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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-37240
PROSPECTUS
2,575,000 Shares
T-NETIX, INC.
COMMON STOCK
Certain of our shareholders have advised us that they intend to sell
from time to time up to 2,575,000 shares of our common stock, $0.01 par value
per share. No underwriter is underwriting this offering. The selling
shareholders, or their respective pledgees, donees, transferees or other
successors in interest, may offer the shares from time to time in one or more
transactions on the Nasdaq National Market at prevailing market prices, or in
negotiated transactions at agreed upon prices, or in a combination of such
methods of sale. We will receive no part of the proceeds of such sales. We have
not issued any of the shares offered by this document, but we will issue those
shares from time to time upon conversion any outstanding shares of our Series A
Convertible Preferred Stock and exercise of certain stock purchase warrants.
Our common stock is traded on the Nasdaq National Market under the
symbol "TNTX." We do not know the prices at which the selling shareholders will
sell any of the shares, or the commissions the selling shareholders will pay, if
any, in connection with any such sale. These prices and commissions may vary
from transaction to transaction.
In this document, we will sometimes refer to T-NETIX, Inc. as simply
"T-NETIX." We will also sometimes refer to the shares being offered by this
Prospectus as the "shares," to our common stock as the "common stock," and to
our Series A Convertible Preferred Stock as the "preferred stock."
Our principal executive offices are located at 67 Inverness Way East,
Suite 100, Englewood, Colorado 80112; our telephone number is (303) 790-9111.
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SEE "RISK FACTORS" ON PAGES 2 TO 5 FOR A DISCUSSION OF CERTAIN FACTORS THAT YOU
SHOULD CONSIDER IN CONNECTION WITH AN INVESTMENT IN THE SHARES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus is dated May 26, 2000
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WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ABOUT THE COMPANY THAT IS DIFFERENT FROM, OR IN ADDITION TO, THAT
CONTAINED IN THIS PROSPECTUS. THEREFORE, IF ANYONE DOES GIVE YOU INFORMATION OF
THIS SORT, YOU SHOULD NOT RELY ON IT. IF YOU ARE IN A JURISDICTION WHERE AN
OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES
OFFERED BY THIS PROSPECTUS IS UNLAWFUL, OR IF YOU ARE A PERSON TO WHOM IT IS
UNLAWFUL TO DIRECT THESE KINDS OF ACTIVITIES, THE OFFER PRESENTED IN THIS
PROSPECTUS DOES NOT EXTEND TO YOU. THIS PROSPECTUS SPEAKS ONLY AS OF THE DATE OF
THIS PROSPECTUS UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE
APPLIES.
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TABLE OF CONTENTS
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Page
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Summary Information........................................................ 1
Risk Factors............................................................... 2
Use of Proceeds............................................................ 6
Selling Shareholders....................................................... 6
Information about RGC International Investors, L.L.C....................... 7
Plan of Distribution....................................................... 7
Legal Matters.............................................................. 9
Experts................................................................... 10
Where You Can Find More Information....................................... 10
</TABLE>
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T-NETIX, INC.
2,575,000 SHARES
COMMON STOCK
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P R O S P E C T U S
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May 26, 2000
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SUMMARY INFORMATION
We provide specialized call processing and other services to the
corrections industry, directly or through our telecommunications service
provider customers. We derive our revenue from three main sources:
telecommunications services, direct call provisioning and equipment sales. Our
primary customers for telecommunications services include AT&T, Bell Atlantic,
US WEST, SBC Communications, Inc., BellSouth, MCI WorldCom and GTE. As a direct
inmate call provider, we buy "wholesale" call services and resell them as
collect calls. Equipment sales are generally made to our telecommunications
services customers. We provide our services in over 1,100 correctional
facilities. Our products and services include comprehensive call processing
systems, recording systems, commissary management systems and prison information
systems for the corrections industry and special-purpose speech processing
software and systems. Our current products are based on proprietary software and
a combination of proprietary and "off-the-shelf" electronic hardware. These
systems are designed to be flexible delivery platforms which are easily
integrated with our customer's networks and information systems. Our revenue
stream is mostly recurring, as a result of T-NETIX's generally charging for its
services on a fee per transaction processed basis over long-term contracts.
