Registration No. ________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
----------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
VIZACOM INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-3270045
(State or other jurisdiction of I.R.S. Employer Identification No.)
incorporation or organization)
GLENPOINTE CENTRE EAST, 300 FRANK W. BURR BOULEVARD, 7TH FLOOR,
TEANECK, NEW JERSEY 07666
(201) 928-1001
(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.
GLENPOINTE CENTRE EAST
300 FRANK W. BURR BOULEVARD
7TH FLOOR
TEANECK, NEW JERSEY 07666
(201) 928-1001
(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
----------------
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. [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and
list the Securities Act registration statement number of the earlier
effective registration 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. [ ]
----------------
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum Amount of
Title of each class of Amount to offering price aggregate registration
securities to be registered be registered per unit offering price fee
<S> <C> <C> <C> <C> <C>
Common stock. . . . . . . . . . . . . . . . 4,331,113 $3.5625 (1) $15,429,590(1) $4,074
Common stock issuable upon
exercise of warrants (2) . . . . . . . . . 900,000 $3.00 (3) $ 2,700,000(3) $713
Common stock issuable upon conversion
of principal and interest under
convertible promissory notes (2). . . . . . 182,118 $3.00 (3) $546,354(3) $145
TOTAL . . . . . . . . . . . . . . . . . . . $4,932
<FN>
(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c) promulgated under the Securities Act of 1933, based
upon the high and low sales prices of the common stock on April 14, 2000.
(2) Pursuant to Rule 416, there are also being registered such
indeterminable number of additional shares of common stock as may become
issuable pursuant to anti-dilution provisions contained in warrants and
convertible promissory notes.
(3) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(g) promulgated under the Securities Act.
</FN>
</TABLE>
----------------
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.
================================================================================
<PAGE>
The information contained in this preliminary prospectus is not complete and may
be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is declared effective. This
preliminary 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 APRIL 17, 2000
PRELIMINARY PROSPECTUS
VIZACOM INC.
5,413,231 shares of common stock
This prospectus uses the "shelf" registration process. It covers 5,413,231
shares of our common stock. The shares include 4,331,113 shares of common stock
that are currently outstanding and 1,082,118 shares of common stock underlying
outstanding derivative securities, which are warrants and convertible promissory
notes. The shares 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 are being offered and sold is provided in the
"Selling securityholders" and "Plan of distribution" sections of this
prospectus.
We will not receive any of the proceeds from the sale of the shares and
derivative securities, other than the exercise or conversion price, if any, to
be received upon exercise or conversion of the derivative securities. We have
agreed to bear all of the expenses in connection with the registration and sale
of the shares, except for commissions, which expenses we estimate to be
$50,000.00.
Our common stock is currently traded on the Nasdaq SmallCap Market under
the symbol "VIZY" and listed on the Boston Stock Exchange under the symbol
"VZM." On April 14, 2000, the average of the high and low sales prices for our
common stock, as reported by Nasdaq, was $3.5625 per share.
----------------
THE SECURITIES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK.
YOU SHOULD CAREFULLY READ AND CONSIDER THE "RISK FACTORS," COMMENCING ON PAGE 10
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 , 2000
-----------
<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. We are subject to the information reporting
requirements of the Securities Exchange Act of 1934. As such, we file 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 World Wide Web site that
contains reports, proxy and information statements and other information
regarding companies, including us, that file electronically with the SEC at the
address "http://www.sec.gov."
Stock market. Our common stock is listed on The Nasdaq SmallCap Market and
the Boston Stock Exchange. Material filed by us 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 100 Franklin Street, Boston, Massachusetts 02110.
Vizacom. Our SEC filings are also available to you at our web site at
"http://www.vizacom.com." Further, we will provide you without charge, upon your
request, with a copy of any or all reports, proxy statements and other documents
we file 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.
2
<PAGE>
Requests for such copies should be directed to:
Vizacom Inc.
Attention: Investor Relations Department
Glenpointe Centre East
300 Frank W. Burr Boulevard
7th Floor
Teaneck, New Jersey 07666
Telephone number: (201) 928-1001
Information incorporated by reference. The SEC allows us to "incorporate by
reference" the information we file with the SEC, which means that:
- incorporated documents are considered part of this prospectus,
- we can disclose important information to you by referring you to
those documents, and
- information that we file after the date of this prospectus
with the SEC will automatically update and supersede information
contained in this prospectus and the registration statement.
We incorporate by reference the documents listed below and any future
filings we 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. our annual report on form 10-KSB, for the fiscal year ended December 31,
1999,
2. our current report on form 8-K/A (date of report: February 15, 2000), filed
with the SEC on April 17, 2000,
3. our current report on form 8-K/A (date of report: March 9, 2000), filed
with the SEC on April 17, 2000, and
4. our current report on form 8-K/A (date of report: March 27, 2000), filed
with the SEC on April 17, 2000, and
5. the description of the common stock contained in our 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.
3
<PAGE>
OUR BUSINESS
OVERVIEW
We provide business-to-business and business-to-consumer e-commerce
solutions to businesses seeking to improve their operations through the use of
Internet-based technologies. We also develop and market visual communication
software products and resell third-party computer software, hardware and
ancillary products.
Our e-commerce solutions are intended to aid our clients in improving
business efficiencies, enhancing customer relationships and marketing, or
branding, their businesses, products and services. We combine our
industry-specific knowledge and local implementation abilities in providing
e-commerce solutions to United States- and European-based companies. Our
e-commerce solutions clients primarily consists of small and mid-sized companies
and divisions and local offices of large, multi-national corporations. Our
e-commerce solutions include the following services:
- web site development, including web site graphic design, e-business
consulting, marketing and implementation,
- systems integration services, including Internet, intranet and
extranet development, web site-to-legacy systems integration,
computer network design and implementation, and acting as an
authorized value-added-reseller of computer and other digital
communication equipment, and
- e-commerce call center services, including multi-national,
multi-lingual web- enabled call-center sales, customer and
technical-support services, and related direct marketing,
telemarketing and product fulfillment services.
We gained our competencies in web site development and systems integration
through strategic acquisitions, including our recent acquisitions of Renaissance
Multimedia, Inc., Junction 15 Limited and PWR Systems, Inc.
We gained our competencies in customer service, telemarketing, direct
marketing and product fulfillment services through our historical business of
developing and marketing our own and third-party computer products. We currently
operate three telemarketing call centers in Nashua, New Hampshire, Nottingham,
England, and Aachen, Germany. We have web-enabled each of these three centers
using an Internet protocol-based multimedia contact center technology that we
licensed from a third-party. As such, our call centers are capable of providing
real-time chat, audio and video communication services between our call-center
representatives, acting on behalf of our clients, and our clients' customers
under current bandwidth capabilities. Our call centers are operated on a 24
hours per day, seven days per week, 365 days per year, commonly referred to as
on a 24/7/365 basis.
We continue to develop and market visual communications products. We
currently offer twenty-eight software products, which we developed, that operate
on Windows-based operating systems for personal and networked computers. Our
current flagship software products include
4
<PAGE>
SERIF PAGEPLUS 6, HARVARD GRAPHICS 98, HARVARDGRAPHICS EASY PRESENTATIONS,
SERIF DRAWPLUS 4 and SERIF PHOTOPLUS 6. We also offer a number of hardware
products, primarily digital cameras, manufactured by third parties, and sell
software products packaged together with hardware products.
