As filed with the Securities and Exchange Commission on
December 23, 2004.November 27, 2017
Registration no. 333-_______________
No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form _________________
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
INSIGNIA SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Minnesota
| | | | 41-1656308 |
(State or other jurisdiction of incorporationofincorporation or organization) | 41-1656308
| | | (IRS Employer IdentificationI.R.S. EmployerIdentification No.) |
6470 Sycamore Court North
Maple Grove, MN 55369
8799 Brooklyn Blvd.
Minneapolis, Minnesota 55445
(763) 392-6200
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Jeffrey A. JagersonScott F. Drill
President
Chief Financial Officer and Chief Executive Officer
Treasurer
Insignia Systems, Inc.
6470 Sycamore Court North
Maple Grove, MN 55369-6032
8799 Brooklyn Blvd.
Minneapolis, Minnesota 55445
(763) 392-6200
(Name, address, including zip code, and telephone number, including area code, of agent for service)
W. Morgan Burns, Esq. Joshua L. Colburn, Esq.Faegre Baker Daniels, LLP 90 South Seventh Street, Suite 2200 Minneapolis, Minnesota 55402 Tel: (612) 766-7136 Fax: (612) 766-1600 |
COPIES TO:
Charles C. Berquist, Esq.
Best & Flanagan LLP
225 South Sixth Street, Suite 4000
Minneapolis, MN 55402
(612) 339-7121Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement becomes effective.
registration statement.
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 bebeing 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]box. ☑
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: [ ]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
earliestearlier effective registration statement for the same
offering: [ ]offering. ☐
If delivery ofthis Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the prospectus is expected to be madeCommission pursuant to Rule 434, please462(e) under the Securities Act, check the following box: [ ]box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b2 of the Exchange Act.
CALCULATION OF REGISTRATION FEELarge accelerated filer | | ☐ | | Accelerated filer | | ☐ |
Non-accelerated filer | | ☐ (Do not check if a smaller reporting company) | | Smaller reporting company | | ☑ |
TITLE OF EACH CLASS OF
SECURITIES TO BE REGISTERED | | AMOUNT TO BE
REGISTERED | | PROPOSED MAXIMUM
OFFERING PRICE
PER SHARE | | PROPOSED MAXIMUM
AGGREGATE OFFERING
PRICE | | AMOUNT OF
REGISTRATION FEE |
|---|
|
Common Stock, | | | · | | Emerging growth company | | | | |
$0.01 par value | | 2,490,000 shares (1) | | $1.5855 (2) | | $3,947,895 (2) | | $464.67 | |
☐ |
If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
(1) | | CALCULATION OF REGISTRATION FEE | Title of Each Class of Securities to be Registered | Amount to be Registered(a) | Proposed Maximum Offering Price per Share (b)
| Proposed Maximum Aggregate Offering Price (b)
| Amount of Registration Fee | | Common stock, par value $0.01 per share | 2,313,200 shares | $1.71 | $3,954,416 | $492.47 |
|
(2) | | Estimated solely for purposes of calculating the filing fee pursuant to Rule 457(c) under the Securities Act of 1933, based on the average of the high and low prices per share reported on the Nasdaq SmallCap Market on December 20, 2004. |
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 THAT 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.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT A SOLICITATION TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 23, 2004
PROSPECTUS
INSIGNIA SYSTEMS, INC.
2,490,000 SHARES OF
COMMON STOCK
The selling shareholders listed on page 7 of this Prospectus may from time to time dispose of up to 2,490,000 shares sold to them in a private placement completed on December 3, 2004.
The selling shareholders may dispose of the shares from time to time as describeda result of stock splits, stock dividends, or similar transactions, or pursuant to the anti-dilution provisions in the Planabove warrants.
Estimated in accordance with Rule 457(c) solely for the purpose of Distribution includedcalculating the registration fee. The proposed maximum offering price per share and in the aggregate are based on the average of the high and low sale prices of the registrant’s common stock, as reported on the Nasdaq Capital Market on November 21, 2017.
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, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this
Prospectus.prospectus is not complete and may be changed. The selling shareholders named in this prospectus may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and the selling shareholder named in this prospectus is not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to completion, dated November 27, 2017
PROSPECTUS
Insignia Systems, Inc.
2,313,200 Shares of Common Stock
Offered by the Selling Shareholders
This prospectus relates to the possible resale from time to time of up to 2,313,200 shares of our common stock, par value $0.01 per share, which shares are issued and outstanding. Such common stock may be sold from time to time by the selling shareholders named herein. We are not offering any shares of common stock for sale under this prospectus, and we will not receive any of the proceeds from the sale or other disposition of the shares. However, we shares offered hereby. This prospectus describes the general manner in which our common stock may be offered and sold by the selling shareholders.
The common stock may be offered or sold by the selling shareholders at fixed prices, at prevailing market prices at the time of sale or at prices negotiated with purchasers, to or through underwriters, broker-dealers, agents, or through any other means described in this prospectus under “Plan of Distribution”. The selling shareholders will pay substantiallybear all expenses incidentcommissions and discounts, if any, attributable to the registrationsales of the shares. Our common stock is listedtrades on the Nasdaq SmallCap NASDAQ Capital Market under the symbol “ISIG”. The“ISIG.” On November 21, 2017, the last reported last sale price of theour common stock on December 20, 2004, was $1.60$1.65 per share. You should rely only on the information contained in this prospectus or any prospectus supplement or amendment. We have not authorized anyone to provide you with different information.
THIS INVESTMENTINVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE “RISK FACTORS” BEGINNING ON PAGE 4.3OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR
PASSED UPON THE ACCURACYDETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR
ADEQUACY OF THIS PROSPECTUS.COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is December 23, 2004.
In this prospectus, “Insignia” “we,” “us,” and “our” refer to Insignia Systems, Inc.November
27, a Minnesota corporation.2017
TABLE OF CONTENTS
PROSPECTUS SUMMARY | | 2 | |
| SUMMARY | 1 |
FORWARD-LOOKING STATEMENTSTHE OFFERING | | 3 | |
2 |
| RISK FACTORS | | 4 | 3 |
| CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS | 3 |
SELLING SHAREHOLDERSSHARESHOLDERS | | 7 | 4 |
| USE OF PROCEEDS | 6 |
PLAN OF DISTRIBUTION
| | 8 | |
|
USE OF PROCEEDS | | 9 | |
6 |
DESCRIPTION OF CAPITAL STOCK
| | 9 | |
|
INDEMNIFICATION | | 10 | |
8 |
LEGAL MATTERS
| | 10 | |
9 |
EXPERTS
| | 10 | 9 |
INFORMATION INCORPORATED BY REFERENCE
| 9 |
WHERE YOU CAN FIND MORE INFORMATION
| | 10 | 9 |
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY HIGHLIGHTS THE MATERIAL INFORMATION CONTAINED IN
ABOUT THIS PROSPECTUS. IT IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS AND IN DOCUMENTS INCORPORATED HEREIN BY REFERENCE.
About InsigniaYou should rely only on the information contained in, or incorporated by reference into, this prospectus. No person has been authorized to give any information or make any representations in connection with this offering other than those contained or incorporated by reference in this prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized by us. Neither we, nor the selling shareholders, are making any offer to sell these securities in any jurisdiction where the offer is not permitted. The information in this prospectus is accurate only as of the applicable dates, regardless of the time of delivery of this prospectus or any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.
For investors outside the United States: Neither we nor the selling shareholders have taken any action to permit a public offering of the shares of our common stock or the possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.