At March 31, 2000, our assets were $70,477,000, total shareholders'
equity was $21,089,000 and our net loss for the three-month period ended March
31, 2000 was $1,079,000.
We issued 3,750 shares of our Series A Convertible Preferred Stock and
a stock purchase warrant exercisable for 340,909 shares our common stock to RGC
International Investors, L.L.C., a fund managed by Rose Glen Capital Management,
L.P., in an issuance that was exempt from the registration requirements of the
Securities Act of 1933, as amended, under Section 4(2) of the Securities Act and
Regulation D. The exercise price of the stock purchase warrant is $6.60 per
share. The preferred stock has a yield of 8% per annum payable on liquidation,
and is convertible into our common stock at a "variable" conversion price based
on the market price of the common stock during a pricing period of any five
consecutive trading days during the 22 consecutive trading days preceding
conversion, up to a "fixed" conversion price of $6.05. The fixed conversion
price is subject to adjustment if, during the 10 consecutive trading days ending
on August 17, 2000, 110% of the average closing bid price of our common stock is
below $6.05. The preferred stock matures on April 17, 2003.
With limited exceptions relating to a change of control of T-NETIX,
during the six month period after we issued the preferred stock, the preferred
stock is not convertible into our common stock unless the market price of our
common stock equals or exceeds the fixed conversion price or 115% of the
variable conversion price. After that, we have the right to issue cash instead
of common stock upon conversion of the preferred stock if the market price of
the common stock is less than the fixed conversion price.
If any of the following occurs, the holder of the preferred stock can
require that we redeem the preferred stock at a premium equal to the greater of
20% over the stated value of the preferred stock (plus the 8% yield), and the
product of the highest number of shares then issuable on conversion of the
preferred stock times the highest closing price for the common stock during the
period between the occurrence of any of the following and one day prior to the
date the redemption occurs;
o We breach certain covenants relating to the issuance or transfer of common
stock issuable on conversion of the preferred stock, or relating to the
registration of that common stock;
o We commit certain acts of insolvency or bankruptcy;
o We fail to maintain the listing of our common stock on Nasdaq, the New York
Stock Exchange ("NYSE") or the American Stock Exchange ("AMEX"); or
o The amount of common stock issuable on conversion of the preferred stock
would represent more than 20% of the total outstanding common stock.
If all of the following are true, we have the right to redeem the
preferred stock at a premium equal to the greater of 20% over the stated value
of the preferred stock (plus the 8% yield), and the product of the highest
number of shares then issuable on conversion of the preferred stock times the
highest closing price for the common stock during the period between the date
we send notice of intent to redeem and one day prior to the date the redemption
occurs:
o The common stock issuable on conversion of the preferred stock is authorized
and reserved for issuance, registered under the Securities Act and eligible
to be traded on Nasdaq, the NYSE or the AMEX;
o The holder of the preferred stock cannot then require us to redeem the
preferred stock; and
o The trading price of our common stock is $4.00 or less (subject to
adjustments) for a period of 10 consecutive trading days.
Also, if the first two bullet points immediately above are true, we
have the right to redeem the preferred stock if we publicly announce a major
transaction, such as a merger of T-NETIX or a sale of all or substantially all
of our assets, at a different redemption price than the redemption price
described above. The different redemption price is the greater of the product of
the highest number of shares then issuable on conversion of the preferred stock
times the price per share being offered in the major transaction, and the
product of the stated amount (plus the 8% yield) times either 165% if the major
transaction occurs within one year of issuance of the preferred stock or 200% if
the major transaction occurs more than one year after issuance of the preferred
stock.
