Rule 424(b)(3)
Registration No. 333-69259
INSO CORPORATION
Prospectus Supplement No. 1 dated September 30, 1999
(To Prospectus dated December 17, 1998)
This is a supplement to the prospectus dated December 17,
1998 of Inso Corporation. In December 1998, we issued warrants
(the "Original Warrants") to purchase an aggregate of 1,456,458
shares of the Company's common stock in connection with our
acquisition of Sherpa Systems Corporation. The prospectus
relates to the public offering, which will not be underwritten,
of the shares held by certain of our stockholders as a result of
the exercise of the warrants.
You should read this supplement in conjunction with the
prospectus.
New Warrants Offered
On June 22, 1999, we entered into an agreement whereby
holders of Original Warrants exchanged their warrants for new
warrants (the "New Warrants") which entitle them to a lesser
number of shares at a lower exercise price.
Terms of New Warrants
The exercise price of the New Warrants is $10.00 per
share, as adjusted from time to time for stock splits and other
similar events, and an aggregate of 1,000,000 shares of the
Company's common stock may be purchased upon the exercise of the
New Warrants. The New Warrants will expire on April 15, 2002.
Due to the reduction in the exercise price, the total gross
proceeds we will receive upon the exercise of the warrants may
range from zero to approximately $10,000,000, depending upon the
number of warrants exercised. At the time this supplement was
filed 100% of the holders had exchanged their
Original Warrants for New Warrants.
Selling Shareholders
The following table sets forth the number of shares
issuable upon the exercise of the New Warrants to each of the
Selling Shareholders as of the date of this supplement, based on
the total number of outstanding shares of the Company's Common
Stock (15,606,020) as of September 10, 1999. These shares may
be offered from time to time by the Selling Shareholders. No
estimate is given as to the amount of shares that will be held
by the Selling Shareholders after the completion of this
offering because the Selling Shareholders may offer all or some
of the shares and because, to our knowledge, there are currently
no agreements, arrangements or understandings with respect to
the sale of any of the Shares.
<TABLE>
<CAPTION>
Number of Shares Percentage Number of
Beneficially of Shares
Owned Outstanding Registered
Shares for Sale
Name of Selling Shareholder Hereby
<S> <C> <C> <C>
New Enterprise Associates VIII 343,610 2.2% 343,610
New Enterprise Associates II 132,344 * 132,344
New Enterprise Associates V 118,307 * 118,307
Century IV Partners 67,112 * 67,112
Commonwealth Venture Partners 45,453 * 45,453
Pennsylvania Venture Partners 1,068 * 1,068
Paul Capital Partners V 98,128 * 98,128
Domestic Annex Fund
Paul Capital Partners V 8,258 * 8,258
Paul Capital Partners V
International 3,573 * 3,573
Fostin Capital Associates II 34,644 * 34,644
Transitions Three Ltd. 83,145 * 83,145
Spectra Enterprise Assoc. 34,644 * 34,644
Ellison Special Assets LP 9,921 * 9,921
Mark MeDearis 69 * 69
William Siddon 5 * 5
Ilona Sockol 58 * 58
Vivian Wong 25 * 25
Mary Collins 519 * 519
Sheldon Breiner 4,025 * 4,025
Stephen C. Baunach 14,653 * 14,653
LeRoy Ellison 16 * 16
John Chamberlain 423 * 423
__________________________
* Less than one percent
</TABLE>
