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SECURITIES AND EXCHANGE COMMISSION
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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VIZACOM INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3270045
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
3A Oak Road, Fairfield, New Jersey 07004 - (973) 808-1992
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Mark E. Leininger
President and Chief Executive Officer
Vizacom Inc.
3A Oak Road
Fairfield, New Jersey 07004
(973) 808-1992
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
Neil M. Kaufman, Esq.
Kaufman & Moomjian, LLC
50 Charles Lindbergh Boulevard - Suite 206
Mitchel Field, New York 11553
(516) 222-5100
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. ___
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. XX
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 statement 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. ___
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<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Amount to maximum maximum Amount of
Title of each class of be offering price aggregate registration
securities to be registered registered per unit offering price fee
<S> <C> <C> <C> <C>
Common Stock, par value $.001 per share
(the "Common Stock") . . . . . . . . . . . . 1,675,729 $3.875 (1) $6,493,449.88 (1) $1,805.18
Placement Agent Warrants (2) . . . . . . . . 17,052 (3)
Common Stock issuable upon exercise of the
Placement Agent Warrants (2) . . . . . . . . 17,052 $1.50 (4) $25,578.00 (4) $7.11
Common Stock issuable upon exercise of
European Consultnt Warrants (2). . . . . . . 600,000 $ .75 (4) $450,000.00 (4) $125.10
Common Stock issuable upon exercise of
Consultant Warrants (2). . . . . . . . . . . 640,000 $ .75 (4) $480,000.00 (4) $133.44
Common Stock issuable upon exercise of
Advisor Warrants (2) . . . . . . . . . . . . 45,000 $1.125 (4) $50,625.00 (4) $14.07
Common Stock issuable upon exercise of
Employee and Consultant Warrants (2) . . . . 385,000 $1.03125 (4) $397,031.25 (4) $110.37
Common Stock issuable upon exercise of
Counsel Options (2) . . . . . . . . . . . . 25,000 $2.75 (4) $68,750.00 (4) $19.11
Common Stock issuable upon exercise of
Seafish Warrants. . . . . . . . . . . . . . 260,000 $1.06255 (4) $276,250.00 (4) $76.80
TOTAL . . . . . . . . . . . . . . . . . . . $2,291.18 (5)
<FN>
(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c) promulgated under the Securities Act of 1933, as
amended, (the "Securities Act"), based upon a per share last sale price for
the Common Stock on July 13, 1999.
(2) Pursuant to Rule 416, there are also being registered such
indeterminable additional Placement Agent Warrants, Investment Banking
Warrants and shares of Common Stock as may become issuable pursuant to
anti-dilution provisions contained in the Placement Agent Warrants,
European Consultant Warrants, Consultant Warrants, Advisor Warrants,
Employee and Consultant Options, Counsel Options and Seafish Warrants.
(3) No fee required pursuant to Rule 457(g) promulgated under the Securities
Act.
(4) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(g) promulgated under the Securities Act.
(5) A fee of $1,464.74 was paid upon the filing of the original
Registration Statement to which this is Amendment No. 1.
</FN>
</TABLE>
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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 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
The information contained in this Prospectus is not complete and may be changed.
The Company may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is declared effective. This
Prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED JULY __, 1999
PRELIMINARY PROSPECTUS
VIZACOM INC.
3,647,781 Shares of Common Stock
and
17,052 Warrants to Purchase Common Stock
This prospectus is part of a Registration Statement filed by Vizacom Inc.
(formerly, Software Publishing Corporation Holdings, Inc.) with the SEC using
the "shelf" registration process. The Registration Statement covers 3,647,781
Shares of the Company's Common Stock, par value $.001 per share, and 17,052
Registered Warrants to purchase shares of Common Stock. The Shares include
1,675,729 shares of Common Stock that are currently outstanding and 1,972,052
shares of Common Stock underlying outstanding Derivative Securities, which are
options and warrants, including the 17,052 Registered Warrants. The Shares and
Registered Warrants may be offered and sold from time to time by Selling
Securityholders and any pledgees and donees of the Shares and Derivative
Securities. Information regarding the identities of the Selling Securityholders,
the manner in which they acquired their Shares and Derivative Securities and the
manner in which the Shares and Registered Warrants are being offered and sold is
provided in the "Selling Securityholders" and "Plan of Distribution" sections of
this Prospectus.
The Company will not receive any of the proceeds from the sale of the
Shares and Derivative Securities, other than the exercise price, if any, to be
received upon exercise of the Derivative Securities. The Company has agreed to
bear all of the expenses in connection with the registration and sale (other
than commissions) of the Shares and Registered Warrants, which expenses we
estimate to be $80,000.00.
The Common Stock is currently traded on the Nasdaq SmallCap Market under
the symbol "SPCO" and listed on the Boston Stock Exchange under the symbol
"SPO." On July 13, 1999, the last sales price for the Common Stock, as reported
by Nasdaq, was $ 3-7/8 per share.
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The securities offered in this Prospectus involve a high degree of risk.
You should carefully read and consider the "Risk Factors," commencing on page 5
for information that should be considered in determining whether to purchase any
of the securities.
- -----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------------------
The date of this Prospectus is July __, 1999
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND IN ANY ACCOMPANYING PROSPECTUS SUPPLEMENT. NO
ONE HAS BEEN AUTHORIZED TO PROVIDE YOU WITH DIFFERENT INFORMATION.
THE SECURITIES ARE NOT BEING OFFERED IN ANY JURISDICTION WHERE THE OFFER IS
NOT PERMITTED.
YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE
FRONT OF SUCH DOCUMENTS.
WHERE YOU CAN FIND MORE INFORMATION
Government Filings. The Company is subject to the information reporting
requirements of the Securities Exchange Act of 1934, as amended. As such, the
Company files annual, quarterly and special reports, proxy statements and other
documents with the SEC. These reports, proxy statements and other documents may
be inspected and copied at the public reference facilities maintained by the SEC
at Room 1024, Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549, and
at the SEC's regional offices located at Seven World Trade Center, Suite 1300,
New York, New York 10048, and at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60601- 2511. You may also obtain copies of such material by mail from
the public reference facilities of the SEC's Washington, D.C. offices, at
prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information
on their public reference facilities. In addition, the SEC maintains a Worldwide
Web site that contains reports, proxy and information statements and other
information regarding companies, including the Company, that file electronically
with the SEC at the address "http://www.sec.gov."
Stock Market. The Common Stock is listed on The Nasdaq SmallCap Market and
the Boston Stock Exchange. Material filed by the Company can also be inspected
and copied at the offices of Nasdaq at 1735 K Street, N.W., Washington, D.C.
20006, and the Boston Stock Exchange, at One Boston Place, Boston, Massachusetts
02108.
The Company. Most of the Company's SEC filings are also available to you at
the Company's web site at "http://www.spch.com." Further, the Company will
provide you without charge, upon your request, with a copy of any or all
reports, proxy statements and other documents filed by the Company with the SEC,
as well as any or all of the documents incorporated by reference in this
Prospectus or the Registration Statement (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference into such
documents). Requests for such copies should be directed to:
Vizacom Inc.
Attention: Investor Relations Department
3A Oak Road
Fairfield, New Jersey 07004
Telephone number: (973) 808-1992
Information Incorporated by Reference. The SEC allows the Company to
"incorporate by reference" the information the Company files with the SEC, which
means that:
- incorporated documents are considered part of this Prospectus,
- the Company can disclose important information to you by
eferring you to those documents and
- information that the Company files after the date of this
Prospectus with the SEC will automatically update and
supersede information contained in this Prospectus and the
Registration Statement.
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<PAGE>
The Company incorporates by reference the documents listed below and any
future filings the Company will make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act until this offering has been completed:
1. The Company's Annual Report on Form 10-KSB, for the fiscal year ended
December 31, 1998;
2. The Company's Quarterly Report on Form 10-QSB, for the quarter ended
March 31, 1999;
3. The Company's Current Report on Form 8-K (Date of Report:
June 8, 1999);
4. The Company's Current Report on Form 8-K (Date of Report:
July 1, 1999); and
5. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, declared effective on December 6,
1995, including any amendment(s) or report(s) filed for the purpose of
updating such description.
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated by reference into this
Prospectus include "forward- looking statements" within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking
statements involve known and unknown risks, uncertainties and other factors
which could cause the Company's actual results, performance (financial or
operating) or achievements expressed or implied by such forward-looking
statements not to occur or be realized. Such forward-looking statements
generally are based upon the Company's best estimates of future results,
performance or achievement, based upon current conditions and the most recent
results of operations. Forward-looking statements may be identified by the use
of forward-looking terminology such as "may," "will," "expect," "believe,"
"estimate," "anticipate," "continue," or similar terms, variations of those
terms or the negative of those terms. Potential risks and uncertainties include,
among other things, such factors as:
- the overall level of business and consumer spending for
computer software,
- the market acceptance and amount of sales of the Company's
products,
- the extent that the Company's direct mail programs achieve
satisfactory response rates,
- the ability of the Company to obtain sufficient supplies of
successful products,
- the efficiency of the Company's telemarketing operations,
- the competitive environment within the computer software
and direct mail industries,
- the Company's ability to raise additional capital,
- unforeseen operational difficulties and financial losses
due to year 2000 computer problems,
- the cost-effectiveness of the Company's product development
activities,
- the extent to which the Company is successful in developing,
acquiring or licensing products which are accepted by the
market, and
- the other factors and information disclosed and discussed
under "Risk Factors" and in other sections of this
Prospectus.
Investors should carefully consider such risks, uncertainties and other
information, disclosures and discussions which contain cautionary statements
identifying important factors that could cause actual results to differ
materially from those provided in the forward-looking statements. We undertake
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
THE COMPANY
The Company makes and sells computer software products for both the United
States domestic and international markets. Most of these products are visual
communication tools comprised of desktop publishing,
3
<PAGE>
presentation graphics and graphics/drawing software for the corporate,
small office and home office ("SOHO") and consumer markets. Our software and
hardware products are intended to allow the user to improve the visual and
graphical appeal as well as the overall effectiveness of documents and digital
images produced by either the Company's or third parties' desktop publishing,
web publishing, presentation graphics, e-mail, word processing and other similar
applications and products. We currently offer twenty-eight products that operate
on the Windows(R) 98, Windows 95, Windows NT(R) , Windows 3.1 and DOS operating
systems for IBM personal computers and compatibles. We also sell software
products together with certain computer hardware, such as "mouse pens," new
personal computers and digital cameras. We have established a multi-channel
distribution system utilizing direct mail, telemarketing, retail, corporate and
OEM sales channels and also disseminate our software programs over the Internet.
The Company currently derives substantially all of its net sales from products
sold directly to end-users by its direct mail and telemarketing centers, and to
retailers, distributors and corporate purchasers by its internal sales force and
independent sales representatives. We estimate that approximately 84% of our net
sales for the year ended December 31, 1998 (the "1998 Fiscal Year") and 93% of
our net sales for the three months ended March 31, 1999 (the "1999 Fiscal
Period") were generated through the Company's direct sales and telemarketing
efforts.
North America and international net sales for the 1998 Fiscal Year and the
year ended December 31, 1997 (the "1997 Fiscal Year") were as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------
1998 1997
----------------- ------------------
Amount % Amount %
----------------- ------------------
<S> <C> <C> <C> <C>
North America . . . . $ 8,431,271 46.1 $ 8,770,684 51.1
International . . . . 9,840,462 53.9 8,386,181 48.9
----------- ----- ----------- -----
Total . . . . . . . . 18,271,733 100.0 $17,156,865 100.0
=========== ===== =========== =====
</TABLE>
North America and international net sales for the 1999 Fiscal Period and
the three months ended March 31, 1998 (the "1998 Fiscal Period") were as
follows:
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------------------
1999 1998
----------------- ------------------
Amount % Amount %
----------------- ------------------
<S> <C> <C> <C> <C>
North America . . . . $ 1,685,370 34.1 $ 1,875,219 47.8
International . . . . 3,250,158 65.9 2,048,227 52.2
----------- ----- ----------- -----
Net sales . . . . . . $ 4,935,528 100.0 $ 3,923,446 100.0
=========== ===== =========== =====
</TABLE>
We believe that end users are continuing to migrate from the Windows 3.1
and Windows 95 environments to the Windows NT and Windows 98 platforms and to
Internet computing. We expect increased competition, including price
competition, in the computer software and hardware markets in the future.
