Filed pursuant to Rule 424(b)(3)
Registration No. 333-68035
INTERNATIONAL FIBERCOM, INC.
6,107,322 SHARES OF COMMON STOCK, NO PAR VALUE
---------------
These shares of Common Stock are being sold by the selling shareholders
listed in the "Selling Shareholders Table" beginning on page 13. We will not
receive any part of the proceeds from the sale. See "Risk Factors" and "Plan of
Distribution."
Our Common Stock is listed on the NASDAQ National Market under the
Symbol "IFCI" and on the Philadelphia Stock Exchange under the symbol "IFC." On
January 12, 1999, the reported last sales price of the Common Stock on the
NASDAQ National Market was $6.28 per share.
Unless the context indicates otherwise, all references to "we," "our,"
the "Company" or "IFC" refer to International FiberCom, Inc. and its
subsidiaries. Our principal executive offices are located at 3410 East
University, Suite 180, Phoenix, Arizona 85034. Our telephone number is (602)
941-1900.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN
RISKS RELATED TO AN INVESTMENT IN THE COMMON STOCK.
---------------
THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SEC OR ANY STATE SECURITIES COMMISSION NOR HAVE
THESE ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is January 25, 1999
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, NY and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public at the
SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with it, which means we can disclose important information to you by referring
to those documents. The information incorporated by reference is considered to
be a part of this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act of
1934 until the Selling Shareholders sell all of their shares. This prospectus is
part of a registration statement we filed with the SEC (Registration No.
333-68305).
+ Annual Report on Form 10-KSB for the fiscal year ended December 31,
1997;
+ Quarterly Reports on Form 10-QSB for the quarters ended March 31,
1998, June 30, 1998 and September 30, 1998;
+ Current Reports on Form 8-K dated February 12, 1998, August 10, 1998,
October 1, 1998 and November 13, 1998; and
+ The description of the Common Stock contained in our Registration of
Certain Classes of Securities Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934 on Form 8-A, dated August 9, 1994, as
amended from time to time.
You may request a copy or these filings, at no cost, by writing or
telephoning us at our principal executive offices at the following address and
phone number:
Secretary
International FiberCom, Inc.
3410 East University, Suite 180
Phoenix, Arizona 85034
(602) 941-1900
You should rely on information incorporated by reference or provided in
this prospectus or any supplement. We have not authorized anyone else to provide
you with different information. The Selling Shareholders will not make an offer
of these shares in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any supplement is accurate as
of any date other than the date on the front of these documents.
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<PAGE>
SUMMARY OF INTERNATIONAL FIBERCOM'S BUSINESS
We offer a wide variety of services and equipment to the
telecommunications, cable television and other related industries through our
seven wholly-owned subsidiaries in the following three principal business
segments:
CONSTRUCTION SERVICES
Our Construction Services segment includes our Fiber Optic Cable and CATV
Services Division which specializes in the design, installation and maintenance
of fiber-optic and other cable services for the telecommunication and other CATV
industries. This segment also includes our Systems Integration Services and
Products Division specializing in systems integration services which includes
design, engineering, installation and maintenance of structured cable systems,
network hardware and software, workstation peripherals and intercommunications
systems, primarily within commercial, industrial and government facilities. We
have three subsidiaries in this segment:
+ Kleven Communications, Inc. ("Kleven")
+ Kleven Communications - CA, Inc. ("Kleven-CA")
+ Concepts in Communication, Inc. ("Concepts")
ENGINEERING
Our Engineering segment specializes in video, voice and data network development
using state of the art, fiber-optic distribution platforms. We have one
subsidiary in this segment:
+ Compass Communications, Inc. ("Compass")
EQUIPMENT SALES
Our Equipment Sales segment subsidiaries purchase, sell and deal in new and used
telecommunications equipment used in the digital access, switching and transport
systems of leading telecommunications companies, Regional Bell Operating
Companies, telecommunications hardware resellers and other Fortune 500
companies. We have three subsidiaries in this segment:
+ Southern Communications Products, Inc. ("Southern")
+ Diversitec, Inc. ("Diversitec")
+ United Tech, Inc. ("United Tech")
Our strategy is to be a one-stop solution for the telecommunications
marketplace. This strategy involves offering a wide range of engineering,
consulting and maintenance services for fiber-optic and broadband networks and
systems integrated with local area network ("LAN") and wide area network ("WAN")
expertise and capabilities. A LAN is a group of personal computers linked
together in a building or campus to share programs, data, e-mail, peripherals
and other resources. A WAN is a network that covers a large geographic area,
such as a state or country.
In 1997 we began to implement this strategy through the strategic
acquisitions of businesses that complement and enhance our services or products.
