling
Shareholders.
As of July 31, 1999, Sims had 16,734,077 shares of common stock issued and
outstanding. Assuming all preferred shares are converted into 2,125,000 shares
of common stock (assuming a conversion price of $0.80 per share), and all
warrants and options held by the selling shareholders are exercised, there will
be 20,349,681 shares of common stock issued and outstanding. The number of
outstanding shares before and after this offering does not give effect to shares
which may be issued upon the exercise and/or conversion of other options,
warrants or convertible securities previously issued by Sims.
Statement of Operations Data:
Years Ended June 30, Nine Months Ending
1998 1997 March 31, 1999
---- ---- ------------------
Revenues $980,951 $2,923,532 $1,284,585
Cost of Sales (523,479) (1,608,572) (520,678)
Operating and other Expenses (7,503,483) (4,657,587) (5,296,637)
(Loss) Income from Discontinued
Operations (63,737) 553,731 -
--------------- ------------ --------------
Net (Loss) $(7,109,748) $(2,788,896) $(4,532,730)
============ =========== ============
Balance Sheet Data:
June 30, 1998 March 31, 1999
---------------- ------------------
Current Assets $1,088,022 $1,364,123
Total Assets 5,602,751 7,032,474
Current Liabilities 2,785,015 2,375,184
Total Liabilities 3,372,542 3,001,285
Working Capital (Deficit) (1,697,013) (1,011,061)
Shareholders' Equity 2,230,209 4,031,189
No common stock dividends have been declared by Sims since its inception.
<PAGE>
RISK FACTORS
Prospective Investors should be aware that ownership of Sims' common stock
involves certain risks, including those described below, which could adversely
affect the value of their holdings of common stock. Sims does not make, nor has
it authorized any other person to make, any representations about the future
market value of Sims' common stock.
The securities offered should be purchased only by persons who can afford
to lose their entire investment. Prospective investors should read this entire
prospectus and carefully consider, among others, the following risk factors in
addition to the other information in this Prospectus prior to making an
investment.
History of Losses. Sims has incurred losses since it was formed in 1991.
From the date of its formation through March 31, 1999, Sims incurred net losses
of approximately $(24,982,000). During the nine months ended March 31, 1999 Sims
had a loss of $(4,532,730). Sims expects to continue to incur losses until such
time, if ever, as it earns net income. There can be no assurance that Sims will
be able to generate sufficient revenues and become profitable.
Sims Needs Additional Capital to Continue in Business. This offering is
being made on behalf of certain selling shareholders. Sims will not receive any
proceeds from the sale of the shares offered by the selling shareholders. Sims'
continued operations will depend upon the availability of additional funding.
There can be no assurance that Sims will be able to obtain additional funding,
if needed, or if available on terms satisfactory to Sims.
Agreements with Credit Card Companies. Sims' point-of-sale terminals and
video dispensing machines are capable of operating on an automatic basis as the
result of a nationwide credit card system. By means of telephone lines and
computers, this system links credit card companies, issuing banks and credit
card processing firms throughout the United States and allows products and
services to be purchased through credit cards. Sims presently has agreements
with credit card processors which authorize the use of various major credit
cards in Sims' machines. In order for Sims to continue to have the services of
these credit card processors available, Sims is required to meet certain
conditions as provided in the agreements between the credit card processors and
Sims. In the event Sims fails to meet these conditions, the credit card
processors may automatically refuse to accept credit cards, in which case Sims'
machines would be unable to process transactions.
Prices for Sims' Common Stock have been highly volatile and will be
influenced by a number of factors, including the depth and liquidity of the
market for Sims' Common Stock, Sims' financial results, investor perceptions of
Sims, and general economic and other conditions.
<PAGE>
There is No Assurance that Sims' Common Stock Will Continue to be Listed
on NASDAQ. Although Sims' Common Stock is currently listed on the NASDAQ
Small-Cap Market, the National Association of Securities Dealers, Inc. ("NASD")
requires, for continued inclusion on the NASDAQ Small-Cap Market, that Sims must
maintain $2,000,000 in tangible net worth and that the bid price of Sims' Common
Stock must be at least $1.00. Although Sims presently complies with these
listing standards, if Sims' securities were delisted from the NASDAQ Small-Cap
Market, Sims' securities would trade in the unorganized interdealer
over-the-counter market through the OTC Bulletin Board which provides
significantly less liquidity than the NASDAQ Small-Cap Market. Securities which
are not traded on the NASDAQ Small-Cap Market may be more difficult to sell and
may be subject to more price volatility than NASDAQ listed securities. There can
be no assurance that Sims' securities will remain listed on the NASDAQ Small-Cap
Market.
