1 As filed with the Securities and Exchange Commission on December 7, 2000 Registration No. 333-UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DCWashington, D.C. 20549
_______________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT
0FOF 1933_______________________
INNODATA
CORPORATION (ExactINC.(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization) 7374 (Primary Standard Industrial Classification Code Number) 13-3475943 (IRS Employer Identification Number)
| Delaware | 13-3475943 | |
| (State or other jurisdiction of | (I.R.S. Employer identification number) | |
| incorporation or organization) |
Three University Plaza
Hackensack, NJNew Jersey 07601
(201) 488-1200
(Address,371-8000
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
Martin Kaye, Executive office)
_______________________
Amy R. Agress
Vice President, 95 Rockwell Place
Brooklyn,General Counsel and Secretary
Innodata Inc.
Three University Plaza
Hackensack, New York 11217
(718) 522-0222
(Name,Jersey 07601
(201) 371-8000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies of all Communications
_______________________
Copy to:
Oscar D. Folger Esq.
Folger & Folger
521 Fifth Avenue
New York, New York 10175
(212) 697-6464
697-7300
_______________________
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.statement becomes effective.
If the only securities being registered on this Formform are being offered pursuant to dividend or interest reinvestment plans, please check the following box./ /¨
If any of the securities being registered on this Formform are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/box þ
If this Formform is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /¨
If this Formform is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /
¨
If delivery 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. / /
¨
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 or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):
| Large accelerated filer¨ | Accelerated filerþ |
| Non-accelerated filer¨ (Do not check if a smaller reporting company) | Smaller reporting company¨ |
_______________________
CALCULATION OF REGISTRATION FEE
| Title of Each Class of Securities To Be Registered (1)(2) | Amount to be Registered/Proposed Maximum Aggregate Offering Price per Unit/Proposed Maximum Aggregate Offering Price (1) | Amount of Registration Fee (3) | ||||||
| Common Stock, par value $0.01 per share | ||||||||
| Preferred Stock | ||||||||
| Debt Securities | ||||||||
| Warrants | ||||||||
| Units | ||||||||
| Total | $ | 70,000,000 | $ | 8,022 | ||||
| (1) | The proposed maximum |
| (2) | Includes an indeterminate number of securities that may be issued in primary offerings or upon exercise, conversion or exchange of any securities registered hereunder that provide for exercise, conversion or exchange, which together shall have an aggregate initial offering price not to exceed $70,000,000. Any securities registered hereunder may be sold separately or as units with the |
| (3) | The registration fee has been calculated in accordance with Rule 457(o) under the Securities Act of |
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 whichthat 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 thethis registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
If, as a result of stock splits, stock dividends or similar transactions,
The information in this prospectus is not complete and may be changed. We may not sell these securities until the
number of securities purported to be registered on this registration statement increases,filed with the provisions of Rule 416 shall apply,Securities and this registration
statement shall be deemedExchange Commission is effective. This prospectus is not an offer to coversell these securities and it is not soliciting an offer to buy these securities in any such additional shares of common stock.
10
PROSPECTUS
state where the offer or sale is not permitted.
Subject to completion, dated December 7, 2000
June 14, 2012
PROSPECTUS
INNODATA CORPORATION
1,148,478 SHARES OF COMMON STOCK
This Prospectus covers only the registration for resale of shares of our common
stock. These sharesINC.
$70,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
_______________________
We may be offered and sold from time to time by the security
holder identified on page 7 of this prospectus. The shares that may be offeredoffer and sold in reliance on this prospectus consist of 1,148,478 sharessell any combination of common stock, ("Shares") owned by Track Data Corporation.preferred stock, debt securities and warrants described in this prospectus, either individually or in units, in one or more offerings. The selling security holderaggregate initial offering price of all securities sold under this prospectus will receive allnot exceed $70,000,000. The preferred stock, debt securities and warrants may be convertible into or exercisable for our common or preferred stock.
This prospectus provides a general description of the proceedssecurities we may offer. The specific terms of any securities to be offered will be described in a supplement to this prospectus that contains specific information about the offering and will pay all
underwriting discounts and selling commissions, if any, from the saleterms of the shares.
__________________________
securities.
We may offer and sell these securities to or through one or more underwriters, dealers and agents, or directly to purchasers, on a continued or delayed basis.
Our Common Stockcommon stock is traded on the Nasdaq NationalGlobal Market System under the symbol "INOD." On December 5, 2000,“INOD.”
Investing in the last reported sale price of the Common Stock
on Nasdaq was $9.19 per share.securities involves risks. See "Risk Factors" beginning“Risk Factors” on page 3 for information that should be considered
by prospective investors.
You should read the entire prospectus carefully before you make your investment
decision. You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with information different from
that contained in this prospectus. The selling security holder is offering to
sell, and seeking offers to buy, shares of Innodata Corporation Common Stock
only in jurisdictions where offers and sales are permitted. The information
contained in this prospectus is accurate only as of the date of this prospectus regardlessas well as references to risk factors in any one or more prospectus supplements. Before buying the securities, you should read and consider the risk factors included in our periodic reports and in other information that we file with the Securities and Exchange Commission and that are incorporated by reference in this prospectus.