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<PAGE>
At the beginning of 1997 Kleven was our only operating subsidiary. During 1997
we completed the acquisition of Concepts, Compass and Southern, which resulted
in a significant increase in our revenues and net income.
In 1998 we completed two additional material acquisitions and four smaller
acquisitions:
+ Effective September 1, 1998, we acquired United Tech in exchange for
1,502,000 restricted shares of Common Stock.
+ Also effective September 1, 1998, we acquired Diversitec in exchange
for 1,752,000 restricted shares of Common Stock.
+ We also acquired several smaller companies including General
Communications, Inc. and Communications Center, Inc. (both now a part
of Concepts), Riley Communications, Inc. (now Kleven-CA) and Dumbauld
& Associates (now a part of Compass).
In 1998, we had operations in Arizona, California, Tennessee, Florida,
Georgia and Virginia. Our customers include, among others, Cox Communications,
BellSouth Telecommunications, AT&T Network Systems, Ameritech, Lucent
Technologies, US West, Time Warner, Motorola, MediaOne, Australia's Optus
Vision, and the City of Phoenix.
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<PAGE>
SUMMARY OF THE OFFERING
SECURITIES OFFERED 6,107,322 shares of Common Stock, no par value
CAPITAL STOCK OUTSTANDING
COMMON STOCK 26,343,682 shares, no par value outstanding,
as of January 15, 1999 (1)
COMMON STOCK MARKET SYMBOLS Nasdaq National Market - "IFCI"
Philadelphia Stock Exchange - "IFC"
ESTIMATED NET PROCEEDS The net proceeds of the sale of the
shares will be received directly by each
Selling Shareholder. No proceeds will be
received by us from the sale of the
shares offered by this prospectus. See
"Use of Proceeds."
RISK FACTORS This offering involves a high degree
of risk. See "Risk Factors" on the following
page.
- ----------
(1) Does not include 1,770,000 shares issuable upon exercise of stock options
not covered by the registration statement of which this prospectus is a
part. All of these shares, except 1,150,884 shares issuable upon exercise
of stock options granted to our officers and directors, are included either
under a Registration Statement on Form S-3 which was declared effective on
October 15, 1998 or under the Registration Statement on Form S-8 which was
filed on December 8, 1997.
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<PAGE>
RISK FACTORS
INVESTING IN OUR COMMON STOCK INVOLVES A NUMBER OF RISKS. YOU SHOULD
CAREFULLY CONSIDER THE FOLLOWING FACTORS, IN ADDITION TO THE RISKS AND
INVESTMENT CONSIDERATIONS DISCUSSED ELSEWHERE IN THIS PROSPECTUS, BEFORE
PURCHASING ANY OF THE SHARES.
RISKS OF THE COMPANY
ACQUISITION STRATEGY
A key element of our growth to date and our strategy for the future is expansion
through the acquisition of companies that have complementary businesses, that
can utilize or enhance our existing capabilities and resources or that expand
our existing range of services or products in the telecommunications or CATV
industries.
As a result, we continually evaluate potential acquisition opportunities, some
of which may be large in size or scope when compared to our size. Acquisitions
involve a number of special risks, including the time associated with
identifying and evaluating possible acquisitions, the diversion of management's
attention to the integration of the operations and personnel of the acquired
companies, the incorporation of acquired products or services into our products
and services, possible adverse short-term effects on our operating results, the
realization of acquired intangible assets and the loss of key employees of the
acquired companies.
We completed three major acquisitions in 1997 and two major and four smaller
acquisitions in 1998. To accomplish future acquisitions we may issue equity
securities and other forms of consideration that could cause dilution to
investors purchasing our Common Stock. There can be no assurance that we will be
able to identify additional suitable acquisition candidates, consummate or
finance any such acquisitions, or integrate any such acquisitions successfully
into our operations.
MANAGEMENT OF GROWTH
We are currently experiencing a period of rapid growth resulting from recent
acquisitions and the internal expansion of our operations, both of which have
placed significant demands on our resources. Our success in managing this growth
will require us to continue to improve our operational, financial and management
information systems, and to motivate and effectively manage our employees. Prior
to our 1997 acquisitions, we had no prior experience in the systems integration,
engineering or telecommunication equipment fields. Therefore, we have relied
primarily upon the former management of Concepts, Compass and Southern to
provide a base of knowledge in these fields until our management gains
sufficient experience. Further, we have retained, and are relying on, certain
key employees in each of the businesses we acquired in 1998 to manage such
businesses.
We cannot assure you that we will successfully assimilate our new acquisitions
into our existing business operations. We can also give you no assurance that we
will be successful in expanding the businesses of our new acquisitions, that new
customers can be attracted as anticipated, or that there will be a continued, if
any, demand for the services of our new acquisitions' technology, products or
expertise in new and competitive markets.