SUMMARY
This summary highlights information contained elsewhere in this prospectus or incorporated in this prospectus by reference, and does not contain all of the information that you should consider in making your investment decision. Before investing in our securities, you should carefully read this entire prospectus including each of the documents incorporated herein by reference, our financial statements and the related notes and the information set forth therein under the heading “Risk Factors”.
Insignia Systems, Inc.
Insignia Systems, (theInc. (“Insignia,” “we,” “us,” “our” or the “Company”) marketsis a developer and marketer of innovative in-store advertising products, programs and services to retailers andthat help consumer packaged goods manufacturers.(“CPG”) manufacturers and retail partners drive sales at the point of purchase. The Company has beenwas incorporated under the laws of the State of Minnesota in business since 1990. Since 1998, we have focused on managing a retail network, made up of approximately 21,000 store locations, for the Companyprimary purpose of providing turn-key at-shelf market access for CPG manufacturers’ marketing programs. We provide participating retailers with benefits including incremental revenue, incremental sales opportunities, increased shopper engagement in-store, and custom creative development and other in-kind services.
Our primary product has been focusing on providing in-store services through the Insignia Point-Of-Purchase Services (POPS)(POPS®) in-store advertisingmarketing program.Insignia’s POPSign™ Insignia PO
PS program is a national, account-specific, in-store, shelf-edge advertising and promotional tactic. Internal testing has indicated the program shown to deliver significantdelivers incremental sales increases. Funded by consumer packaged goods manufacturers,for the featured brand. The program allows manufacturers to deliver vital product information to consumers at the point-of-purchase. Thepoint-of-purchase, and to leverage the local retailer brand information is combined with each retailer’sand store-specific prices and is displayed on the retailer’sto provide a unique sign format. The combining of manufacturer and retailer information produces a complete “call to action” that gets consumers the information they want and need to make purchasing decisions, while building store and brand equity.For retailers, Insignia’s POPSign program is a source of incremental revenue and is the first in-store advertising program that delivers a complete “call to action” on a product- and store-specific basis, with all participating retail stores updated weekly. For consumer goods manufacturers, Insignia’s POPSign program provides accessdraws attention to the optimum retail advertising site for their products – the retail shelf-edge. In addition, manufacturersfeatured brand and triggers a purchase decision. CP
G customers benefit from significant sales increases,our nimble operational capabilities, which include short lead times, in-house graphic design capabilities, post-program analytics, and micro-marketing capabilities such as store-specificvariable or bilingual messaging. We recently announced the nationwide launch of freshADSSM, an exclusive advertising vehicle featured in produce, created to inspire shoppers early in their trip and multiple language options,help navigate them to center store. Registration and Standstill Agreement
On November 9, 2017, we entered into a wide varietyregistration and standstill agreement with the selling shareholders (the “2017 Agreement”). Pursuant to the 2017 Agreement, we agreed to prepare and file the registration statement of program features and enhancements that provide unique advertising advantages.The Company’s Internet addresswhich this prospectus iswww.insigniasystems.com. a part. The Company has made available on its Web site allagreed, among other things, to indemnify each of the reports it files withselling shareholders from certain liabilities, fees and expenses for errors and omissions in the Securitiesregistration statement. See “Selling Shareholders” for more information.
Corporate Information
The mailing address and
Exchange Commission (“SEC”). Copiestelephone number of our principal executive offices are 8799 Brooklyn Blvd., Minneapolis, MN 55445 and (763) 392-6200, respectively. Our website is www.insigniasystems.com. Information contained on, or that can
also be
obtained freeaccessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of
charge by requesting them from Insignia Systems, Inc., 6470 Sycamore Court North, Maple Grove, Minnesota 55369-6032; Attention: CFO; telephone 763-392-6200.The Offering
The Offering relatesthis prospectus.
Our logo and our other trade names, trademarks and service marks appearing in this prospectus are our property. Other trade names, trademarks and service marks appearing in this prospectus are the property of their respective owners. Solely for convenience, our trademarks and tradenames referred to in this prospectus may appear without the ™ symbol, but those references are not intended to indicate, in any way, that we will not assert, to the dispositionfullest extent under applicable law, our rights, or the right of upthe applicable licensor to 2,490,000these trademarks and tradenames.
Under this prospectus, the selling shareholders may, from time to time, sell shares of our common stock by a groupin one or more offerings. See “Plan of investors who purchased the shares from the Company in a private placement on December 3, 2004.Distribution” below.
Common stock coveredoffered by this Prospectusthe selling shareholders | 2,313,200 shares |
2,490,000 shares | |
Common stock outstanding as of December 20, 2004 | 11,914,676 shares |
| |
14,973,625Use of proceeds | We are not offering any shares pursuant to this prospectus, and we will not receive any proceeds from the sale of the shares offered by the selling shareholders. |
| |
Nasdaq SmallCapCapital Market Symbol | symbol | ISIG | |
Use Of Proceeds
We will not receive any proceeds from the disposition of the shares covered by this Prospectus by the selling shareholders.
Risk Factors
This offering involves certain investment risks. See “RISK FACTORS.”
FORWARD-LOOKING STATEMENTSRISK FACTORSCertain statements
Investing in our common stock involves high degree of risk. Before you invest in our common stock you should carefully consider the information in this prospectus, and the documents incorporated by reference or made in this Prospectus are “forward-looking statements”prospectus, and carefully read the risks described in the documents incorporated by reference in this prospectus including those set forth under the caption “Risk Factors” in ourAnnual ReportonForm 10-K for our fiscal year ended December 31, 2016, which is incorporated herein by reference, and under similar headings in our subsequently filed quarterly reports onForm10-Q and annual reports onForm10-K, as well as the other risks and uncertainties described in any applicable prospectus supplement or any other documents incorporated herein by reference. Any of these risks could cause our actual results to vary materially from recent results or from anticipated future results or could materially and adversely affect our business, financial condition and results of operations. This effect could be compounded if multiple risks were to occur. The occurrence of any of these risks might cause you to lose all or part of your investment.
Please also refer to the section below titled “Cautionary Statements Regarding Forward-Looking Statements” regarding forward-looking statements included or incorporated by reference in this prospectus. You should read this prospectus, including any risk factors incorporated by reference in this prospectus, in conjunction with our financial statements, the notes to those financial statements and our management’s discussion and analysis of financial condition and results of operation included in our periodic reports and incorporated by reference herein.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS This prospectus contains forward-looking statements within the meaning of
Section 27A of the
Private Securities
Litigation Reform Act of
1995. These statements are subject to the safe harbor provisions1933, as amended (the “Securities Act”), and Section 21E of the
Reform Act. SuchSecurities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify forward-looking statements
are contained principally inby the
section entitled “Risk Factors” and include our statements about:our growth strategy;
our ability to develop business relationships with clients; and
following words: “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “ongoing”, “plan”, “potential,” “predict”, “project”, “should”, “will”, “would”, or the negative of these terms or other statements that are not historical facts.
When used in this Prospectus, the words “will,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements,comparable terminology, although not all forward-looking statements contain these identifying words. We cannotForward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved.
Forward-looking statements involve a number of risks and uncertainties, many of which are outside of our control. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements and you should not place undue reliance on our forward-looking statements. Because such forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results, performance or achievements to differbe materially different from thosethe information expressed or implied by suchthe forward-looking statements including:declines in annual financial results;
this report. Factors that might cause actual results to differ include, but are not limited to, those set forth under “Risk Factors” in the continued impactdocuments incorporated by reference herein or therein. You should read the matters described in “Risk Factors” and the other cautionary statements made in this report as being applicable to all related forward-looking statements wherever they appear in this report.