If Sims' Common Stock was delisted from NASDAQ, trades in such securities
may then be subject to Rule 15g-9 under the Securities Exchange Act of 1934,
which rule imposes certain requirements on broker/dealers who sell securities
subject to the rule to persons other than established customers and accredited
investors. For transactions covered by the rule, brokers/dealers must make a
special suitability determination for purchasers of the securities and receive
the purchaser's written agreement to the transaction prior to sale. Rule 15g-9,
if applicable to sales of Sims' securities, may affect the ability of
broker/dealers to sell Sims' securities and may also affect the ability of
investors in this offering to sell such securities in the secondary market and
otherwise affect the trading market in Sims' securities.
The Securities and Exchange Commission has rules that regulate
broker/dealer practices in connection with transactions in "penny stocks". Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume information with
respect to transactions in that security is provided by the exchange or system).
The penny stock rules require a broker/dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document prepared by the Commission that provides information about
penny stocks and the nature and level of risks in the penny stock market. The
broker/dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker/dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker/dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation. These disclosure requirements may have the
effect of reducing the level of trading activity in the secondary market for a
stock that becomes subject to the penny stock rules.
COMPARATIVE SHARE DATA
As of July 31, 1999, the present shareholders of Sims owned 16,734,077
shares of Common Stock, which had a net tangible book value of approximately
$0.15 per share. The following table illustrates the comparative stock ownership
of the present shareholders of Sims, as compared to the investors in this
Offering, assuming all shares offered are sold.
<PAGE>
Number of Shares Note Reference
Shares outstanding as of July 31,1999(1) 16,734,077
Shares issuable upon conversion of Series C 2,125,000 A
Preferred Stock.
Shares issuable in payment of dividends to 93,750 B
holders of Series C Preferred shares.
Shares issuable upon exercise of warrants 113,333 B
held by Series C Preferred shareholders.
Shares held by, or which may be acquired 111,519 B
by sales agent.
Shares issuable upon exercise of warrants 360,000 C
issued to sales agents and financial consultants
Shares issuable upon exercise of warrants sold 889,269 D
to private investors
Shares outstanding (pro forma basis)(1) 20,349,681
Net tangible book value per share as of
July 31, 1999 $0.15
Equity ownership by present shareholders
after this offering 82.3%
Equity ownership by investors in this offering 17.7%
(1) Amount excludes shares which may be issued upon the exercise and/or
conversion of options, warrants and other convertible securities previously
issued by Sims. See table below.
"Net tangible book value per share" is the amount that results from
subtracting the total liabilities and intangible assets of Sims from its total
assets and dividing such amount by the shares of Common Stock then outstanding.
The purchasers of the securities offered by this Prospectus will suffer
immediate dilution if the price paid for the securities offered is greater than
the net tangible book value of Sims' common stock.
<PAGE>
Other Shares Which May Be Issued:
The following table lists additional shares of Sims' Common Stock which
may be issued as the result of the exercise of outstanding options, warrants or
the conversion of other securities issued by Sims:
Number Note
of Shares Reference
Shares issuable upon exercise
of warrants issued to sales agents
and financial consultants 1,528,206 C
Shares issuable upon the exercise of
warrants sold to private investors 915,684 D
Shares issuable upon conversion of notes
and exercise of warrants sold in
private offering 137,565 E
Shares issuable upon exercise of options
previously granted by Company 4,825,500 F
Additional shares issuable in connection
with the acquisition of One Medical
Services, Inc.: G
Warrant Shares 187,500
Incentive Shares 1,485,000
A. Between November 1998 and January 1999, Sims sold 1,700 shares of its Series
C Preferred Stock (the "Preferred Stock") to a group of institutional investors
for $1,700,000. Each Preferred Share is convertible into shares of Sims' common
stock equal in number to the amount determined by dividing $1,000 by the lower
of (i) $1.50 (or $1.28 in the case of 750 shares sold in December 1998), or (ii)
80% of the average price of Sims' common stock for any two trading days during
the ten trading days preceding the conversion date. The lower of (i) or (ii) is
the "Conversion Price" for the Series C Preferred Stock. The shares in the table
assume a conversion price of $0.80 per share. The actual number of shares to be
issued upon the conversion of the Series C Preferred Shares will depend upon the
price of Sims' common stock at the time of conversion.
B. In connection with the issuance of the Series C Preferred Stock Sims also:
(i) Agreed to pay annual dividends to the Series C Preferred
shareholders at the rate of $60 per share. At Sims' option these
dividends may be paid in cash or in shares of Sims' common stock.
For dividends paid in shares of stock, the number of shares to be
issued is determined by dividing the dollar amount
<PAGE>
of the dividends by 80% of the average price of Sims' common stock
for any two trading days during the ten trading days preceding the
date the dividends are payable. As of July 31, 1999 Sims owed
approximately $75,000 in dividends to the Series C Preferred
shareholders. Sims has elected to pay these dividends with shares of
common stock. The number of shares in the table was determined by
dividing $75,000 by $0.80.