We also issued a stock purchase warrant exercisable for 25,000 shares
our common stock to Daniel M. Carney, our Chairman of the Board, in an issuance
that was exempt from the registration requirements of the Securities Act under
Section 4(2) and Regulation D. The exercise price of Mr. Carney's stock purchase
warrant is $6.05 per share. The warrant matures on April 14, 2005.
We also issued a stock purchase warrant exercisable for 50,000 shares
our common stock to Zanett Securities Corp., which brokered our arrangement with
Rose Glen Capital Management L.P., in an issuance that was exempt from the
registration requirements of the Securities Act under Section 4(2) and
Regulation D. The exercise price of Zanett Securities Corp.'s stock purchase
warrant is $6.60 per share. The warrant matures on April 17, 2005.
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We are registering the shares of common stock underlying the Series A
Convertible Preferred Stock and the above-noted stock purchase warrants as
required by a Registration Rights Agreement dated April 17, 2000, into which we
entered with RGC International Investors, L.L.C.
RISK FACTORS
An investment in the securities offered by this Prospectus involves a
high degree of risk. You should consider carefully the following factors, in
addition to other information contained in this Prospectus and any Prospectus
Supplement, in connection with an investment in the securities offered in this
offering.
This Prospectus contains statements which constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). The words "anticipate," "expect,"
"believe," "goal," "plan," "intend," "estimate" and similar expressions and
variations thereof used in this Prospectus are intended to specifically identify
forward-looking statements. Prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various
factors, including the risk factors described below. We undertake no obligation
to publicly update or revise forward-looking statements made in this Prospectus
to reflect events or circumstances after the date of this Prospectus or to
reflect the occurrence of unanticipated events.
A SMALL NUMBER OF CUSTOMERS ACCOUNTED FOR A HIGH PERCENTAGE OF OUR REVENUE,
THEREFORE, THE LOSS OF A MAJOR CUSTOMER COULD HARM OUR BUSINESS.
In the Corrections Division, a small number of customers account for a
significant portion of our revenue. If we lose existing customers and do not
replace them with new customers, our revenue will decrease and may not be
sufficient to cover our costs. For the year ended December 31, 1999, AT&T, Bell
Atlantic and SBC Communications, Inc. accounted for approximately 13%, 10% and
10%, respectively of our total revenue. In the Internet Services Division, a
single customer, US WEST !NTERPRISE America, Inc., accounts for all of our
Internet Services revenue. If we lose this customer and do not replace it with
new customers, our revenue will decrease, we will be unable to continue this
line of business and this could harm our business.
CHANGES IN GOVERNMENT TELECOMMUNICATIONS REGULATIONS COULD CAUSE REDUCED DEMANDS
FOR OUR PRODUCTS AND SERVICES.
In our Corrections Division, our telecommunications service provider
customers and we are subject to varying degrees of federal, state, and local
regulation. Regulatory actions have impacted, and are likely to continue to
impact, both our customers and us. Regulatory actions may cause changes in the
manner in which our customers or we conduct business. The products that we
develop must comply with standards established by the Federal Communications
Commission. A change in these standards may have a material adverse affect on
our business, operating results, and financial condition. In the Internet
Services Division, if state regulatory authorities grant our existing Internet
service customer the ability to carry inter-LATA Internet services, the need for
our Internet services could be extinguished and our existing contract would
terminate.
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WE OPERATE IN HIGHLY COMPETITIVE MARKETS AND MAY NOT BE ABLE TO COMPETE
EFFECTIVELY.
The telecommunications industry, including the inmate calling market,
is and can be expected to remain highly competitive. In our Corrections Division
we compete directly against other suppliers of inmate call processing systems,
such as private pay phone operators and manufacturers of call processing
equipment. In addition, our customers and we jointly compete against other call
providers to obtain contracts for inmate calling services. Finally, we may also
compete against our customers who choose to use another call provider on a
particular bid. Changes in regulations have affected the competitive dynamics
within our industry. Increased competition may reduce the fees we charge, reduce
margins and cause a loss of market share. As a result of these and other
factors, we may not be able to compete effectively with our current or future
competitors, which would have a material adverse affect on our business,
operating results, and financial condition.