In light of the significant litigation on our business;
availability of financing;
collectibility of receivables;
changes in economic and business conditions;
unpredictability of government regulations;
ability to keep up with changing trendsuncertainties inherent in our industry;
changes in business strategies; and
other factors discussed under "Risk Factors."
Also, these forward-looking statements, representthe inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our estimatesobjectives and assumptions only asplans will be achieved. Furthermore, past performance in operations and share price is not necessarily indicative of the date of this prospectusfuture performance. We disclaim any intention or the date of the document from which they are incorporated by reference. We undertake no obligation to update publiclyor revise any forward-looking statements, for any reason, even if new information becomes available or other events occur in the future.
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS BEFORE MAKING AN INVESTMENT DECISION. OUR BUSINESS, OPERATING RESULTS OR FINANCIAL CONDITION COULD BE MATERIALLY ADVERSELY AFFECTED BY ANY OF THE FOLLOWING RISKS. THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE DUE TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. YOU SHOULD ALSO CAREFULLY REVIEW THE INFORMATION IN OUR FORM 10-K AND FORM 10-K/A FOR THE YEAR ENDED DECEMBER 31, 2003, FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2004, FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2004 AND FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2004, INCLUDING OUR FINANCIAL STATEMENTS AND RELATED NOTES.
We Have Had Significant Losses In Recent Periods
We had a net loss of $4,252,000 for the year ended December 31, 2003, and a net loss of $5,014,000 for the nine months ended September 30, 2004. Although we had net earnings during the years ended December 31, 2002 and 2001 of $333,000 and $121,000, respectively, there can be no assurance we will be profitable in the future.
We Are Involved In Major Litigation
In October 2003, News America Marketing In-Store, Inc., a significant competitor and subsidiary of News Corporation, a multi-billion dollar company, brought suit against the Company in U.S. District Court in New York, New York. In this action, News America has alleged that the Company has engaged in deceptive acts and practices, has interfered with its existing business relationships with certain retailers and prospective economic advantage, and has engaged in unfair competition. The suit seeks unspecified damages and injunctive relief. The Company filed an amended Motion to Dismiss in July 2004 and is awaiting decision by the Court. Management believes the allegations are without merit and that the Company will prevail.
On September 23, 2004, the Company brought suit against News Corporation, LTD (News Corp.), News America, and Albertson’s Inc. in Federal District Court in Minneapolis, Minnesota, for violations of federal and state antitrust and false advertising laws. In this action, the Company has alleged that News Corp., through its wholly owned subsidiary, News America, has acquired and maintained monopoly power through various wrongful acts designed to harm the Company in the in-store advertising and promotion products and services market. The suit seeks injunctive relief sufficient to prevent further antitrust injury and an award of treble damages to be determined at trial for the harm caused to the Company. Defendants have filed motions to dismiss which will be heard in January 2005.
During the nine months ended September 30, 2004 the Company incurred legal fees of $2,154,000 related to these lawsuits and expects to continue to incur significant expenses until the litigation is concluded. Also, if we are required to pay a significant amount in settlement or damages, it will have a material adverse effect on our operations and financial condition. In addition, a negative outcome of this litigation could affect long-term competitive aspects of our business. Continuing litigation with a retailer could also have a negative impact on our business.
We Are Dependent On Our Contracts With Retailers And Our Ability To Renew Those Contracts When Their Terms Expire
A number of our contracts with retailers are coming up for renewal, including our contract with Safeway Inc. Some of our retailer contracts require us to guarantee minimum payments to our retailers. If we are unable to offer guarantees at the required levels in the new contracts, and the contracts are not renewed because of that or because of other reasons, it will have a material adverse effect on our operations and financial condition.
Our POPS business and results of operations could be adversely affected if the number of retailer partners decreases significantly or if the retailer partners fail to continue to provide good service including performing their duties in placing and maintaining POPSigns at the shelf in their stores and providing product movement data to us.
We May Need Additional External Financing In The Future Which May Not Be Available
The Company has implemented various initiatives to improve its operating performance through the reduction of cost of sales expenses, operating expenses and legal fees. Management believes it will be able to continue to fund operations through cash savedwhether as a result of new information, future events or otherwise, except as required by law. You are advised, however, to consult any additional disclosures we have made or will make in our reports filed with the implementation these initiatives, its financing agreement with Itasca Business Credit, Inc.Securities and Exchange Commission (the “Commission”) on Forms 10-K, 10-Q and 8-K. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this prospectus and the proceedsother documents incorporated by reference herein.
The selling shareholders, or their pledgees, assignees, or successors-in-interest, are offering for resale, from time to time, up to an aggregate of
the private equity placement just completed. However, there can be no assurance that future external financing will not be needed or that the Company will be able to secure such financing if and when needed.Our Results Of Operations May Be Subject To Significant Fluctuations Which May Result In A Decrease In Our Stock Price
Our quarterly and annual operating results have fluctuated in the past and may vary in the future due to a wide variety of factors including:
the loss of contracts with retailers;
the continued impact of significant litigation on our business;
the timing of seasonal events for customers or the loss of customers;
the timing of new retail stores being added;
the timing of additional selling, marketing and general and administrative expenses; and
competitive conditions in our industry.
Due to these factors, our quarterly net sales, expenses and results of operations could vary significantly in the future. You should take these factors into account when evaluating past periods and, because of the potential variability in our quarterly results, you should not rely upon results of past periods as an indication of our future performance. In addition, because our operating results may vary significantly from quarter to quarter, results may not meet the expectations of securities analysts and investors, and this could adversely affect the market price2,313,200 shares of our common stock.
We Have Significant Competitors
We face significant competition from other providers of at-shelf advertising or promotional signage. Some of these competitors have significantly greater financial resources that can be used to market their products. Should our competitors succeed in obtaining more of the at-shelf advertising business from our current customers, our revenues and related operations would be adversely affected.
Our Results Are Dependent On The Success Of Our Insignia Pops® Program Which Represents A Very Significant Part Of Our Business
Our company is largely dependent on our POPS program, which represented approximately 85% and 81% of total net sales for fiscal 2003 and 2002, respectively. We expect the POPS program to continue to represent a higher percentage in fiscal 2004 and future periods. Should brand manufacturers no longer perceive value in the POPS program, our business and results of operations would be adversely affected due to our heavy dependence on this program.
Our Results Are Dependent On The Level Of Spending By Branded Product Manufacturers For Advertising And Promotional Expenditures
Our company is largely dependent on the net sales from our POPSigns, which are purchased by branded product manufacturers. Changes in economic conditions could result in reductions in advertising and promotional
expenditures by branded product manufacturers. Should these reductions occur, our revenues and related results of operations would be adversely affected.
Our Results Are Dependent On Our Manufacturer Partners Continuing To Achieve Sales Increases
Our product manufacturer customers use our POPS program to motivate consumers to buy their branded products. Use of our POPS programtable below has historically resulted in sales increases for that particular product. If our POPS program does not continue to result in these product sales increases, our marketing success and sales levels could be adversely affected.