Several of our competitors sell suites of products which include products that
directly compete with our products. We believe that these offerings of product
suites have and will continue to adversely affect sales of our products as the
individual products within the suites continue to gain increased levels of
inter-operability and functionality. The Company currently does not offer a
suite of general purpose office products; however, we currently offer one
product suite, Serif Publishing Power Suite, as well as products that complement
competitive suite products.
The Company currently is in the process of developing a new website
entitled VisualCities.com. The Company contemplates that this website will be an
Internet portal/community which would provide information, content, goods and
services to users. No assurance can be given that the Company will be able to
successfully develop and operate this website, that it will attract a
significant number of users or that the Company will achieve significant
revenues therefrom.
In July 1996, we acquired Serif Inc. and Serif (Europe) Limited
(collectively, the "Serif companies"), which significantly expanded our product
line to include desktop publishing and drawing titles Serif PagePlus and Serif
DrawPlus, among others. In December 1996, we acquired all of the outstanding
capital stock of Software
4
Publishing Corporation ("SPC"), as a result of which our product line
expanded further to include SPC's presentation graphics and other visual
communications and business productivity software products. We continue to
operate the Serif companies and SPC as wholly-owned subsidiaries. Since January
1998, the operations of SPC have been significantly reduced.
We are currently substantially dependent upon sales of our Serif line of
software programs. Microsoft Corporation ("Microsoft"), Corel Corporation, Adobe
Systems and others sell products targeted for substantially the same market as
the Serif product line, some of which are included in product suites.
We believe that in order to increase net revenues, we must continue to
develop and introduce new technologies and products internally, obtain
additional technologies and products through strategic alliances and
acquisitions and introduce new marketing strategies to include strengthening our
marketing through e-commerce and the Internet. Any inability or delay in
executing these strategies, difficulties encountered in introducing new products
or marketing programs, or failures of our current and future products to compete
successfully with products offered by other vendors, could adversely affect our
performance. The Company's growth is expected to require increases in the number
of employees, expenditures for new product development and expansion of our e-
commerce and Internet sites, the acquisition of product rights, sales and
marketing expenses, and general and administrative expenses.
In the third quarter of the 1998 Fiscal Year, we began selling our Go
Digital Camera Pak, which consists of a digital camera and digital imaging
software licensed from a third party, as well as certain accessories. The
digital imaging market is fairly new and we may not sustain a profitable level
of sales as competitors focus their marketing efforts, develop enhancements to
their products and develop products that take advantage of technological
advances.
Unless the context otherwise requires, all references herein to the Company
include Vizacom Inc. and its subsidiaries, including SPC and the Serif
companies, on a consolidated basis.
Principal Offices
The Company's principal executive offices are located at 3A Oak Road,
Fairfield, New Jersey 07004; telephone (973) 808-1992. The Company maintains
websites at www.spch.com, www.serif.com and www.harvardgraphics.com.
RISK FACTORS
The securities offered in this Prospectus are speculative and involve a
high degree of risk. Only those persons able to lose their entire investment
should purchase any of the securities. Prior to making an investment decision,
you should carefully read this Prospectus and consider, along with other matters
referred to herein, the following risk factors.
No Assurance of Profitability; Losses to Date
The Company has been unprofitable since inception in July 1992 and may
continue to incur operating losses in the future. For the year ended December
31, 1998, we had a net loss of approximately $2,407,000 and, for the three
months ended March 31, 1999, we had a net loss of $671,942. Our operating losses
may increase as we develop, produce and distribute additional products,
de-emphasize other products and continue to develop our business. We may not be
able to become profitable or, if we obtain profitability, we may thereafter not
be able to maintain profitability.
5
<PAGE>
Competition May Adversely Affect Results of Operations
The market for our software products is characterized by:
- ongoing technological developments,
- evolving industry standards,
- licensing of technology between companies,
- cross and collateral marketing of products by two or more
companies,
- alliances between companies,
- joint marketing campaigns and
- rapid changes in customer requirements and increasing customer
demands.
We believe that the principal competitive factors in the corporate, SOHO
and consumer software markets include:
- pricing (which includes individual product pricing, standard and
competitive upgrade pricing, licensing and volume discounting),
- product functionality,
- ease-of-use,
- bundling in suites of related products,
- distribution through existing and new channels and
- brand name recognition.
As a result, we believe that our success in this market depends upon our
ability to continue to:
- provide continued enhancement of our existing and future
products,
- correctly identify and enter new markets,
- effectively market and sell our current and future products,
- expand our existing distribution channels while also developing new
distribution channels, including e-commerce,
- timely and efficiently acquire, license or develop and introduce new
products that take advantage of technological advances and
- respond to new requirements and demands of the market.
To the extent one or more of our competitors introduce products that better
address market requirements, our business could be adversely affected. We may
not be successful in developing and marketing enhancements to our existing
products or new products incorporating new technology on a timely basis. Also,
our existing and new products may not adequately address the changing needs of
the marketplace. If we are unable to timely develop and introduce new products
or enhance existing products, our business and results of operations could be
materially and adversely affected.
The dominant position of Microsoft in the personal computer operating
system and application program marketplace provides Microsoft with a range of
competitive advantages, including its ability to determine the direction of
future operating systems and to leverage its strength in one or more product
areas to achieve a dominant position in new markets. This position may enable
Microsoft to increase its market position even with respect to products having
superior performance, price and ease-of-use features. Microsoft's ability to:
- offer corporate and SOHO operating systems combined with its own
productivity software,
- bundle software,
- provide incentives to customers to purchase certain products in order
to obtain favorable sales terms or necessary compatibility or
information with respect to other products,
- pre-load such bundled software on new computers, and
- purchase advantageous product positioning and presentations in various
distribution channels
6
<PAGE>
may significantly inhibit our ability to maintain or expand our business. In
addition, as Microsoft or other companies create new operating systems and
applications, we may not be able to re-work our products in order for the
products to remain compatible with these new systems and applications. The
introduction of upgrades to operating systems or the introduction of new
operating systems and standardized software by Microsoft and others, over which
we have no control, may adversely affect our ability to upgrade our own products
and may cause a reduction in sales of our products.
We believe that competition will continue to intensify in the future and
that new product introductions, as well as potential price reductions, strategic
alliances and other actions by competitors could materially and adversely affect
our competitive position.
Short Product Life Cycles May Adversely Affect Revenues
From time to time we or our competitors may announce new products,
capabilities or technologies that have the potential to replace or shorten the
life cycles of our existing products. Such announcements of currently planned or
other new products may cause customers to defer purchasing our existing
products.
Seasonality Is Expected to Cause Fluctuations in Revenues and Operating Results
The computer software market is characterized by significant seasonal
swings in demand, which typically peak in the fourth quarter of each calendar
year. The seasonal pattern is due primarily to the increased demand for software
during the year-end holiday buying season and reduced retail and corporate
demand for business software during the summer vacation period. We expect our
net sales and operating results to reflect this seasonality.
Fluctuations in Quarterly Results and the Uncertainty of Future Operating
Results May Cause Significant Fluctuations in Our Stock Price
Our quarterly operating results have and, in the future, may fluctuate
significantly, depending on factors such as:
- demand for our products,
- the size, timing and timely fulfilment of orders,
- the number, timing and significance of new product announcements
by us and our competitors, our ability to develop, introduce and
market new products, as well as enhanced versions of our current
products on a timely basis,
- the level of product and price competition,
- changes in operating expenses,
- changes in average selling prices and product mix,
- changes in our sales incentive strategy, as well as sales personnel
changes,
- the mix of direct and indirect sales, product returns and rebates,
- changes in technology,
- general economic factors, and
- seasonality.
Our expense levels, however, are expected to be based in large part on our
expectations of future revenues. Therefore, if revenue levels are below
expectations, operating results are likely to be adversely affected. Net income
may be disproportionately affected by an unanticipated decline in revenue for a
particular quarter because a relatively small amount of our expenses will vary
with our revenue in the short term. As a result, we believe that
period-to-period comparisons of our results of operations are not and will not
necessarily be meaningful and should not be relied upon as any indication of
future performance. Due to all of the foregoing factors, it is likely that in
some future quarter our operating results will be below expectations. In such
event, the market price of the Common Stock could be materially adversely
affected.
7
<PAGE>
Volatility of Stock Prices
The market for the Common Stock is highly volatile. The trading price of
the Common Stock could be subject to wide fluctuations in response to, among
other things:
- quarterly variations in operating and financial results,
- announcements of technological innovations or new products by us or
our competitors,
- changes in prices of our products or our competitors' products and
services,
- changes in product mix,
- changes in our revenue and revenue growth rates as a whole or for
individual geographic areas, business units, products or product
categories, and
- response to the Company's strategies concerning e-commerce and the
Internet.
Statements or changes in opinions, ratings, or earnings estimates made by
brokerage firms or industry analysts relating to the market in which we do
business or relating to us could result in an immediate and adverse effect on
the market price of the Common Stock. In addition, the stock market has from
time to time experienced extreme price and volume fluctuations which have
particularly affected the market price for the securities of many software and
Internet companies and which often have been unrelated to the operating
performance of these companies. These broad market fluctuations may adversely
affect the market price of the Common Stock.
Rapid Technological Changes Could Cause Delay in New Products; Delays May Cause
Reduced Revenues
The software market is characterized by ongoing technological developments,
evolving industry standards, frequent new product introductions and rapid
changes in customer requirements and preferences. The introduction of products
embodying new technologies and the emergence of new industry standards and
practices can rapidly render existing products obsolete and unmarketable. In the
past, we have experienced delays in software development and may experience
delays in connection with current product developments or future development
activities. Such delays may prevent the successful introduction or marketing of
these products. Further, our new products and product enhancements may not
adequately meet the requirements of the marketplace and achieve market
acceptance. Delays in the commencement of commercial shipments of new products
or enhancements may also result in customer dissatisfaction and delay or loss of
product revenues.
Product Defects Could Delay or Prevent Market Acceptance of New or Upgraded
Products
Software products as complex as those offered by the Company may contain
undetected errors or failures when first introduced or as new versions are
released. Despite testing internally or by current or potential customers,
errors may be found in new products after commencement of commercial shipments,
resulting in loss of or delay in market acceptance.
Although we have a number of ongoing development projects, the following
risks still exist:
- development may not be completed successfully on time or within our
projected cost,
- projects may not include the features required to achieve market
acceptance, and
- enhancements to our products may not keep pace with broadening market
requirements.
Product Returns and Difficulties in the Collection of Accounts Receivable Could
Result in Reductions in Cash Flows
Some of our sales are made on credit terms which may vary substantially. We
do not hold collateral to secure payment. Therefore, a default in payment on a
significant scale could materially adversely affect our business, results of
operations and financial condition. In addition, it is difficult for us to
ascertain future demand for our existing products and anticipated demand for
newly introduced products. Consistent with industry practices, we may accept
product returns or provide other credits in the event that a retailer or
distributor holds excess inventory of our products, even when we are not legally
required to do so. Accordingly, we are exposed to the risk
8
<PAGE>
of product returns from retailers, distributors and direct sales customers.
While we believe that we have established appropriate allowances for collection
problems and anticipated returns based on our historical experience and industry
norms, actual returns and uncollectible receivables may exceed such allowances.
Defective products also may result in higher customer support costs and product
returns.