If our management is unable to manage growth effectively, to maintain the
quality of our products and services and to retain key personnel our business,
financial condition and results of operations could be materially adversely
affected.
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<PAGE>
DEPENDENCE ON THE TELECOMMUNICATIONS AND CATV INDUSTRIES
Demand for a substantial portion of our services, and therefore future increases
in our net sales and net income, depends primarily on capital spending by CATV
operators, telecommunications and other companies for constructing, rebuilding,
maintaining or upgrading their telecommunications systems. However, we expect
our future revenue increases to come primarily from upgrading, retrofitting,
rebuilding and maintaining existing cable systems with fiber-optic and other
cables, and from the sale of telecommunications equipment, rather than from
constructing completely new systems.
The amount of capital spending by CATV operators and telecommunications
companies and, therefore, our sales and profitability, are affected by a variety
of factors, including general economic conditions, access by cable operators to
financing, government regulation of cable operators, demand for cable services
and technological developments in the broadband communications industry. We
cannot assure you that such capital spending will occur or occur at the level
announced by the various telecommunications and CATV companies. Federal
regulations rolling back rates for basic tier CATV services may have a negative
impact on the capital spending plans of the CATV companies and thus have a
material adverse affect on our business.
NEED FOR ADDITIONAL FINANCING
The expansion of our business and the continued implementation of our
acquisition strategy may require us to seek additional financing that may
include bank financing or the issuance of debt or equity securities. Our ability
to obtain bank financing or raise additional debt or equity capital will depend
upon our financial condition, results of operations, covenants and limitations
of any outstanding debt obligations at that time, and general economic
conditions. We cannot assure you that we will be able to obtain additional
capital or, if available, that such capital will be available at terms
acceptable to us or that would not result in substantial dilution of the equity
interest of existing shareholders.
FEDERAL REGULATION
CATV operators are subject to federal regulation. In 1992, Congress passed an
act that repealed the 1984 deregulation of cable television and subjected cable
systems to rate regulation and other FCC-enforced obligations. In 1996 Congress
passed the 1996 Telecommunications Act which repeals many of the major
provisions of the 1992 Act. Current FCC rules regulating cable service rates
will be repealed in three years, except for the "basic tier" of cable
programming. Price caps are repealed for "small" cable companies (less than $25
million in annual revenues) immediately or for any cable system once it faces
"effective competition" from a local telephone company providing "comparable"
video programming services. It is difficult to predict the impact, if any, this
legislation might have on the telecommunications industry in general or our
business in particular.
IMPACT OF STATE REGULATION
Our ability to pursue our business activities is regulated, directly or
indirectly, by various agencies and departments of state governments. Licenses
from public utilities commissions are frequently required prior to the
commencement of services by us and our clients. There can be no assurance that
we or our customers will be successful in our or their efforts to obtain
necessary licenses or regulatory approvals. Our inability or the inability of
any of our customers to secure any necessary licenses or approvals could have a
material adverse effect on our business.
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<PAGE>
In addition to specific regulations, we are subject to all federal, state and
local rules and regulations imposed upon businesses generally. The cost of
compliance with regulations is an additional cost of doing business for us.
TECHNOLOGICAL DEVELOPMENTS AND RISKS OF TECHNOLOGICAL OBSOLESCENCE
Our services and products are subject to significant technological change and
innovation. Technological developments are occurring rapidly in the
communications and systems integration industries and, while the effects of such
developments are uncertain, they may have a material adverse effect on the
demand for our services. For example, in the CATV industry, technologies are
being developed that would bypass existing cable systems and permit the
transmission of signals directly into households. Our success will generally
depend on our ability to penetrate and retain markets for our existing services
and to retain our expertise in installing and repairing telecommunications, CATV
cable and integrated systems on a cost-effective and timely basis. We cannot
assure you that we will be able to remain competitive or that our products and
services will not be subject to technological obsolescence.
COMPETITION
All segments of our business are highly competitive. We compete with national,
regional and local companies. Many of our competitors or potential competitors
are substantially larger and have greater resources. In addition, because of the
convergence of the CATV, telecommunications and computer industries and rapid
technological development, new competitors may seek to enter the market.
DEPENDENCE UPON MAJOR CUSTOMERS AND LARGE CONTRACTS
The CATV industry is highly concentrated with most of U.S. domestic subscribers
being served by approximately 25 major multi-system operators ("MSO"). We have
customers that have accounted for more than 10% of our revenues on a historical
basis. Any decision by these major customers to cease or reduce their use of our
services may have a material adverse effect on our business. A number of our
contracts are substantial in size. The failure to timely or adequately replace a
large contract upon its completion or termination with one or more new contracts
or customers may materially adversely affect our business and operations.