Our Business Could Be Significantly Disrupted If We Lose Members Of Our Management Team
We believe our future success depends to a significant degreebeen prepared based upon the continued contributionsinformation furnished to us by the selling shareholders as of our executive officers and other key personnel, both individually and as a group. Our future performance will be dependent on our ability to retain them. The loss of the services of any of our executive officers, particularly Scott Drill, our Chief Executive Officer, or Gary Vars, our President of the Insignia POPS division, could prevent us from executing our business strategy which would adversely impact our financial results.
The Market For Our Stock Could Be Hurt By The Sale Of The Shares Offered In This Prospectus And Shares Covered By Other Warrants And Options
November 15, 2017. The selling shareholders may sell up to 2,490,000have purchased, acquired, sold, transferred or otherwise disposed of some or all of their shares offered by this prospectussince the date on which the information in the public market from time to time. There is a limited market for our common stock, and the resale (or availability for resale) of the 2,490,000 shares covered by this prospectus, plus an additional 1,825,860 shares covered by other warrants and options currently outstanding, which in the aggregate represented approximately 15% of our outstanding common stock as of December 1, 2004, may depress the price of the stock. Selling a large number of our shares at one time may be difficult because smaller quantities of our shares are typically bought and sold and security analysts’ coverage and news media coverage is generally limited. These factors could result in lower prices and larger spreads between the bid and ask prices for our shares.
Our Stock Price Has Been And May Continue To Be Volatile
Between December 1, 2003 and December 1, 2004, our common stock has traded between $3.10 and $0.71 per share. The market price of our common stock may continue to be volatile and may be significantly affected by:
the loss or addition of contracts with major retailers;
the continued impact of significant litigation on our business;
actual or anticipated fluctuations in our operating results;
announcements of new services by us or our competitors;
developments with respect to conditions and trends in our industry or in the industries we serve;
general market conditions; and
other factors, many of which are beyond our control.
Fluctuations or decreases in the trading price of our common stock may adversely affect your ability to trade your shares.
SELLING SHAREHOLDERS
The following table sets forth certain information with respect to theis presented. The beneficial ownership of Insigniaour common stock by the selling shareholders has been determined in accordance with Rule 13d-3 under the Exchange Act.
The selling shareholders may sell some, all or none of the shares offered by this prospectus. Because the number of shares the selling shareholders may offer and sell is not presently known, we cannot estimate the number of shares that will be held by the selling shareholders after completion of this offering. This table, however, presents the maximum number of shares of common stock that the selling shareholders may offer pursuant to this prospectus and the number of shares of common stock that would be beneficially owned after the sale of the maximum number of shares of common stock by the selling shareholders.
| Selling Shareholder(s) | | Number of Shares of Common Stock Beneficially Owned Prior to this Offering(a) | | Number of Shares of Common Stock Being Offered(b) | | Number of Shares of Common Stock Beneficially Owned After this Offering(c) |
| | Number | | Percentage | | | Number | | Percentage |
| The Lion Fund II, L.P.(d) | | 2,313,200 | | 19.4% | | 2,313,200 | | – | | – |
Sardar Biglari ______________________________
| | 11,788 | | * | | – | | 11,788 | | * |
(a)
“Beneficial ownership” means that a person, directly or indirectly, has or shares voting or investment power with respect to a security or has the right to acquire such power within 60 days. The number of shares beneficially owned is determined as of November 21, 2017, and the percentage is based upon 11,914,676 shares of our common stock outstanding as of November 21, 2017.
(b)
Represents the maximum number of shares that may be sold by the selling sharesholders pursuant to this prospectus; provided, however, that pursuant to Rule 416 under the Securities Act of 1933, as amended, the registration statement of which this prospectus is a part shall also cover any additional shares of common stock which become issuable in connection with the shares registered for sale hereby by reason of any stock dividend, stock split, recapitalization or other transaction that, without the receipt of consideration, results in an increase in the number of outstanding shares of our common stock.
(c)
Assumes the sale of all shares offered hereby to unaffiliated third parties. The selling shareholders may sell all or part of their respective shares.
(d)
Biglari Capital Corp. (“BCC”) is the general partner of The Lion Fund II, L.P. (“The Lion Fund II”), and Sardar Biglari is the Chairman and Chief Executive Officer of BCC. Mr. Biglari holds investment discretion over securities owned by The Lion Fund II. By virtue of these relationships, BCC and Mr. Biglari may be deemed to beneficially own the shares held by The Lion Fund II. Each of BCC and Mr. Biglari disclaims beneficial ownership of the shares that it or he does not directly own. The address for BCC, The Lion Fund II and Mr. Biglari is 17802 IH 10 West, Suite 400, San Antonio, TX 78257.
Past and Current Relationships with Selling Shareholders
2015 Standstill Agreement and Board of Directors
In December 2015, we entered into a standstill agreement (the “ 2015 Agreement”) with Sardar Biglari, Philip L. Cooley, The Lion Fund II and BCC (collectively, the “Biglari Group”) and certain other parties defined therein as the “Air T Group”. The 2015 Agreement expired on its terms upon the conclusion of our 2016 annual meeting of shareholders on June 10, 2016.
Under the 2015 Agreement, we agreed to increase the size of our Board of Directors from seven to nine directors, effective as of December 1, 2004:| Selling Shareholder | | Shares
Owned Prior to
Offering | | Shares
Offered (1) | | Shares
Owned After
Offering (2) | | Percent |
|
| Bristol Investment Fund, Ltd. (3) | | 500,000 | | 500,000 | | 0 | | * | |
| Bear Stearns Securities Corp., Inc. | |
| FBO J. Steven Emerson Roth IRA (4) | | 500,000 | | 500,000 | | 0 | | * | |
| Potomac Capital Partners, LP (5) | | 478,600 | | 289,100 | | 189,500 | | 1.3% | |
| JMG Capital Partners, LP (6) | | 302,750 | | 250,000 | | 52,750 | | * | |
| JMG Triton Offshore Fund, Ltd. (7) | | 302,750 | | 250,000 | | 52,750 | | * | |
| Hammond Holdings, LLC (8) | | 609,915 | | 200,000 | | 409,915 | | 2.7% | |
| Potomac Capital International Ltd. (5) | | 231,700 | | 184,100 | | 47,600 | | * | |
| Pleiades Investment Partners-R, L.P., (5) | | 309,400 | | 176,800 | | 132,600 | | * | |
| Trustees of The Runnels Family Trust (9) | | 159,437 | | 70,000 | | 89,437 | | * | |
| High Tide, LLC (9) | | 80,000 | | 70,000 | | 10,000 | | * | |
|
| TOTAL | | 3,474,552 | | 2,490,000 | | 984,552 | | 6.6% | |
_________________
* Less5, 2015. We also agreed to have our
Board elect Mr. Biglari and Dr. Cooley as directors effective as of the same date. The Company further agreed to nominate and recommend that shareholders elect Mr. Biglari, Dr. Cooley, and two other individuals named in the 2015 Agreement, as four of no more than 1%nine total nominees for election as directors at the 2016 annual meeting of shareholders.(1) | | Represents the maximum number of shares that may be disposed of by each selling shareholder pursuant to this Prospectus. |
(2) | | Assumes the disposition of all shares offered hereby to unaffiliated third parties. No assurances can be given as to the number of shares that will ultimately be disposed of by the selling shareholders. |
(3) | | Paul Kessler has voting and dispositive control over the shares held by Bristol Investment Fund, Ltd. Mr. Kessler disclaims beneficial ownership of the shares held by Bristol Investment Fund., Ltd. |
(4) | | J. Steven Emerson has voting and dispositive control over the shares held by his IRA. |
(5) | | Paul J. Solit has voting and dispositive control over the shares held by Potomac Capital Partners, LP, Potomac Capital International, Ltd, and Pleiades Investment Partners-R, LP. |
(6) | | Jonathan M. Glaser has voting and dispositive control over the shares held by JMG Capital Partners, LP. |
(7) | | Jonathan M. Glaser and Roger Richter have voting and dispositive control over the shares held by JMG Triton Offshore Fund Ltd. |
We further agreed to reimburse the Air T Group and the Biglari Group for certain expenses incurred in connection with the 2015 Agreement and related matters. Under the 2015 Agreement, the members of the Air T Group and the Biglari Group agreed to vote all shares of our common stock beneficially owned by them in favor of all of our Board’s director nominees at the 2016 annual meeting of shareholders, for approval of the advisory vote to approve executive compensation, in accordance with our Board’s recommendation on any
(8) | | Jeffrey Sowada has voting and dispositive control over the shares held by Hammond Holdings, LLC. Shares owned prior to the offering include 280,627 shares owned by WBL Limited Partnership, 64,000 shares owned by Jeffrey Sowada IRA, and warrants to purchase 65,288 shares held by WBL Limited Partnership. |
advisory vote on the frequency of future advisory votes to approve executive compensation and for the ratification of our independent auditors. The Air T Group and the Biglari Group each agreed to also abide by certain standstill provisions until the conclusion of the 2016 annual meeting of shareholder or any earlier date, if any, upon which the Company had materially breached certain of its commitments under the 2015 Agreement.