(ii) Issued to the holders of the Series C Preferred Stock, on a pro rata
basis, warrants which collectively allow for the purchase of up to
113,333 shares of Sims' common stock. The warrants are exercisable
at a price of $1.00 per share at any time prior to July 31, 2004.
(iii) Issued to Settondown Capital International, Ltd., the sales agent
for the offering, 45 shares of Series C Preferred Stock, warrants
for the purchase of 37,500 shares of Sims' common stock and 14,769
shares of common stock. The Series C Preferred Shares issued to the
sales agent are convertible on the same basis as the Series C
Preferred Shares sold to the institutional investors (with a maximum
conversion price of $1.50 per share). The warrants for the purchase
of the 37,500 shares of common stock are exercisable at a price
ranging between $1.27 and $1.50 per share at any time prior to
December 31, 2003. Settondown, as the holder of 45 shares of the
Series C preferred stock, also received 3,000 warrants which have
the same terms as the warrants referred to in (ii) above.
C. In connection with prior private offerings of Sims' common stock, Sims paid
Commissions to the sales agents for such offerings in the form of cash and
warrants. Sims has also entered into a number of agreements with various
financial consultants. Pursuant to the terms of these agreements, Sims has
issued to the financial consultants shares of common stock, plus warrants to
purchase additional shares of common stock. The warrants referred to above are
exercisable at prices ranging between $0.59 and $5.00 per share and expire
between November 2001 and April 2004. Up to 360,000 shares of common stock
issuable upon the exercise of warrants held by certain financial consultants are
being offered to the public by means of this prospectus. See "Selling
Shareholders".
D. In connection with certain private offerings, Sims sold shares of common
stock and warrants. The warrants sold in these private offerings are exercisable
at prices ranging between $0.44 and $1.54 per share and expire between March
2000 and April 2004. Up to 889,269 shares of common stock issuable upon the
exercise of warrants sold to certain investors in these offerings are being
offered to the public by means of this prospectus. See "Selling Shareholders".
E. Between February and December l997 Sims sold $1,017,500 of convertible notes
(the "Notes"), together with warrants for the purchase of 75,065 shares of Sims'
common stock. The Notes bear interest at 8% per annum and are presently due and
payable. As of July 31, 1999 Notes in the principal amount of $917,500 (plus
accrued interest) have been converted into 571,851 shares of Sims' common stock.
The remaining Notes are collectively convertible into 62,500 shares of Sims'
Common Stock at a conversion price of $1.60 per share. The Warrants are
exercisable at any time prior to May 31, 2002 at prices ranging between $4.00
and $10.00 per share.
<PAGE>
F. Options are held by present and former officers, directors and employees of
Sims.
G. Effective May 30, 1998 Sims acquired One Medical Services, Inc. in
consideration for 142,349 shares of common stock and 187,500 warrants
exercisable at $2.00 per share at any time prior to May 30, 2003. Sims has also
agreed to issue to the former owners of One Medical up to 1,485,000 additional
shares of common stock depending on the future operating of One Medical. The
number of shares to be issued will be determined by dividing the quarterly net
income of One Medical (for each fiscal quarterly beginning June 30, 1998 and
ending June 30, 2001), by the average closing price of Sims' common stock for
the five day trading period prior to the end of each quarter.
The shares which are referred to in Notes A, B, C and D (limited to
360,000 shares in the case of Note C and 889,269 shares in the case of Note D),
as well as approximately 5,078,337 additional shares, are being registered for
public sale by means of this prospectus.
A total of 1,295,900 shares issuable upon the exercise of options, and
which are referred to in Note F, have been registered for public sale by means
of a registration statement on Form S-8 filed with the Securities and Exchange
Commission
SELLING SHAREHOLDERS
The Offering
This prospectus relates to the sale of shares of Sims' common stock:
- issuable upon the conversion of Sims' Series C preferred stock, -
issuable upon the exercise of warrants held by the Series C
preferred shareholders
- issuable upon the exercise of warrants and options which were
previously issued by Sims, and
- held by certain persons who either purchased the shares from Sims in
private offerings, received the shares for services provided to Sims,
or received the shares in settlement of amounts owed to these persons
by Sims.
The holders of the preferred shares, warrants and options, to the
extent they convert their preferred shares into shares of common stock or
exercise the warrants or options, and the owners of the common stock described
above are referred to in this prospectus as the Selling Shareholders.