RISKS OF POSSIBLE COST ESCALATION UNDER FIXED PRICE CONTRACTS
On an historical basis a substantial portion of our revenues from our
Construction Services segment have been generated principally under firm
fixed-price contracts. Fixed-price contracts carry certain inherent risks,
including underestimating costs, problems with new technologies and economic and
other changes that may occur over the contract period. We recognize revenues
from our Construction Services segment using the percentage-of-completion
method. Under this method revenue is recognized based on actual costs incurred
in relation to total estimated costs to complete the contract. This method may
result in irregular and uneven quarterly results. Unforeseen events and
circumstances can alter our estimate of the costs and potential profit
associated with a particular contract. To the extent that original cost
estimates are modified, estimated costs to complete increase, delivery schedules
are delayed, or progress under a contract is otherwise impeded, cash flow,
revenue recognition and profitability from a particular contract may be
adversely affected.
INSURANCE AND POTENTIAL EXCESS LIABILITY
We maintain liability insurance to protect against damages to persons or
property which may result from our work. If we were to incur liability in excess
of our policy coverage, our financial condition could be adversely affected.
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<PAGE>
ARIZONA ANTI-TAKEOVER STATUTE
The Arizona Corporate Takeover Act ("Takeover Act") was adopted in 1987. The
policy of the Takeover Act is to prevent unfriendly corporate takeover attempts
by third parties. The Takeover Act prohibits certain types of transactions,
including "green mail," limits voting rights of certain individuals acquiring
shares in the market and regulates certain business combinations respecting
corporate transactions proposed by insiders and as part of a takeover plan. The
Company is subject to the foregoing provisions.
The Takeover Act enhances the possibility that a potential bidder for our
control will be required to act through arm's-length negotiation with respect to
a major transaction, such as a merger, consolidation or purchase of
substantially all of our assets. The Takeover Act may also have the effect of
discouraging tender offers or other stock acquisitions, giving our management
power to reject certain transactions which might be desired by the owners of the
majority of our voting securities. The Takeover Act could also be deemed to
benefit incumbent management to the extent that the Act deters such offers by
persons who would wish to make changes in management or exercise control over
management.
Our Board of Directors does not presently know any third party that plans to
make an offer to acquire the Company through a tender offer, merger or purchase
of all or substantially all of the assets of the Company.
DEPENDENCE UPON SUPPLIERS
We do not have written agreements with our suppliers. It is possible that we may
encounter shortages in parts, components, or other elements vital to our
operations in the future. If such shortages occur, we cannot guarantee that we
would be able to locate other satisfactory suppliers, or even if other suppliers
could be located, that we would be able to establish commercial relationships
with any such suppliers. If we are unable to establish commercial relationships
with other suppliers, we may be required to suspend or curtail some of our
services. Suspension or curtailment of services could have a material adverse
effect on us.
DEPENDENCE UPON KEY PERSONNEL
We are dependent on the services of Joseph P. Kealy and Terry W. Beiriger, our
principal executive officers. We entered into a five-year employment agreement
with each of these individuals, effective as of December 1995. When we acquired
Concepts, Compass, Southern, United Tech and Diversitec, we entered into
employment agreements with numerous "key" employees and consulting agreements
with certain executives of these companies.
We must compete with much larger companies that have significantly greater
resources to attract and retain personnel. We cannot assure you that we will be
successful in this regard or, if successful, that the services of such personnel
can be secured on terms deemed favorable to us. The loss of the services of any
of the individuals mentioned above or our inability to attract other qualified
employees could materially and adversely affect our business and operations.
ECONOMIC AND GENERAL RISKS OF THE BUSINESS
Our success will depend upon factors that are beyond our control and that cannot
clearly be predicted at this time. Such factors include general economic
conditions, both nationally and internationally, changes in tax laws,
fluctuating operating expenses, including energy costs, changes in governmental
regulations, including regulations imposed under federal, state or local
environmental laws, labor laws, and trade laws and other trade barriers.
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<PAGE>
RISKS RELATING TO OFFERING
POSSIBLE DEPRESSIVE EFFECT ON MARKET PRICE OF SECURITIES ELIGIBLE FOR FUTURE
SALE
Our officers and directors own an aggregate of 2,284,599 shares of Common Stock,
including exercisable stock options. All but 1,150,884 of such shares are
eligible for sale either under a Registration Statement on Form S-3 which was
declared effective on October 15, 1998 or under the Registration Statement on
Form S-8 which was effective on December 9, 1997. Sales of substantial amounts
of Common Stock by our other shareholders or even the potential for such sales,
could have a depressive effect on the market price of shares of Common Stock and
could impair our ability to raise capital through the sale of our Common or
Preferred Stock.