Through our Serif Inc. and Serif (Europe) Limited subsidiaries, two
companies we acquired in May 1996, we have over ten years of experience in
software development and international direct marketing and tele-marketing. We
believe the Serif brand is highly regarded and well-known throughout the United
Kingdom for its line of visual communication graphic software products. Through
our Software Publishing Corporation subsidiary, which we acquired in December
1996, we own the HARVARD GRAPHICS brand and product line. We believe the Harvard
Graphics brand is internationally recognized as a pioneer in computer software
applications, and is respected internationally for its presentation graphics
software products.
We also operate VisualCities.com, a destination web site that offers
information, content, membership benefits, products and services targeted at the
visual communication computer products community. We intend to utilize this web
site to sell visual communications products, including our own products and
products manufactured by third parties, to users in our targeted market.
RECENT ACQUISITIONS AND FINANCINGS
ACQUISITIONS
We have implemented a strategy to acquire e-commerce service providers in
order to expand our range and depth of services. The acquisitions completed
through March 31, 2000 consist of:
Renaissance Multimedia
- ----------------------
On February 15, 2000, we acquired Renaissance Computer Art Center, Inc,
d/b/a Renaissance Multimedia, a New York City-based digital communication
company focused on designing, implementing and supporting Internet web sites and
digital businesses through the use of new media. We acquired Renaissance
Multimedia through a merger of Renaissance Computer Art Center, Inc. with and
into RCAC Acquisition Corp., a wholly-owned subsidiary which we formed for this
specific transaction. RCAC changed its name to Renaissance Multimedia, Inc.
following the merger.
The Renaissance Multimedia merger was completed pursuant to the terms of an
Agreement and Plan of Merger, dated February 15, 2000. Pursuant to this merger
agreement, we issued an aggregate of 449,870 shares of our common stock and paid
an aggregate of $250,000 to the stockholders of Renaissance Multimedia at the
effective time of the merger. One-half of the shares issued are subject to an
escrow agreement to protect against any inaccuracy in any of the representations
and warranties of Renaissance Computer Art Center, Inc. and its stockholders
contained in this merger agreement.
5
<PAGE>
The 449,870 shares of our common stock were issued in reliance upon an
exemption from registration under Section 4(2) of the Securities Act. These
shares are registered for resale by their holders under this prospectus.
Under lock-up agreements entered into at the time of the Renaissance
Multimedia merger, each party who received any of the 449,870 shares of our
common stock we issued in the Renaissance Multimedia merger agreed to limit
sales of these shares to 10% of the total shares each received during the period
from August 15, 2000 through November 15, 2000, and an additional 10% during the
following three months.
We also have entered into a three year employment agreement with Andrew
Edwards, the president of Renaissance Multimedia at the time of the merger.
Under this agreement, Mr. Edwards will serve as one of our vice presidents and
president of Renaissance Multimedia, Inc. This agreement also contains
restrictions on Mr. Edwards engaging in competition with us for the term of the
agreement and for one year thereafter and provisions protecting our proprietary
rights and information.
Junction 15
- -----------
On March 9, 2000, we acquired Junction 15 Limited, a London, England-based
digital communication company focused on designing, implementing and supporting
Internet web sites and digital businesses through the use of new media. We
acquired Junction 15 through our purchase of all of the outstanding capital
stock of Junction 15 from Junction 15's shareholders.
The Junction 15 acquisition was completed pursuant to the terms of a Stock
Purchase Agreement, dated March 9, 2000, between us and the shareholders of
Junction 15. Pursuant to the acquisition agreement, we issued an aggregate of
681,818 shares of our common stock and paid an aggregate of $250,000 to the
Junction 15 shareholders.
The 681,818 shares of our common stock that we issued in this acquisition
transaction were issued in reliance upon an exemption from registration under
Section 4(2) of the Securities Act. These shares are registered for resale by
their holders under this prospectus.
We also entered into lock-up agreements with each of the former
shareholders of Junction 15 regarding their disposition of the shares of our
common stock that we issued in the acquisition transaction, the extent of the
lock-up being dependent upon the former shareholders' relationships with
Junction 15. For those former shareholders who were directors of Junction 15 at
the time of the acquisition transaction and an affiliate, who received an
aggregate 583,767 shares of our common stock in the transaction, the lock-up
agreements prohibit the disposition of such shares prior to March 9, 2002,
except for (a) 10% of the total shares each received during the period of
September 9, 2000 to March 8, 2001, (b) an additional 10% during the period of
March 9, 2001 to September 8, 2001, and (c) an additional 10% during the period
of September 9, 2001 to March 8, 2002. For those former shareholders who were
not directors of Junction 15 at the time of the acquisition transaction, who
received an aggregate 98,051 shares of our
6
<PAGE>
common stock in the transaction, the lock-up agreements prohibit the
disposition of such shares prior to March 9, 2001.
We also have entered into a three-year employment agreement with each of
Ian McCalla, the Managing Director of Junction 15, and Paul Simpson, a Director
of Junction 15 at the time of the transaction. Under his agreement, Mr. McCalla
will serve as Managing Director of Junction 15 and receive a base annual salary
of 90,000 (or $144,000, based on currency exchange rates in effect on March 31,
2000). This base salary will increase to 100,000 on March 9, 2001 (or $160,000,
based on currency exchange rates in effect on March 31, 2000). Mr. McCalla will
also be entitled to annual bonuses based upon Junction 15's performance during
the employment period. Under his agreement, Mr. Simpson will serve as a Director
of Junction 15 and receive a base salary of 50,000. Mr. Simpson will also be
entitled to annual bonuses based upon the gross profit to Junction 15 from
projects generated through Mr. Simpson's sales efforts. These employment
agreements also contain restrictions on Messrs. McCalla or Simpson engaging in
competition with us for the term of the agreement and for one year thereafter
and provisions protecting our proprietary rights and information.
PWR Systems
- -----------
Effective March 27, 2000, we acquired PC Workstation Rentals, Inc., d/b/a
PWR Systems, a Long Island, New York-based designer and integrator of Internet,
intranet and extranet systems and other computer networks and
value-added-reseller of computer and digital communication equipment. The
acquisition was in the form of a merger of PWR into PWR Acquisition Corp., a
wholly-owned subsidiary formed for this transaction.
The PWR Systems acquisition was completed pursuant to an agreement and plan
of merger, dated as of February 28, 2000, among us, PWR Acquisition, PWR and
PWR's shareholders. Pursuant to the merger agreement, at the closing of the
transaction, we made a cash payment to the PWR shareholders of $1 million and
delivered to the PWR shareholders our promissory notes in the aggregate
principal amount of $500,000. These notes are payable in twelve equal monthly
installments, commencing on April 27, 2000. These notes are convertible into
shares of our common stock, at a conversion price of $3.00 per share, and bear
interest at 6.27%. Accrued interest on these notes is payable with the monthly
principal payments. These notes have been guaranteed by our PWR subsidiary. The
stock portion of the acquisition consideration payable at closing was in the
form of 1,500,000 shares of our common stock.
The PWR Systems merger agreement provides for additional contingent
consideration of up to $350,000 per year for the three-year period following the
closing of the acquisition, based upon increases in PWR's earnings before
interest, taxes, depreciation and amortization. We are also obligated to issue
additional shares of our common stock if the market price of our common stock
falls below $1.00 per share for any consecutive 30-day period during the
one-year period following the closing of the acquisition.