CHANGES IN TECHNOLOGY AND OUR ABILITY TO ENHANCE OUR EXISTING PRODUCTS MAY
ADVERSELY AFFECT OUR FINANCIAL RESULTS
The markets for our products, especially the telecommunications
industry, change rapidly because of technological innovation, changes in
customer requirements, declining prices, and evolving industry standards, among
other factors. To be competitive, we must develop and introduce product
enhancements and new products, which increase our customers' and our ability to
increase market share in the corrections industry. New products and new
technology often render existing information services or technology
infrastructure obsolete, excessively costly, or otherwise unmarketable. As a
result, our success depends on our ability to timely innovate and integrate new
technologies into our current products and services and to develop new products.
In addition, as the telecommunications networks are modernized and evolve from
analog-based to digital-based systems, certain features offered by us may
diminish in value. Moreover, regulatory actions affecting the telecommunications
industry may require significant upgrades to our current technology or may
render our service offerings obsolete or commercially unattractive. We cannot
guarantee that we will have sufficient technical, managerial or financial
resources to develop or acquire new technology or to introduce new services or
products that would meet our customers needs in a timely manner.
OUR SUCCESS DEPENDS ON OUR ABILITY TO PROTECT OUR PROPRIETARY TECHNOLOGY AND
ENSURE THAT OUR SYSTEMS ARE NOT INFRINGING ON OTHER COMPANIES
Our success depends to a significant degree on our protection of our
proprietary technology, particularly in the area of three-way call prevention.
The unauthorized reproduction or other misappropriation or our proprietary
technology could enable third parties to benefit from our technology without
paying us for it. Although we have taken steps to protect our proprietary
technology, they may be inadequate. We rely on a combination of patent and
copyright law and non-disclosure agreements to establish and protect our
proprietary rights in our systems. However, existing trade secret, copyright and
trademark laws offer only limited protection. Despite our efforts to protect our
proprietary rights, unauthorized parties may attempt to copy aspects of our
products or obtain and use trade secrets or other information we regard as
proprietary. If we resort to legal proceedings to enforce our intellectual
property rights, the proceedings would be burdensome and expensive and could
involve a high degree of risk.
In addition, with respect to our intellectual property rights, we
cannot be sure that a third party will not accuse us of infringement. Any claim
of infringement could cause us to incur substantial costs
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defending against that claim, even if the claim is not valid, and could distract
our management from our business. A party making a claim also could secure
judgment that requires us to pay substantial damages. A judgment could also
include an injunction or other court order that could prevent us from selling
our products. Any of these events could have a material adverse effect on our
business, operating results and financial condition.
OUR BUSINESS COULD BE ADVERSELY AFFECTED IF OUR PRODUCTS AND SERVICES FAIL TO
PERFORM OR BE PERFORMED PROPERLY
Products as complex as ours may contain undetected errors or "bugs",
which result in product failures or security breaches or otherwise fail to
perform in accordance with customer expectations. Any failure of our systems
could result in a claim for substantial damages against us, regardless of our
responsibility for the failure. Although we maintain general liability
insurance, including coverage for errors and omissions, there can be no
assurance that our existing coverage will continue to be available on reasonable
terms or will be available in amounts sufficient to cover one or more large
claims, or that the insurer will not disclaim coverage as to any future claim.
The occurrence of errors could result in loss of data to us or our customers
which could cause a loss of revenue, failure to achieve acceptance, diversion of
development resources, injury to our reputation, or damages to our efforts to
build brand awareness, any of which could have a material adverse affect on our
market share and, in turn, our operating results and financial condition.