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of our Common Stock increased significantly during 1997 and
1998. The period was marked by generally favorable industry conditions,
acquisitions of new businesses and substantially improving operating results,
including revenue and net income from the recently acquired businesses.
The trading price of our Common Stock in the future could be subject to wide
fluctuations in response to many factors including:
+ quarterly variations in our operating results or those of our
competitors;
+ actual or anticipated announcements of new acquisitions by us or our
competitors;
+ actual or anticipated announcements of new contracts by us or our
competitors;
+ technical innovations or new products by our competitors;
+ changes in analysts' estimates of our financial performance;
+ changes in capital plans of our cable and other customers; and
+ general industry, economic and financial conditions in the United
States.
In addition, the stock market has experienced extreme price and volume
fluctuations which have particularly affected the market prices for many
technology and telecommunications companies and which have been, in come cases,
unrelated to the operating performance of such companies. These broad market
fluctuations and other factors may adversely affect the market price of our
Common Stock.
EXERCISE PRICE NOT NECESSARILY RELATED TO ESTABLISHED CRITERIA OF VALUE
The exercise prices of the warrants issued in connection with our private
placement of Series B and Series C Preferred were set through negotiations
conducted prior to the time of their sale, with reference to the public trading
price of our Common Stock. The price of our Common Stock in such exercises may
not necessarily bear any relationship to our asset value, net worth, earnings or
any other established criteria of value at the time of exercise.
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<PAGE>
POSSIBLE ISSUANCE OF OPTIONS MAY DILUTE INTEREST OF STOCKHOLDERS
We reserved 441,707 shares of Common Stock for issuance under our 1994 Incentive
Stock Option and Restricted Stock Purchase Plans, 3,200,000 shares of Common
Stock for issuance under our 1997 Incentive Stock Option and Restricted Stock
Plans and 2,000,000 shares for issuance under our Employee Stock Purchase Plan.
As of December 31, 1997, all of the options available under the Incentive Stock
Option Plans had been granted and 104,036 shares had been purchased under the
Stock Purchase Plan. As of January 15, 1999, 204,116 options had been granted to
our officers under the 1997 Incentive Stock Option Plan became effective. We
also issued 400,000 stock options to our directors who are not employees of the
Company and 1,150,884 shares to various officers and directors outside of our
Stock Option and Restricted Stock Plans.
To the extent that stock options are granted and exercised, dilution to the
interests of our stockholders may occur. Moreover, the terms upon which we will
be able to obtain additional equity capital may be adversely affected since the
holders of the outstanding options can be expected to exercise them at a time
when we would, in all likelihood, be able to obtain such needed capital on terms
more favorable to us than those provided in outstanding options.
WARRANTS MAY ADVERSELY AFFECT MARKET PRICE OF COMMON STOCK
In connection with our 1997 private placement of Series B Preferred, we issued
700,000 common stock purchase warrants ("Series B Warrants"), 480,000 of which
remain outstanding as of January 15, 1999. The Series B Warrants are exercisable
to purchase one share of Common Stock at varying exercise prices depending on
the tranche of the Series B Preferred with which it was issued. All warrants
issued with the first tranche of Series B Preferred have been exercised. The
exercise price for 220,000 warrants is $2.15625 per share, which warrants are
exercisable until April 2002, and the exercise price for 260,000 warrants is
$2.75 per share, which warrants are exercisable until May 2002.
For the lives of the Series B Warrants, the holders will have the opportunity to
profit from an increase in the price of our Common Stock. The existence of these
Warrants may adversely affect the market price of our Common Stock and the terms
on which we can obtain additional financing. The holders of these Warrants can
be expected to exercise them at a time when we would, in all likelihood, be able
to obtain additional capital by an offering of our unissued Common Stock on
terms more favorable to us than those provided by such Warrants.
ISSUANCE OF SENIOR SECURITIES
Our Articles of Incorporation authorize the issuance of up to 10,000,000 shares
of preferred stock ("Preferred Stock"). As of January 15, 1999, our Board of
Directors had designated 4,400 shares as Series A Preferred, all of which have
been converted and canceled, 4,400 shares as Series B Preferred, all of which
have been converted and canceled, and 1,000 shares as Series C Preferred, all of
which have been converted and canceled.
Additional shares of Preferred Stock may be issued by our Board of Directors
from time to time in one or more series for such consideration and with such
relative rights and preferences as our Board of Directors may determine. Any
shares of Preferred Stock that may be issued in the future could be given voting
and conversion rights that could dilute the voting power and equity of holders
of shares of Common Stock, and have preferences over shares of Common Stock with
respect to dividends and in liquidation.