During the period for which the restrictions applied, each of the Air T Group and the Biglari Group was restricted, subject to certain limited exceptions, from: (i) submitting, inducing or encouraging the submission of any shareholder proposal or notice of nomination or other business for consideration at a meeting of our shareholders; (ii) opposing directors nominated by our Board of Directors (iii) participating in any “group” within the meaning of Section 13(d)(3) of the Exchange Act, other than their respective shareholder group or any group deemed to arise from the 2015 Agreement; (iv) participating in the solicitation of any proxy other than in support of the nominees of our Board of Directors; (v) calling a special meeting of shareholders; (vi) seeking, other than as a director of the Company, to control or influence the governance or policies of the Company; (vii) effecting or facilitating, other than as a director of the Company, the acquisition of any material assets or business of the Company,
any business combination involving the Company, or any other extraordinary transaction with respect to the Company, and (viii) disclosing or pursuing certain intentions with respect to the 2015 Agreement.
Mr. Biglari served as a member of our Board of Directors from December 2015 until his resignation in March 2017.
2017 Registration and Standstill Agreement
On November 9, 2017, we entered into the 2017 Agreement with each of the selling shareholders. Pursuant to the 2017 Agreement, we agreed to prepare and file a registration statement with the Commission for purposes of registering the sale of up to 2,313,200 shares of common stock beneficially owned by one or more of the selling shareholders. We have agreed, among other things, to indemnify each selling shareholder from certain liabilities, fees and expenses for errors and omissions in the registration statement.
Under the 2017 Agreement, the registration period continues until the earliest to occur of certain events, including the third anniversary of the effective date of the 2017 Agreement, and the disposition of shares under the registration statement is subject to a specified price requirement as set forth in the 2017 Agreement.
Under the 2017 Agreement, the standstill period continues under the earliest to occur of certain events, including the third anniversary of the effective date of the 2017 Agreement. The selling shareholders have agreed during the standstill period to vote all shares of our common stock beneficially owned by them (i) in favor of all directors nominated by our Board of Directors for election at any annual meeting of shareholders of the Company and (ii) for approval with respect to the advisory vote to approve executive compensation, in accordance with the Board of Directors’ recommendation on any advisory vote on the frequency of future advisory votes to approve executive compensation, and for the ratification of our independent auditors.
The selling shareholders have also agreed during the standstill period to abide by certain standstill provisions as described in the 2017 Agreement. During the standstill period, the selling shareholders are restricted, subject to certain limited exceptions, from: (i) submitting, inducing or encouraging the submission of any shareholder proposal or notice of nomination or other business for consideration; (ii) nominating any candidate for election to the Board of Directors or opposing the directors nominated by the Board; (iii) participating in any “group” within the meaning of Section 13(d)(3) of the Exchange Act, other than a group consisting of the selling shareholders and their affiliates or any group deemed to arise from the 2017 Agreement; (iv) participating in the solicitation of any proxy other than in support of the Board’s nominees; (v) calling a special meeting of shareholders; (vi) seeking, other than as a director of the Company, to control or influence the governance or policies of the Company; (vii) effecting or facilitating the acquisition of any material assets or business of the Company, any business combination involving the Company, or any other extraordinary transaction with respect to the Company, and (viii) disclosing or pursuing certain intentions with respect to the 2017 Agreement.
(9) | | G. Tyler Runnels has voting and dispositive control over the shares held The Runnels Family Trust and shares held by High Tide, LLC. Mr. Runnels is affiliated with a broker-dealer firm. |
The selling shareholders will receive all of the proceeds from the sale of the shares offered for sale by them under this prospectus. We will not receive proceeds from the sale of the shares by the selling shareholders. Pursuant to the 2017 Agreement, the selling shareholders will bear the first $40,000 of the Company’s expenses related to the registration of securities under this registration statement and the Company will bear all other expenses incident to this registration statement, including all registration and filing fees and fees and expenses of our own counsel and accountants, but excluding the legal expenses of the selling shareholders. For more information on the 2017 Agreement or the selling shareholders, see “Selling Shareholders”.
The selling shareholders will pay any underwriting discounts and commissions and expenses incurred by the selling shareholders in disposing of the shares. Any transfer taxes payable on these shares and any commissions and discounts payable to underwriters, agents, brokers or dealers will be paid by the selling shareholders.
DETERMINATION OF OFFERING PRICE
The selling shareholders will determine at what price they may sell the offered shares, and such sales may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.
The selling shareholders and their, which as used herein includes donees, pledgees, assignees andtransferees or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from a selling shareholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of the Company common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These salesdispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.
The selling shareholders may use any one or more of the following methods when selling shares:disposing of shares or interests therein:
●
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
●
block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
●
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
●
an exchange distribution in accordance with the rules of the applicable exchange;
●
privately negotiated transactions;
settlement of
●
short sales entered intoeffected after the date the registration statement of which this prospectus;
broker-dealers may agree withprospectus is a part is declared effective by the selling shareholders to sell a specified number of such shares at a stipulated price per share;SEC;
a combination of any such methods of sale;
●
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; or
●
broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share;
●
a combination of any such methods of sale; and
●
any other method permitted pursuant toby applicable law.
The selling shareholders may, alsofrom time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell theshares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 144 under424(b)(3) or other applicable provision of the Securities Act amending the list of 1933,selling shareholders to include the pledgees, transferees or other successors in interest as amended, if available, rather than selling shareholders under this prospectus.Broker-dealers engaged by The selling
shareholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling shareholders may arrangebeneficial owners for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling shareholders (or, if any broker-dealer acts as agent for the purchaserpurposes of shares, from the purchaser) in amounts to be negotiated. Each selling shareholder does not expect these commissions and discounts relating to its sales of shares to exceed what is customary in the types of transactions involved.this prospectus.
In connection with the sale of shares,our common stock or interests therein, the selling shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the sharescommon stock in the course of hedging the positions they assume. The selling shareholders may also sell shares of our shares common stock short and deliver these securities to close out their short positions, or loan or pledge the sharescommon stock to broker-dealers that in turn may sell these securities. The selling shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-
dealerbroker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The aggregate proceeds to the selling shareholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling shareholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents.