This prospectus may not be used to offer or sell any of our securities unless accompanied by a prospectus supplement.
_______________________
Neither the time of delivery of this prospectus or ofSecurities and Exchange Commission nor any sale of the
shares.
__________________________
The SEC and state regulatory authorities have notsecurities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
__________________________
Information contained herein is subject to completion or amendment. A
registration statement for these securities has been filed with the SEC. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of any offer to buy nor shall
there be any sale of these securities in any state in which an offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
_______________________
The date of this prospectus is ___________________
__________, 2012
TABLE OF CONTENTS
| Page | |
| About This Prospectus | 1 |
| The Company | 2 |
| Forward-Looking Statements | 2 |
| Risk Factors | 3 |
| Use of Proceeds | 3 |
| Ratio of Earnings to Fixed Charges | 4 |
| Description of Capital Stock | 4 |
| Description of Debt Securities | 7 |
| Description of Warrants | 17 |
| Description of Units | 18 |
| Plan of Distribution | 18 |
| Legal Matters | 21 |
| Experts | 21 |
| Where You Can Find More Information | 21 |
| Information Incorporated by Reference | 21 |
| Disclosure of Commission Position on Indemnification for Securities Act Liabilities | 22 |
ABOUT THE COMPANY
Innodata Corporation (the "Company") is a leading provider of digital
content outsourcing services. The Company offers a "single solution" for
companies needing to create high-value, large-scale Web content. The Company's
digital content outsourcing services include strategic and technical consulting
for content initiatives across multiple digital channels; content architecture
services; data conversion; metadata creation; and digital content management.
Its goal is to help its clients meet the challenge posed by the Internet - to
publish massive quantities of high value-added information on the Web. Innodata
does this by creating customized solutions for each of its clients, freeing them
to focus on their own core businesses.
Innodata's clients range from leading Global 1000 companies and new media
companies to some of the largest and most prestigious publishers of digital
content. Its clients are predominantly located in North America and Europe.
Innodata services these clients principally through a North American Solutions
Center located in New Jersey. In addition, Innodata operates production
facilities strategically located in Asia.
The executive offices of the Company are located at Three University Plaza,
Hackensack, New Jersey 07601. Its telephone number is 201-488-1200. Its
operations in the Philippines are conducted at 2900 Faraday Street in Manila, as
well as locations in Mandaue, the Philippines and Fuente Osmena, Cebu City, in
Cebu. The Company's facilities in Manila are accessible by calling its New
Jersey offices, 201-488-1200, Ext. 5551.
RISK FACTORS
An investment in the offered shares involves a high degree of risk. Prospective
investors should understand that they may lose their investment and should
consider carefully the following risk factors in making their investment
decision. This prospectus contains and incorporates by reference forward-looking
statements which are intended to fall within the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Examples include the
discussion under "Business" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Form 10-K for the year
ended December 31, 1999 and Form 10-Q for the quarter ended September 30, 2000.
These statements are based on current expectations that involve a number of
uncertainties including those set forth in the following risk factors. Actual
results could differ significantly from the results projected in these
forward-looking statements.
We rely on operations conducted primarily in foreign countries where local
conditions may disrupt our business operations.
Most of our operations take place in the Philippines, India and Sri Lanka.
The majority of our fixed assets are at these locations. We are subject to
risks associated with foreign operations in general, including political or
economic instability or disruptions, foreign regulatory approval requirements,
embargoes, transportation delays and trade restrictions, all of which could harm
our operations and financial condition, or could impair our ability to perform
and deliver services on a competitive and timely basis.
While the political situations in these countries currently has not
impaired our operations, our operations may be harmed in the future by
political instability in the countries in which we operate. Political
instability could also change the current satisfactory legal environment for us
through the imposition of restrictions on foreign ownership, repatriation of
funds, adverse labor laws, and the like.
Power failures and natural disasters in the foreign countries where our
operations are located could harm or impair our business.
Frequent power outages occur in the Philippines and India which have lasted
for as long as eight hours per day. Our facilities are equipped with standby
generators to produce electric power during such power failures but the general
impact of such power failures outside our offices may still be very disruptive
to our overall operations. Municipal power production capacity may not remain
adequate, and could deteriorate further, with the result that our operations
could be harmed or impaired. The Philippines is subject to relatively frequent
earthquakes, volcanic eruptions, floods and other natural disasters, which may
disrupt our operations.
Currency fluctuation and inflation could harm our business.
We fund our foreign operations through the transfer of dollars from the
United States. We generally remit funds to our foreign operations only as
needed and do not maintain any significant amount of funds or monetary assets in
those countries. Inflation without corresponding devaluation of foreign
currencies against the dollar, or any other increase in value of foreign
currency relative to the dollar, could harm our operations and financial
condition.
The loss of large customers could reduce our business revenues.
During the nine months ended September 30, 2000, one customer accounted for
44% of our revenues. Another customer accounted for 23% of such revenues in
1999. No other customer accounted for 10% or more of such revenues. If any of
these customers were to stop using our services, our revenues could be reduced
and our business significantly harmed.