Of the shares of our common stock issued at closing of the PWR Systems
acquisition, 1,470,000 shares are subject to lock-up agreements between each PWR
shareholder and us.
7
<PAGE>
Under these lock-up agreements, the PWR shareholders are prohibited from
selling or otherwise transferring any of the shares that they receive at
closing, except for
- - 10% of the shares received during a six-month period commencing
September 27, 2000,
- - an additional 10% during the six-month period commencing March 27,
2001,
- - and an additional 10% during the six-month period commencing September 27,
2001.
All remaining shares held by the PWR shareholders two years after the closing
will be free of any sale restriction under the lock-up agreements. Any shares
issued upon conversion of our promissory notes delivered at closing in the
aggregate principal amount of $500,000 will not be subject to these lock-up
agreements.
All of the shares of our common stock issued or issuable in the PWR Systems
acquisition transaction, including those that may be issued upon conversion of
the notes delivered at closing, have or will be issued in reliance upon an
exemption from registration under Section 4(2) of the Securities Act. In
accordance with the merger agreement, at the closing, we entered into a
registration rights agreement in which we granted the PWR shareholders one
demand and customary piggy-back registration rights. These shares are registered
for resale by their holders under this prospectus.
In accordance with the acquisition agreement, we made a capital
contribution of $2 million to PWR immediately following the closing.
We have entered into three year employment agreements with each of PWR's
executive officers and sole stockholders, Vincent DiSpigno and David N. Salav.
The employment agreements with each of Messrs. DiSpigno and Salav provide for
their service as vice presidents of Vizacom and as executive officers of our PWR
subsidiary. We also elected each of Messrs. DiSpigno and Salav to our board of
directors. Each of these employment agreements also provide for annual base
salaries of $200,000, provide for annual bonuses of up to $25,000, based upon
PWR attaining specified performance thresholds, and contain restrictions on
their engaging in competition with us for the term of the agreement and for one
year thereafter and provisions protecting our proprietary rights and
information.
Prior to the closing, PWR delivered to the PWR shareholders promissory
notes in the aggregate principal amount of $888,638. This amount represents an
estimate of PWR's accumulated retained earnings as of March 27, 2000. These
notes bear interest at 6.30% per year, and are payable in four quarterly
payments, commencing June 27, 2000. The principal amount of these PWR notes will
be adjusted to reflect PWR's actual accumulated retained earnings at March 31,
2000. Payment of any amount outstanding under these PWR notes will be
accelerated to the date of our receipt of aggregate gross proceeds of at least
$15 million from the sale of our securities since November 12, 1999. We have
guaranteed these PWR notes.
8
<PAGE>
CREDIT FACILITY
In the first quarter of 2000, we obtained a two-year $1 million line of
credit facility with Churchill Consulting. The interest rate on the line of
credit is 8% per year, compounded monthly, on the outstanding principal amount.
Under this line of credit facility, all future borrowings will be due and
payable 180 days after funding. In February 2000, we borrowed $1 million under
this line of credit facility. This amount has been repaid. As of March 31, 2000,
no amount was outstanding under this line of credit facility. In connection with
our first borrowing under this line of credit facility, we issued to Churchill
warrants exercisable for seven years to purchase 250,000 shares of our common
stock at $3.00 per share. The shares of common stock issuable to Churchill
Consulting under these warrants are registered for resale by Churchill
Consulting under this prospectus.
PRIVATE PLACEMENTS OF OUR COMMON STOCK
In March 2000, we sold a total of 936,954 shares of our common stock to 45
accredited investors for gross proceeds of $4,216,293. The issuances of theses
shares were private transactions exempt from registration under Section 4(2) of
the Securities Act.
In March 2000, we also accepted subscriptions for and sold a total of
762,471 shares of our common stock to eleven foreign investors for gross
proceeds of $3,392,996. The issuances of these shares were private transactions
exempt from registration pursuant to Section 4(2) of, and Regulation S under,
the Securities Act.
These aggregate 1,699,425 shares of common stock are registered for resale
by their holders under this prospectus.
9
<PAGE>
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.
WE HAVE INCURRED LOSSES TO DATE AND THERE IS NO ASSURANCE THAT WE WILL BECOME
PROFITABLE.
We have been unprofitable since our inception in July 1992 and may continue
to incur operating losses for the foreseeable future. For the year ended
December 31, 1999, we had a net loss attributable to common stockholders of
approximately $5,683,000. For the year ended December 31, 1998, we had a loss of
approximately $2,407,000. Our operating losses may increase as we:
- develop our e-commerce services business,
- develop, produce and distribute additional products and services,
- de-emphasize other products and services,
- implement our growth strategy, which is expected to include
investments required to accelerate the growth of acquired companies,
- develop our Internet commerce network, and
- operate in a multi-currency marketplace.
No assurance can be given that we will ever become profitable nor, if we
obtain profitability, that we would thereafter maintain profitability.
WE HAVE LIMITED EXPERIENCE AS AN E-COMMERCE MARKETER AND SERVICE PROVIDER.
Our historical operations have been as a developer and marketer of software
products, primarily visual communication applications. We have only recently
focused our resources on competing in the e-commerce services market. This has
been primarily accomplished by the offering of our telemarketing, direct
marketing, call center and fulfilment services to third party e-commerce and
other businesses and our acquisitions of Renaissance Multimedia, Junction 15 and
PWR Systems. Accordingly, there is little historical information on which you
can base an evaluation of our new businesses and prospects. As an e-commerce
services company, we face risks and uncertainties that are different than the
risks and uncertainties we faced and continue to face with our software
operations. To address these new risks and uncertainties, we must do the
following:
- continue to raise working capital to be able to compete effectively
in the e-commerce services market with well-funded competition,
- attract, integrate, retain and motivate qualified personnel,
- maintain and enhance our brands,
- successfully execute our business acquisition and marketing strategy,
- continue to develop and upgrade our technology and information
processing systems,
- provide superior customer service, and
10
<PAGE>
- respond to competitive developments.
We may be unable to accomplish one or more of these things, which could
cause our business to suffer. In addition, accomplishing one or more of these
things may be very expensive, which could adversely affect our ability to
achieve profitability and thereafter operate profitably.
WE ANTICIPATE SIGNIFICANT EXPANSION WHICH, IF NOT MANAGED CORRECTLY, COULD HARM
OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
Our business strategy calls for us to aggressively pursue acquisitions of
e-commerce solutions companies. To address potential growth in our business
operations and market opportunities and in executing our business strategies, we
may experience a period of significant expansion in:
- the number of our employees,
- our facilities,
- our infrastructure, and
- the number of countries in which we maintain operations.
We expect this anticipated expansion will place a significant strain on our
management, operational and financial resources.
WE MAY BE UNABLE TO IMPLEMENT OUR ACQUISITION GROWTH STRATEGY, WHICH COULD HARM
OUR BUSINESS AND COMPETITIVE POSITION.