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<PAGE>
LACK OF DIVIDENDS
Holders of Preferred Stock and Common Stock are entitled to receive any
dividends that may be declared by our Board of Directors. To date, we have not
paid any cash dividends on our Common Stock and do not expect to pay cash
dividends on either our Preferred Stock or Common Stock in the near term. We
intend to retain future earnings, if any, to provide funds for operations of the
business. Investors who anticipate the need for dividends from investments
should refrain from purchasing our Common Stock.
FUNDS LEGALLY AVAILABLE FOR PAYMENT OF DIVIDENDS ON PREFERRED STOCK
We may not pay distributions or dividends if we are insolvent or would be
rendered insolvent by such a dividend or distribution. Under the General
Corporation Law of the State of Arizona, "insolvency" means the inability of a
corporation to pay its debts as they become due in the ordinary course of its
business. There can be no assurance that we will generate any or sufficient
earning to pay dividends on the Preferred Stock.
YEAR 2000 DISCLOSURE
We are currently working to mitigate the extent of any "Year 2000" problems that
we may have and that may have an effect on our business, but we have not yet
completed this evaluation. However, based on our work to date, we do not expect
the costs to address the problem will be material, and we do not expect that the
consequences of incomplete or untimely resolution of the problem will materially
impact the operation of our business. We have not incurred, and we do not expect
to incur, any specific quantifiable cost that can be directly and solely related
to the Year 2000 issue. However, no assurance can be given at this point that we
will be Year 2000 compliant or that we will not incur significant additional
expenses pursuing Year 2000 compliance. Furthermore, we could be adversely
affected by the Year 2000 problem if computer systems of third parties such as
banks, suppliers and others with whom we do business fail to address the Year
2000 problem successfully. In an effort to evaluate and reduce its exposure in
this area, we intend to make an inquiry of our vendors and other partners about
their progress in identifying and addressing problems that their systems may
face in correctly processing date information related to the Year 2000. However,
despite our efforts to date, there can be no assurance that the Year 2000
problem will not have a material adverse effect on us in the future.
FORWARD-LOOKING INFORMATION
This Prospectus contains certain forward-looking statements and information
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. The cautionary statements made in this
paragraph and elsewhere in this Prospectus should be read as being applicable to
all related forward-looking statements wherever they appear in this Prospectus.
Forward-looking statements, by their very nature, include risks and
uncertainties. Accordingly, our actual results could differ materially from
those discussed herein. A wide variety of factors could cause or contribute to
such differences and could adversely impact revenues, profitability, cash flows
and capital needs. Such factors, many of which are beyond our control, include
the following: our success in obtaining new contracts; the volume and type of
work orders that are received under such contracts; the accuracy of the cost
estimates for the projects; our ability to complete our projects on time and
within budget; levels of, and ability to, collect accounts receivable;
availability of trained personnel and utilization of our capacity to complete
work; competition and competitive pressures on pricing; and economic conditions
in the United States and in the region we serve.
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<PAGE>
USE OF PROCEEDS
All of the proceeds of this offering will be received by the Selling
Shareholders, we will not receive any proceeds from the sale of the Common Stock
registered hereunder.
DETERMINATION OF OFFERING PRICE
This Prospectus may be used from time to time by the Selling Shareholders
to sell the Common Stock listed below in the Selling Shareholders table. The
price at which those shares will be sold will be determined by the Selling
Shareholder and may be based on market prices prevailing at the time of sale, at
prices relating to such prevailing market prices, or at negotiated prices.
SELLING SHAREHOLDERS
The following table provides certain information with respect to the Common
Stock beneficially owned by the Selling Shareholders who are entitled to use
this Prospectus. The information in the table is as of the date of this
Prospectus. Except as described below, no Selling Shareholder has had a material
relationship with the Company within the past three years other than as a result
of the ownership of Common Stock. The Common Stock listed below may be offered
from time to time by the Selling Shareholders named below or their nominees:
SHARES AVAILABLE PERCENT OWNED AFTER
NAME AND ADDRESS OF SHARES FOR SALE UNDER COMPLETION OF THE
SELLING SHAREHOLDER OWNED(1) THIS PROSPECTUS OFFERING (1)