Substantial competitors could harm our business.
Our ability to compete favorably is, in significant part, dependent upon
our ability to control costs, react swiftly and appropriately to short and
long-term trends, harness technology and competitively price our services. Firms
compete based on quality, speed, accuracy, and "customer intimacy," as well as
on the relative ability to accomplish massive and complex data conversions
economically. Major competitors include: for document and information
outsourcing, F.Y.I. Inc. and Lason Inc.; for data conversion services, Saztec
Philippines, Inc., Access Innovations, Inc., APEX Data Services, Inc. and Jouve
S.A.; for SGML/XML and related consulting services, Database Publishing Systems
Ltd. and KPMG Consulting. We may also be considered in competition with
customers' and potential customers' in-house personnel who may attempt to
duplicate our services.
Sale of shares eligible for future sale could reduce our stock price.
977,886 shares of our presently outstanding common stock may be deemed
"restricted securities," and may not be sold except in compliance with Rule 144
under the Securities Act. Rule 144 generally provides that a person holding
restricted securities for a period of one year may publicly sell in brokerage
transactions an amount equal to 1% of our outstanding Common Stock every three
months or, if greater, a percentage of the shares publicly traded during a
designated period. All of these 977,886 shares are currently eligible for sale
under Rule 144.
Our right to issue preferred stock could dilute or diminish the value of
existing investors' common stock.
Our governing documents authorize the issuance of up to one million shares
of preferred stock without stockholder approval, with dividend, liquidation,
conversion, voting or other rights which could adversely affect the voting power
or other rights of the holders of our common stock. Depending on the
designations, rights and preferences of a particular issuance of preferred
stock, such issuance could adversely affect the market value of our common
stock.
Our right to issue preferred stock could make a third-party acquisition of us
difficult.
Our governing documents authorize the issuance of up to one million shares
of preferred stock without stockholder approval, with dividend, liquidation,
conversion, voting or other rights which could adversely affect the voting power
or other rights of the holders of our common stock. In the event of issuance,
the preferred stock could be utilized, under certain circumstances, as a method
of discouraging, delaying or preventing a change in control. Although we have
no present intention to issue any shares of preferred stock, there can be no
assurance that we will not do so in the future.
Success of stockholder actions against directors is less likely as our
directors' liability for their actions is limited and we may indemnify them if
they are sued.
Our governing documents limit the liability of our directors for breach of
their fiduciary duty of care. The effect is to eliminate liability of directors
for monetary damages arising out of negligent or grossly negligent conduct.
Stockholder actions against a director of Innodata for monetary damages can only
be maintained upon a showing of certain factors and not for such director's
negligence or gross negligence in satisfying his duty of care. The factors
required to obtain monetary damages are a breach of the individual director's
duty of loyalty to Innodata, a failure to act in good faith, intentional
misconduct, a knowing violation of the law, an improper personal benefit, or an
illegal dividend or stock purchase. These documents also provide for
indemnification as permitted by Delaware law. However, insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling Innodata pursuant to the
foregoing provisions, we have been informed that in the opinion of the
Commission such indemnification is against public policy as expressed in the Act
and is therefore unenforceable.
It is unlikely that we will pay dividends.
We have not paid any cash dividends since our inception and do not
anticipate paying any cash dividends in the foreseeable future. There can be no
assurance that our operations will result in sufficient earnings to enable us to
pay dividends. It is anticipated that earnings, if any, will be used to finance
our growth.
USE OF PROCEEDS
All of the Shares of Common Stock are being sold by the selling security
holder for its own account. The Company will receive none of the proceeds of
sales of the securities.
PLAN OF DISTRIBUTION
The selling security holder has indicated it is acting independently from us in
determining the manner and extent of sales of the shares of our Common Stock.
Although all of the shares are being registered for public sale, the sale of any
or all of such shares by the selling security holder may depend on the sale
price of such shares and market conditions generally prevailing at the time.
The selling security holder has advised us that:
- - it has publicly announced a plan pursuant to the provisions of Rule 10b5-1
under which it plans to sell 20,000 shares per month. It also reserved the
right to terminate such plan at any time in the future.
- - the Shares may be sold by the selling security holder or its respective
pledgees, donees, transferees or successors in interest, in sales occurring in
the public market, in privately negotiated transactions, in block trades,
through the writing of options on shares, hedging transactions, short sales,
direct sales to one or more purchasers, or in a combination of such
transactions;
- - each sale may be made either at market prices prevailing at the time of
such sale, at a fixed offering price, at varying prices determined at the time
of sale, or at negotiated prices;
- - some or all of the Shares may be sold through brokers acting on behalf of
the selling security holder or to dealers for resale by such dealers;
- - in connection with such sales, such brokers and dealers may receive
compensation in the form of discounts and commissions from the selling
stockholder and may receive commissions from the purchasers of shares for whom
they act as broker or agent (which discounts and commissions may be less than or
exceed those customary in the types of transactions involved). Any broker or
dealer participating in any such sale may be deemed to be an "underwriter"
within the meaning of the Securities Act and will be required to deliver a copy
of this prospectus to any person who purchases any common stock from or through
such broker or dealer.