<PAGE>
The names of the Selling Shareholders are:
Shares
Which
May Be Shares
Acquired Which
Upon Con- May be Share
version of Acquired Shares to Owner-
Series C Upon Ex- be Sold ship
Shares Preferred ercise of in this After
Name Owned Shares (1) Warrants Offering (2) Offering
- ---------------- -------- ---------- -------- ------------ --------
Tonga Partners, LP -- 718,750 38,333 (2) 757,083 --
Manchester Asset
Management Ltd. -- 406,250 21,667 (2) 427,917 --
Augustine Fund, LP -- 375,000 20,000 (2) 395,000 --
Gilston Corporation
Ltd. -- 312,500 16,667 (2) 329,167 --
HSBC James Capel
Canada, Inc. -- 312,500 16,667 (2) 329,167 --
Settondown Capital
International, Ltd. 14,769 56,250 40,500 111,519 --
Great Neck Partners 333,333 133,333 466,666 --
Jack Levit 183,334 183,334 --
Leon Ladd 33,350 33,350 --
Asian Restaurants 338,983 338,983 --
Jack Levit 183,334 183,334 --
James Wagner 571,429 571,429 --
Chelverton Fun
Limited 100,000 100,000 --
Richmark Capital 30,000 30,000 --
James Morse 250,000 250,000 --
<PAGE>
Shares
Which
May Be Shares
Acquired Which
Upon Con- May be Share
version of Acquired Shares to Owner-
Series C Upon Ex- be Sold ship
Shares Preferred ercise of in this After
Name Owned Shares (1) Warrants Offering (2) Offering
- ---------------- -------- ---------- -------- ------------ --------
Todd Brouse Grantor
Trust 40,000 40,000 --
Robert Brouse Grantor
Trust 40,000 40,000 --
Vincent Pipia 80,000 80,000 --
Continental Capital 200,000 200,000 --
Morse Financial 400,000 400,000 --
SMP Financial
Consultants 190,000 190,000 --
OAC Joint Venture,
Inc. 22,857 22,857 45,714 --
John Jones 45,714 45,714 91,428 --
Nancy Jones 22,857 22,857 45,714 --
Jeffrey Nunez 22,857 22,857 45,714 --
Dieterich & Associates 4,571 4,571 9,142 --
Gregg Berger 3,429 3,429 6,858 --
Toni Gales 3,716 3,716 7,432 --
Richard Gales 1,050 1,050 2,100 --
Ammar Kubba 33,142 33,142 66,284 --
Sam Meltzer 11,428 11,428 22,856 --
Aron D. Scharf 18,286 18,286 36,572 --
<PAGE>
Shares
Which
May Be Shares
Acquired Which
Upon Con- May be Share
version of Acquired Shares to Owner-
Series C Upon Ex- be Sold ship
Shares Preferred ercise of in this After
Name Owned Shares (1) Warrants Offering (2) Offering
- ---------------- -------- ---------- -------- ------------ --------
David Stone 4,571 4,571 9,142 --
United Recyclers,
Inc. 22,857 22,857 45,714 --
Ruben Kitay 11,428 11,428 22,856 --
Zapara Inc. 22,857 22,857 45,714 --
Susan McCabe 4,571 4,571 9,142 --
Thomas McCausland 4,571 4,571 9,142 --
Chris Dieterich 11,428 11,428 22,856 --
Jessica Santuro 4,571 4,571 9,142 --
Errol Kaplan 68,571 68,571 --
Philip Brook 33,333 6,667 40,000 --
Scott Elliot 40,000 40,000 --
John Travis Rhodes 10,000 10,000 --
Andrew Collins 40,000 40,000 --
Donald Baker 10,000 10,000 --
Charles Wheet 20,000 20,000
Market Search
International Inc. 13,333 13,333
Brian Johns 10,000 10,000
Brett Carlson 20,000 20,000
<PAGE>
Shares
Which
May Be Shares
Acquired Which
Upon Con- May be Share
version of Acquired Shares to Owner-
Series C Upon Ex- be Sold ship
Shares Preferred ercise of in this After
Name Owned Shares (1) Warrants Offering (2) Offering
- ---------------- -------- ---------- -------- ------------ --------
Kevin Sorg 10,000 10,000
Vito Palermo 10,000 10,000
Fayette Severance 16,667 16,667
Craig Kinley 10,000 10,000
Larry Hansen 10,000 10,000
Knight Press 30,000 30,000
David E.Cowan 20,000 20,000
Christopher Ross 10,000 10,000
C. Larry Roark 100,000 100,000
Jeb L. Milam 10,000 10,000
John P. Weldon III 10,000 10,000
Debra Morse 10,000 10,000 20,000
First Choice Money
Resources, Inc. 10,000 10,000 20,000
Gifts of Joy
Incorporated 80,000 108,571 188,571
U.S. Automotive, Inc. 80,000 108,571 188,571