The selling shareholders will receive all of the proceeds from the sale of the shares offered for sale by them under this prospectus. We will not receive proceeds from the sale of the shares by the selling shareholders. Pursuant to the 2017 Agreement, the selling shareholders will bear the first $40,000 of the Company’s expenses related to the registration of securities under this registration statement and the Company will bear all other expenses incident to this registration statement, including all registration and filing fees, and fees and expenses of our own counsel and accountants, but excluding the legal expenses of the selling shareholders. Any transfer taxes payable on these shares and any commissions and discounts payable to underwriters, agents, brokers or dealers will be paid by the selling shareholders.
The selling shareholders and any underwriters, broker-dealers or agents that are involvedparticipate in sellingthe sale of the common stock or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be deemed to beunderwriting discounts and commissions under the Securities Act. Selling shareholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each selling shareholder has informed the Company that it purchased the shares in the ordinary course of business and does not have any agreement or understanding, directly or indirectly, with any person to distribute the common stock.The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the shares. The Company has agreed to indemnify the selling shareholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
Because selling shareholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act. EachAct.
The selling shareholder has advised us that they have not entered into any agreements, understandings shareholders also may resell all or arrangements with any underwriter or broker-dealer regarding the sale of the resale shares. There is no underwriter or coordinating broker acting in connection with the proposed sale of the resale shares by the selling shareholders.We agreed to keep this prospectus effective until the earlier of (i) the date on which the shares may be resold by the selling shareholders without registration and without regard to any volume limitations by reason of Rule 144(k) under the Securities Act or any other rule of similar effect or (ii) alla portion of the shares have been sold pursuant to the prospectus orin open market transactions in reliance upon Rule 144 under the
Securities Act rather than under this prospectus, provided that they meet the criteria and conform to the requirements of that rule. To the extent required, the shares of our common stock to be sold, the names of the selling shareholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, any other rule of similar effect. The resale sharesapplicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if applicable, the common stock may be sold
in these jurisdictions only through registered or licensed brokers or
dealers if required under applicable state securities laws.dealers. In addition, in
certainsome states the
resale sharescommon stock may not be sold unless
they haveit has been registered or qualified for sale
in the applicable state or an exemption from
the registration or qualification
requirementrequirements is available and is complied with.
Under applicable rules
The selling shareholders and regulations under the Exchange Act, any other person engagedparticipating in thesuch distribution of the resale shares may not simultaneously engage in market making activities with respect to our common stock for a period of two business days prior to the commencement of the distribution. In addition, the selling shareholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of our common stock by the selling shareholders orand any other participating person. We will make copiesRegulation M may also restrict the ability of this prospectus availableany person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.
Pursuant to the 2017 Agreement, we have agreed to indemnify the selling shareholders
and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prioragainst liabilities, including liabilities relating to the
time of the sale.USE OF PROCEEDS
We will not receive any proceeds from the dispositionregistration of the shares offered by this prospectus, resulting from (i) any untrue statement or alleged untrue statement of a material fact contained in this prospectus or the registration statement of which this prospectus is part, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein (in the case of any prospectus, in light of the circumstances under which they were made) not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by this Prospectus or interests thereinregistration statement.
Pursuant to the 2017 Agreement, the selling shareholders have agreed to indemnify the Company against certain liabilities resulting from information furnished to us by the selling shareholders.
shareholders specifically for inclusion in this prospectus, the registration statement of which this prospectus is part, or any amendment or supplement thereto.
We have agreed to keep the registration statement, of which this prospectus is a part, effective until the earlier of (i) the date, if any, that the selling shareholders’ beneficial ownership of our common stock has remained below 10.0% of the then outstanding shares of our common stock for 90 consecutive days; (ii) the date, if any, that the Company no longer qualifies for the use of a registration statement on Form S-3; (iii) such date, if any, as any of the selling shareholders materially breaches certain obligations under the 2017 Agreement; and (iii) November 9, 2020, the third anniversary of the 2017 Agreement.
There can be no assurance that any selling shareholder will sell any or all of the shares of common stock registered pursuant to the registration statement, of which this prospectus forms a part. Once sold under the registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than our affiliates.
DESCRIPTION OF CAPITAL STOCK The following is a summary description of our capital stock. It does not purport to be complete and is subject to, and is qualified in its entirety by, the provisions of our certificate of incorporation and bylaws, copies of which are attached hereto and incorporated herein by reference.
Our authorized capital stock of the Company consists of 20,000,000of: 40,000,000 shares of common stock, $0.01 par value $.01 per share. As of December 20, 2004,October 31, 2017, there were 14,973,62511,914,676 shares of common stock outstanding. No share of common stock is entitled to any preference over any other share. The holders of common stock are entitled to one vote for each share held of record on each matter submitted to a vote of shareholders. Shareholders have no cumulative voting rights, which means that the holders of shares entitled to exercise more than 50% of the voting rights are able to elect all of the directors. Dividends may be paid to holders of common stock when, as and if declared by the Board of Directors out of funds legally available for payment of dividends. Upon liquidation, dissolution or winding up of the Company, after payment to creditors, the assets of the Company will be divided pro rata on a per-share basis among the holders of the common stock. The Bylaws of the Company require that only a majority of the issued
and outstanding shares of common stock of the Company need be present to constitute a quorum and to transact business at a shareholders’ shareholders’ meeting. The holders of common stock are not entitled to any sinking fund, preemptive, subscription, redemption or conversion rights. All outstanding shares of common stock are fully paid and nonassessable.
Dividend Policy
Dividends
The payment by the Company of dividends, if any, in the future rests within the discretion of theits Board of Directors and will depend, among other things, upon the Company’s earnings, its capital requirements, its financial conditions, any restrictions
under credit agreements and other relevant factors. We have not historically paid dividends, other than one-time dividends declared in 2011 and 2016. On November 28, 2016, the Board declared a one-time special dividend of $0.70 per share to shareholders of record as of December 16, 2016, paid on January 6, 2017. The Company has never paid or declared any cash dividendsBoard intends to retain earnings for use in the Company’s business and does not contemplateanticipate paying anycash dividends in the foreseeable future.
Transfer AgentThe transfer agent and registrar for the common stock is Wells Fargo Bank, N.A.
INDEMNIFICATION
Minnesota law and our Articles of Incorporation eliminate or limit certain liabilities of our directors. Minnesota law and our Bylaws require us to indemnify our directors, officers and employees in certain instances. Insofar as exculpation of, or indemnification for, liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling Insignia pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission, such exculpation or indemnification is against public policy as expressed in the Act and is therefore unenforceable.
LEGAL MATTERS
Our outside general counsel, Best & Flanagan LLP of Minneapolis, Minnesota, has issued an opinion about the legality
The validity of the shares of common stock being offered by this prospectus has been passed upon for the selling shareholders and us.
us by Faegre Baker Daniels LLP, Minneapolis, Minnesota.
The audited financial statements and schedules of Insignia incorporated by reference in this prospectus and elsewhere in the registration statement, have been auditedso incorporated by Grant Thornton LLP and Ernst & Youngreference in reliance upon the report of Baker Tilly Virchow Krause, LLP, independent registered public accounting firms, as set forth in their reports included therein, and are incorporated by reference herein in reliancefirm, upon the authority of said firmsfirm as experts in accounting and auditing in giving said reports.
such matters.