In offering the Common Stock covered by this prospectus, the selling security
holder and any broker-dealers and any other participating broker-dealers who
execute sales for the selling stockholder could be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales, and any
profits realized by the selling stockholders and the compensation of such
broker-dealer may be deemed to be underwriting discounts and commissions. In
addition, any shares of Common Stock covered by this prospectus which qualify
for sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus.
In order to comply with certain states' securities laws, if applicable, the
shares of Common Stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states, the shares of
Common Stock may not be sold unless they have been registered or qualified for
sale in such state or an exemption from registration or qualification is
available and is complied with.
The selling security holder has agreed to indemnify and hold us and our officers
and directors harmless, with respect to any losses resulting from any untrue
statement of a material fact in, or omission of a material fact from, this
prospectus or the registration statement of which it is a part, including
amendments and supplements, if such statement or omission was contained in
information furnished to us by such selling security holder. We will not pay
selling or other expenses incurred in the offering, including the discounts and
commissions of broker-dealers.
MATERIAL DEVELOPMENTS
Since the Company's most recent filing of its Quarterly Report on Form 10-Q
for the quarter ended September 30, 2000, no material developments have
occurred.
SELLING SECURITY HOLDER
The following table sets forth the name of the selling security holder, the
number of shares of common stock owned beneficially by such holder as of the
date of this prospectus and the number of shares that may be offered pursuant to
this prospectus. This information is based upon information provided by the
selling security holder.
No estimate can be given as to the number of shares that will be held by any
selling security holder after completion of this offering because they may offer
all or some of the shares and because there currently are no agreements,
arrangements or understandings with respect to the sale of any of the shares.
If all of the registered shares are sold, the selling security holder would own
no remaining shares, as indicated below. The shares offered by this prospectus
may be offered from time to time by the selling security holder named below.
This prospectus is part of a registration statement that we filed with the SEC,Securities and Exchange Commission (the “SEC”) using a “shelf” registration No. 333- _______.process. Under this shelf registration process, we may offer and sell from time to time shares of our common stock, shares of our preferred stock, debt securities, warrants, units, or any combination thereof, in one or more offerings in amounts, at prices and on terms that we determine at the time of the offering, with an aggregate initial offering price of up to $70,000,000. This prospectus provides you with a general description of the securities. Each time we offer the securities, we will provide a prospectus supplement that describes the terms of the offering. The prospectus supplement also may add, update or change information contained in this prospectus. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement, you should rely on the information in the prospectus supplement.
Before making an investment decision, you should read carefully both this prospectus and any prospectus supplement together with the documents incorporated by reference into this prospectus as described below under the heading “Incorporation by Reference.” The registration statement that contains more information than this prospectus, regardingincluding the Company and its common stock, including certain exhibits and schedules. You
can get a copy ofto the registration statement fromand the information incorporated by reference, provides additional information about us and our securities. The registration statement can be read at the SEC web site (www.sec.gov) or at the address listed
aboveSEC public reference room as discussed below under the heading “Where You Can Find More Information.”
You should rely only on the information that we have provided or incorporated by reference in this prospectus and any applicable prospectus supplement that we may authorize to be provided to you. We have not authorized anyone to provide you with information in addition to or different from its Internet site.
INNODATA Corporation
1,148,478 Shares of Common Stock
____________________
PROSPECTUS
____________________
2000that contained in this prospectus and any applicable prospectus supplement. No dealer, salesmansalesperson or any other person has beenis authorized to give any information or to make any representations other than thoserepresent anything not contained in this Prospectus,prospectus and if given or made, suchany applicable prospectus supplement that we may authorize to be provided to you. You must not rely on any unauthorized information or representations mustrepresentation. If anyone provides you with different or inconsistent information, you should not be relied upon as having been authorized by the Company.rely on it. This Prospectus does
not constituteprospectus is an offer to sell or a solicitation of anyonly the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. We will not make an offer to buy anysell our securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus or any accompanying prospectus supplement, as well as information we have previously filed with the Securities and Exchange Commission and incorporated herein by reference, is accurate as of the date on the front of those documents only. Our business, financial condition, results of operations and prospects may have changed since those dates.This prospectus may not be used to consummate a sale of our securities unless it is accompanied by a prospectus supplement.
Unless otherwise mentioned or unless the context requires otherwise, all references in this prospectus to “the Company,” “Innodata,” “we,” “us,” “our,” or similar references mean Innodata Inc., a Delaware corporation and its subsidiaries.
THE COMPANY
Innodata is a leading provider of business process, technology and consulting services, as well as products and solutions that help clients create, manage, use and distribute digital information. Propelled by a culture that emphasizes quality, service and innovation, we have developed a client base that includes many of the world’s preeminent media, publishing and information services companies, as well as leading enterprises in information-intensive industries such as aerospace, defense, financial services, government, healthcare, high technology, insurance, intelligence, manufacturing and law. We operate in two reporting segments. Our Content Services segment provides services that support the creation, enhancement, and repurposing of digital content. We launched Innodata Advanced Data Solutions (IADS) as a separate segment in the second quarter of 2011 to render high quality advanced data analytics to clients in the financial services, healthcare, medical and insurance industries.