OUR FAILURE TO EFFECTIVELY INTEGRATE THE BUSINESSES WE HAVE ACQUIRED MAY
ADVERSELY AFFECT OUR BUSINESS
On June 14, 1999 we merged with Gateway Technologies, Inc. A failure to
effectively integrate this business could have a material adverse effect on our
business, operating results and financial condition. There can be no assurance
that we will be able to consolidate the operations of Gateway with our
operations in a manner that will achieve efficient operating results. In
addition, there can be no assurance that we will be able to retain the personnel
of Gateway.
WE MAY NOT BE ABLE TO OBTAIN ADDITIONAL CAPITAL TO FUND OUR OPERATIONS
We are taking steps to increase cash flow from operations and obtain
additional financing to ensure that we are able to carry out our fiscal 2000
business plan. There can be no assurance that we will be successful in
increasing our cash flow from operations or that additional financing will be
available, or if available, will be obtained on acceptable terms. The financing
may also dilute existing stockholders.
If we cannot obtain adequate funds on acceptable terms, we may be
unable to:
o fund our working capital requirements;
o fund anticipated new installations of inmate call processing systems
and upgrades of existing systems;
o take advantage of strategic opportunities;
o respond to competitive pressures; and
o develop or enhance our services.
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Any of these failures could adversely affect our profitability. If we
do not achieve or sustain profitability in the future, we may be unable to
continue our operations.
OUR PREFERRED STOCK IS CONVERTIBLE INTO SHARES OF OUR COMMON STOCK AT A RATE
THAT ADJUSTS BASED ON THE TRADING PRICE OF OUR COMMON STOCK, THEREFORE
CONVERSION OF THE PREFERRED STOCK MAY RESULT IN SUBSTANTIALLY GREATER DILUTION
OF OUR EXISTING SHAREHOLDERS IF OUR STOCK PRICE DECREASES
As of May 10, 2000, 3,750 shares of our preferred stock were issued and
outstanding. Each share of our preferred stock is convertible into that number
of shares of our common stock as is determined by dividing the stated value
($1,000) of the share of preferred stock by the then current conversion price.
The conversion price is based on the market price of the common stock. If
converted on May 10, 2000, 100% of the Series A Preferred Stock would have been
convertible into approximately 744,417 shares of common stock, however, this
number of shares could be significantly greater if the market price of the
common stock decreases. Purchasers of common stock could therefore experience
substantial dilution of their investment upon conversion of the preferred stock.
The shares of preferred stock are not registered and may be sold only if
registered under the Securities Act or sold in accordance with an applicable
exemption from registration, such as Rule 144. The shares of common stock into
which the preferred stock may be converted are being registered pursuant to this
registration statement.
As of May 10, 2000, a warrant to purchase 340,909 shares of common
stock issued to the purchaser of the preferred stock was outstanding. This
warrant is exercisable in whole or in part over the next five years at a price
of $6.60 per share of common stock. That price may be adjusted from time to time
under antidilution provisions stated in the warrant. The shares of common stock
issuable upon exercise of this warrant are being registered pursuant to this
registration statement.
As of May 10, 2000, a warrant to purchase 25,000 shares of common stock
issued to Daniel M. Carney was outstanding. This warrant is exercisable in whole
or in part over the next five years at a price of $6.05 per share of common
stock. That price may be adjusted from time to time under antidilution
provisions stated in the warrant. The shares of common stock issuable upon
exercise of this warrant are being registered pursuant to this registration
statement.
As of May 10, 2000, a warrant to purchase 50,000 shares of common stock
issued to Zanett Securities Corp. was outstanding. This warrant is exercisable
in whole or in part over the next five years at a price of $6.60 per share of
common stock. That price may be adjusted from time to time under antidilution
provisions stated in the warrant. The shares of common stock issuable upon
exercise of this warrant are being registered pursuant to this registration
statement.
As of May 10, 2000, 2,069,546 shares of common stock were reserved for
issuance upon exercise of our outstanding options, and an additional 2,575,000
shares of common stock were reserved for issuance upon conversion of the
preferred stock and exercise of the warrants described in this prospectus. At
May 10, 2000, there were 12,733,084 shares of common stock outstanding. All of
these outstanding shares were freely tradeable without restriction under the
Securities Act unless held by affiliates.