Customer Concentration and Credit Risk
The Company had one customer which accounted for approximately 5% of the
Company's net sales for the three months ended March 31, 1999 and 13% of net
sales for the year ended December 31, 1998. This same customer accounted for
approximately 41% of the Company's accounts receivable at March 31, 1999 and 36%
of accounts receivable at December 31, 1998. The Company considers several of
its customers to be significant. The loss of any of such customers, a
significant decrease in product shipments to one or more of them or an inability
to collect receivables from one or more of them could adversely affect the
Company's business, operating results and financial condition.
Dependence on Key Personnel
Significant historical growth from acquisitions and operational
restructurings have placed strain upon our personnel, management systems and
resources. In the future, we expect to continue to improve our financial and
management controls, reporting systems and procedures on a timely basis and
train and manage our employee work force. An inability to do so may inhibit our
ability to grow. Competition for qualified sales, technical and other qualified
personnel, including expert Windows-environment programmers, is intense, and we
may not be able to attract or retain highly qualified employees in the future.
Our future success depends in significant part upon the continued service of our
current key technical, sales and senior management personnel. The loss of the
services of one or more of these key employees could have a material adverse
effect on our business, operating results and financial condition. Additions of
new and departures of existing personnel, particularly in key positions, can be
disruptive, which could have a material adverse effect upon the Company.
International Sales and Operations and Currency Fluctuations Could Have an
Adverse Affect
International sales are a significant source of revenue for the Company.
International sales represented approximately 65.9% of our net sales for the
three months ended March 31, 1999 and 53.9% of our net sales for the year ended
December 31, 1998. We believe that achieving profitability will require, among
other matters, additional expansion of sales in foreign markets. In order to
increase international sales, we may be required to establish additional foreign
operations, hire additional personnel and recruit additional international
resellers. Currently, our international sales are denominated in either U.S.
dollars, the Euro or local currency and we do not anticipate engaging in any
hedging activities. The introduction of the Euro may have an impact on currency
fluctuations. Although exposure to currency fluctuations to date has not been
significant, fluctuations in currency exchange rates in the future could have a
material adverse impact on the Company. Additional risks inherent in our
international business activities include:
- unexpected changes in regulatory requirements,
- tariffs and other trade barriers,
- costs of localizing products for foreign countries,
- lack of acceptance of localized products in foreign countries,
- longer accounts receivable payment cycles,
- difficulties in collecting payment,
- difficulties in managing international operations,
- potentially adverse tax consequences including limitations on
the repatriation of earnings,
- reduced protection for intellectual property,
- the burdens of complying with a wide variety of foreign laws, and
- the effects of potentially high local wage scales, employment customs
and other expenses.
9
<PAGE>
Any of these factors or others not presently contemplated by the Company
could have a material adverse effect on our future international operations.
Dependence on Manufacturers and Suppliers of Hardware
In the third quarter of the 1998 Fiscal Year, we began selling our Go
Digital Camera Pak, which consists of a digital camera and digital imaging
software licensed from a third party, as well as certain accessories. In the
1999 Fiscal Period, the Company began to experience delays in shipments of
digital cameras from cameras' respective manufacturer/suppliers, which delays
have continued. As of March 31, 1999, the Company had a backlog of $603,000
relating to this product. While the Company believes that these delays are only
temporary, the Company is presently investigating alternative
manufacturer/suppliers for hardware similar in quality to the digital cameras
presently included in the Go Digital Camera Pak and those offered as upgrade
cameras. No assurance can be given that the Company will, in the future, not
experience delays in receipt of these digital cameras or other hardware sold by
the Company from its manufacturers/suppliers, or identify alternative suppliers
and acquire the alternative hardware on terms as beneficial to the Company as
the Company's present hardware purchase terms.
Litigation and Potential Litigation May be Costly and/or Time-Consuming
Our competitors and potential competitors may resort to litigation as a
means of competition. Any litigation involving the Company, whether as plaintiff
or defendant, regardless of the outcome, may result in substantial costs and
expenses to the Company and significant diversion of effort by our management
and technical personnel. In the event of an adverse result in any such
litigation, we could be required to:
- expend significant resources to develop non-infringing technology,
- obtain licenses to the technology which is the subject of the
litigation on terms not advantageous to the Company,
- pay damages, and/or
- cease the use of any infringing technology.
There can be no assurance that we would be successful in such development,
that any such licenses would be available and/or that we would have available
funds sufficient to satisfy any cash awards.
In the first quarter of 1998, the Company and certain of our current and
former executive officers and directors were named as defendants in an action
claiming that such defendants made intentional misrepresentations of material
facts in connection with such plaintiffs' purchases of an aggregate 296,333
shares of Common Stock for $919,495. While we believe this action to be without
merit, the ultimate outcome of such lawsuit is unknown at this time. Any adverse
decision in this action may have a material adverse effect on our business,
operating results and financial condition.
We are also a defendant in litigations involving disputes with a landlord
and several vendors. These litigations generally arise out of our ordinary
course of business, and we believe that any adverse decision resulting from any
of these litigations will not have a materially adverse effect on the Company;
however, no assurance can be given in this regard.
Software Piracy and Intellectual Property Infringement May Adversely Affect Our
Revenues
We believe that our success depends significantly upon our proprietary
technology. We currently rely on a combination of copyright and trademark laws,
trade secrets, confidentiality procedures and contractual provisions and other
written materials under trade secret, patent and copyright laws to protect our
proprietary technology; however, these methods generally afford only limited
protection. Despite our efforts to protect our proprietary rights, unauthorized
parties may attempt to copy aspects of our products or services or to obtain and
use information that we regard as proprietary. In addition, the laws of some
foreign countries do not protect proprietary rights to as great an extent as do
the laws of the United States. Monitoring and identifying unauthorized use of
personal
10
<PAGE>
computer software is difficult. We expect software piracy to be a
continuing problem resulting in a reduction of our potential revenues.
Dependence on Third Party Licenses Could Have Adverse Affects
We rely on certain software, technology and content that we license or have
licensed from third parties, including software, technology and content that is
integrated with internally developed software and used in our products to
perform key functions. These third-party software licenses may not continue to
be available to us on commercially reasonable terms. Also, such software may not
be appropriately supported, maintained or enhanced by the licensors such that
the licensed software would not continue to provide the necessary commercial
benefits to our products. In addition, we may not be able to license such
software, technology and content on terms advantageous to the Company. The loss
of or inability to obtain or replace licenses to, or inability to support,
maintain and enhance, any of such licensed software, could result in increased
costs, including the expense of internally developing the required software,
technology and/or content, as well as delays or reductions in product shipments.
Dependence on Retailers, Distributors and Sales Representatives May Adversely
Affect Sales and Cash Flows
Our customers are not contractually required to make future purchases of
our products and could discontinue carrying or purchasing our products, at any
time and for any reason. Retailers and distributors generally are in a strong
position to negotiate favorable terms of sale, including price discounts and
product return policies. Retailers also often require software publishers to pay
fees in exchange for preferred shelf space. Further, resellers may give higher
priority to products other than ours, thus reducing their efforts to sell our
products. We may not be able to increase or sustain the current amount of our
retail shelf space and, as a result, our operating results could be adversely
affected.
Use of Net Operating Loss Carryforwards is Limited
We estimate our consolidated tax net operating loss carryforwards to be
approximately $84 million at December 31, 1998, which expire in years 2002
through 2018, and our general business credit carryover to be approximately $1.5
million, which expires in years 2005 and 2006. These carryforwards are subject
to certain limitations described below. Under Section 382 of the Internal
Revenue Code of 1986, as amended (the "Code"), changes in the ownership or the
business of a corporation that has net operating loss carryforwards can result
in the inability to use or the imposition of significant restrictions on the use
of such net operating loss carryforwards to offset future income and tax
liability of such corporation. An "ownership change" may be deemed to have
occurred under Section 382 of the Code and the regulations thereunder with
respect to both the Company and its wholly-owned subsidiary, Software Publishing
Corporation ("SPC"), which the Company acquired in December 1996, and the use by
the Company of these net operating loss carryforwards will be limited.
Utilization of the net operating loss carryforwards of SPC may be further
limited by reason of the consolidated return/separate return limitation year
rules. In addition, the SPC net operating loss carry forwards are also subject
to the additional limitation that such losses can only be utilized to offset the
separate taxable income of SPC. We estimate the maximum utilization of such net
operating loss carryforwards to be approximately $1,200,000 per year for losses
through December 31, 1996; losses incurred thereafter can be fully utilized
until expired under present circumstances. There can be no assurance that we
will be able to utilize all of our net operating loss carryforwards. In
addition, the foreign losses incurred by SPC may decrease or otherwise restrict
our ability to claim U.S. tax credits for foreign income taxes.
Failure to Obtain IRS Closing Agreement Could Result in Large Tax Payment
In September 1997, the Company applied for a closing agreement with the
IRS pursuant to which we would become jointly and severally liable for SPC's tax
obligations upon occurrence of a "triggering event" requiring recapture of dual
consolidated losses previously utilized by SPC. The Company acquired SPC in
December 1996. Such closing agreement would avoid SPC's being required to
recognize a tax of approximately $8 million on approximately $24.5 million of
SPC's pre-acquisition dual consolidated losses. We recently received
11
<PAGE>
notification from the IRS that the IRS has determined not to act on our
application until such time as SPC submits certain filings pertaining to
pre-acquisition filings made by SPC. Such additional filings require SPC to
obtain IRS relief so as to permit SPC to appropriately make the election
allowing SPC to utilize the dual consolidated losses. We believe that once the
appropriate prior year filings are made, and re-application for a closing
agreement is made, the IRS should agree to such a closing agreement. However, no
assurance can be given that the IRS will do so, and any failure to do so could
result in the recognition of this tax liability. Should such a closing agreement
be obtained, in certain circumstances, a future acquirer of the Company may also
be required to agree to a similar closing agreement in order to avoid the same
tax liability, to the extent it is able to do so. This could have a material
adverse effect on our future ability to sell SPC. The report of our auditors
covering the December 31, 1998 consolidated financial statements contains a
paragraph emphasizing these dual consolidated losses.
Year 2000 Compliance Issues
We are in the process of conducting a review of issues related to our Year
2000 compliance. In connection with this evaluation, we intend to review all
Company products for Year 2000 compliance, as well as to review our vendors and
suppliers for Year 2000 compliance, and to effect changes where necessary. We
expect to be able to conduct our review within our current resources, but no
assurance can be given that we have sufficient resources to complete the review
process in a timely manner. We have not determined, at this time, what total
costs we will incur to conduct the review process and to implement any necessary
corrections. At this time, we do not know of any of our products, processes or
systems, which, if found to be non-Year 2000 compliant, would have any
significant impact on the Company. We believe that all of our current products
are Year 2000 compliant. We are currently developing contingency plans to
address the failure of our products, vendors or information technology systems
to be Year 2000 compliant.
Change in Product Strategy May Not be Successful
The Company acquired SPC in December 1996. In SPC's fiscal year ended
September 30, 1996, approximately 70% of SPC's net revenue was derived from the
Harvard Graphics line of products. However, net revenues for that line of
products declined substantially over the previous few years and has continued to
decline. While we believe that the market for the Harvard Graphics product line
has matured, we also believe that our Harvard and Serif brands have attracted
significant customer bases. Accordingly, we intend to utilize these brand
strengths for our current and certain anticipated new products, including our
proposed VisualCities.com Internet portal/community . This product line and
brand transition, and the development of the VisualCities.com Internet
portal/community, may not be accomplished in a timely or efficient manner and
may not be successful.