For a description of our business, financial condition, results of operations and other important information regarding Innodata, we refer you to our filings with the SEC that are incorporated by reference in this prospectus. For instructions on how to find copies of these documents, see the section under the heading “Where You Can Find More Information.” More information about us is also available through our website at www.innodata.com. The information on our website is not incorporated by reference into this prospectus or any accompanying prospectus supplement.
Our principal executive offices are located at Three University Plaza, Hackensack, New Jersey 07601. Our telephone number is (201) 371-8000.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference contain “forward-looking statements” of Innodata 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”). These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties and other factors relate to, among other things:
| · | the primarily at-will nature of our contracts with clients in our Content Services segment and the ability of those clients to reduce, delay or cancel projects; |
| · | continuing Content Services segment revenue concentration in a limited number of clients; |
| · | continuing Content Services segment reliance on project-based work; |
| · | the inability to replace projects that are completed, cancelled or reduced; |
| · | depressed market conditions; |
| · | changes in external market factors; |
| · | the ability and willingness of our clients and prospective clients to execute business plans which give rise to requirements for digital content and professional services in knowledge processing; |
| · | difficulty in integrating and deriving synergies from acquisitions, joint venture and strategic investments; |
| · | potential undiscovered liabilities of companies that we acquire; |
| · | changes in our business or growth strategy; |
| · | the early stage of development of the companies in our IADS segment; |
| · | the possible emergence of new or growing competitors; and |
| · | various other competitive and technological factors. |
Words such as“estimate,” “believe,” “expect,” “anticipate,” “intend”and other similar expressions identify forward-looking statements.
Further, any forward-looking statement made by us herein and in the documents incorporated by reference herein, or elsewhere, speaks only as of the date on which we make it. We have no obligation to update any forward-looking statements herein or therein after the date hereof or thereof, except as required by federal securities laws.
RISK FACTORS
An investment in our securities involves a high degree of risk. You should carefully consider the risks described under “Risk Factors” in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, and all of the other information contained in this prospectus and incorporated by reference into this prospectus, including our financial statements and related notes, before investing in our securities. If any of the possible events described in those sections actually occur, our business, business prospects, cash flow, results of operations or financial condition could be harmed. In this case, the trading price of our common stock or the value of our securities could decrease, and you might lose all or part of your investment in our securities. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our operations and results.
USE OF PROCEEDS
Unless otherwise indicated in the applicable prospectus supplement, we will use the net proceeds from the sale of the securities offered by us for general corporate purposes, including, among other things, working capital, new product development initiatives and/or capital expenditures, which may include expansion of our facilities. We may also use such proceeds to fund acquisitions, technologies or product lines that complement our current business. However, we do not have agreements or commitments for any specific acquisitions at this time.
The amount and timing of our use of proceeds will depend on several factors, including the extent and timing of cash collections of revenue and the amount of net cash used by our operations. Pending their uses, we plan to invest the net proceeds of this offering in short- and intermediate-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.
RATIO OF EARNINGS TO FIXED CHARGES
For the five fiscal years ended December 31, 2011, we had no fixed charges and no shares of preferred stock for which we are required to make dividend payments. Accordingly, we have no ratio of earnings to fixed charges, and no ratio of earnings to combined fixed charges and preferred stock dividends, to illustrate for this period.
DESCRIPTION OF CAPITAL STOCK
The following summary of the terms of our capital stock does not purport to be complete and is subject to, and qualified in its entirety by, our Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), and our Amended and Restated Bylaws (“Bylaws”), copies of which are filed as exhibits to our SEC reports previously filed by us. See “Where You Can Find More Information.”
Certain provisions of our Certificate of Incorporation, Stockholder Rights Plan and Bylaws may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stockor the value of our securities.
General
Our authorized capital stock consists of (i) 75,000,000 shares of common stock, par value $0.01 per share; (ii) 100,000 shares of Series C participating preferred stock, par value $0.01 per share (“Series C Preferred Stock”); and (ii) 4,900,000 shares of preferred stock.Our board of directors authorized our Series C Preferred Stock in connection with the adoption of the Stockholder Rights Plan described below. We redeemed all shares of ourSeries A preferred stock and Series B preferred stock in December 1996.
As of April 30, 2012, there were outstanding 24,766,609 shares of common stock and options to purchase 3,394,807 additional shares of common stock. No shares of preferred stock were outstanding on that date.
Description of our Common Stock
General
Holders of common stock are entitled to one vote per share for each share held of record on all matters submitted to a vote of stockholders, including the election of directors, and do not have cumulative voting rights. Pursuant to our Bylaws, a majority of the shares entitled to vote thereat constitute a quorum at a meeting of stockholders for the transaction of any business. The holders of common stock are entitled to receive equally on a per share basis such anlawful dividends as may be declared by our board of directors. In the event of a liquidation, dissolution or winding up of our business, after payments to creditors and the holders of any senior securities, the holders of common stock will be entitled to receive pro rata all of our remaining assets available for distribution to our stockholders. The common stock has no preemptive, redemption, conversion or subscription rights. All outstanding shares of common stock are fully paid and non-assessable. The shares of common stock to be issued by us in any offering, when issued in consideration of payment, will be fully paid and non-assessable.