- ------------------- -------- --------------- ------------
Thomas M. Clayton
9502 Bonney Lea Court
Richmond, VA 23236 876,000 876,000
Steven R. Shapiro
3708 Sovereign Lane
Richmond, VA 23233 876,000 876,000
Randy C. Jensen
2078 High Vista Dr.
Lakeland, FL 33813 735,980 100,000
Terry D. Lipham
9940 Golf Boulevard
Treasure Island, FL 33706 766,020 100,000
Robert and Karla Forney
8261 North 31st Lane
Phoenix, AZ 85051 41,885 41,885
Robert J. Mahlum
7600 Pebblestone Court
Raleigh, NC 276113 25,131 25,131
Richard Jennings
7051 7th Road
Bartlett, TN 38135 17,857(2) 17,857
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SHARES AVAILABLE PERCENT OWNED AFTER
NAME AND ADDRESS OF SHARES FOR SALE UNDER COMPLETION OF THE
SELLING SHAREHOLDER OWNED(1) THIS PROSPECTUS OFFERING (1)
- ------------------- -------- --------------- ------------
Patricia Jennings
7051 7th Road
Bartlett, TN 38135 17,857(3) 17,857
RBB Bank Aktiengesellschaft
Attn: Mr. Herbert Strauss
Burgring 16
1010 Graz, Austria 1,005,363(4) 1,005,363
Southern Communications
Products, Inc.
Wallace E. Sapp
Edna M. Sapp
1940 Highway 71 So.
Marianna, FL 32446 776,361(5) 776,361
Glenn S. Shaffren
1335 Old Norcross Road
Lawrenceville, GA 30045 111,093 111,093
Dale Nielsen
1335 Old Norcross Road
Lawrenceville, GA 30045 111,093 111,093
John H. Naybor
1335 Old Norcross Road
Lawrenceville, GA 30045 95,000 95,000
H. Raymond Tucker
Concepts in Communications, Inc
5714 Charlotte Avenue
Nashville, TN 37209 115,833 115,833
Dan Himes
1335 Old Norcross Road
Lawrenceville, GA 30045 91,923 91,923
Samuel D. Hughes
P.O. Box 27598
910 Cobia Dr.
Panama City, FL 32548 34,515 34,515
Eugene Michael Kennedy
517 S.W. 1st Avenue
Fort Lauderdale, FL 33301 16,683 16,683
James & Valerie Gibbons, JTWROS
1335 Old Norcross Road
Lawrenceville, GA 30045 5,000 5,000
Thomas M. Swartwood
405 Sixth Avenue
Des Moines, IA 50309 17,000(6) 17,000
-14-
<PAGE>
SHARES AVAILABLE PERCENT OWNED AFTER
NAME AND ADDRESS OF SHARES FOR SALE UNDER COMPLETION OF THE
SELLING SHAREHOLDER OWNED(1) THIS PROSPECTUS OFFERING (1)
- ------------------- -------- --------------- ------------
T. Marshall Swartwood
405 Sixth Avenue
Des Moines, IA 50309 40,000(6) 40,000
Glenn S. Cushman
405 Sixth Avenue
Des Moines, IA 50309 24,000(6) 24,000
Dickinson & Co.
405 Sixth Avenue
Des Moines, IA 50309 39,000(6) 39,000
Liviakis Financial
Communications, Inc.
Attn: John M. Liviakis, President
2420 "K" Street
Suite 220
Sacramento, CA 95816 570,498(5) 570,498
Robert Prag
2420 "K" Street
Suite 220
Sacramento, CA 95816 371,664(5) 371,664
Reardon, Inc.
Atlanta Financial Center,
East Tower
3343 Peachtree
Suite No. 500
Atlanta, GA 30326 378,443(6) 378,443
John C. Canouse Irrevocable
Trust
Atlanta Financial Center,
East Tower
3343 Peachtree
Suite No. 500
Atlanta, GA 30326 53,400(6) 53,400
James P. Canouse
Atlanta Financial Center,
East Tower
3343 Peachtree
Suite No. 500
Atlanta, GA 30326 53,400(6) 53,400
Jeffrey M. Canouse
Atlanta Financial Center,
East Tower
3343 Peachtree
Suite No. 500
Atlanta, GA 30326 53,400(6) 53,400
J.P. Carey Irrevocable Trust
Atlanta Financial Center,
East Tower
3343 Peachtree
Suite No. 500
Atlanta, GA 30326 106,800(6) 106,800
-15-
<PAGE>
(1) Because (i) a Selling Shareholder may offer all or some of the shares of
Common Stock which he holds pursuant to the offerings contemplated by this
Prospectus, (ii) the offerings of shares of Common Stock are not
necessarily being underwritten on a firm commitment basis, and (iii) a
Selling Shareholder could purchase additional shares of Common Stock from
time to time, no estimate can be given as to the amount of shares of Common
Stock that will be held by any Selling Shareholder upon termination of such
offerings. See "PLAN OF DISTRIBUTION."
(2) Includes 8,929 shares of Common Stock owned of record by Mr. Jennings'
wife. Mr. Jennings is the husband of Patricia Jennings. Mr. Jennings
disclaims beneficial ownership of shares owned by Mrs. Jennings.