Potential Anti-Takeover Effects of Delaware Law, Certificate of Incorporation,
Stockholder Rights Plan and Possible Issuances of Preferred Stock Could Impede a
Takeover of the Company
Certain provisions of Delaware law and our Certificate of Incorporation
could make it more difficult to complete a merger, tender offer or proxy contest
involving the Company, even if such events could be beneficial to the interests
of our stockholders. These provisions include:
- Section 203 of the Delaware General Corporation Law,
- the classification of the Company's Board of Directors into three
classes,
- the requirement that 66-2/3% of our stockholders are needed to request
a special meeting of stockholders (other than a special meeting
called by the Board of Directors or the President),
- the "golden parachute" provisions of the Company's agreement with
its President,
- the requirement that 66-2/3% of the stockholders of the Company
entitled to vote thereon approve transaction such as a merger,
consolidation or sale of assets with or to an entity controlling 15%
or more of the voting power of the Company's capital stock, unless
approved by the Board of Directors prior to such entity's acquisition
of 15% or more ofs uch voting power,
- the existence of "blank check" preferred stock that may be issued by
our Board of Directors without stockholder approval on such terms as
the Board may determine, and
- the existence of a "poison pill."
12
<PAGE>
Under the poison pill, the Company has declared a dividend of one Preferred
Share Purchase Right (each, a "Right") on each outstanding share of Common
Stock. Each Right becomes exercisable only if a person or group acquires 20% or
more of the outstanding Common Stock or announces a tender offer the
consummation of which would result in ownership by a person or group of 20% or
more of the Common Stock. If we are acquired in a merger or other business
combination transaction after a person or group has acquired 20% or more of the
outstanding Common Stock, each Right will entitle its holder to purchase, at the
Right's then current exercise price (currently, $1,000), a number of the
acquiring company's common shares having a market value of twice such price. In
addition, if a person or group acquires 20% or more of the outstanding Common
Stock, each Right will entitle its holder (other than such person or members of
such group) to purchase, at the Right's then current exercise price, a number of
shares of Common Stock having a market value of twice such price.
The rights of the holders of Common Stock also will be subject to, and may
be adversely affected by, the rights of the holders of additional or other
classes of preferred stock that may be issued in the future, including the blank
check preferred stock. Such issuance may make it more difficult for a third
party to acquire, or may discourage a third party from acquiring, a majority of
the voting stock of the Company. These provisions could limit the price that
certain investors might be willing to pay in the future for shares of Common
Stock.
Limited Directors' Liability Could Prevent Stockholders From Holding Directors
Responsible for a Lack of Care
The Company's Certificate of Incorporation provides that our directors (but
not our officers) will not be held liable to the Company or our stockholders for
monetary damages upon breach of a director's fiduciary duty, except to the
extent otherwise required by law.
No Dividends
The Company has never paid any cash dividends on the Common Stock and we do
not anticipate paying any dividends in the foreseeable future.
Possible Issuance of Substantial Amounts of Additional Shares Without
Stockholder Approval Could Dilute Stockholders
As of July 13, 1999, we have an aggregate of 6,601,544 shares of Common
Stock outstanding. In addition, as of May 25, 1999, we have 1,939,480 shares of
Serial Preferred Stock authorized but unissued, of which, 1,836,980 shares are
not reserved for specific purposes, and an additional (a) aggregate of 6,302,450
shares of Common Stock issuable upon the exercise of stock options granted or
available for grant under our various stock plans and (b) aggregate of
approximately 3,200,000 shares of Common Stock issuable upon exercise of other
stock options or warrants previously granted and outstanding. All of such shares
may be issued without any action or approval by our stockholders. Although there
are no other material present plans, agreements, commitments or undertakings
with respect to the issuance of additional shares of Common Stock or securities
convertible into any such shares, other than in connection with the exercise of
outstanding stock options and warrants, any shares issued would further dilute
the percentage ownership of the Company held by our stockholders.
Any Delisting of Securities from Nasdaq System Could Precipitate Risks
Associated with Low-Priced Stocks
The Common Stock is listed on the Nasdaq SmallCap Market and the Boston
Stock Exchange. To remain eligible for listing on the Nasdaq SmallCap Market, we
must comply with the following:
- The Common Stock must have a minimum bid price of $1.00,
- we must have either minimum tangible net assets of $2,000,000,
a market capitalization of $35,000,000 or net income of $500,000 in
two of the three prior fiscal years and
- we must have a public float of at least 500,000 shares with a market
value of at least $1,000,000, at least 300 stockholders must hold
shares of Common Stock and at least two market makers must make a
market in the Common Stock.
13
<PAGE>
These maintenance standards may be changed by Nasdaq. While we presently
comply with the Nasdaq listing maintenance requirements, the failure to maintain
these requirements or other requirements of Nasdaq could result in de-listing of
our securities from Nasdaq. In the event our securities are de-listed from
Nasdaq, you may be affected in any one or more of the following ways:
- our securities will have to trade on a non-NASDAQ, and possibly less
efficient, "over-the-counter" market,
- fewer brokerage firms and dealers may make a market in our securities
which may cause a decline in the trading price of our securities,
- you may also find it more difficult to dispose of, or obtain accurate
quotations, as to the market value of our securities,
- our securities may no longer be eligible for sale in certain
jurisdictions without additional compliance with such jurisdictions'
laws and regulations and
- the market for our securities may become illiquid.
No Trading Market for Registered Warrants
There is no trading market for the Registered Warrants and we have no
obligation to create or maintain a market for the Registered Warrants.
Accordingly, if you purchase any of the Registered Warrants you must be prepared
to bear the economic risk of investment for an indefinite period of time.
Possible Inability to Exercise the Registered Warrants
We intend to qualify the sales of the Common Stock and Registered Warrants
in a limited number of states. Although the securities laws of certain states
may permit the Registered Warrants to be transferred to purchasers in states
other than those in which the Registered Warrants were initially qualified, we
will be prevented from issuing Common Stock to persons or entities in such other
states upon the exercise of the Registered Warrants unless an exemption from
qualification is available or unless the issuance of Common Stock upon exercise
of the Registered Warrants is qualified. We are under no obligation to seek, and
may decide not to seek or may not be able to obtain, qualification of the
issuance of such Common Stock in all of the states in which the holders of the
Registered Warrants reside. In such case, the Registered Warrants held by such
holders will expire and have no value if such Registered Warrants cannot be
exercised or sold. Accordingly, the market for the Registered Warrants may be
limited. Further, a current prospectus covering the Common Stock issuable upon
exercise of the Registered Warrants must be in effect before the Company may
accept Registered Warrant exercises. We may not be able to have a prospectus in
effect if this Prospectus is no longer current, notwithstanding our commitment
to use our best efforts to do so.
USE OF PROCEEDS
The proceeds from the sale of the Shares and Registered Warrants by the
Selling Stockholders will belong to the individual Selling Securityholders. The
Company will not receive any of the proceeds from the sale of the Shares and
Derivative Securities, except with respect to the exercise price of the
Derivative Securities. We expect to utilize any such exercise price received
upon exercise of the Derivative Securities for general corporate and working
capital purposes.
PRICE RANGE OF COMMON STOCK
The Common Stock was traded on the Nasdaq SmallCap Market under the symbol
"ANMI" from December 6, 1995 through December 27, 1996, under the symbol "SPCOD"
from December 28, 1996 through January 27, 1997 and from May 28, 1998 through
June 24, 1998, under the symbol "SPCOC" from October 23, 1998 through January
14, 1999, and otherwise from January 28, 1997 through the date of this
Prospectus has been traded under the symbol "SPCO." The Company has been advised
that, effective August 2, 1999, the Common
14
<PAGE>
Stock will trade on Nasdaq under the symbol "VIZY." The Common Stock was
also traded on the Boston Stock Exchange under the symbol "APO" from December 6,
1995 through January 20, 1997 and under the symbol "SPO" from January 20, 1997
through the date of this Prospectus. The Company has been advised that,
effective August 2, 1999 the Common Stock will trade on the Boston Stock
Exchange under the symbol "VZM." The following table sets forth the range of
high and low bid prices for the Common Stock for the periods indicated as
derived from reports furnished by Nasdaq, adjusted to reflect the Company's
one-for-three reverse stock split made effective as of May 27, 1998 (the
"Reverse Stock Split"). Such adjustment has been made by multiplying the closing
prices by three and does not necessarily reflect the prices for the Common Stock
had the Reverse Stock Split occurred prior to the periods indicated. The
information reflects inter-dealer prices, without retail mark-ups, mark-downs or
commissions and may not necessarily represent actual transactions.
<TABLE>
<CAPTION>
High Bid Low Bid
-------- -------
<S> <C> <C>
Fiscal 1997
- -----------
First Quarter . . . . . . . . . . . . . $14-1/4 $ 8-13/16
Second Quarter. . . . . . . . . . . . . 9-9/16 5-5/8
Third Quarter . . . . . . . . . . . . . 7-1/8 3
Fourth Quarter. . . . . . . . . . . . . 6-15/16 2-5/32
Fiscal 1998
- -----------
First Quarter . . . . . . . . . . . . . 2-13/16 1-1/2
Second Quarter . . . . . . . . . . . . 3 1-3/8
Third Quarter . . . . . . . . . . . . . 1-5/8 5/8
Fourth Quarter. . . . . . . . . . . . . 1-1/8 9/16
Fiscal 1999
- -----------
First Quarter . . . . . . . . . . . . . 1-31/32 15/16
Second Quarter . . . . . . . . . . . 4-7/16 1-21/32
Third Quarter (through July 13, 1999) . 4 2-3/8
</TABLE>
As of July 13, 1999, the closing price for the Common Stock as reported on
Nasdaq was $3-7/8. As of the close of business on July 12, 1999, there were 678
stockholders of record of the Company. The Company estimates, based upon surveys
conducted by its transfer agent in connection with the Company's 1999 Annual
Meeting of Stockholders, that there are approximately 5,000 beneficial
stockholders.
DIVIDEND POLICY
The Company has never paid cash dividends on its capital stock and does not
anticipate paying cash dividends in the foreseeable future. The Company
currently intends to retain any future earnings for reinvestment in its
business. Any future determination to pay cash dividends will be at the
discretion of the Board of Directors and will be dependent upon the Company's
financial condition, results of operations, capital requirements and other
relevant factors.
SELLING SECURITYHOLDERS
An aggregate of 3,647,781 Shares, including 1,972,052 Shares issuable upon
exercise of the Derivative Securities, as well as the Registered Warrants to
purchase 17,052 Shares, may be offered for sale and sold pursuant to this
Prospectus by the Selling Securityholders. The Shares and Registered Warrants
are to be offered by and for the respective accounts of the Selling
Securityholders and any pledgees or donees of the Selling Securityholders. The
Company has agreed to register all of the Shares and Registered Warrants under
the Securities Act and to pay all of the expenses in connection with such
registration and sale of the Shares and Registered Warrants (other than
underwriting discounts and selling commissions and the fees and expenses of
counsel and other advisors to the Selling Securityholders). The Company will not
receive any proceeds from the sale of the Shares and Registered
15
<PAGE>
Warrants by the Selling Securityholders, except for the exercise price, if
any, paid in connection with the exercise of the Derivative Securities.