Stockholder Rights Plan
On December 16, 2002, we adopted a stockholder rights plan, or Rights Plan. The description and terms of the rights issuable under the Rights Plan are set forth in a Rights Agreement between us and American Stock Transfer & Trust Co., as rights agent, dated as of December 16, 2002. Under the Rights Plan, the holders of our common stock own one Series C Preferred Stock purchase right for each share of common stock held by them from time to time. The rights are attached to the shares of common stock for which they were issued until the rights become exercisable.
If a person or group of affiliated or associated persons (an “Acquiring Person”) acquires 15% or more of our common stock in a transaction not pre-approved by our Board of Directors or if a person or group begins a tender offer or solicitationexchange offer which, if completed, would be
unlawful. Neitherresult in that person or group becoming an Acquiring Person, then, each right will become exercisable and entitle its holder, other than the deliveryacquirer, to receive for a $4 purchase price (i) one one-thousandth of this Prospectus nor any sale made hereunder
shall under any circumstances create any implicationa share of Series C Preferred Stock, or (ii) shares of our common stock having a then market value of $8.00, or (iii) if we are acquired in a merger or similar transaction, shares of the acquiring corporation that there has been no
change inhad a market value of $8.00 immediately prior to the affairsmerger or similar transaction. We may redeem the rights for a nominal amount before an event that causes the rights to become exercisable. For acquisitions of common stock by Jack Abuhoff, who is our Chairman and CEO, and Todd Solomon, who is a director of the Company, sincethe 15% percentage in this paragraph is changed to 25%.
Each one one-thousandth of a share of Series C Preferred Stock has substantially the same rights as one share of common stock. Stockholders may recognize taxable income should the rights become exercisable or upon the occurrence of certain events thereafter. The rights will expire on December 26, 2012, unless earlier redeemed by us for a nominal amount.
The Rights Agreement and related documents are attached as exhibit 4.1 to the Form 8-K that we filed with the SEC on December 20, 2002. The foregoing brief description is qualified in its entirety by reference to the Rights Agreement and related documents.
The Rights Plan is designed to discourage a merger or tender offer involving our securities that is not approved by our board of directors by increasing the cost of effecting this type of transaction.
Delaware Anti-Takeover Law
We are subject to Section 203 of the Delaware General Corporation Law. Section 203 generally prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date hereof.
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC Registration Fee $2,737.88
Accounting Feesof the transaction in which the person became an interested stockholder, unless:
| · | prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; |
| · | the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (a) shares owned by persons who are directors and also officers and (b) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
| · | on or subsequent to the date of the transaction, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least66 2/3% of the outstanding voting stock which is not owned by the interested stockholder. |
Section 203 generally defines a business combination to include:
| · | any merger or consolidation involving the corporation and the interested stockholder; |
| · | any sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation; |
| · | subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; and |
| · | the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and Expense 2,000.00
Legal Feesany entity or person affiliated with or controlling or controlled by the entity or person.
Special Meetings of Stockholders; Notice Requirements
Our Bylaws provide that the Chairman of our board of directors, a majority of our board of directors and Expenses 2,000.00
Miscellaneous 262.12
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Total $7,000.00
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All feesour Chief Executive Officer each has the power to call a special meeting of stockholders, and expensesthat stockholders do not have the power to call a special meeting of stockholders. Our Bylaws also provide that stockholders may propose nominees for election of directors, or propose other thanactions at annual or special meetings of stockholders, only if the SEC registration fee are estimated.
ITEM 15.stockholders give to us advance notice in the manner provided in the Bylaws. These notice procedures may prevent a contest for the election of directors or the consideration of stockholder proposals. This could deter a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposals, without regard to whether consideration of such nominees or proposals might be harmful or beneficial to us and our stockholders.
Directors’ Liability; Indemnification of Directors and Officers.
Officers
The Company has entered into agreementsis a Delaware corporation. Section 145 of the General Corporation Law of the State of Delaware (the “DGCL”) provides that a Delaware corporation may indemnify any persons who are, or are threatened to be made, parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of such corporation, by reason of the fact that such person is or was an officer, director, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise, if such person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with each directorrespect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. Section 145 of the DGCL further authorizes a corporation to purchase and maintain insurance on behalf of any indemnified person against any liability asserted against him or her and incurred by him or her in whichany indemnified capacity, or arising out of his or her status as such, regardless of whether the Company
agreescorporation would otherwise have the power to indemnify each directorhim or her under the DGCL.