Our business strategy includes making strategic acquisitions of other
companies or businesses, including e-commerce solutions providers, web site
designers, systems integrators and other firms. Our continued growth will depend
on our ability to identify and acquire, on acceptable terms, companies that
complement or enhance our businesses. The competition for acquisition candidates
is intense and we expect this competition to increase. There is no assurance
that we will identify and successfully compete for appropriate acquisition
candidates or complete acquisitions at reasonable purchase prices, in a timely
manner or at all. Further, we may not be able to realize the anticipated results
of future acquisitions. In implementing our acquisition growth strategy, we may
encounter:
- costs associated with incomplete acquisitions,
- expenses, delays and difficulties of integrating acquired companies
into our existing organization,
- the impact of amortizing goodwill and other intangible assets of
acquired companies on our statement of income,
- dilution of the interest of existing stockholders if we issue our
stock in making acquisitions or if we sell our stock to raise cash for
acquisitions,
- diversion of management's attention,
- increases in our expenses in order to advertise and promote acquired
companies and their and our products and services,
- unusual impacts on our financial condition due to the timing
of acquisitions, and
11
<PAGE>
- expenses of any undisclosed or potential legal liabilities of an
acquired company.
Any of these matters could have a material adverse effect on our business,
results of operations and financial condition.
ACQUISITIONS COULD RESULT IN OPERATING DIFFICULTIES AND OTHER HARMFUL
CONSEQUENCES TO US.
If appropriate opportunities present themselves, we intend to acquire
businesses, technologies, services or products. The process of integrating the
operations of any acquisition, including our recent acquisitions of Renaissance
Multimedia, Junction 15 and PWR Systems, may create unforeseen operating
difficulties and expenditures and is itself risky.
To the extent we use cash consideration for acquisitions in the future, we
may need to obtain additional financing which may not be available on favorable
terms or at all. To the extent our management must devote significant time and
attention to the integration of technology, operations, businesses and personnel
as a result of these acquisitions, our ability to service current customers and
attract new customers may suffer. In addition, our senior management faces the
difficult and potentially time consuming challenge of implementing uniform
standards, controls, procedures and policies throughout our operating units,
including future acquisitions. We could also experience financial or other
setbacks if any of the acquired businesses experience unanticipated problems.
Further, we may experience disputes with the sellers of acquired businesses and
may fail to retain key acquired personnel. In addition, we may experience a
decline in employee morale and retention issues resulting from changes in
compensation, reporting relationships, future prospects, or the direction of the
business.
Moreover, the anticipated benefits of any or all of these acquisitions may
not be realized. Future acquisitions could result in the incurrence of debt,
contingent liabilities and amortization expenses related to goodwill and other
intangible assets, each of which could have a material adverse effect on our
operating results and financial position.
FAILURE TO OBTAIN IRS CLOSING AGREEMENT COULD RESULT IN LARGE TAX PAYMENT.
In September 1997, we applied for a closing agreement with the IRS pursuant
to which we would become jointly and severally liable for Software Publishing
Corporation's tax obligations upon occurrence of a "triggering event" requiring
recapture of dual consolidated losses previously utilized by SPC. Such closing
agreement would avoid SPC's being required to recognize a tax of approximately
$8.0 million on approximately $24.5 million of SPC's pre-acquisition dual
consolidated losses. We have received notification from the IRS that the IRS
determined not to act on our application until SPC submitted additional filings
pertaining to pre-acquisition filings made by SPC. We have submitted these
filings in an application for relief. We believe that, if the IRS accepts the
application for relief, and the re-application for a closing agreement is made,
the IRS should agree to 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,
under certain circumstances, a future acquirer of SPC or us also may be required
to agree to a similar closing agreement in order to
12
<PAGE>
avoid the same tax liability. This could have a material adverse effect on
our future ability to sell SPC. The report of our auditors covering our December
31, 1999 consolidated financial statements contains a paragraph emphasizing
these dual consolidated losses.
WE MUST CONTINUE TO DEVELOP OUR VISUALCITIES.COM WEB SITE IN ORDER TO MAKE IT
COMPETITIVE.
Only a limited number of expected functions are currently operational on
our VisualCities.com web site. In order to attract and maintain visitors to the
web site, we must complete our development, including, adding additional
functions.
OUR SOFTWARE REVENUES MAY CONTINUE TO DECLINE.
We have experienced a decline in software revenues, primarily from our
North American software operations, including in our 1999 fiscal year. We
believe that we must continue to enhance our software products, develop
additional products, license successful products, create strategic alliances,
implement successful marketing programs and reduce operating costs of our
software business, in order to remain competitive in the software industry. No
assurance can be given that we will be able to do so in a commercially
successful manner.
13
<PAGE>
FORWARD-LOOKING STATEMENTS
Statements contained in 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 our actual results,
performance and achievements, whether expressed or implied by such
forward-looking statements, not to occur or be realized. Such forward-looking
statements generally are based upon our 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 market acceptance and amount of sales of our products and
services,
- the success of our expansion into Internet and other e-commerce
solutions offerings, such as web site design, web-enabled customer
service and systems integration,
- our success in integrating the operations of acquired
companies, including Renaissance Multimedia, Junction 15 and PWR
Systems, into a coordinated and complimentary operation,
- the extent that we are able to generate e-commerce revenues
from, build membership in and implement technological enhancements to
our VISUALCITIES.COM Internet commerce network,
- our ability to retain an active user base, attract new users
and maintain customer satisfaction for our software products, as well
as our VISUALCITIES.COM and other web sites,
- the extent that our direct marketing operations achieve
satisfactory response rates,
- our ability to obtain sufficient supplies of marketable products,
- the competitive environment within the industries in which we
operate,
- our ability to raise additional capital,
- the extent to which we are successful in developing, acquiring or
licensing products which are accepted by the market,
- consumer confidence in the security of transactions on our web sites,
- our ability to attract and retain qualified personnel,
- business and consumer trends,
- the cost-effectiveness of our product development activities, and
- the other factors and information disclosed and discussed under
"Risk factors" above and in other sections of this prospectus and in
our SEC filings.
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.
14
<PAGE>
USE OF PROCEEDS
The proceeds from the sale of the shares by the selling securityholders
will belong to the individual selling securityholders. We 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 warrants or the elimination of our
indebtedness upon the conversion of the convertible promissory notes. We expect
to utilize any such exercise prices received upon exercise of the warrants for
general corporate and working capital purposes.
PRICE RANGE OF COMMON STOCK
Our common stock has traded on the Nasdaq SmallCap Market under the symbol
"VIZY" since August 2, 1999. Our common stock traded on the Nasdaq SmallCap
Market under the symbol "SPCOD" 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 August 1, 1999 under the symbol "SPCO." Our common
stock also has traded on the Boston Stock Exchange under the symbol "VZM" since
August 2, 1999 and under the symbol "SPO" from January 20, 1997 through August
1, 1999. The following table sets forth the range of high and low bid prices for
our common stock for the periods indicated as derived from reports furnished by
The Nasdaq Stock Market, adjusted to reflect our one-for-three reverse stock
split effective on May 27, 1998. Such adjustment has been made by multiplying
the closing prices by three and does not necessarily reflect the prices for our
common stock had such 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
-------- -------
Fiscal 1998
- -----------
<S> <C> <C> <C> <C>
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 . . . . . . . . . . . . . 4-1/4 2-1/4
Fourth quarter. . . . . . . . . . . . . 4 2-1/8
Fiscal 2000
- -----------
First quarter . . . . . . . . . . . . . 9-3/4 3
</TABLE>
As of April 14, 2000, the closing price for our common stock as reported on
Nasdaq was $3-1/4. As of the close of business on March 31, 2000, we had 711
stockholders of record. We
15
<PAGE>
estimate, based upon surveys conducted by our transfer agent in connection
with our 1999 Annual Meeting of Stockholders, that we have approximately 5,000
beneficial holders of our common stock.