Certain information with respect to the Selling Securityholders, the Shares
and Registered Warrants is set forth in the following table. None of the Selling
Securityholders has had any material relationship with the Company within the
past three years, except as noted in the following table.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial
Ownership of
Common Stock
Ownership Prior Amount After Sale of
to Sale Offered Hereby the Securities
-------------------------- -------------------------- --------------------------
Registered Registered
Selling Securityholder Shares Warrants Shares Warrants Number Percent
- ---------------------- ------ ---------- ------ ----------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
David Bader and Devra Bader,
TEN ENT (1) . . . . . . . . . . 12,500 -0- 12,500 -0- -0- -0-
Irving Bader and Ellen Bader (1) . . 25,000 -0- 25,000 -0- -0- -0-
Gary Bates (2) (3) . . . . . . . . . 46,849 (4) -0- 100,000 (5) -0- 21,849 (4) *
Peter Beedham (2) (6). . . . . . . . 42,291 (7) -0- 3,921 -0- 38,370 (7) *
B.I. Investors, LLC (8). . . . . . . 210,000 -0- 210,000 -0- -0- -0-
Benjamin Blech and Elaine Blech,
TEN ENT (1) . . . . . . . . . . 25,000 -0- 25,000 -0- -0- -0-
Jacques Boutin (6) (9) . . . . . . . 1,238 -0- 1,238 -0- -0- -0-
Shaya Boymelgreen (10) . . . . . . . 210,000 -0- 210,000 -0- -0- -0-
Keith S. Braun (11). . . . . . . . . 3,750 (12) -0- 15,000 (13) -0- -0- -0-
Tiffany Brown (14) . . . . . . . . . 250 (15) -0- 1,000 (16) -0- -0- -0-
Anthony Broy (17). . . . . . . . . . 105,000 -0- 105,000 -0- -0- -0-
James Bryce (1) (18) (19). . . . . . 42,902 (20) -0- 70,159 (21) -0- 21,633 (20) *
Deborah J. Charney (5)(22) . . . . . 750 (23) -0- 3,000 (24) -0- -0- -0-
John Chianello (25). . . . . . . . . 18,796 -0- 18,796 -0- -0- -0-
Martin Chopp (1) . . . . . . . . . . 50,000 -0- 50,000 -0- -0- -0-
Howard Cohen and Helene Cohen,
JTWROS (25) . . . . . . . . . . 37,593 -0- 37,593 -0- -0- -0-
Carl Coppola (1) . . . . . . . . . . 12,500 -0- 12,500 -0- -0- -0-
Mark Daintree (6)(9) . . . . . . . . 10,318 -0- 5,366 -0- 4,952 *
Darren Darvill (2) (6) . . . . . . . 21,133 (26) -0- 5,366 -0- 15,767 (26) *
Gary Dunning (2) (6) . . . . . . . . 19,820 (27) -0- 5,366 -0- 14,454 (27) *
First Builder Associates, Inc. (10). 210,000 -0- 210,000 -0- -0- -0-
Hannah Fischer (1) . . . . . . . . . 25,000 -0- 25,000 -0- -0- -0-
Rivka Friedman (1) . . . . . . . . . 25,000 -0- 25,000 -0- -0- -0-
Steven Georgallas (1). . . . . . . . 12,500 -0- 12,500 -0- -0- -0-
Barbara A. Gombert (28). . . . . . . 750 (29) -0- 3,000 (30) -0- -0- -0-
Paul Hempstock (2) (6) . . . . . . . 17,206 (31) -0- 2,683 -0- 14,523 (31) *
John D. Hodel and Linda M. Hodel
JTWROS (25). . . . . . . . . . . . 37,593 -0- 37,593 -0- -0- -0-
K. David Issacs (1). . . . . . . . . 12,500 -0- 12,500 -0- -0- -0-
Andrew Jeffrey (6) (9) . . . . . . . 206 -0- 206 -0- -0- -0-
Joel Katz Keogh Profit Sharing
Plan (25). . . . . . . . . . . . . 37,593 -0- 37,593 -0- -0- -0-
David C. Katz (1). . . . . . . . . . 22,500 -0- 12,500 -0- 10,000 *
Ron J. Katz (1). . . . . . . . . . . 25,000 -0- 25,000 -0- -0- -0-
Neil M. Kaufman (32) . . . . . . . . 125,760 (33) -0- 36,904 (34) -0- 105,523 (35) 1.6
Simon Korn (1) . . . . . . . . . . . 12,500 -0- 12,500 -0- -0- -0-
Gary L. Krauthamer (1) . . . . . . . 50,000 -0- 50,000 -0- -0- -0-
16
<PAGE>
Ronniel Levy (36). . . . . . . . . . 750 (37) -0- 3,000 (38) -0- -0- -0-
MAK Group LLC (1). . . . . . . . . . 12,500 -0- 12,500 -0- -0- -0-
Donald Markowitz (25). . . . . . . . 37,593 -0- 37,593 -0- -0- -0-
Marquis Capital, LLC (39). . . . . . 45,000 (40) -0- 45,000 (40) -0- -0- -0-
Steve Medeiros (1) . . . . . . . . . 12,500 -0- 12,500 -0- -0- -0-
Lisa Nafash (1). . . . . . . . . . . 12,500 -0- 12,500 -0- -0- -0-
George Nahass (1). . . . . . . . . . 12,500 -0- 12,500 -0- -0- -0-
Ronald Nahass (1). . . . . . . . . . 12,500 -0- 12,500 -0- -0- -0-
Nicholas Ponzio (41) . . . . . . . . 117,500 (41) -0- 105,000 -0- 12,500 (41) *
Mark Ramsey (2) (6). . . . . . . . . 21,390 (42) -0- 5,366 -0- 16,024 (42) *
Regency Investment Partners (43) . . 600,000 (44) -0- 600,000 (44) -0- -0- -0-
Charles S. Ruppman Revocable Living
Trust (25) . . . . . . . . . 74,436 -0- 74,436 -0- -0- -0-
Alan W. Schoenbart (2) (45). . . . . 50,000 (46) -0- 110,000 (47) -0- -0- -0-
Seafish Partners (48). . . . . . . . 260,000 (49) -0- 260,000 (49) -0- -0- -0-
Seneca Associates (50) . . . . . . . 260,000 (51) -0- 260,000 (51) -0- -0- -0-
SG Cowen Securities Corp., Custodian
f/b/o William G. Walters IRA (1) 125,000 -0- 125,000 -0-
Denise Shapiro (52). . . . . . . . . 77,052 (53) 17,052 37,052 (53) 17,052 40,000 *
David Southgate (2) (54). . . . . . 49,025 (55) -0- 85,000 (56) -0- 27,775 (55) *
Target Capital Corp. (57). . . . . . 260,000 (58) -0- 260,000 (58) -0- -0- -0-
United Krasna Organizations (59) . . 120,000 (60) -0- 120,000 (60) -0- -0- -0-
Burton Weinstein (1) . . . . . . . . 12,500 -0- 12,500 -0- -0- -0-
Michael Wells (2). . . . . . . . . . 3,144 (61) -0- 550 -0- 2,594 (61) *
Yeshiva Beth Hillel of Krasna (1). . 12,500 -0- 12,500 -0- -0- -0-
- ----------
* Less than 1%.
<FN>
(1) Acquired the Shares so listed pursuant to a Subscription Agreement, accepted
by the Company effective June 9, 1999, at a purchase price of $2.00 per share.
(2) Employee of the Company.
(3) Acquired an option (an "Employee/Consultant Option") to purchase 100,000
Shares in April 1999. The Employee/Consultant Option held by Mr. Bates is
exercisable, with respect to 25,000 Shares, immediately and, with respect
to an additional 25,000 Shares, on each of April 6, 2000, 2001 and 2002.
Mr. Bates' Employee/Consultant Option expires on April 5, 2009 and is
exercisable at $1.03125 per Share.
(4) Includes (a) for ownership prior to sale only, 25,000 Shares issuable
upon exercise of an Employee/Consultant Option granted to Mr. Bates
outside of the Company's various stock plans which are exercisable within
the next 60 days and (b) 21,849 shares of Common Stock issuable upon
exercise of options granted Mr. Bates under the Company's various stock
plans which are exercisable within the next 60 days. Does not include (a)
75,000 shares of Common Stock issuable upon exercise of the
Employee/Consultant Option held by Mr. Bates which are not exercisable
within the next 60 days nor (b) 39,609 shares of Common Stock issuable
upon exercise of options granted Mr. Bates under the Company's various
stock plans which are not exercisable within the next 60 days.
(5) Represents all 100,000 Shares issuable upon exercise of the Employee/
Consultant Option held by Mr. Bates.
(6) Acquired the Shares so listed from the Serif (Europe) Limited
Employee Share Option Scheme (the "Scheme") for nominal consideration.
The Scheme may be deemed an affiliate of the Company.
17
<PAGE>
(7) Includes 18,664 shares of Common Stock issuable upon exercise of
options granted Mr. Beedham under the Company's various stock plans which
are exercisable within the next 60 days. Does not include 24,918 shares
of Common Stock issuable upon exercise of options granted Mr. Beedham
under the Company's various stock plans which are not exercisable within
the next 60 days.
(8) Acquired 210,000 Shares as an assignee of an individual who acquired
such 210,000 Shares pursuant to a Subscription Agreement, dated December
15, 1998, at a purchase price of $.40 per Share.
(9) Former employee of the Company.
(10) Acquired the Shares so listed pursuant to a Subscription Agreement,
dated December 15, 1998, at a purchase price of $.40 per Share.
(11) Acquired an Employee/Consultant Option to purchase 15,000 Shares in
April 1999. The Employee Consultant Option held by Mr. Braun is
exercisable, with respect to 3,750 Shares, immediately and, with respect
to an additional 3,750 Shares, on each of April 6, 2000, 2001 and 2002.
Mr. Braun's Employee/Consultant Option expires on April 5, 2009 and is
exercisable at $1.03125 per Share.
(12) Represents 3,750 Shares issuable upon exercise of an Employee/Consultant
Option held by Mr. Braun which are exercisable within the next 60 days.
Does not include 11,250 Shares issuable upon exercise of an Employee/
Consultant Option held by Mr. Braun which are not exercisable within
the next 60 days.
(13) Represents all 15,000 Shares issuable upon exercise of the Employee/
Consultant Option held by Mr. Braun.
(14) Acquired an Employee/Consultant Option to purchase 1,000 Shares in
April 1999. The Employee Consultant Option held by Ms. Brown is
exercisable, with respect to 250 Shares, immediately and, with respect to
an additional 250 Shares, on each of April 6, 2000, 2001 and 2002. Ms.
Brown's Employee/Consultant Option expires on April 5, 2009 and is
exercisable at $1.03125 per Share.
(15) Represents 250 Shares issuable upon exercise of an Employee/
Consultant Option held by Ms. Brown which are exercisable within the next
60 days. Does not include 750 Shares issuable upon exercise of
an Employee/Consultant Option held by Ms. Brown which are not exercisable
within the next 60 days.
(16) Represents all 1,000 Shares issuable upon exercise of the Employee/
Consultant Option held by Ms. Brown.
(17) Acquired 210,000 Shares as an assignee of an individual who acquired
such 210,000 Shares pursuant to a Subscription Agreement, dated December
15, 1998, at a purchase price of $.40 per Share. Subsequently, Mr. Broy
assigned 105,000 Shares to Nicholas Ponzio. (See note (41) below.)
(18) Acquired 5,159 Shares so listed from the Scheme for nominal
consideration. The Scheme may be deemed an affiliate of the Company.
(19) Acquired an Employee/Consultant Option to purchase 65,000 Shares in April
1999. The Employee Consultant Option held by Mr. Bryce is
exercisable, with respect to 16,250 Shares, immediately and, with respect
to an additional 16,250 Shares, on each of April 6, 2000, 2001 and 2002.
Mr. Bryce's Employee/Consultant Option expires on April 5, 2009 and is
exercisable at $1.03125 per Share.
(20) Includes (a) for ownership prior to sale only, 16,250 Shares
issuable upon exercise of an Employee/Consultant Option granted Mr. Bryce
which are exercisable within the next 60 days and (b) 10,638 shares of
Common Stock issuable upon exercise of options granted Mr. Bryce under
the Company's various stock plans which are exercisable within the next
60 days. Does not include (a) 48,750 Shares issuable upon exercise of the
Employee/Consultant Option held by Mr. Bryce which are not
18
<PAGE>
exercisable within the next 60 days and (b) 13,865 shares of Common Stock
issuable upon exercise of options granted Mr. Bryce under the Company's
various stock plans which are not exercisable within the next 60 days.
(21) Includes all 65,000 Shares issuable upon exercise of the Employee/
Consultant Option held by Mr. Bryce.
(22) Acquired an Employee/Consultant Option to purchase 3,000 Shares in
April 1999. The mployee Consultant Option held by Ms. Charney is
exercisable, with respect to 750 Shares, immediately and, with respect to
an additional 750 Shares, on each of April 6, 2000, 2001 and 2002. Ms.
Charney's Employee/Consultant Option expires n April 5, 2009 and is
exercisable at $1.03125 per Share.