Our Certificate of Incorporation provides that we will indemnify our directors and officerofficers, and the directors and officers of our subsidiaries, to the maximum extent permitted by law. The Company's Certificate of Incorporation provides that all directors,
officers, employees and agents of the Registrant shall be entitled to be
indemnified by the Company to the fullest extent permitted by law. TheOur Certificate of Incorporation also provides as follows:
Athat a director, or former director, shall not be liable to the corporationus or to any of itsour stockholders for monetary damages for breach of fiduciary duty as a director, it being provided that thissuch indemnity provision shalldoes not eliminate or limit the liability of a director: (i) for any breach of the director's duty of loyalty to the corporationus or itsto our stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 174 of the General Corporation Law of the State of Delaware, pertaining to the liability of directors for unlawful payment of dividends or unlawful stock purchase or redemption; or (iv) for any transaction from which the director derived an improper personal benefit. Our Bylaws provide that we shall indemnify our directors and officers to the fullest extent permitted by law, or as otherwise set forth in an indemnification agreement entered into between us and an officer or director. Furthermore, we have entered into agreements with our directors in which we agreed to indemnify the director to the maximum extent permitted by law. We also maintain directors’ and officers’ liability insurance.
Stock Transfer Agent
The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company.
Description of Preferred Stock
Our Certificate of Incorporation provides that our board of directors is authorized from time to time to issue up to an aggregate of 4,900,000 shares of preferred stock in one or more series. Our board of directors is also authorized, subject to the limitations prescribed by Delaware law, to establish the number of shares to be included in each series and to fix the designations, preferences, rights and any qualifications, limitations or restrictions of the shares of any series, including the dividend rights, dividend rates, conversion rights, voting rights, redemption terms and prices and liquidation preferences of shares constituting any series, as shall be determined by our board of directors in a resolution providing for the issuance of such preferred stock. As a result, the issuance of such preferred stock may adversely affect the voting or other rights of holders of common stock. No shares of preferred stock were outstanding as of June 14, 2012. The issuance of preferred stock or of rights to purchase preferred stock could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a controlling interest in our Company.
We will describe the specific terms of a particular series of preferred stock in the prospectus supplement relating to that series. The description of preferred stock above and the description of the terms of a particular series of preferred stock in the prospectus supplement are not complete. You should refer to the applicable certificate of designation for complete information. The prospectus supplement will also contain a description of U.S. federal income tax consequences relating to the preferred stock.
DESCRIPTION OF DEBT SECURITIES
The following is a summary of the general terms of the debt securities. We will file a prospectus supplement or term sheet that will contain additional terms when we issue debt securities. The terms presented here, together with the terms in a related prospectus supplement or term sheet, will be a description of the material terms of the debt securities. You should also read the indenture under which the debt securities are to be issued and the form of debt securities. Such indenture may be supplemented from time to time. We have filed a form of indenture governing different types of debt securities with the Securities and Exchange Commission as an exhibit to the registration statement of which this prospectus is a part. All capitalized terms have the meanings specified in the indenture.
We may issue, from time to time, debt securities, in one or more series. The debt securities we offer will be issued under an indenture between us and the trustee named in the indenture. These debt securities that we may issue include senior debt securities, senior subordinated debt securities, subordinated debt securities, convertible debt securities and exchangeable debt securities. The following is a summary of certain provisions of the form of the indenture filed as an exhibit to the registration statement of which this prospectus is a part. For each series of debt securities, the applicable prospectus supplement or term sheet for the series may change and supplement the summary below.
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General Terms of the Indenture
The indenture does not limit the amount of debt securities that we may issue. It provides that we may issue debt securities up to the principal amount that we may authorize. Except for the limitations on consolidation, merger and sale of all or substantially all of our assets contained in the indenture, the terms of the indenture do not contain any covenants or other provisions designed to give holders of any debt securities protection against changes in our operations, financial condition or transactions involving us. For each series of debt securities, any restrictive covenants for those debt securities will be described in the applicable prospectus supplement or term sheet for those debt securities.
We may issue the debt securities issued under the indenture as “discount securities,” which means they may be sold at a discount below their stated principal amount. These debt securities, as well as other debt securities that are not issued at a discount, may, for United States federal income tax purposes, be treated as if they were issued with “original issue discount,” or OID, because of interest payment and other characteristics. Special United States federal income tax considerations applicable to debt securities issued with original issue discount will be described in more detail in any applicable prospectus supplement or term sheet.