The market for our common stock is highly volatile. The trading price of
our common stock could widely fluctuate in response to, among other things:
- quarterly variations in our 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 the product mix of our sales,
- changes in our revenue and revenue growth rates as a whole or for
individual geographicareas, business units, products or product
categories,
- responses to our strategies concerning e-commerce and the Internet,
- unscheduled system interruptions,
- our ability to timely develop, introduce and market new products, as
well as enhanced versions of our current products,
- additions or departures of key personnel,
- announcements of technological innovations or new services by us or
our competitors,
- changes in financial estimates, opinions or ratings by securities
analysts,
- conditions or trends in the Internet and online commerce industries,
- changes in the market valuations of other Internet or e-commerce
service companies,
- developments in Internet regulations,
- announcements by us or our competitors of significant acquisitions,
strategic partnerships, joint ventures or capital commitments,
- sales of our common stock or other securities in the open market,
and
- other events or factors that may be beyond our control.
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 which often have been
unrelated to the operating performance of these companies. These broad market
fluctuations may adversely affect the market price of our common stock.
DIVIDEND POLICY
We have never paid cash dividends on our capital stock and do not
anticipate paying cash dividends in the foreseeable future. We currently intend
to retain any future earnings for reinvestment in our business. Any future
determination to pay cash dividends will be at the discretion of our board of
directors and will be dependent upon our financial condition, results of
operations, capital requirements and other relevant factors.
16
<PAGE>
SELLING SECURITYHOLDERS
An aggregate of 5,413,231 shares, including 1,082,118 shares issuable upon
exercise or conversion of the derivative securities, may be offered for sale and
sold pursuant to this prospectus by the selling securityholders. The shares are
to be offered by and for the respective accounts of the selling securityholders
and any pledgees or donees of the selling securityholders. We have agreed to
register all of the shares under the Securities Act and to pay all of the
expenses in connection with such registration and sale of the shares, other than
underwriting discounts and selling commissions and the fees and expenses of
counsel and other advisors to the selling securityholders. We will not receive
any proceeds from the sale of the shares by the selling securityholders, except
for the exercise price, if any, paid in connection with the exercise of the
warrants, or the elimination of our indebtedness upon the conversion of the
convertible promissory notes.
Information with respect to the selling securityholders and the shares is
set forth in the following table. None of the selling securityholders has had
any material relationship with us within the past three years, except as noted
in the following table.
<TABLE>
<CAPTION>
Amount and nature
of beneficial
Shares Number ownership of
owned of shares common stock
prior offered after sale of
to sale hereby the securities
------- ------ --------------
Selling securityholder Number Percent
- ---------------------- ------ -------
<S> <C> <C> <C> <C>
The Apmont Group, Inc. Pension Plan (1). . . . . . . . . 25,000 25,000 -0- -0-
Arel AMG, Inc. (2) . . . . . . . . . . . . . . . . . . . 650,000 650,000 -0- -0-
Ariel Insurance Company Ltd. (1) . . . . . . . . . . . . 25,000 25,000 -0- -0-
Bank Hapoalim (Switzerland) Ltd. (3) . . . . . . . . . . 112,360 112,360 -0- -0-
Mina Bartfeld (1). . . . . . . . . . . . . . . . . . . . 25,000 25,000 -0- -0-
Betelgeuse (3) . . . . . . . . . . . . . . . . . . . . . 40,000 40,000 -0- -0-
Hugh Montgomery Brown (4)(5) . . . . . . . . . . . . . . 12,338 12,338 -0- -0-
Churchill Consulting (1)(6) . . . . . . . . . . . . . . . . 361,111 361,111 -0- -0-
Concorde Bank Ltd. (3) . . . . . . . . . . . . . . . . . 78,650 78,650 -0- -0-
Court Services Limited,As trustees of the
McCalla Settlement (4) . . . . . . . . . . . . . . . 425,325 425,325 -0- -0-
Andrew Darrant (4)(7). . . . . . . . . . . . . . . . . . 1,623 1,623 -0- -0-
Nader Dayani (1) . . . . . . . . . . . . . . . . . . . . 12,500 12,500 -0- -0-
Anthony Del Monte (8)(9) . . . . . . . . . . . . . . . . 22,493 22,493 -0- -0-
Abe Diamont and Helen Diamont (1). . . . . . . . . . . . 12,500 12,500 -0- -0-
Vincent DiSpigno (10)(11). . . . . . . . . . . . . . . . 826,059 826,059 -0- -0-
Dawn Dobras (1)(12). . . . . . . . . . . . . . . . . . . 1,111 1,111 -0- -0-
Andrew Edwards (8)(13) . . . . . . . . . . . . . . . . . 134,961 134,961 -0- -0-
ELROB Realty, LLC (1). . . . . . . . . . . . . . . . . . 22,222 22,222 -0- -0-
Murray Englard (1)(14) . . . . . . . . . . . . . . . . . 17,600 5,600 12,000 *
Europe Israel Croissance (3) . . . . . . . . . . . . . . 20,000 20,000 -0- -0-
Linda Fenlon (4) . . . . . . . . . . . . . . . . . . . . 7,305 7,305 -0- -0-
Aaron Fertig (1) . . . . . . . . . . . . . . . . . . . . 22,222 22,222 -0- -0-
Hannah Fischer (1) . . . . . . . . . . . . . . . . . . . 19,611 11,111 8,500 *
17
<PAGE>
Connie A. Friedman (1) . . . . . . . . . . . . . . . . . 11,111 11,111 -0- -0-
Rivka Friedman (1) . . . . . . . . . . . . . . . . . . . 25,000 25,000 -0- -0-
Clifford Garrin and David Bader (1). . . . . . . . . . . 11,111 11,111 -0- -0-
John Georgallas (1). . . . . . . . . . . . . . . . . . . 11,111 11,111 -0- -0-
Pierre Charron Gestion (3) . . . . . . . . . . . . . . . 100,000 100,000 -0- -0-
Howard L. Gregg and Sherry D. Gregg (1). . . . . . . . . 10,000 10,000 -0- -0-
Gruber & McBaine International (1) . . . . . . . . . . . 44,445 44,445 -0- -0-
Jon D. Gruber (1)(15). . . . . . . . . . . . . . . . . . 22,222 22,222 -0- -0-
Joseph Laws Harris (4) . . . . . . . . . . . . . . . . . 7,305 7,305 -0- -0-
Stuart Hershkowitz (1) . . . . . . . . . . . . . . . . . 5,600 5,600 -0- -0-
Linda Ingber (1) . . . . . . . . . . . . . . . . . . . . 11,000 11,000 -0- -0-
Ron J. Katz (1). . . . . . . . . . . . . . . . . . . . . 60,000 35,000 25,000 *
Murray Klein (1) . . . . . . . . . . . . . . . . . . . . 22,222 22,222 -0- -0-
Simon Korn (1) . . . . . . . . . . . . . . . . . . . . . 11,111 11,111 -0- -0-
Jerome Kossoff (1) . . . . . . . . . . . . . . . . . . . 30,600 5,600 25,000 *
Martyn Konig (3) . . . . . . . . . . . . . . . . . . . . 11,236 11,236 -0- -0-
Hershel Kulefsky (1) . . . . . . . . . . . . . . . . . . 30,000 30,000 -0- -0-
Lagunitas Partners LP (1). . . . . . . . . . . . . . . . 144,445 144,445 -0- -0-
Sara Leifer (1). . . . . . . . . . . . . . . . . . . . . 11,111 11,111 -0- -0-
Susan Margaret Lloyd (4) . . . . . . . . . . . . . . . . 7,305 7,305 -0- -0-