(3) Includes 8,928 shares of Common Stock owned of record by Mrs. Jennings'
husband. Mrs. Jennings is the wife of Richard Jennings. Mrs. Jennings
disclaims beneficial ownership of shares owned by Mr. Jennings.
(4) Assumes full and complete conversion of all 5.5% Debentures and full
exercise of the Warrants issued in connection with the issuance of our
Series B Convertible Preferred Stock. Shares held in the name of RBB Bank
are held for the account of foreign investors. RBB Bank represents that no
beneficial owner represents 5% or more of our outstanding voting
securities.
(5) Represents options owned by the Selling Shareholder and assumes exercise of
all options held by such person.
(6) Represents warrants owned by the Selling Shareholder and assumes exercise
of all warrants held by such person.
PLAN OF DISTRIBUTION
We are registering the Shares on behalf of the Selling Shareholders. As
used herein, "Selling Shareholders" includes donees and pledgees selling shares
received from a named Selling Shareholder after the date of this prospectus. All
costs, expenses and fees in connection with the registration of the Shares
offered hereby will be borne by the Company. Brokerage commissions and similar
selling expenses, if any, attributable to the sale of Shares will be borne by
the Selling Shareholders. Sales of Shares may be effected by Selling
Shareholders from time to time in one or more types of transactions (which may
include block transactions) on the Nasdaq National Market, in the
over-the-counter market, in negotiated transactions, through put or call options
transactions relating to the Shares, through the short sale of Shares, or a
combination of such methods of sale, at market prices prevailing at the time of
sale, or at negotiated prices. Such transactions may or may not involve brokers
or dealers. The Selling Shareholders have advised us that they have not entered
into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities, nor is there an
underwriter or coordinating broker acting in connection with the proposed sale
of Shares by the Selling Shareholders.
The Selling Shareholders may effect such transactions by selling Shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Shareholders and/or the
purchasers of Shares for whom such broker-dealers may act as agents or to whom
they sell as principal, or both, which compensation as to a particular
broker-dealer might be in excess of customary commissions.
-16-
<PAGE>
The Selling Shareholders and any broker-dealers that act in connection
with the sale of Shares might be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act, and any commissions received by such
broker-dealers and any profit on the resale of the Shares sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act. Because Selling Shareholders may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, the
Selling Shareholders will be subject to prospectus delivery requirements of the
Securities Act. The Company has informed the Selling Shareholders that the
anti-manipulative provisions of Regulation M promulgated under the Exchange Act
may apply to their sales in the market.
Selling Shareholders also may resell all or a portion of the Shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such Rule.
Upon our notification by a Selling Shareholder that any material
arrangement has been entered into with a broker-dealer for the sale of Shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Shareholder and of
the participating broker-dealer(s), (ii) the number of Shares involved, (iii)
the price at which such Shares were sold, (iv) the commissions paid or discounts
or concessions allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus and (vi) other facts
material to the transaction. In addition, upon our notification by a Selling
Shareholder that a donee or pledgee intends to sell more than 500 shares, a
supplement to this prospectus will be filed.
LEGAL MATTERS
The legality of the securities offered hereby has been passed upon for
us by Streich Lang, P.A., Phoenix, Arizona. One or more members of such law firm
own shares of our Common Stock constituting less than 1% of our total
outstanding Common Stock.
EXPERTS
The consolidated financial statements and the related financial
statement schedules incorporated in this Prospectus by reference from our Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1997 have been
audited by Semple & Cooper, independent auditors, as stated in their reports,
which are incorporated herein by reference, and have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
MATERIAL CHANGES
No material changes have occurred in our affairs since the end of the
last fiscal year for which certified financial statements were included in the
latest annual report to security holders and which has not been described in a
report on Form 10-QSB or Form 8-K filed under the Exchange Act.
-17-
<PAGE>
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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES
OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY
PERSON IN ANY JURISDICTION IN WHICH SUCH AN OFFER WOULD BE UNLAWFUL. NEITHER
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT INFORMATION CONTAINED HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
---------------
TABLE OF CONTENTS
PAGE
----
WHERE YOU CAN FIND MORE INFORMATION............ 2
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE....................... 2
PROSPECTUS SUMMARY............................. 3
RISK FACTORS................................... 6
USE OF PROCEEDS................................ 13
DETERMINATION OF OFFERING PRICE................ 13
SELLING SHAREHOLDERS........................... 13
PLAN OF DISTRIBUTION........................... 16
LEGAL MATTERS.................................. 17
EXPERTS........................................ 17
MATERIAL CHANGES............................... 17
INTERNATIONAL FIBERCOM, INC.
6,107,322 SHARES
NO PAR VALUE
PROSPECTUS
JANUARY 25, 1999
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