Zora Dietrich 28,950 28,950 57,900
Michael Associates 300,000 60,000 360,000
Lynn Simay 24,000 4,800 28,800
<PAGE>
Shares
Which
May Be Shares
Acquired Which
Upon Con- May be Share
version of Acquired Shares to Owner-
Series C Upon Ex- be Sold ship
Shares Preferred ercise of in this After
Name Owned Shares (1) Warrants Offering (2) Offering
- ---------------- -------- ---------- -------- ------------ --------
Hal Turkiewicz 7,318 1,464 8,782
Joseph Sciacca 12,000 2,400 14,400
William Piazza 10,000 2,000 12,000
Lynne Levy 7,927 1,585 9,512
Robert Suppan 12,500 2,500 15,000
Michael Spielman 6,097 1,219 7,316
William Piazza 20,000 4,000 24,000
Edward Seganti 25,800 5,160 30,960
Kenneth Zubay 30,488 6,098 36,586
Robert Corchia 60,975 12,195 73,170
Patrick Alston 1,000 1,000
Wendy Bennett 7,500 7,500
Marvin Berger 7,000 7,000
George Borst 8,000 8,000
Debi Cobb 4,500 4,500
Dennis Corn 3,500 3,500
David Dyke 4,000 4,000
William Eickenberg 21,000 21,000
<PAGE>
Shares
Which
May Be Shares
Acquired Which
Upon Con- May be Share
version of Acquired Shares to Owner-
Series C Upon Ex- be Sold ship
Shares Preferred ercise of in this After
Name Owned Shares (1) Warrants Offering (2) Offering
- ---------------- -------- ---------- -------- ------------ --------
Jeffrey Faelnar 4,500 4,500
Ian Hart 35,000 35,000
Maria Hernandez 2,000 2,000
Michael Hughes 5,000 5,000
Celia Niemerow 4,000 4,000
Richard Niemerow 5,000 5,000
Tracey Olszewski 13,000 13,000
Claudia O'Neill 5,000 5,000
Debbie Peterkin 2,000 2,000
Marsh Phelps 6,500 6,500
Robert Stevens 7,000 7,000
Tho Trieu 3,500 3,500
Matthew Worthington 4,000 4,000
Ronald Pizzolo 40,000 40,000
Anthony Pizzolo 40,000 40,000
Bruce Weitzberg 7,500 7,500
Diane Kurfis 4,000 4,000
Linda Piazza 6,500 6,500
<PAGE>
Shares
Which
May Be Shares
Acquired Which
Upon Con- May be Share
version of Acquired Shares to Owner-
Series C Upon Ex- be Sold ship
Shares Preferred ercise of in this After
Name Owned Shares (1) Warrants Offering (2) Offering
- ---------------- -------- ---------- -------- ------------ --------
Luis Marenco 6,500 6,500
Lalit Bhatia 4,500 4,500
Maria Sabb 3,500 3,500
Lou Novembre 3,000 3,000
Ann Powell 2,500 2,500
Marlo Sabb 2,500 2,500
Bruno Bieler 1,500 1,500
BettyannFalleo 1,500 1,500
Nicole Cugliandro 600 600
Jim Gallear 600 600
Margret Healy 400 400
George Baron 350 350
Jeff McKay 25,000 25,000
Jessee Massingill 9,600 9,600
Robert Crowder 19,200 19,200
William Piazza 60,975 12,195 73,170
Jack Sandler 15,000 3,000 18,000
<PAGE>
Shares
Which
May Be Shares
Acquired Which
Upon Con- May be Share
version of Acquired Shares to Owner-
Series C Upon Ex- be Sold ship
Shares Preferred ercise of in this After
Name Owned Shares (1) Warrants Offering (2) Offering
- ---------------- -------- ---------- -------- ------------ --------
Brenda Gonzalez 15,000 3,000 18,000
Nabeel Hasan 20,000 4,000 24,000
Lori Doctor 24,000 4,800 28,800
Jerry Messer 30,000 6,000 36,000
Rebecca Raff 50,000 50,000
Joseph Kurtz 350,000 70,000 420,000
William Crowder 19,200 19,200
---------- -------------------------
5,078,337 2,181,250 1,403,103 8,662,690
========= ========= ========= =========
(1) Represents shares issuable upon the conversion of the Series C Preferred
Stock assuming conversion price of $0.80 per share. The actual number of
shares to be issued upon the conversion of the Series C Preferred Shares
will depend upon the price of Sims' common stock at the time of conversion.
See "Comparative Share Data".
(2) Assumes all shares owned, or which may be acquired, by the selling
shareholders, are sold to the public by means of this prospectus.
None of the selling shareholders will own more than 1% of Sims' common stock
after this offering.