Francis X. Murphy (16) . . . . . . . . . . . . . . . . . 30,000 30,000 -0- -0-
LZL Equities, LLC (1). . . . . . . . . . . . . . . . . . 20,000 20,000 -0- -0-
J. Patterson McBaine (1)(15) . . . . . . . . . . . . . . 8,889 8,889 -0- -0-
Ian Charles Norris McCalla (4)(17) . . . . . . . . . . . 10,065 10,065 -0- -0-
Bernard Ian Myers (3). . . . . . . . . . . . . . . . . . 11,236 11,236 -0- -0-
Lisa Nafash (1). . . . . . . . . . . . . . . . . . . . . 13,333 13,333 -0- -0-
Raymond Nafash (1) . . . . . . . . . . . . . . . . . . . 5,111 5,111 -0- -0-
U. David Ogorek and Shevy Ogorek (1) . . . . . . . . . . 5,600 5,600 -0- -0-
Dudley John Langelot Price (4) . . . . . . . . . . . . . 18,182 18,182 -0- -0-
Jeanne M. Quinto and Frederick M. Quinto (1) . . . . . . 5,600 5,600 -0- -0-
Ribon, Inc. (9). . . . . . . . . . . . . . . . . . . . . 292,416 292,416 -0- -0-
David N. Salav (10)(18). . . . . . . . . . . . . . . . . 826,059 826,059 -0- -0-
Seafish Partners (1)(19) . . . . . . . . . . . . . . . . 20,000 20,000 -0- -0-
Anthony Robert Simpson (4) . . . . . . . . . . . . . . . 7,305 7,305 -0- -0-
Paul John Simpson (4)(20). . . . . . . . . . . . . . . . 148,377 148,377 -0- -0-
Victoire Sirius (3). . . . . . . . . . . . . . . . . . . 200,000 200,000 -0- -0-
Sofragi (3). . . . . . . . . . . . . . . . . . . . . . . 180,000 180,000 -0- -0-
Squire International S.A. (1). . . . . . . . . . . . . . 22,222 22,222 -0- -0-
David Leonard Street (4) . . . . . . . . . . . . . . . . 29,383 29,383 -0- -0-
David Dimitri Sullivan (3) . . . . . . . . . . . . . . . 8,989 8,989 -0- -0-
Eric Swergold (1)(21). . . . . . . . . . . . . . . . . . 1,111 1,111 -0- -0-
Isaac Tessler and Miriam Tessler (1) . . . . . . . . . . 25,000 25,000 -0- -0-
United States Casualty Corporation (1) . . . . . . . . . 5,000 5,000 -0- -0-
James Van Dongen (1) . . . . . . . . . . . . . . . . . . 6,000 6,000 -0- -0-
William Walters (1). . . . . . . . . . . . . . . . . . . 45,000 45,000 -0- -0-
Marcus L. Weitz and Hadassa A. Weitz (1) . . . . . . . . 5,600 5,600 -0- -0-
Ian Gilbert Wiper (4). . . . . . . . . . . . . . . . . . 7,305 7,305 -0- -0-
Worldwide Gem Ventures LLC (1) . . . . . . . . . . . . . 25,000 25,000 -0- -0-
Yeshiva Beth Hillel of Krasna, Inc. (1). . . . . . . . . 25,300 16,800 8,500 *
Yitz Grossman Charitable Trust (1)(22) . . . . . . . . . 22,222 22,222 -0- -0-
- --------------
*Less than one percent.
18
<PAGE>
<FN>
(1) Purchased shares at $4.50 per share in our self offering private
placement in March 2000.
(2) Represents an aggregate of 650,000 shares issuable upon exercise of
three-year warrants at $3.00 per share owned by this consultant. Of this
amount, 100,000 warrants are immediately exercisable and the remaining
550,000 warrants will become exercisable or released from escrow, as the
case may be, upon the selling securityholder achieving milestones described
in our consulting agreement with this selling securityholder and such
warrants.
(3) Purchased shares at $4.45 per share in our private placement in March 2000.
(4) Acquired shares in connection with our acquisition of Junction 15 in
February 2000.
(5) Number of shares owned by this selling securityholder does not include
17,000 shares of common stock issuable upon exercise of options owned by
him.
(6) Purchased shares at $4.50 per share in our self offering private placement
in March 2000. Number of shares also includes shares at $4.50 per share in
our self offering private placement in March 2000. Number of shares also
includes 250,000 shares issuable upon exercise of warrants at $3.00 per
share acquired by this selling securityholder pursuant to the provisions
of our line of credit agreement.
(7) Selling securityholder is an employee of Junction 15. The number of
shares owned by this selling securityholder does not include 17,000 shares
issuable upon exercise of options owned by him.
(8) Acquired shares in connection with our acquisition of Renaissance
Multimedia in March 2000.
(9) Selling securityholder is an employee of Renaissance Multimedia. The
number of shares owned by this selling securityholder does not include
150,000 shares issuable upon exercise of options owned by him.
(10) Acquired shares in connection with our acquisition of PWR Systems in March
2000.
(11) Selling securityholder is currently the chief executive officer of PWR
Systems and one of our directors and vice presidents. Number of shares
owned by this selling securityholder includes 91,059 shares issuable upon
conversion of principal and interest under convertible promissory note
acquired by this selling securityholder in connection with our acquisition
of PWR Systems. The number of shares owned by this selling securityholder
does not include 125,000 shares of common stock issuable upon exercise of
options owned by this selling securityholder.
(12) Number of shares owned by this selling securityholder does not include
1,111 shares owned by her spouse, Eric Swergold.
(13) Selling securityholder is currently president of Renaissance Multimedia
and one of our vice presidents.
(14) Number of shares owned by this selling securityholder does not
include 3,000 shares issuable upon exercise of options held by him.
(15) Number of shares owned by this selling securityholder does not
include shares owned by Lagunitas Partners LP or Gruber & McBaine
International. This selling securityholder is a managing member of a
limited liability company that is both the attorney-in-fact of Gruber
& McBaine International and the general partner of Lagunitas Partners LP.
(16) Acquired shares in exchange for consulting services to PWR Systems in
connection with our acquisition of this subsidiary.
(17) Selling securityholder is currently the managing director of Junction 15
and one of our vice presidents. The number of shares owned by this
selling securityholder does not include 120,000 shares issuable upon
19
<PAGE>
exercise of options owned by him and does not include 425,325 shares of
common stock owned by The McCalla Settlement, of which he is a beneficiary.
(18) Selling securityholder is currently the president of PWR Systems
and one of our directors and vice presidents. Number of shares includes
91,059 shares issuable upon conversion of principal and interest under
convertible promissory note acquired by this selling securityholder
in connection with our acquisition of PWR Systems. Number of shares
does not include 125,000 shares of common stock issuable upon exercise of
options owned by this selling securityholder.
(19) Does not include 260,000 shares issuable upon exercise of warrants held by
this selling securityholder.
(20) Selling securityholder is a director and employee of Junction 15.
Number of shares owned by this selling securityholder does not include
40,000 shares issuable upon exercise of options held by him.
(21) Number of shares owned by this selling securityholder does not include
1,111 shares owned by his spouse, Dawn Dobras.