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USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares.
All proceeds from the sale of the shares will be for the account of the selling
shareholders listed below (collectively, the "selling shareholders"), as
described below. See "Selling Shareholders" and "Plan of Distribution."
SELLING SHAREHOLDERS
The following table lists the selling shareholders for whose account
the shares are being offered, the number of shares (and percentage if greater
than one percent) of common stock held by each selling shareholder prior to the
offering, the number of shares being offered for the selling shareholders'
accounts, and (if greater than one percent) the percentage of the outstanding
common stock to be owned by each selling shareholder after completion of the
offering (see footnote 1 below):
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SHARES BENEFICIALLY
OWNED PRIOR SHARES POSITION WITH
NAME TO THE OFFERING OFFERED(1) T-NETIX
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RGC International Investors, L.L.C. 2,500,000(2) 2,500,000 None
Zanett Securities Corp. 50,000(3) 50,000 None
Daniel M. Carney 1,950,140(4) 25,000 Director
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(1) Assuming all of the shares are sold pursuant to this Prospectus--see "Plan
of Distribution." Under these circumstances, the only selling shareholder
that will own common stock after the shares are sold is Daniel M. Carney,
who will own 1,925,140 shares or 12.6% assuming he sells none of his other
shares. The actual number of shares of common stock offered in this
prospectus, and included in the registration statement of which this
prospectus is a part, includes the additional number of shares of common
stock that may be issued or issuable upon conversion of the preferred stock
and exercise of the stock purchase warrants by reason of any stock split,
stock dividend or similar transaction involving the common stock, in
accordance with Rule 416 under the Securities Act.
(2) See "Information About RGC International Investors, L.L.C." below.
(3) Includes 50,000 shares issuable upon exercise of a stock purchase warrant
within 60 days of May 10, 2000.
(4) Includes (i) 115,000 shares owned by Communications Vending Corporation of
Arizona, of which Mr. Carney has a 30% beneficial interest; (ii) 20,000
shares issuable pursuant to options exercisable within 60 days of May 10,
2000; and (iii) 25,000 shares issuable upon exercise of a stock purchase
warrant within 60 days of May 10, 2000.
The information in this table with respect to the percentage of
outstanding common stock is based on the assumption that the number of
outstanding shares of common stock does not increase or decrease from 15,308,084
shares (the actual number of outstanding shares (12,733,084) plus the 2,575,000
shares offered by this Prospectus), the number of shares of common stock used to
prepare this table as of May 10, 2000, and does not include outstanding stock
options. We may amend or supplement this Prospectus to update the disclosure set
forth herein.
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INFORMATION ABOUT RGC INTERNATIONAL INVESTORS, L.L.C.
The number of shares set forth in the table for RGC International
Investors, L.L.C. represents an estimate of the number of shares of common stock
to be offered by RGC International Investors, L.L.C. The actual number of shares
of common stock issuable upon conversion of the preferred stock and exercise of
the related warrants is indeterminate, is subject to adjustment and could be
materially greater or less than the estimated number. Whether that actual number
of shares increases or decreases depends on factors that cannot be predicted by
us at this time, including, among other factors, the future market price of the
common stock. Under the terms of the preferred stock, if the preferred stock had
been actually converted on May 10, 2000, the conversion price would have been
$5.0375. The warrants issued in connection with the Series A Preferred Stock are
exercisable into 340,909 shares of common stock at an exercise price of $6.60.
Under the terms of the preferred stock and the related warrants, the
shares of preferred stock are convertible and the warrants are exercisable by
any holder only to the extent that the number of shares of common stock issuable
pursuant to the preferred stock and warrants, together with the number of shares
of common stock owned by the holder and its affiliates (but not including shares
of common stock underlying unconverted shares of preferred stock or unexercised
portions of the warrants) would not exceed 4.9% of the then outstanding common
stock, as determined in accordance with Section 13(d) of the Exchange Act.