Manner of Sale. The shares of Common Stock owned, or which may be
acquired, by the Selling Shareholders may be offered and sold by means of this
Prospectus from time to time as market conditions permit in the over-the-counter
market, or otherwise, at prices and terms then prevailing or at prices related
to the then-current market price, or in negotiated transactions. These shares
may be sold by one or more of the following methods, without limitation: (a) a
block trade in which a broker or dealer so engaged will attempt to sell the
shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction; (b) purchases by a broker or dealer as principal
and resale by such broker or dealer for its account pursuant to this Prospectus;
(c) ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and (d) face-to-face transactions between sellers and
purchasers without a broker/dealer. In effecting sales, brokers or dealers
engaged by the Selling Shareholders may arrange for other brokers or dealers to
participate. Such brokers or dealers may receive commissions or discounts from
Selling Shareholders in amounts to be negotiated.
From time to time one or more of the Selling Shareholders may transfer,
pledge, donate or assign the shares received upon the conversion of the Series C
Preferred Stock (the "Conversion Shares") to lenders or others and each of such
persons will be deemed to be a Selling Shareholder for purposes of this
Prospectus. The number of Conversion Shares beneficially owned by those Selling
Shareholders will decrease as and when they transfer, pledge, donate or assign
the Conversion Shares. The plan of distribution for the Conversion Shares sold
by means of this Prospectus will otherwise remain unchanged, except that the
transferees, pledgees, donees or other successors will be Selling Shareholders
for purposes of this Prospectus .
A Selling Shareholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of Sims' common
stock in the course of hedging the positions they assume with such Selling
Shareholder, including, without limitation, in connection with the distribution
of Sims' common stock by such broker-dealers. A Selling Shareholder may also
enter into option or other transactions with broker-dealers that involve the
delivery of the common stock to the broker-dealers, who may then resell or
otherwise transfer such common stock. A Selling Shareholder may also loan or
pledge the common stock to a broker-dealer and the broker-dealer may sell the
common stock so loaned or upon default may sell or otherwise transfer the
pledged common stock.
Broker-dealers, underwriters or agents participating in the distribution
of Sims' common stock as agents may receive compensation in the form of
commissions, discounts or concessions from the Selling Shareholders and/or
purchasers of the common stock for whom such broker-dealers may act as agent, or
to whom they may sell as principal, or both (which compensation as to a
particular broker-dealer may be less than or in excess of customary
commissions). Selling Shareholders and any broker-dealers who act in connection
with the sale of common stock hereunder may be deemed to be "Underwriters"
within the meaning of the Securities Act, and any commissions they receive may
be deemed to be underwriting discounts and commissions under the Securities Act.
Neither Sims nor any Selling Shareholder can presently estimate the amount of
such compensation. Sims knows of no existing arrangements between any Selling
Shareholder, any other stockholder, broker, dealer, underwriter or agent
relating to the sale or distribution of Sims' common stock.
The Selling Shareholders and any broker/dealers who act in connection with
the sale of the Shares hereunder may be deemed to be "underwriters" within the
meaning of ss.2(11) of the Securities Acts of 1933, and any commissions received
by them and profit on any resale of the Shares as principal might be deemed to
be underwriting discounts and commissions under the Securities Act. Sims has
agreed to indemnify the Selling Shareholders and any securities broker/dealers
who may be deemed to be underwriters against certain liabilities, including
liabilities under the Securities Act as underwriters or otherwise.
Sims has advised the Selling Shareholders that they and any securities
broker/dealers or others who may be deemed to be statutory underwriters will be
subject to the Prospectus delivery requirements under the Securities Act of
1933. Sims has also advised the Selling Shareholders that in the event of a
"distribution" of the shares owned by the Selling Shareholder, such Selling
Shareholders, any "affiliated purchasers", and any broker/dealer or other person
who participates in such distribution may be subject to Rule 102 under the
Securities Exchange Act of 1934 ("1934 Act") until their participation in that
distribution is completed. A "distribution" is defined in Rule 102 as an
offering of securities "that is distinguished from ordinary trading transactions
by the magnitude of the offering and the presence of special selling efforts and
selling methods". Sims has also advised the Selling Shareholders that Rule 102
under the 1934 Act prohibits any "stabilizing bid" or "stabilizing purchase" for
the purpose of pegging, fixing or stabilizing the price of the Common Stock in
connection with this offering. Rule 101 makes it unlawful for any person who is
participating in a distribution to bid for or purchase stock of the same class
as is the subject of the distribution.
DESCRIPTION OF SECURITIES
Common Stock Sims is authorized to issue 40,000,000 shares of Common Stock, (the
"Common Stock"). Holders of Common Stock are each entitled to cast one vote for
each share held of record on all matters presented to shareholders. Cumulative
voting is not allowed; hence, the holders of a majority of the outstanding
Common Stock can elect all directors.
Holders of Common Stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefor and,
in the event of liquidation, to share pro rata in any distribution of Sims'
assets after payment of liabilities. The board is not obligated to declare a
dividend. It is not anticipated that dividends will be paid in the foreseeable
future.