(22) Number of shares owned by this selling securityholder does not
include 11,765 shares of common stock issuable upon exercise of
warrants owned by it.
</FN>
</TABLE>
20
<PAGE>
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be sold by the selling
securityholders or by pledgees and donees of the selling securityholders for
their respective own accounts. We will receive none of the proceeds from this
offering except with respect to the exercise price of the warrants or the
elimination of our indebtedness upon conversion of the convertible promissory
notes. The selling securityholders will pay or assume brokerage commissions or
other charges and expenses incurred in the sale of the shares.
The distribution of the shares by the selling securityholders is not
subject to any underwriting agreement. The selling securityholders may sell
their shares 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, 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 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 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 may be deemed to be
underwriters and any commissions received by them and any profit on the resale
of the shares 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 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 1,082,118 shares offered by this prospectus upon the exercise or
conversion 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 our 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 or
conversion price of the derivative securities so exercised or converted, the
registered holder of a warrant or such holders assigned will be entitled to
receive a certificate for the shares so purchased.
21
<PAGE>
DESCRIPTION OF CAPITAL STOCK
GENERAL
Our 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, par value $.001 per share, 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, and 60,520 shares of Class B voting preferred stock, Series A, par value
$.001 per share.
The following description of our capital stock is subject to and qualified
by our certificate of incorporation and by-laws which are included as exhibits
to our registration statement of which this prospectus forms a part and by
applicable provisions of Delaware Law.
COMMON STOCK
As of March 31, 2000, there were 11,882,539 shares of our common stock
outstanding held of record by approximately 5,000 beneficial stockholders. Our
common stock is currently listed on The Nasdaq SmallCap Market under the trading
symbol "VIZY" and also traded on the Boston Stock Exchange under the symbol
"VZM." Holders of our common stock are entitled to one vote for each share owned
on all matters submitted to a vote of stockholders. Holders of our common stock
also are entitled to receive cash dividends, if any, declared by our board of
directors out of funds legally available therefor, subject to the rights of any
holders of preferred stock. Holders of our common stock do not have
subscription, redemption, conversion or preemptive rights. Each share of our
common stock is entitled to participate pro rata in any distribution upon
liquidation, subject to the rights of holders of preferred stock.
Holders of our common stock are entitled to elect all of our directors. Our
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 our 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.
CLASS A 14% CUMULATIVE NON-CONVERTIBLE REDEEMABLE PREFERRED STOCK, SERIES A
Holders of our 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 we fail to tender in full three consecutive semi-annual
dividend payments. In addition, we have 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
22
<PAGE>
unpaid dividends on the Class A preferred stock so redeemed. We currently
have no shares of Class A preferred stock outstanding.
CLASS B VOTING PREFERRED STOCK
Holders of Class B preferred stock are entitled to ten votes on each matter
subject to stockholder approval. Holders of our Class B preferred stock also are
entitled to vote together with holders of our common stock on all matters, other
than, pursuant to the Delaware General Corporation Law, with respect to
proposals to increase the number, par value or powers, preferences or special
rights of authorized shares of our common stock. Shares of Class B preferred
stock have no right to dividends and have a liquidation preference of $.001 per
share. We currently have no shares of Class B voting preferred stock issued and
outstanding.
CLASS C 11% CUMULATIVE NON-CONVERTIBLE REDEEMABLE PREFERRED STOCK, SERIES A
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 we fail to tender in full three consecutive semi-annual
dividend payments. In addition, we have 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. We currently have no shares of Class C preferred
stock outstanding.
JUNIOR PARTICIPATING PREFERRED STOCK
The junior preferred stock has preferential voting, dividend and
liquidation rights over our common stock. On March 31, 1998, we declared a
dividend distribution, payable on April 30, 1998, of one preferred share
purchase right on each share of our common stock. Each right, when exercisable,
entitles its registered holder to purchase from us 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 our common stock. The rights will not be
exercisable or transferable apart from our common stock until an acquiring
person, as defined in our rights agreement with American Stock Transfer & Trust
Company, acquires 20% or more of the voting power of our common stock or
announces a tender offer that would result in 20% ownership. We are entitled to
redeem these rights, at $.001 per right, any time before a 20% position has been
acquired. Under certain circumstances, including the acquisition of 20% of our
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
our 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 our voting power,
we are involved in a merger or other business combination transaction with
another person in which its common shares are changed or converted, or we sell
50% or more of our assets or earning power to another person. The rights expire
on April 20, 2008. We currently have no shares of junior preferred stock
outstanding.
23
<PAGE>
SERIAL PREFERRED STOCK
Our board of directors is authorized by our certificate of incorporation to
issue up to 1,939,480 shares of one or more series of serial preferred stock,
including the 1,500 authorized shares of Class A preferred stock, 1,000
authorized shares of Class C preferred stock and 100,000 authorized shares of
junior preferred stock. Except for the Class A preferred stock, Class C
preferred stock and junior preferred stock, no shares of serial preferred stock
have been authorized for future issuance by our board. In addition, we have no
present plans to issue any such shares, except with respect to the issuance of
100,000 shares of junior preferred stock upon the occurrence, if ever, of events
requiring their issuance. In the event that our board of directors 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, our board of directors 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 our common stock and/or other
series of serial preferred stock; to have more or less voting power per share
than that possessed by our 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 our liquidation, dissolution or winding up, the holders of serial
preferred stock may be entitled to receive preferential cash distributions fixed
by our board when creating the particular series thereof before the holders of
our common stock are entitled to receive anything. Serial preferred stock
authorized by our board of directors could be redeemable or convertible into
shares of any other class or series of our capital stock.
The issuance of serial preferred stock by our board of directors could
adversely affect the rights of holders of our 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 us through the acquisition of shares of
our common stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is American Stock
Transfer and Trust Company, 40 Wall Street, New York, New York 10005. American
Stock Transfer's telephone number is (212) 936-5100.
24
<PAGE>
EXPERTS
Our consolidated financial statements as of December 31, 1999, 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 one of our wholly
owned subsidiaries, Serif (Europe) Limited, as of December 31, 1999 and for the
two years then ended, incorporated by reference herein, given upon the authority
of these firms as experts in accounting and auditing. The report of Richard A.
Eisner & Company, LLP covering the December 31, 1999 consolidated financial
statements also contains an explanatory paragraph discussing a federal income
tax contingency.
The combined financial statement of PWR Systems as of December 31, 1999 and
1998 and for the two years then ended have been incorporated by reference from
the current report on form 8-K/A No. 1 of Vizacom, Inc. dated April 17, 2000,
have been audited by Deloitte & Touche LLP, independent auditors, given upon the
authority of this firm as experts in accounting and auditing.
The consolidated financial statements of Renaissance Multimedia as of
December 31, 1999, and for the year then ended, have been incorprated by
reference in this prospectus and in the registration statement in reliance
upon the report of Richard A. Eisner & Company, LLP, independent auditors, given
upon the authority of this firm as experts in accounting and auditing.
The financial statements of Junction 15 as of December 31, 1999, and for
the year then ended, have been incorporated by reference in this prospectus and
in the registration statement in reliance upon the report of Silver Levene,
independent auditors, given upon the authority of this firm as experts in
accounting and auditing.