WHERE YOU CAN FIND INFORMATION INCORPORATED BY REFERENCEWe file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC’s public reference rooms in Washington, DC, New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from the SEC’s website at http://www.sec.gov.
The SECCommission allows us to “incorporate by reference” into this prospectus the information we file with them, which means that we can disclose important information to you by referring you to those documents. The informationAny statement contained or incorporated by reference is consideredin this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein, or in any subsequently filed document which also is incorporated by reference herein, modifies or supersedes such earlier statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus, and later information that we file with the SEC will automatically update and supersede this information.prospectus. We incorporate by reference the documents listed below and any future filings made with below:
●
the SEC under Sections 13(a), 13(c), 14, or 15(d)description of the Securities Act of 1934 until the selling shareholders dispose of all the shares. This Prospectus is part of aour common stock contained in our registration statement weon Form 8-A filed with the SEC.Commission on October 9, 1997, including all amendments and reports filed for the purpose of updating such information;
Annual Report
●
our annual report on Form 10-K for the fiscal year ended December 31, 2003,2016, filed with the Commission on March 29, 2004, as amended by Form 10-K/A,7, 2017;
●
our definitive proxy statement on Schedule 14A, filed July 15, 2004;
Current Reportwith the Commission on Form 8-K, filed February 18, 2004;April 25, 2017;
Current Report on Form 8-K, filed April 27, 2004;
Quarterly Report●
our quarterly reports on Form 10-Q for the quarterquarters ended March 31, 2004,2017, June 30, 2017, and September 30, 2017, filed with the Commission on May 12, 2004;4, 2017, August 4, 2017 (as amended August 14, 2017), and November 6, 2017, respectively; and
Current Report
●
our current reports on Form 8-K filed May 25, 2004;with the Commission on February 22, 2017, March 2, 2017, June 7, 2017, June 16, 2017, June 30, 2017, and November 13, 2017.
Current Report
We also incorporate by reference into this prospectus all documents (other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items) that are subsequently filed by us with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering of the securities made by this prospectus (including documents filed after the date of the initial registration statement and prior to the effectiveness of the registration statement). These documents include 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 definitive proxy statements.
Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded to the extent that a statement contained in this prospectus or any subsequently filed July 21, 2004;
Quarterly Report on Form 10-Q fordocument that is deemed to be incorporated by reference into this prospectus modifies or supersedes the quarter ended June 30, 2004, filed August 4, 2004;statement.
Current Report on Form 8-K, filed August 30, 2004;
Current Report on Form 8-K, filed September 22, 2004;WHERE YOU CAN FIND MORE INFORMATIONCurrent Report on Form 8-K, filed October 21, 2004;
Quarterly Report on Form 10-Q forWe are subject to the quarter ended September 30, 2004, filed November 12, 2004;
Current Report on Form 8-K, filed December 2, 2004;informational requirements of the Exchange Act and
Current Report on Form 8-K, filed December 7, 2004.
are required to file annual, quarterly and current reports, proxy statements and other information with the Commission.You may requestread and copy this information and the registration statement at the Commission public reference room located at 100 F Street, N.E., Room 1580, Washington, DC
20549. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. Any information we file with the Commission, including the documents incorporated by reference into this prospectus, is also available on the Commission’s website at www.sec.gov.
You may obtain, without charge, a copy of
any of these
filings, at no cost,documents, other than exhibits to those documents that are not specifically incorporated by reference into those documents, by writing
or telephoning us at the following address:
Insignia Systems, Inc.
Attention: Chief Financial Officer
6470 Sycamore Court North
Maple Grove,, 8799 Brooklyn Blvd., Minneapolis, MN 55369-6032
55445, or by telephoning us at (763) 392-6200
392-6200. We havealso make many of these documents publicly available, free of charge, on our website at www.insigniasystems.com as soon as reasonably practicable after filing such documents with the Commission. The information contained in, or that can be accessed through, our website is not authorized anyone to provide you with any information other than the information provided inpart of this Prospectus or any supplement, or incorporated by reference in this Prospectus or any supplement, or included in the Form S-3 Registration Statement of which the Prospectus is a part.
prospectus.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM
Item 14.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*The following setsOther Expenses of Issuance and Distribution.
Set forth below is an estimate (except for registration fees, which are actual) of the estimated amountsapproximate amount of the fees and expenses other than the transaction fee to the Company’s placement agent, to be incurredpayable by us in connection with the offering described indistribution of the shares of common stock being sold by the selling shareholders pursuant to this registration statement:statement. The selling shareholders have agreed to reimburse the Company for such expenses up to a maximum of $40,000. The selling shareholders will pay their own underwriting discounts and commissions, if any.
SECCommission registration fee | | $ 465 | 492 |
Nasdaq listing feeLegal fees and expenses | | 24,900 | $35,000 |
| Accounting fees and expenses | | 15,000 | |
Legal fees and expenses | | 75,000 | |
Blue Sky fees and expenses | | $5,000 | |
Transfer agent and registrar fees | | 4,000 | |
Miscellaneous | | 2,135 | |
|
| |
| Total | | $126,500 | |
|
| 40,492 |
_________________
*Except for
Item 15. Indemnification of Directors and Officers.
Minnesota law and ourArticles of Incorporationeliminate or limit certain liabilities of our directors.The Company is subject toMinnesota Statutes Chapter 302A, the SEC registration fee and Nasdaq listing fee, all of the foregoing expenses have been estimated. The Registrant is paying all of the above fees and expenses.ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERSMinnesota Business Corporation Act (the “Corporation Act”). Section 302A.521 of Minnesota Statutes requires the Registrant toCorporation Actprovides in substance that, unless prohibited by its articles of incorporation or bylaws, a corporation must indemnify a person, including an officer or director, who is made or threatened to be made a party to a proceeding by reason of the former or present official capacity of the person with respect to the Registrant, against judgments, penalties, fines, including, without limitation, excise taxes assessed against the person with respect to an employee benefit plan, settlements, and reasonable expenses, ifincluding attorneys’ fees and disbursements, incurred by such person (1)in connection with the proceeding, if certain criteria are met. These criteria, all of which must be met by the person seeking indemnification, are(a)that such person has not been indemnified by another organization or employee benefit plan for the same judgments, penalties, fines, including, without limitation, excise taxes assessed against the person with respect to an employee benefit plan, settlements, and reasonable expenses, including attorneys’ fees and disbursements, incurred by the person in connection with the proceeding with respect to the same acts or omissions; (2)(b)that such person must have acted in good faith; (3) received(c)that no improper personal benefit was obtained by such person and such person satisfied certain statutory procedure has been followed in the case of any conflictconflicts of interest by a director; (4)provisions, if applicable;(d)that in the case of a criminal proceeding, such person had no reasonable cause to believe that the conduct was unlawful; and (5)(e)that, in the case of acts or omissions occurring in thesuch person’s performance in thean official capacity, of director or, forsuch person must have acted in a manner such person not a director, in the official capacity of officer, committee member or employee, reasonably believed that the conduct was in the best interests of the Registrant,corporation or, in the case of performance by a director, officer or employee of the Registrant as a director, officer, partner, trustee, employee or agent of another organization or employee benefit plan, reasonably believed that the conduct wascertain limited circumstances, not opposed to the best interests of the Registrant.corporation. In addition, Section 302A.521, subd.Subdivision 3 of theCorporation Actrequires payment by the Registrant,registrant, upon written request, of reasonable expenses in advance of final disposition in certain instances. A decision as to required indemnification is made by a disinterested majority of the Boarddisinterested board of Directorsdirectors present at a meeting at which a disinterested quorum is present, or by a designated committee of the Board,disinterested directors, by special legal counsel, by the disinterestedshareholders, or by a court. The Registrant’s Bylaws provide for indemnificationOur certificate of officers,incorporation and amended and restated bylaws limit the liability of our directors employees, and agents to the fullest extent providedpermitted by Section 302A.521. Minnesota law.