Holders of Common Stock do not have preemptive rights to subscribe to
additional shares if issued by Sims. There are no conversion, redemption,
sinking fund or similar provisions regarding the Common Stock. All of the
outstanding shares of Common Stock are fully paid and non-assessable and all of
the shares of Common Stock offered as a component of the Units will be, upon
issuance, fully paid and non-assessable.
Preferred Stock
Sims is authorized to issue up to 1,000,000 shares of Preferred Stock.
Sims' Articles of Incorporation provide that the Board of Directors has the
authority to divide the Preferred Stock into series and, within the limitations
provided by Delaware statute, to fix by resolution the voting power,
designations, preferences, and relative participation, special rights, and the
qualifications, limitations or restrictions of the shares of any series so
established. As the Board of Directors has authority to establish the terms of,
and to issue, the Preferred Stock without shareholder approval, the Preferred
Stock could be issued to defend against any attempted takeover of Sims.
In April 1995, Sims issued 25,250 shares of Series A Preferred Stock. Each
Series A Preferred share is convertible into 0.2 of a share of Sims' Common
Stock. As of July 31 1999, 16,000 shares of the Series A Preferred Stock had
been converted into shares of Sims' common stock.
In March 1996, Sims issued 100,000 shares of its Series B Preferred Stock.
Each Series B Preferred share is convertible into 0.25 of a share of Sims'
Common Stock. As of July 31, 1999 all shares of the Series B Preferred Stock had
been converted into 25,000 shares of Sims' common stock.
See "Comparative Share Data" for information concerning Sims' Series C
Preferred Stock.Transfer Agent
Corporate Stock Transfer, Inc., of Denver, Colorado, is the transfer agent
for Sims' Common Stock.
EXPERTS
The financial statements as of June 30, 1998 incorporated by reference in
this prospectus from Sims' annual report on Form 10-K have been audited by
Ehrhardt Keefe Steiner & Hottman, independent auditors, as stated in their
report which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
<PAGE>
INDEMNIFICATION
Sims' Bylaws authorize indemnification of a director, officer, employee or
agent of Sims against expenses incurred by him in connection with any action,
suit, or proceeding to which he is named a party by reason of his having acted
or served in such capacity, except for liabilities arising from his own
misconduct or negligence in performance of his duty. In addition, even a
director, officer, employee, or agent of Sims who was found liable for
misconduct or negligence in the performance of his duty may obtain such
indemnification if, in view of all the circumstances in the case, a court of
competent jurisdiction determines such person is fairly and reasonably entitled
to indemnification. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, or persons
controlling Sims pursuant to the foregoing provisions, Sims has been informed
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
ADDITIONAL INFORMATION
Sims has filed with the Securities and Exchange Commission, 450 5th
Street, N.W., Washington, D.C. 20001, a Registration Statement under the
Securities Act of l933, as amended, with respect to the securities offered by
this prospectus. This Prospectus does not contain all of the information set
forth in the Registration Statement. For further information with respect to
Sims and such securities, reference is made to the Registration Statement and to
the exhibits filed with the registration statement. Statements contained in this
Prospectus as to the contents of any contract or other documents are summaries
which 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
the actual terms of the document. Sims is subject to the requirements of the
Securities Exchange Act of l934 and is required to file reports, proxy
statements and other information with the Securities and Exchange Commission.
Copies of the exhibits to the registration statement, as well as copies of any
reports, proxy statements and other information filed by Sims, can be inspected
and copied at the public reference facility maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. and at the Commission's Regional
offices in New York (7 World Trade Center, Suite 1300, New York, New York 10048)
and Chicago (Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511). Copies of such material can be obtained from the
Public Reference Section of the Commission at its office in Washington, D.C.
20549 at prescribed rates. Certain information concerning Sims is also available
at the Internet Web Site maintained by the Securities and Exchange Commission at
www.sec.gov.
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus. Any information or representation not contained in this Prospectus
must not be relied upon as having been authorized by Sims. This Prospectus does
not constitute an offer to sell, or a solicitation of an offer to buy, the
securities offered hereby in any state or other jurisdiction to any person to
whom it is unlawful to make such offer or solicitation. Neither the delivery of
this Prospectus nor any sale made by means of this prospectus, under any
circumstances, create an implication that there has been no change in the
affairs of Sims since the date of this prospectus.
TABLE OF CONTENTS
Page
Prospectus Summary ...................................
Risk Factors ..........................................
Comparative Share Data .....................................
Selling Shareholders .......................................
Description of Securities ....................................
Experts .........................................................
Indemnification ...............................................
Additional Information ........................................
Common Stock
SIMS COMMUNICATIONS, INC.
PROSPECTUS
<PAGE>
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution
SEC Filing Fee $ 2,661
Blue Sky Fees and Expenses 2,000
Printing and Engraving Expenses 2,000
Legal Fees and Expenses 20,000
Accounting Fees and Expenses 3,000
Miscellaneous Expenses 339
-----------
TOTAL $ 30,000
========
All expenses other than the S.E.C. filing fees are estimated.