(23) Represents 750 Shares issuable upon exercise of an Employee/
Consultant Option held by Ms. Charney which are exercisable within the
next 60 days. Does not include 250 Shares issuable upon exercise of
an Employee/Consultant Option held by Ms. Charney which are not
exercisable within the next 60 days.
(24) Represents all 3,000 Shares issuable upon exercise of the Employee/
Consultant Option held by Ms. Charney.
(25) Acquired the Shares so listed as of December 11, 1998, at a purchase
price of $.665 per Share, pursuant to the Company's private placement
("Private Placement"), for which Parker Bromley Ltd. ("P-B") acted as
Placement Agent.
(26) Includes 10,815 shares of Common Stock issuable upon exercise of options
granted Mr. Darvill under the Company's various stock plans which are
exercisable within the next 60 days. Does not include 14,851 shares of
Common Stock issuable upon exercise of options granted Mr. Darvill
under the Company's various stock plans which are not exercisable within
the next 60 days.
(27) Includes 10,878 shares of Common Stock issuable upon exercise of options
granted Mr. Dunning under the Company's various stock plans which are
exercisable within the next 60 days. Does not include 14,788 shares of
Common Stock issuable upon exercise of options granted Mr. Dunning
under the Company's various stock plans which are not exercisable within
the next 60 days.
(28) Acquired an Employee/Consultant Option to purchase 3,000 Shares in April
1999. The Employee Consultant Option held by Ms. Gombert is
exercisable, with respect to 750 Shares, immediately and, with respect to
an additional 750 Shares, on each of April 6, 2000, 2001 and 2002. Ms.
Gombert's Employee/Consultant Option expires on April 5, 2009 and is
exercisable at $1.03125 per Share.
(29) Represents 750 Shares issuable upon exercise of an Employee/
Consultant Option held by Ms. Gombert which are exercisable within the
next 60 days. Does not include 2,250 Shares issuable upon exercise of
an Employee/Consultant Option held by Ms. Gombert which are not
exercisable within the next 60 days.
(30) Represents all 3,000 Shares issuable upon exercise of the Employee/
Consultant Option held by Ms. Gombert.
(31) Includes 11,712 shares of Common Stock issuable upon exercise of options
granted Mr. Hempstock under the Company's various stock plans which are
exercisable within the next 60 days. Does not include 16,454 shares of
Common Stock issuable upon exercise of options granted Mr. Hempstock
under the Company's various stock plans which are not exercisable
within the next 60 days.
(32) Pursuant to a letter agreement, dated June 11, 1999, between the Company
and Kaufman & Moomjian, LLC ( "K&M") as amended by letter agreements,
dated June 30, 1999 and July 8, 1999 (collectively, the "K&M Letter
Agreements"), Mr. Kaufman was granted an option (the "Kaufman Option")
to purchase 25,000 Shares. The Kaufman Option is exercisable, with
respect to 8,333 Shares, immediately, with respect to an additional 8,333
shares, commencing June 11, 2000, and with respect to the final 8,334
19
<PAGE>
Shares, commencing on June 11, 2001. The Kaufman Option expires on June
10, 2009 and is exercisable at $2.75 per Share. Additionally, in July
1999, Mr. Kaufman was granted, under the Company's 1994 Long Term
Incentive Plan, 37,500 Shares of Common Stock and an option to purchase
an additional 50,000 shares of Common Stock exercisable, with respect to
16,666 shares of Common Stock, immediately and, with respect to an
additional 16,667 shares, on the first and second anniversaries of the
date of grant. This option expires in July 2009 and is exercisable at
$3.08125 per share. In May 1998, a predecessor to K & M was issued 11,904
Shares in partial satisfaction of outstanding legal fees equal in amount
to the market value of such Shares, and these Shares have been assigned
to Mr. Kaufman. During 1997, the Company incurred approximately $480,000
in legal fees to Moritt, Hock and Hamroff LLP ("Moritt Hock"), then its
counsel. Neil M. Kaufman, a director of the Company, was a partner in
Moritt Hock during 1997. Mr. Kaufman is a member of K&M, which currently
acts as counsel to the Company. During 1997, the Company incurred
approximately $55,000 in legal fees to K & M's predecessor. During 1998,
the Company incurred approximately $390,000 in legal fees to K & M and
its predecessor.
(33) Includes (a) 8,333 Shares issuable upon exercise of the Kaufman Option
which are exercisable within the next 60 days and (b) 60,690 shares
of Common Stock issuable upon exercise of options granted to Mr. Kaufman
under the Company's various stock plans which are exercisable within the
next 60 days. Does not include (a) 33,334 Shares issuable upon
exercise of the Kaufman Option which are not exercisable within the next
60 days and (b) 94,310 shares of Common Stock issuable upon exercise of
options granted to Mr. Kaufman under the Company's various stock plans
which are not exercisable within the next 60 days.
(34) Represents (a) all 25,000 Shares issuable upon exercise of the Kaufman
Option and (b) 11,904 Shares owned by Mr. Kaufman as assignee of K&M.
(35) Includes 60,690 shares of Common Stock issuable upon exercise of options
granted to Mr. Kaufman under the Company's various stock plans which
are exercisable within the next 60 days.
(36) Acquired an Employee/Consultant Option to purchase 3,000 Shares in
April 1999. The Employee Consultant Option held by Mr. Levy is
exercisable, with respect to 750 Shares, immediately and, with respect to
an additional 750 Shares, on each of April 6, 2000, 2001 and 2002. Mr.
Levy's Employee/Consultant Option expires on April 5, 2009 and is
exercisable at $1.03125 per Share.
(37) Represents 750 Shares issuable upon exercise of an Employee/
Consultant Option held by Mr. Levy which are exercisable within the next
60 days. Does not include 2,250 Shares issuable upon exercise of an
Employee/Consultant Option held by Mr. Levy which are not exercisable
within the next 60 days.
(38) Represents all 3,000 Shares issuable upon exercise of the Employee/
Consultant Option held by Mr. Levy.
(39) Acquired warrants ("Marquis Warrants") to purchase 45,000 shares
pursuant to a Financial Advisory and Investment Banking Agreement, dated
April 6, 1999 (the "Marquis Agreement"), between the Company and Marquis
Capital, LLC ("Marquis"), pursuant to which the Company retained Marquis
to provide investment banking services for a one year period. The Marquis
Warrants are exercisable at any time, in whole or part, commencing April
6, 2000 and through April 5, 2004, at an exercise price of $1.125 per
share.
(40) Represents all 45,000 Shares issuable upon exercise of the Marquis
Warrants.
(41) Received the 105,000 Shares as an assignee of Anthony Broy. (See note
(17) above.) Shares owned includes 12,500 shares of Common Stock
owned by Wolcot Capital Money Purchase Plan, an affiliate of Mr. Ponzio.
(42) Includes 10,612 shares of Common Stock issuable upon exercise of options
granted Mr. Ramsey under the Company's various stock plans which are
exercisable within the next 60 days. Does not include 14,804
20
<PAGE>
shares of Common Stock issuable upon exercise of options granted Mr.
Ramsey under the Company's various stock plans which are not exercisable
within the next 60 days.
(43) Acquired warrants (the "European Consultant Warrants") to purchase
600,000 Shares pursuant to a Consulting Agreement, dated as of December
17, 1998, between the Company and Michele Ladovich (sic), pursuant to
which the Company retained Michel Ladovitch to provide investor relations
services in the European Union and United Kingdom for a five year period.
Mr. Ladovitch directed that the European Consultant Warrants be
registered in the name of Regency Investment Partners. The European
Consultant Warrants are exercisable, with respect to 500,000 Shares,
immediately and, with respect to 100,000 Shares, on June 17, 1999. The
European Consultant Warrants expire on December 16, 2005 and have an
exercise price of $.75 per Share.
(44) Represents all 600,000 Shares issuable upon exercise of the European
Consultant Warrants.
(45) Acquired an Employee/Consultant Options to purchase 110,000 Shares
upon commencement of employment with the Company. Mr. Schoenbart is
currently Vice President-Finance and Chief Financial Officer of the
Company. Mr. Schoenbart's Employee/Consultant Option is exercisable, with
respect to 50,000 Shares, immediately and, with respect to an additional
15,000 Shares, on each of April 6, 2000, 2001, 2002 and 2003. Mr.
Schoenbart's Employee/Consultant Option expires on April 5, 2009 and is
exercisable at $1.03125 per Share.
(46) Represents 50,000 Shares issuable upon exercise of Mr. Schoenbart's
Employee/Consultant Option which are exercisable with in the next 60
days. Does not include 60,000 Shares issuable upon exercise of Mr.
Schoenbart's Employee/Consultant Option which are not exercisable within
the next 60 days.
(47) Represents all 110,000 Shares issuable upon exercise of Mr. Schoenbart's
Employee/Consultant Options.
(48) Acquired warrants (the "Seafish Warrants") to purchase 260,000
Shares pursuant to an Agreement, dated as of January 4, 1999, between the
Company and Seafish Partners ("Seafish"), whereby Seafish, as the holder
of all outstanding shares of the Company's Class A 14% Cumulative
Non-Convertible Preferred Stock, Series A (the "Class A Preferred
Stock"), exchanged its 930 shares of Class A Preferred Stock for (a) 930
shares of the Company's Class C 11% Cumulative Non-Convertible Preferred
Stock, Series A (the "Class C Preferred Stock") and (b) the Seafish
Warrants. The Class C Preferred Stock is identical to the Class A
Preferred Stock, except the Class C Preferred Stock has a reduced rate of
dividends on the Class A Preferred Stock of 11% per annum, compared to
14% per annum for the Class A Preferred Stock, and the Class C Preferred
Stock does not require the Company to pay a redemption premium upon a
redemption of shares of the Class C Preferred Stock, compared to a
premium of $300 per share for the Class A Preferred Stock. The Seafish
Warrants are exercisable immediately, expire on January 3, 2006 and have
an exercise price of $1.062 per share.
(49) Represents all 260,000 Shares issuable upon exercise of the Seafish
Warrants.
(50) Acquired warrants (the "Seneca Warrants") to purchase 260,000 Shares
as an assignee of Target Capital Corp. ("Target"). (See note (57) below.)
The Seneca Warrants are exercisable immediately, expire on December 16,
2005 and have an exercise price of $.75 per Share.
(51) Represents all 260,000 Shares issuable upon exercise of the Seneca
Warrants.
(52) Acquired 17,052 Registered Warrants to purchase an aggregate 17,025
Shares (the "Agency Warrants") and 60,000 Shares as assignee of P-B. P-B
acquired the Agency Warrants in connection with acting as Placement Agent
for the Private Placement. P-B also received $16,200 as fees and $4,860
as a non-accountable expense allowance in connection with acting as
placement agent for the Private Placement. The Agency Warrants are
exercisable from December 11, 1998 through December 10, 2000, at an
exercise price of $1.50 per Share. P-B acquired such 60,000 Shares
pursuant to the terms of a Consulting
21
<PAGE>
Agreement, dated August 12, 1998, between the Company and P-B, pursuant
to which the Company retained P-B to provide consulting services for a
one year period.
(53) Includes 17,052 Shares issuable upon exercise of the Agency Warrants.
(54) Acquired an Employee/Consultant Option to purchase 85,000 Shares in
April 1999. The Employee/Consultant Option held by Mr. Southgate is
exercisable, with respect to 21,250 Shares, immediately and, with respect
to an additional 21,250 Shares, on each of April 6, 2000, 2001 and 2002.
Mr. Southgate's Employee/Consultant Option expires on April 5, 2009 and
is exercisable at $1.03125 per Share.
(55) Includes (a) for ownership prior to sale only, 21,250 Shares
issuable upon exercise of an Employee/Consultant Option granted to Mr.