Accordingly, the number of shares of common stock set forth in the table for RGC
International Investors, L.L.C. exceeds the number of shares of common stock
that RGC International Investors, L.L.C. could own beneficially at any given
time through its ownership of the preferred stock and the warrants. In that
regard, the beneficial ownership of the common stock by RGC International
Investors, L.L.C. set forth in the table is not determined in accordance with
Rule 13d-3 under the Exchange Act.
PLAN OF DISTRIBUTION
The shares covered by this Prospectus may be offered and sold from time
to time by the selling shareholders or their respective pledgees, donees,
transferees or other successors in interest. Each selling shareholder will act
independently of T-NETIX in making decisions with respect to the timing,
manner and size of each sale. The selling shareholders may sell the shares being
offered in one or more transactions, which may involve block transactions:
o on the Nasdaq National Market or on any other market on which
the common stock may from time to time be trading;
o in an over-the-counter distribution in accordance with the
rules of the Nasdaq National Market;
o in ordinary brokerage transactions and transactions in which
the brokers solicit purchasers;
o in privately-negotiated transactions;
o through the writing of options on the shares;
o in short sales; or
o in any combination thereof.
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The sale price to the public may be:
o the market price prevailing at the time of sale;
o a price related to the prevailing market price;
o a negotiated price; or
o other prices that the selling shareholders may determine from
time to time.
The shares may also be sold pursuant to Rule 144.
The selling shareholders shall have the sole and absolute discretion
not to accept any purchase offer or make any sale of shares if they deem the
purchase price to be unsatisfactory at any particular time.
The selling shareholders or their respective pledgees, donees,
transferees or other successors in interest, may also sell the shares directly
to market makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers. The broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the selling shareholders
and/or the purchasers of shares for whom the broker-dealers may act as agents or
to whom they may sell as principals or both, and the compensation as to a
particular broker-dealer might be in excess of customary commissions. Market
makers and block purchasers purchasing the shares will do so for their own
account and at their own risk. It is possible that a selling shareholder will
attempt to sell shares of common stock in block transactions to market makers or
other purchasers at a price per share that may be below the then market price.
The selling shareholders, alternatively, may sell all or any part of
the shares offered under this prospectus through an underwriter. No selling
shareholder has entered into any agreement with a prospective underwriter and
there is no assurance that any underwriting agreement will be entered into. If a
selling shareholder enters into an underwriting agreement or agreements, the
relevant details will be set forth in a supplement or revisions to this
prospectus.
The selling shareholders cannot assure that all or any of the shares
offered in this prospectus will be issued to, or sold by, the selling
shareholders.
To the extent required, this prospectus may be amended and supplemented
from time to time to describe a specific plan of distribution. In connection
with distribution of the shares or otherwise, the selling shareholders may enter
into hedging transactions with broker-dealers or other financial institutions.
In connection with those transactions, broker-dealers or other financial
institutions may engage in short sales of our common stock in the course of
hedging the positions they assume with the selling shareholders. The selling
shareholders may also sell our common stock short and redeliver the shares to
close out their short positions. The selling shareholders may also enter into
options or other transactions with broker-dealers or other financial
institutions which require the delivery to a broker-dealer or other financial
institution of the shares offered, which shares the broker-dealer or
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other financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect the transaction). The selling shareholders
may also pledge shares to a broker-dealer or other financial institution, and,
upon a default, the broker-dealer or other financial institution may effect
sales of the pledged shares pursuant to this prospectus (as supplemented or
amended to reflect the transaction).
In effecting sales, brokers, dealers or agents engaged by the selling
shareholders may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
selling shareholders in amounts to be negotiated prior to the sale. The brokers
or dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Act and the Securities Exchange Act of
1934, as amended, or the rules and regulations under those acts, in connection
with these sales, and any commissions, discounts or concessions may be deemed to
be underwriting discounts or commissions under the Act and the Exchange Act, or
the rules and regulations under those acts. We will not pay any commissions and
discounts of underwriters, dealers or agents or any transfer taxes.