Item 25. Indemnification of Officers and Directors.
The Delaware General Corporation Law and Sims' Bylaws that Sims may
indemnify any and all of its officers, directors, employees or agents or former
officers, directors, employees or agents, against expenses actually and
necessarily incurred by them, in connection with the defense of any legal
proceeding or threatened legal proceeding, except as to matters in which such
persons shall be determined to not have acted in good faith and in the best
interest of Sims.
Item 16. Exhibits
Exhibits Page Number
1 Underwriting Agreement N/A
3.1 Certificate of Incorporation, (1)
--------------
as amended
3.1.1 Amendment to Articles of Incorporation (1)
3.2 Bylaws (l)
Form of 1993 Incentive Stock Option Plan
and 1993 Non-Statutory Stock Option Plan (2)
--------------
4.2 Form of Stock Bonus Plan (3)
--------------
4.3 Designation of Series C Preferred Stock (as amended)
(4)
5 Opinion of Counsel
10 Series C Preferred Stock Purchase Agreement,
Escrow Agreement, Registration Rights Agreement (4)
----------------
and Form of Warrant
23.1 Consent of Hart and Trinen
23.2 Consent of Ehrhardt Keefe Steiner & Hottman previously filed
PC
24. Power of Attorney Included as part of the
Signature Page
(1) Incorporated by reference to the same exhibit filed as part of Sims'
Registration Statement on Form SB-2 (Commission File No. 33-70546-A).
(2) Incorporated by reference, and as same exhibit number, from Registration
Statement on Form SB-2 (Commission File Number 33-70546-A).
(3) Incorporated by reference, and as same exhibit number, from
Amendment No. 1 to Registration Statement on Form SB-2 (Commission File
Number 33-70546-A).
(4) Incorporated by reference, and as same exhibit number, from report on 8-K
dated December 14, 1998.
Item 17. Undertakings.
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 l0(a)(3) of the
Securities Act of l933; (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;
(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, including
(but not limited to) any addition or deletion of a managing underwriter.
(2) That, for the purpose of determining any liability under the
Securities Act of l933, 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.
Insofar as indemnification for liabilities arising under the Securities
Act of l933 may be permitted to directors, officers and controlling persons of
the Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the 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 of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
POWER OF ATTORNEY
The registrant and each person whose signature appears below hereby
authorizes the agent for service named in this Registration Statement, with full
power to act alone, to file one or more amendments (including post-effective
amendments) to this Registration Statement, which amendments may make such
changes in this Registration Statement as such agent for service deems
appropriate, and the Registrant and each such person hereby appoints such agent
for service as attorney-in-fact, with full power to act alone, to execute in the
name and in behalf of the Registrant and any such person, individually and in
each capacity stated below, any such amendments to this Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
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 Irvine, State of California, on the 30th day of July,
1999.
SIMS COMMUNICATIONS INC.
By: /s/ Mark
Bennett
MARK BENNETT, President
By: /s/ Ian Hart
IAN HART, Principal Financial
Officer and Chief Accounting Officer
Pursuant to the requirements of the Securities Act of l933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Mark Bennett
Mark Bennett Director July 30, 1999
/s/ Michael Malet
Michael Malet Director July 30, 1999
/s/ David Breslow
David Breslow Director July 30, 1999
Julio Curra Director
<PAGE>
July 29, 1999
Sims Communications, Inc.
18001 Cowan Suite C & D Irvine,
CA 92614 Gentlemen:
This letter will constitute an opinion upon the legality of the sale by
certain
Selling Shareholders of Sims Communications, Inc., a Delaware corporation
("Sims"), of up to 8,316,333 shares of Common Stock, all as referred to in the
Registration Statement on Form S-3 filed by Sims with the Securities and
Exchange Commission.
We have examined the Articles of Incorporation, the Bylaws and the minutes of
the Board of Directors of Sims and the applicable laws of the State of Colorado,
and a copy of the Registration Statement. In our opinion, Sims was authorized to
issue the shares of stock mentioned above and such shares represent fully paid
and non-assessable shares of Sims' Common Stock.
Very truly yours,
HART & TRINEN
William T. Hart
CONSENT OF ATTORNEYS
Reference is made to the Registration Statement of Sims
Communications, Inc., whereby certain Selling Shareholders propose to sell up to
8,316,333 shares of Sims' Common Stock. Reference is also made to Exhibit 5
included in the Registration Statement relating to the validity of the
securities proposed to be sold.
We hereby consent to the use of our opinion concerning the validity of the
securities proposed to be issued and sold.
Very truly yours,
HART & TRINEN
William T. Hart
Denver, Colorado
July 29, 1999