Southgate outside of the Company's various stock plans which are
exercisable within the next 60 days and (b) 26,423 shares of Common Stock
issuable upon exercise of options granted Mr. Southgate under the
Company's various stock plans which are exercisable within the next 60
days. Does not include (a) 63,750 Shares issuable upon exercise of the
Employee/Consultant Option held by Mr. Southgate which are not
exercisable within the next 60 days nor (b) 45,492 shares of Common Stock
issuable upon exercise of options granted Mr. Southgate under the
Company's various stock plans which are not exercisable within the next
60 days.
(56) Represents all 85,000 Shares issuable upon exercise of the Employee/
Consultant Option held by Mr. Southgate.
(57) Acquired warrants (the "Consultant Warrants") to purchase 260,000
Shares pursuant to a Consulting Agreement, dated as of December 17, 1998
(the "Target Consulting Agreement"), between the Company and Target,
pursuant to which the Company retained Target to provide consulting
services for a five year period. The Consultant Warrants are exercisable
immediately, expire on December 16, 2005 and have an exercise price of
$.75 per Share.
(58) Represents all 260,000 Shares issuable upon exercise of the Consultant
Warrants owned by Target.
(59) Acquired warrants (the "Krasna Warrants") to purchase 120,000 Shares
pursuant to the Target Consulting Agreement. (See note (57) above.) The
Krasna Warrants are exercisable immediately, expire on December 16, 2005
and have an exercise price of $.75 per Share.
(60) Represents all 120,000 Shares issuable upon exercise of the Krasna
Warrants.
(61) Includes 2,457 of Common Stock issuable upon exercise of options granted
Mr. Wells under the Company's various stock plans which are exercisable
within the next 60 days. Does not include 3,875 shares of Common Stock
issuable upon exercise of options granted Mr. Wells under the Company's
various stock plans which are not exercisable within the next 60 days.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
The Shares and Registered Warrants offered hereby may be sold from time to
time by the Selling Securityholders for their respective own accounts. The
Company will receive none of the proceeds from this offering. The Selling
Securityholders will pay or assume brokerage commissions or other charges and
expenses incurred in the sale of the Shares and Registered Warrants.
The distribution of the Shares and Registered Warrants by the Selling
Securityholders is not subject to any underwriting agreement. The Shares and
Registered Warrants covered by this Prospectus may be sold by the Selling
Securityholders or by pledgees and donees of the Selling Securityholders. The
Shares and Registered Warrants offered by the Selling Securityholders may be
sold from time to time at market prices prevailing at the time of sale, at
prices relating to such prevailing market prices or at negotiated prices. The
Selling Securityholders
22
<PAGE>
may sell their Shares and Registered Warrants covered by this Prospectus
through customary brokerage channels, either through broker-dealers acting as
agents or brokers, or through broker-dealers acting as principals, who may then
resell the Shares and Registered Warrants, or at private sale or otherwise, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Securityholders
may effect such transactions by selling the Shares and Registered Warrants to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of underwriting discounts, concessions, commissions, or fees from the
Selling Securityholders and/or purchasers of the Shares and Registered Warrants
for whom such broker-dealers may act as agent or to whom they sell as principal,
or both (which compensation to a particular broker-dealer might be in excess of
customary commissions). Any broker dealers that participate with the Selling
Securityholders in the distribution of the Shares and Registered Warrants may be
deemed to be underwriters and any commissions received by them and any profit on
the resale of the Shares and Registered Warrants positioned by them might be
deemed to be underwriting discounts and commissions within the meaning of the
Securities Act, in connection with such sales.
Any Shares and Registered Warrants covered by the Prospectus that qualify
for sale pursuant to Rule 144 under the Securities Act may be sold under Rule
144 rather than pursuant to this Prospectus.
The 1,972,052 Shares offered hereby upon the exercise of the Derivative
Securities will be issuable in accordance with the terms of the Derivative
Securities. Among other things, the Derivative Securities provide that, upon
surrender at the Company's principal offices of a certificate evidencing any of
the Derivative Securities, with the annexed form to exercise the Warrant duly
executed, together with payment of the exercise price of the Derivative
Securities so exercised, the registered holder of a Warrant (or assignee) will
be entitled to receive a certificate for the Shares so purchased.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock currently consists of 60,000,000
shares of Common Stock, $.001 par value per share, 1,939,480 shares of Serial
Preferred Stock, $.001 par value per share (the "Serial Preferred Stock"), of
which 1,500 shares have been designated Class A Preferred Stock, 1,000 shares
have been designated as Class C Preferred Stock and 100,000 shares have been
designated Junior Participating Preferred Stock (the "Junior Preferred Stock"),
and 60,520 shares of Class B Voting Preferred Stock, Series A, par value $.001
per share (the "Class B Voting Preferred Stock").
Common Stock
As of the date of this Prospectus, there were 6,601,544 shares of Common
Stock outstanding held of record by approximately 5,000 beneficial stockholders
of Common Stock. The Common Stock is currently listed on Nasdaq under the
trading symbol "SPCO" and also traded on the BSE under the symbol "SPO." Holders
of Common Stock do not have subscription, redemption, conversion or preemptive
rights. Each share of Common Stock is entitled to participate pro rata in any
distribution upon liquidation, subject to the rights of holders of preferred
stock, and to one vote on all matters submitted to a vote of stockholders. The
holders of Common Stock may receive cash dividends as declared by the Board of
Directors out of funds legally available therefor, subject to the rights of any
holders of preferred stock.
Holders of Common Stock are entitled to elect all directors of the Company.
The Board of Directors consists of three classes, each of which serves for a
term of three years. At each annual meeting of the stockholders the directors in
only one class will be elected. The holders of Common Stock do not have
cumulative voting rights, which means that the holders of more than half of the
shares voting for the election of a class of directors can elect all of the
directors of such class and in such event the holders of the remaining shares
will not be able to elect any of such directors.
23
<PAGE>
Class A 14% Cumulative Non-Convertible Redeemable Preferred Stock, Series A
On December 15, 1998, the Company authorized 1,500 shares of Class A
Preferred Stock. Under the Company's Certificate of Designation, holders of
shares of Class A Preferred Stock are entitled to (a) cumulative dividends of
$140 per share per annum, payable semi-annually on June 30 and December 31 of
each calendar year, commencing on June 30, 1999, (b) a liquidation preference of
$1,000 per share and (c) the right to elect one director in the event the
Corporation fails to tender in full three consecutive semi-annual dividend
payments. In addition, the Company has the right to redeem the Class A Preferred
Stock, in part or whole, at any time, upon payment of $1,300 per share of Class
A Preferred Stock plus any accrued and unpaid dividends on the Class A Preferred
Stock so redeemed. The Company currently has no shares of Class A Preferred
Stock outstanding.
Class C 11% Cumulative Non-Convertible Redeemable Preferred Stock, Series A
On January 4, 1999, the Company authorized 1,000 shares of Class C
Preferred Stock. Under the Company's Certificate of Designation, holders of
shares of Class C Preferred Stock are entitled to (a) cumulative dividends of
$110 per share per annum, payable semi-annually on June 30 and December 31 of
each calendar year, commencing on June 30, 1999, (b) a liquidation preference of
$1,000 per share and (c) the right to elect one director in the event the
Corporation fails to tender in full three consecutive semi-annual dividend
payments. In addition, the Company has the right to redeem the Class C Preferred
Stock, in part or whole, at any time, upon payment of $1,000 per share of Class
C Preferred Stock plus any accrued and unpaid dividends on the Class C Preferred
Stock so redeemed. The Company currently has outstanding 930 shares of Class C
Preferred Stock.
Junior Participating Preferred Stock
In March 1998, the Company authorized 100,000 shares of Junior
Participating Preferred Stock, Series A, par value $.001 per share (the "Junior
Preferred Stock"). The Junior Preferred Stock has preferential voting, dividend
and liquidation rights over the Common Stock. On March 31, 1998, the Company
declared a dividend distribution, payable April 30, 1998, of one Preferred Share
Purchase Right ("Right") on each share of Common Stock. Each Right, when
exercisable, entitles the registered holder thereof to purchase from the Company
one one-thousandth of a share of Junior Preferred Stock at a price of $1.00 per
one one-thousandth of a share (subject to adjustment). The one one-thousandth of
a share is intended to be the functional equivalent of one share of the Common
Stock. The Rights will not be exercisable or transferable apart from the Common
Stock until an Acquiring Person, as defined in the Rights Agreement, dated as of
March 31, 1998, between the Company and American Stock Transfer & Trust Company,
without the prior consent of the Company's Board of Directors, acquires 20% or
more of the voting power of the Common Stock or announces a tender offer that
would result in 20% ownership. The Company is entitled to redeem the Rights, at
$.001 per Right, any time before a 20% position has been acquired or in
connection with certain transactions thereafter announced. Under certain
circumstances, including the acquisition of 20% of the Common Stock, each Right
not owned by a potential Acquiring Person will entitle its holder to purchase,
at the Right's then-current exercise price, shares of Common Stock having a
market value of twice the Right's exercise price. Holders of a Right will be
entitled to buy stock of an Acquiring Person at a similar discount if, after the
acquisition of 20% or more of the Company's voting power, the Company is
involved in a merger or other business combination transaction with another
person in which its common shares are changed or converted, or the Company sells
50% or more of its assets or earning power to another person. The Rights expire
on April 20, 2008.
Class B Voting Preferred Stock
As of the date of this Prospectus, there are no shares of Class B Voting
Preferred Stock issued and outstanding. The Class B Preferred Stock, if issued
and outstanding, votes together with the Common Stock other than, pursuant to
the Delaware General Corporation Law, with respect to proposals to increase the
number of authorized shares of Common Stock and certain other specified matters.
Each share of Class B Preferred Stock entitles the holder thereof to ten votes
on each matter subject to stockholder approval. Shares of Class B Preferred
Stock have no right to dividends and have a liquidation preference of $.001 per
share.
24
<PAGE>
Serial Preferred Stock
The Board of Directors is authorized by the Company's Certificate of
Incorporation to issue up to 1,939,480 shares of one or more series of Serial
Preferred Stock. No shares of Serial Preferred Stock have been authorized for
future issuance by the Board, and the Company has no present plans to issue any
such shares, except with respect to (a) the authorization of 100,000 shares of
Junior Preferred Stock and reservations of such 100,000 shares for issuance upon
exercise of rights and (b) the authorization of 1,500 shares of Class A
Preferred Stock and the issuance of 930 shares of Class A Preferred Stock. In
the event that the Board does issue additional shares of Serial Preferred Stock,
it may exercise its discretion in establishing the terms of such Serial
Preferred Stock. In the exercise of such discretion, the Board may determine the
voting rights, if any, of the series of Serial Preferred Stock being issued,
which could include the right to vote separately or as a single class with the
Common Stock and/or other series of Serial Preferred Stock; to have more or less
voting power per share than that possessed by the Common Stock or other series
of Serial Preferred Stock; and to vote on certain specified matters presented to
the stockholders or on all of such matters or upon the occurrence of any
specified event or condition. On liquidation, dissolution or winding up of the
Company, the holders of Serial Preferred Stock may be entitled to receive
preferential cash distributions fixed by the Board of Directors when creating
the particular series thereof before the holders of the Common Stock are
entitled to receive anything. Serial Preferred Stock authorized by the Board
could be redeemable or convertible into shares of any other class or series of
stock of the Company.
The issuance of Serial Preferred Stock by the Board could adversely affect
the rights of holders of the Common Stock by, among other things, establishing
preferential dividends, liquidation rights or voting powers. The issuance of
Serial Preferred Stock could be used to discourage or prevent efforts to acquire
control of the Company through the acquisition of shares of Common Stock.
Agency Warrants
The Agency Warrants are exercisable immediately, expire on December 10,
2000 and have an exercise price of $1.50 per Share. Each Agency Warrant entitles
the holder thereof to purchase one Share. The Agency Warrants are redeemable by
the Company. The Agency Warrants are subject to adjustment in their exercise
price and the number of Shares issuable upon exercise in certain circumstances,
including in the event of a stock dividend, recapitalization, reorganization,
merger or consolidation of the Company.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Common Stock is American Stock
Transfer and Trust Company, 40 Wall Street, New York, NY 10005, telephone
number: (212) 936-5100.