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in those jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The selling shareholders and any other persons participating in the
sale or distribution of the shares will be subject to applicable provisions of
the Exchange Act and the rules and regulations under that act, including,
without limitation, Regulation M. These provisions may restrict certain
activities of, and limit the timing of purchases and sales of any of the shares
by, the selling shareholders or any other person participating in the sale or
distribution. Furthermore, under Regulation M, persons engaged in a distribution
of securities are prohibited form simultaneously engaging in market making and
certain other activities with respect to those securities for a specified period
of time prior to the commencement of the distributions, subject to specified
exceptions or exemptions. All of these limitations may affect the marketability
of the shares.
We have agreed to indemnify RGC International Investors, L.L.C., or its
transferees or assignees, against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments that RGC International
Investors, L.L.C. or its pledgees, donees, transferees or other successors in
interest, may be required to make in respect of those liabilities.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered
hereby has been passed upon for us by Rothgerber Johnson & Lyons LLP, Denver,
Colorado.
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EXPERTS
The financial statements of T-NETIX, Inc. as of December 31, 1999 and
1998, and for each of the years in the three-year period ended December 31,
1999, and the related financial statement schedule, have been incorporated by
reference herein and in the registration statement in reliance upon the reports
of KPMG LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a
Registration Statement under the Securities Act, which registers the common
stock being offered by this Prospectus. The Registration Statement, including
its attached exhibits and schedules, contains additional relevant information
about us and our common stock. The rules and regulations of the Commission allow
us to omit certain information included in the Registration Statement from this
Prospectus. Such additional information is available for inspection and copying
at the offices of the Commission.
We file annual, quarterly and current reports, proxy statements and
other information with the Commission. You may read and copy any reports,
statements or other information that we file at the following locations of the
Commission:
Public Reference Room New York Regional Office Chicago Regional Office
Room 1024 13th Floor Citicorp Center
450 Fifth Street, N.W. 7 World Trade Center Suite 1400
Washington, D.C. 20549 New York, NY 10048 500 West Madison Street
Chicago, IL 60661
Please call the Commission at 1-800-SEC-0330 for further information.
Our public filings are also available from commercial document retrieval
services and at the Internet web site maintained by the Commission at
http://www.sec.gov.
The Commission allows us to "incorporate by reference" information into
this Prospectus, which means that we can disclose important information to
investors by referring them to another document filed separately with the
Commission. The information incorporated by reference is deemed to be part of
this Prospectus, except for any information superseded by information contained
directly in this document. This Prospectus incorporates by reference the
documents set forth below that we have previously filed with the Commission.
These documents contain important information about us and our financial
condition.
T-NETIX Commission Filings (File No. 0-25016):
Annual Report on Form 10-K for the year ended December 31, 1999.
Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.
Current Report on Form 8-K dated April 19, 2000.
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Definitive Proxy Statement, Schedule 14A filed with the Commission on
April 17, 2000.
Description of the common stock contained in T-NETIX's Registration
Statement on Form 8-A, Registration No. 0-25016, filed by T-NETIX under
Section 12 of the Exchange Act.
Additional documents that we may file with the Commission between the
date of this Prospectus and the date this offering is terminated are also
incorporated by reference. These include any periodic reports, such as Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K, as well as any proxy statements.
You can obtain any of the documents incorporated by reference in, but
not included with, this Prospectus from us without charge, excluding all
exhibits unless we have specifically incorporated by reference an exhibit in
this Prospectus, by requesting them in writing or by telephone from the
following address:
T-NETIX, Inc.
Attn: John Giannaula, Corporate Secretary
67 Inverness Way East, Suite 100
Englewood, Colorado 80112
Telephone: (303) 790-9111
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