Insofar as exculpation of, or indemnification for, liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”“Securities Act”) may be permitted to directors, officers andor persons controlling persons of the Registrant Insignia pursuant to the foregoing provisions, referenced in Item 15 of this Registration Statement or otherwise, the Registrant haswe have been advisedinformed that in the opinion of the Securities and Exchange Commission, such exculpation or indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereunder, 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 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.
II-1
Our bylaws provide in general that we shall indemnify our officers and directors to the fullest extent permitted by law. Our bylaws authorize us to purchase and maintain insurance to insure our indemnification obligations, whether arising under the bylaws or otherwise. We may create a fund or otherwise to secure our indemnification obligations which arise under our bylaws, our articles of incorporation, by agreement, vote of shareholders or directors, or otherwise. We have purchased directors’ and officers’ liability insurance.
ITEMItem 16. EXHIBITSExhibits.
Unless otherwise indicated, all documents incorporated herein by reference to a document filed with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are located under Commission file number 001-13471.
4.1Description | | Purchase Agreement, dated December 1, 2004, by and among Insignia Systems, Inc. and the Investors (1)Method of Filing |
4.23.1 | | Registration Rights Agreement dated |
4.331, 2015) | | Escrow Agreement, dated December 1, 2004Incorporated by and among Insignia Systems, Inc. and Investors (1)Reference |
5.13.2 | | Opinion and Consent of Best & Flanagan LLP, counsel |
23.1year ended December 31, 2015) | | Consent of Grant Thornton LLP, independent registered public accounting firm (filed herewith)Incorporated by Reference |
23.3 | | Filed Electronically |
10.1 | | | | Incorporated by Reference |
23.1 | | | | Filed Electronically |
23.2 | | |
24 | | Filed Electronically |
24.1 | | Powers of Attorney (included on signature page)in Signature Page) | | Filed Electronically |
(1) Incorporated by reference from the Registrant’s Form 8-K filed December 2, 2004.
ITEM
Item 17.
UNDERTAKINGSUndertakings.
(a) The undersigned
Registrantregistrant hereby
undertakes, in accordance with Item 512 of Regulation S-K:(a)undertakes:
(1) toTo file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) toTo include any prospectus required by sectionSection 10(a)(3) of the Securities Act of 1933; Act.
(ii) toTo reflect in the Prospectusprospectus any facts or events arising after the effective date of thethis registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change toin the information set forth in thethis registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of the 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 volume and price represent no more than a 20%20
percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; statement. and
(iii)
toTo include any material information with respect to the plan of distribution not previously disclosed in
thethis registration statement or any material change to such information in
thethis registration
statement; provided, however, that clauses (1)(i)and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those clauses is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement.statement.
(2) That, for the purpose of determining any liability under the Securities Act, of 1933, each such post-effective amendment 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;
II-2
thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the
offering;offering.
(b) That,The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, of 1933, each filing of the Registrant’sregistrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act (and, where applicable, each filing of 1934an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statementthis 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; and(e) 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 and Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X is 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.
(h)thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrantregistrant pursuant to the
foregoingindemnification provisions
described herein, or otherwise, the
Registrantregistrant has been advised that in the opinion of the Securities and Exchange 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
Registrantregistrant of expenses incurred or paid by a director, officer or controlling person of the
Registrantregistrant 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
Registrantregistrant 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 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.
SIGNATURES
SIGNATURES AND POWERS OF ATTORNEYPursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 andregistrant has duly caused this registration statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in Maple Grove,the City of Minneapolis, State of Minnesota, on December 23, 2004.
November 27, 2017.| | | INSIGNIA SYSTEMS, INC. |
| |
| | | |
| By: |
| /s/ Scott F. DrillKristine A. Glancy | |
| |
|
| | | | Scott F. Drill, President
and Chief Executive Officer
(principal executive officer) | |
|
| | By: | | /s/ Justin W. ShiremanKristine A. Glancy | |
| |
|
| | | | Justin W. Shireman, Controller
(principal financialPresident and accounting officer)Chief Executive Officer | |
Pursuant to the requirements
Power of
the Securities Act of 1933, this registration statement has been signed on December 23, 2004 by the following persons in the capacities indicated. The persons signing as directors are all of the Registrant’s directors.Attorney
Each person whose signature appears below also constitutes and appoints Scott F. DrillKristine A Glancy and Jeffrey A. Jagerson, or either of them, as his or her true and lawful attorney-in-fact and agent, each acting alone, with full powerspower of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement on Form S-3, and to file the same, with all exhibits thereto, and otherall documents in connection therewith, with the Securities and Exchange Commission,SEC, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite orand necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature
| | Title
|
|---|
|
/s/ Scott F. DrillSignatures | | Title | | Date |
/s/ Kristine A. Glancy | | President, and Chief Executive Officer, and Director (principal executive officer) and Director | | November 27, 2017 |
| Kristine A. Glancy | | |
|
Scott F. Drill | |
|
|
/s/ Justin W. ShiremanJeffrey A. Jagerson | | ControllerChief Financial Officer and Treasurer (principal financial and accounting officer) | | November 27, 2017 |
| Jeffrey A. Jagerson | | |
/s/ Jacob J. Berning | | Director | | November 27, 2017 |
Justin W. ShiremanJacob J. Berning | | |
|
|
/s/ Gary L. VarsRachael B. Vegas | | President, POPS Division and Director | | November 27, 2017 |
| Rachael B. Vegas | | |
/s/ F. Peter Zaballos | | Chairman of the Board, Director | | November 27, 2017 |
Gary L. VarsF. Peter Zaballos | | |
|
|
/s/ Donald J. KramerSteven R. Zenz | | Director | | Director | November 27, 2017 |
|
Donald J. Kramer | |
|
|
/s/ W. Robert Ramsdell | | Director | |
|
W. Robert Ramsdell | |
|
|
/s/ Gordon F. Stofer | | Director | |
|
Gordon F. Stofer | |
II-4
EXHIBIT INDEX
Exhibit No.Steven R. Zenz | | |
4.1 | | Purchase Agreement dated December 1, 2004 by and among Insignia Systems, Inc. and Investors (1) |
4.2 | | Registration Rights Agreement dated December 1, 2004 by and among Insignia Systems, Inc. and Investors (1) |
4.3 | | Escrow Agreement dated December 1, 2004 by and among Insignia Systems, Inc. and Investors (1) |
5.1 | | Opinion and Consent of Best & Flanagan LLP, counsel to the Company (filed herewith) |
23.1 | | Consent of Grant Thornton LLP, independent registered public accounting firm (filed herewith) |
23.2 | | Consent of Ernst & Young LLP, independent registered public accounting firm (filed herewith) |
23.3 | | Consent of Best & Flanagan LLP (included in Exhibit 5.1) |
24 | | Powers of Attorney (included on signature page) |
(1) | Incorporated by reference from the Registrant’s Form 8-K filed December 2, 2004.
|
II-5