EXPERTS
The consolidated financial statements of the Company as of December 31,
1998, and for the two years then ended, have been incorporated by reference in
this Prospectus and in the Registration Statement in reliance upon the report of
Richard A. Eisner & Company, LLP, independent auditors, and, in part, on the
report of Ernst & Young, independent auditors of the financial statements of a
wholly-owned subsidiary of the Company, Serif (Europe) Limited, as of December
31, 1998 and for the two years then ended, incorporated by reference herein,
given upon the authority of said firms as experts in accounting and auditing.
The report of Richard A. Eisner & Company, LLP covering the December 31, 1998
consolidated financial statements also contains an emphasis paragraph discussing
a federal income tax contingency.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company and the Selling Securityholders by Kaufman & Moomjian, LLC, Mitchel
Field, New York. Neil M. Kaufman, Esq., a director of
25
<PAGE>
the Company and a member of K&M, owns 56,737 shares of Common Stock and
options to purchase 180,000 shares of Common Stock. In addition, another member
of K&M owns 12,500 shares of Common Stock and options to purchase 25,000 shares
of Common Stock.
26
<PAGE>
================================================================================
No person has been authorized in connection with the offering made hereby to
give any information or to make any representation not contained in this
prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by the Company, any Selling Securityholder
or any other person. This Prospectus does not constitute an offer to sell or a
solicitation of any offer to buy any of the securities offered hereby to any
person or by anyone in any jurisdiction in which it is unlawful to make such
offer or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, except as otherwise contemplated by the rules and regulations
of the Securities and Exchange Commission, create any implication that the
information contained herein is correct as of any date subsequent to the date
hereof.
-------------------------
TABLE OF CONTENTS
Where You Can Find More Information. . . . . . . . . . . . . . . 2
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . 3
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . 14
Price Range of Common Stock. . . . . . . . . . . . . . . . . . . 14
Dividend Policy. . . . . . . . . . . . . . . . . . . . . . . . . 15
Selling Securityholders. . . . . . . . . . . . . . . . . . . . . 15
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . 22
Description of Capital Stock. . . . . . . . . . . . . . . . . 23
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 25
================================================================================
<PAGE>
================================================================================
3,647,781 SHARES
and
WARRANTS TO PURCHASE
17,052 SHARES
VIZACOM INC.
-------------------------
PROSPECTUS
-------------------------
July __, 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses of the distribution, all of which are to be borne by
the Registrant, are as follows:
SEC Registration Fee . . . . . . . . . . . . . . . . . . . . . $ 2,291.18
Blue Sky Fees and Expenses . . . . . . . . . . . . . . . . . . 15,000.00 *
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . 9,000.00 *
Legal Fees and Expenses. . . . . . . . . . . . . . . . . . . . 40,000.00 *
Printing and Engraving . . . . . . . . . . . . . . . . . . . . 10,000.00 *
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . 3,708.82*
--------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $80,000.00 *
- ----------
*Estimated
Item 15. Indemnification of Directors and Officers.
Under the provisions of the Certificate of Incorporation and By-Laws of the
Registrant, each person who is or was a director or officer of Registrant shall
be indemnified by the Registrant as of right to the full extent permitted or
authorized by the General Corporation Law of Delaware. Under such law, to the
extent that such person is successful on the merits of defense of a suit or
proceeding brought against such person by reason of the fact that such person is
a director or officer of the Registrant, such person shall be indemnified
against expenses (including attorneys' fees) reasonably incurred in connection
with such action. If unsuccessful in defense of a third-party civil suit or a
criminal suit is settled, such a person shall be indemnified under such law
against both (1) expenses (including attorneys' fees) and (2) judgments, fines
and amounts paid in settlement if such person acted in good faith and in a
manner such person reasonably believed to be in, or not opposed to, the best
interests of the Registrant, and with respect to any criminal action, had no
reasonable cause to believe such person's conduct was unlawful. If unsuccessful
in defense of a suit brought by or in the right of the Registrant, or if such
suit is settled, such a person shall be indemnified under such law only against
expenses (including attorneys' fees) incurred in the defense or settlement of
such suit if such person acted in good faith and in a manner such person
reasonably believed to be in, or not opposed to, the best interests of the
Registrant except that if such a person is adjudicated to be liable in such suit
for negligence or misconduct in the performance of such person's duty to the
Registrant, such person cannot be made whole even for expenses unless the court
determines that such person is fairly and reasonably entitled to be indemnified
for such expenses.
The officers and directors of the Registrant are covered by officers' and
directors' liability insurance. The policy coverage is $3,000,000, which
includes reimbursement for costs and fees. There is a maximum aggregate
deductible for each loss under the policy of $200,000. The Registrant has
entered into Indemnification Agreements with each of its executive officers and
directors. The Agreements provide for reimbursement for all direct and indirect
costs of any type or nature whatsoever (including attorneys' fees and related
disbursements) actually and reasonably incurred in connection with either the
investigation, defense or appeal of a Proceeding, as defined, including amounts
paid in settlement by or on behalf of an Indemnitee, as defined.
II-1
<PAGE>
Item 16. Exhibits.
Number Description
4.1 Specimen Common Stock Certificate. (Incorporated by reference to
Exhibit 4.1 to the Company's Annual Report on Form 10-KSB (Commission
File Number: 1-14076), for the year ended December 31, 1997, filed
with the Commission on April 15, 1998.)
4.2 Warrant to purchase 17,052 shares of Common Stock, registered in
the name of Denise Shapiro.*
5 Opinion and consent of Kaufman & Moomjian, LLC.
23.1 Consent of Ernst & Young.
23.2 Consent of Richard A. Eisner & Company, LLP.
23.3 Consent of Kaufman & Moomjian, LLC. (Included in legal opinion filed
as Exhibit 5.)
24 Powers of Attorney (set forth on the signature page of this
Registration Statement on Form S-3).*
- ----------
* Previously filed.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to any of the provisions
described under Item 15 above, or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission (the "Commission")
such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the
final adjudication of such issue.
The Registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(a) include any prospectus required by Section 10(a)(3) of
the Securities Act;
(b) reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement(or
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; notwithstanding the forgoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in the
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement; and
(c) 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;
provided, however, the undertakings set forth in clauses (1)(a) and (1)(b)
above shall not apply if the information required to be included in a
post-effective amendment by such clauses is contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that are incorporated by reference in the Registration
Statement.
II-2
<PAGE>
(2) For determining any liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering; and
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the termination of the offering.
The Registrant hereby further undertakes that it will:
(1) For determining any liability under the Securities Act, treat the
information omitted from th form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)or
497(h) under the Securities Act as part of this Registration Statement as
of the time the Commission declared it effective; and
(2) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the Registration
Statement, and that offering of such securities at that time as the initial
bona fide offering of those securities.
The Registrant hereby further undertakes that, for purposes of determining
liability under the Securities Act, each of the Registrant's annual report
pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The Registrant hereby further undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Fairfield, State of New Jersey, this day of July,
1999.
VIZACOM INC.
By: /s/ Mark E. Leininger
Mark E. Leininger
President and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on July , 1999 by the following
persons in the capacities indicated. Each person whose signature appears below
constitutes and appoints Mark E. Leininger with full power of substitution,
his/her true and lawful attorney-in-fact and agent to do any and all acts and
things in his/her name and on his/her behalf in his/her capacities indicated
below which he may deem necessary or advisable to enable Vizacom Inc. to comply
with the Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission, in connection with this
Registration Statement including specifically, but not limited to, power and
authority to sign for him/her in his/her name in the capacities stated below,
any and all amendments (including post-effective amendments) thereto, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in such
connection, as fully to all intents and purposes as we might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
/s/ Mark E. Leininger President, Chief Executive Officer and Director
Mark E. Leininger Principal Executive Officer)
/s/ Alan W. Schoenbart Vice President - Finance, Chief Financial Officer
Alan W. Schoenbart (Principal Accounting and Financial Officer)
/s/Marc E. Jaffe Chairman of the Board, Secretary and Director
Marc E. Jaffe
/s/Norman W. Alexander Director
Norman W. Alexander
Director
Werner G. Haase
/s/Neil M. Kaufman Director
Neil M. Kaufman
II-4
<PAGE>
EXHIBIT INDEX
Number Description
4.1 Specimen Common Stock Certificate. (Incorporated by reference to
Exhibit 4.1 to the Company's Annual Report on Form 10-KSB (Commission
File Number: 1-14076), for the year ended December 31, 1997, filed
with the Commission on April 15, 1998.)
4.2 Warrant to purchase 17,052 shares of Common Stock, registered in
the name of Denise Shapiro.*
5 Opinion and Consent of Kaufman & Moomjian, LLC.
23.1 Consent of Ernst & Young.
23.2 Consent of Richard A. Eisner & Company, LLP.
23.3 Consent of Kaufman & Moomjian, LLC. (Included in legal opinion filed
as Exhibit 5.)
24 Powers of Attorney (set forth on the signature page of this
Registration Statement on Form S-3).*
- ----------
* Previously filed.
II-5
KAUFMAN & MOOMJIAN, LLC
50 Charles Lindbergh Boulevard
Suite 206
Mitchel Field, New York 11553
July 15, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20006
Re: Vizacom Inc.
Registration Statement on Form S-3
Dear Sirs/Madams:
We have acted as counsel for Vizacom Inc. (formerly known as Software
Publishing Corporation Holdings, Inc.), a Delaware corporation (the "Company"),
in connection with the registration under the Securities Act of 1933, as
amended, of an aggregate 3,647,781 shares (the "Shares") of the common stock,
par value $.001 per share (the "Common Stock"), of the Company, and 17,052
warrants (the "Registered Warrants") to purchase an aggregate 17,052 shares of
Common Stock, to be offered and sold by certain securityholders of the Company
(the "Selling Securityholders"). In this regard, we have participated in the
preparation of a Registration Statement on Form S-3 (the "Registration
Statement") relating to the Shares and Registered Warrants. The Shares include
an aggregate 1,972,052 shares (the "Underlying Shares") of Common Stock issuable
upon exercise of outstanding options and warrants (the "Derivative Securities")
of the Company, including the Registered Warrants. In such connection, the
Company is offering the Underlying Shares to the holders of the Derivative
Securities.
We are of the opinion that (a) the Derivative Securities, including
the Registered Warrants, are valid and binding obligations of the Company,
enforceable in accordance with their respective terms, (b) the Shares issued and
outstanding on the date hereof are duly authorized, legally issued, fully paid
and non-assessable and (c) the Underlying Shares, upon issuance in accordance
with the terms of the respective Derivative Securities, will be duly authorized,
legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Registration Statement and in the Prospectus included therein.
Very truly yours,
/s/ Kaufman & Moomjian, LLC
Kaufman & Moomjian, LLC
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-3) and related Prospectus of Vizacom Inc. (formerly known as Software
Publishing Corporation Holdings, Inc.) (the "Company") of our report dated April
1, 1999, with respect to the financial statements of Serif (Europe) Limited
included in the Annual Report (Form 10-KSB) of the Company for the year ended
December 31, 1998 filed with the Securities and Exchange Commission.
/s/Ernst & Young
ERNST & YOUNG
Registered Auditor
Nottingham, England
July 15, 1999
INDEPENDENT AUDITORS' CONSENT
We consent to the use of our report on our audit of the consolidated financial
statements of Vizacom Inc. (formerly known as Software Publishing Corporation
Holdings, Inc.) as of and for the year ended December 31, 1998 included in the
Company's annual report on Form 10-KSB incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
Our report, dated April 8, 1999, which was based in part upon the report of
other independent auditors, contains an emphasis paragraph regarding a federal
income tax contingency.
/s/ Richard A. Eisner & Company, LLP
New York, New York
July 15, 1999