LEGAL MATTERS
The validity of our common stock offered hereby will be passed upon for us
by Kaufman & Moomjian, LLC, Mitchel Field, New York. Neil M. Kaufman, Esq., one
of our directors and a member of Kaufman & Moomjian, LLC, owns 56,738 shares of
our common stock and options to purchase 305,000 shares of our common stock. In
addition, another member of Kaufman & Moomjian, LLC owns 12,500 shares of our
common stock and options to purchase 33,000 shares of our common stock.
25
<PAGE>
================================================================================
Prospective investors may rely only on the information contained in this
prospectus. We have not authorized anyone to provide prospective investors with
different or additional information. This prospectus is not an offer to sell nor
is it seeking an offer to buy in any jurisdiction where such offer, or sale is
not permitted. The information contained in this prospectus is correct only as
of the date of this prospectus, regardless of the time of delivery of this
prospectus or any sale of these shares.
----------------
TABLE OF CONTENTS
Where you can find more information. . . . . . . . . . . . . . . . . . . . . .2
Our businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Risk factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Forward-looking statements . . . . . . . . . . . . . . . . . . . . . . . . . .14
Use of proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Price range of common stock. . . . . . . . . . . . . . . . . . . . . . . . . .15
Dividend policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Selling securityholders. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Plan of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Description of capital stock . . . . . . . . . . . . . . . . . . . . . . . . .22
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Legal matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
================================================================================
<PAGE>
5,413,231 shares
VIZACOM INC.
----------------
Prospectus
----------------
---------------------
, 2000
================================================================================
<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:
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee . . . . . . . . . . . . . . . . . . . . . $ 4,074.00
Blue Sky Fees and Expenses . . . . . . . . . . . . . . . . . . 5,000.00 *
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . 5,000.00 *
Legal Fees and Expenses. . . . . . . . . . . . . . . . . . . . 25,000.00 *
Printing and Engraving . . . . . . . . . . . . . . . . . . . . 10,000.00 *
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . 926.00 *
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000.00 *
- --------------
* Estimated
</TABLE>
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.
II-1
<PAGE>
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.
Item 16. EXHIBITS.
Number Description
- ------ -----------
3.1 Composite of Certificate of Incorporation of the Company, as amended
to date. (Incorporated by reference to Exhibit 3.1 to the Company's
Current Report on Form 8-K (Date of Report: July 1, 1999) (Commission
File Number: 1-14076), filed with the Commission on July 15, 1999.)
3.2 By-laws of the Company, as amended. (Incorporated by reference to
Exhibit 3.3 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 16, 1998.)
4 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.)
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 Silver Levene
23.4 Consent of Deloitte & Touche, LLP
23.5 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).
Item 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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
II-2
<PAGE>
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.
(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.
II-3
<PAGE>
The Registrant hereby further undertakes that it will for determining
any liability under the Securities Act, treat the information omitted from the
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.
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-4
<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 Teaneck, State of New Jersey, this 17th day of April,
2000.
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 April 17, 2000 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 (Principal Executive Officer)
Mark E. Leininger
/s/ Alan W. Schoenbart Vice President - Finance, Chief Financial
- ------------------------------- Officer (Principal Accounting and
Alan W. Schoenbart Financial Officer)
/s/ Marc E. Jaffe Chairman of the Board, Secretary and
- ------------------------------- Director
Marc E. Jaffe
II-5
<PAGE>
/s/ Norman W. Alexander Director
- -------------------------------
Norman W. Alexander
/s/ Werner G. Haase Director
- -------------------------------
Werner G. Haase
/s/ Neil M. Kaufman Director
- -------------------------------
Neil M. Kaufman
/s/ David N. Salav Director
- --------------------------------
David N. Salav
/s/ Vincent DiSpigno Director
- --------------------------------
Vincent DiSpigno
II-6
<PAGE>
Number Description
- ------ -----------
3.1 Composite of Certificate of Incorporation of the Company, as amended
to date. (Incorporated by reference to Exhibit 3.1 to the Company's
Current Report on Form 8-K (Date of Report: July 1, 1999) (Commission
File Number: 1-14076), filed with the Commission on July 15, 1999.)
3.2 By-laws of the Company, as amended. (Incorporated by reference to
Exhibit 3.3 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 16, 1998.)
4 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.)
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 Silver Levene
23.4 Consent of Deloitte & Touche, LLP
23.5 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).
KAUFMAN & MOOMJIAN, LLC
Attorneys at Law
- - - - - - - - - - - -
50 Charles Lindbergh Boulevard - Suite 206
Mitchel Field, New York 11553
- - - - - - - - - - - -
Telephone:(516) 222-5100
Facsimile:(516) 222-5110
Internet: www.kmcorplaw.com
April 17, 2000
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., a Delaware corporation
(the "Company"), in connection with the registration under the Securities Act of
1933, as amended, of an aggregate of 5,413,231 shares (the "Shares") of the
common stock, par value $.001 per share (the "Common Stock"), of the Company, 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. The Shares include an aggregate of 1,082,118 shares (the
"Underlying Shares") of Common Stock issuable upon exercise of outstanding
warrants (the "Warrants") and upon the conversion of principal and interest
under convertible promissory notes (together with the Warrants, the "Derivative
Securities") of the Company.
We are of the opinion that (a) the Shares issued and outstanding
on the date hereof are duly authorized, legally issued, fully paid and
non-assessable and (b) 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
Ernst & Young
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-3) and related Prospectus of Vizacom Inc. of our report dated March 27, 2000
with respect to the financial statements of Serif (Europe) Limited included in
the Annual Report (Form 10-KSB) of Vizacom Inc. for the year ended December 31,
1999 filed with the Securities and Exchange Commission.
/s/ Ernst & Young
Ernst & Young
Registered Auditor
Nottingham, England
April 17, 2000
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-3) and related Prospectus of Vizacom Inc. (the "Company") of our report dated
March 27, 2000 with respect to our audit of the financial statements of the
Company and our report dated March 20, 2000 with respect to our audit of the
financial statements of Renaissance Computer Art Center, Inc., included in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1999,
filed with the Securities and Exchange Commission.
Our report dated March 27, 2000 with respect to our audit of the financial
statements of the Company contains an explanatory paragraph regarding a Federal
income tax matter described in Note 8 to the financial statements.
/s/ Richard A. Eisner & Company, LLP
New York, New York
April 17, 2000
34 Warren Street Telephone 020 7383 3200
London W1P 5PD Fax 020 7383 4165/4168
DX 123593 Regents Park 3
email [email protected]
SILVER LEVENE
Chartered Certified Accountants
Registered Auditors
The Directors
Junction 15 Limited
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-3) and related Prospectus of Vizacom Inc. of our report dated April 4, 2000
with respect to our audit of the financial statements of Junction 15 Limited
included in the Annual Report (Form 10-KSB) of Vizacom Inc. for the year ended
December 31, 1999 filed with the Securities and Exchange Commission.
/s/ Silver Levene
SILVER LEVENE
Chartered Certified Accountants
Registered Auditors
London, United Kingdom
April 13, 2000
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Vizacom, Inc. on Form S-3 of our report on the combined financial statements
of P.C. Workstation Rentals, Inc. and Storageland, Inc. dated March 23, 2000
(March 27, 2000 with respect to Note 12) appearing in the current report on Form
8-K/A of Vizacom Inc. filed April 17, 2000, which is part of this Registration
Statement.
We also consent to the reference to us under the heading as "Experts" in such
Prospectus.
/s/ Deloitte & Touche LLP
Jericho, New York
April 13, 2000