You should refer to the prospectus supplement or term sheet relating to a particular series of debt securities for a description of the following terms of the debt securities offered by that prospectus supplement or term sheet and by this prospectus:
| · | the title and authorized denominations of those debt securities; |
| · | the aggregate principal amount of the debt securities and any limit on the aggregate principal amount of that series of debt securities; |
| · | the date or dates on which principal and premium, if any, of the debt securities of that series are payable; |
| · | the interest rate or rates, and the dates from which interest, if any, on the debt securities of that series will accrue, and the dates when interest is payable or the method by which such dates are to be determined; |
| · | the right, if any, to extend the interest payment periods and the duration of the extensions; |
| · | if the amount of payments of principal or interest is to be determined by reference to an index or formula, or based on a coin or currency other than that in which the debt securities are stated to be payable, the manner in which these amounts are determined and the calculation agent, if any, with respect thereto; |
| · | the place or places where and the manner in which principal of, premium, if any, and interest, if any, on the debt securities of that series will be payable and the place or places where those debt securities may be presented for transfer and, if applicable, conversion or exchange; |
| · | the period or periods within which, the price or prices at which, the currency or currencies in which, and other terms and conditions upon which those debt securities may be redeemed, in whole or in part, at our option or the option of a holder of those securities, if we or a holder is to have that option; |
| · | our obligation or right, if any, to redeem, repay or purchase those debt securities pursuant to any sinking fund or analogous provision or at the option of a holder of those securities, and the terms and conditions upon which the debt securities will be redeemed, repaid or purchased, in whole or in part, pursuant to that obligation; |
| · | the terms, if any, on which the debt securities of that series will be subordinate in right and priority of payment to our other debt; |
| · | if other than the entire principal amount of the debt securities when issued, the portion of the principal amount payable upon acceleration of maturity as a result of a default on our obligations or how this portion will be determined; |
| · | whether those debt securities will be issued in fully registered form without coupons or in a form registered as to principal only with coupons or in bearer form with coupons; |
| · | whether any securities of that series are to be issued in whole or in part in the form of one or more global securities and the depositary for those global securities; |
| · | if other than United States dollars, the currency or currencies in which payment of principal of or any premium or interest on those debt securities will be payable; |
| · | if the principal of or any premium or interest on the debt securities of that series is to be payable, or is to be payable at our election or the election of a holder of those securities, in securities or other property, the type and amount of those securities or other property, or the manner of determining that amount, and the period or periods within which, and the terms and conditions upon which, any such election may be made; |
| · | any provisions granting special rights to the holders of debt securities upon the occurrence of specified events; |
| · | the events of default and covenants relating to the debt securities that are in addition to, modify or delete those described in this prospectus; |
| · | conversion or exchange provisions, if any, including conversion or exchange prices or rates and adjustments thereto; |
| · | whether and upon what terms the debt securities may be defeased, if different from the provisions set forth in the indenture; |
| · | the nature and terms of any security for any secured debt securities; |
| · | the terms applicable to any debt securities issued at a discount from their stated principal amount; and |
| · | any other specific terms of any debt securities. |
The applicable prospectus supplement or term sheet will present any material United States federal income tax considerations for holders of any debt securities and the securities exchange or quotation system on which any debt securities are to be listed or quoted.
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Conversion or Exchange Rights
Debt securities may be convertible into or exchangeable for shares of our equity securities or other securities. The terms and conditions of conversion or exchange will be stated in the applicable prospectus supplement or term sheet. The terms will include, among others, the following:
| · | the conversion or exchange ratio (or the calculation method); |
| · | the conversion or exchange period (or how the period will be determined); |
| · | provisions regarding our ability or the ability of any holder to convert or exchange the debt securities; |
| · | events requiring adjustment to the conversion or exchange ratio; and |
| · | provisions affecting conversion or exchange in the event of our redemption of the debt securities. |
These terms may also include provisions under which the number or amount of other securities to be received by the holders of the debt securities upon conversion or exchange would be calculated according to the market price of the other securities as of a time stated in the prospectus supplement or term sheet.
Reopening of Issue
We may, from time to time, reopen an issue of debt securities and issue additional debt securities with the same terms (including maturity date and interest rate) as debt securities issued on an earlier date. After such additional debt securities are issued, they will be fungible with the debt securities issued on the earlier date to the extent specified in the applicable prospectus supplement.
Consolidation, Merger or Sale
We cannot consolidate with or merge with or into, convey, transfer or lease all or substantially all of our properties and assets to, any person, unless we are the continuing or successor company or unless the successor entity or person to which our properties and assets are transferred or leased is organized under the laws of the United States, any state of the United States or the District of Columbia and expressly assumes by a supplemental indenture the due and punctual payment of the principal of, any premium on and any interest on, all the outstanding debt securities and the performance of every covenant and obligation in the indenture to be performed by us. In addition, we cannot complete such a transaction unless immediately after giving effect to the transaction, no event of default under the indenture, and no event that, after notice or lapse of time or both, would become an event of default under the indenture, has occurred and is continuing. When the successor entity or person to whom our assets are transferred or leased has assumed our obligations under the debt securities and the indenture, we will be discharged from all our obligations under the debt securities and the indenture except in limited circumstances.
This covenant would not apply to any recapitalization transaction, a change of control affecting us or a highly leveraged transaction, unless the transaction or change of control were structured to include a merger or consolidation or transfer or lease of all or substantially all of our properties and assets.
Events of Default
The indenture provides that the following will be “events of default” with respect to any series of debt securities:
| · | failure to pay interest for 30 days after the date payment is due and payable; provided, however, that a valid extension of the interest payment period in accordance with the indenture will not constitute a failure to pay interest; |
| · | failure to pay principal or premium, if any, on any debt security when due, either at maturity, upon any redemption, by declaration or otherwise and, in the case of technical or administrative difficulties, only if such default persists for a period of more than three business days; |
| · | failure to perform other covenants contained in the indenture for the benefit of the debt securities for 75 days after notice is given by the holders of at least 25% in principal amount of the outstanding debt securities of that series or by the trustee as specified in the indenture; |
| · | certain events in bankruptcy, insolvency or reorganization relating to us; or |
| · | any other event of default provided in the applicable officer’s certificate, resolution of our board of directors or the supplemental indenture under which we issue a series of debt securities. |
An event of default for a particular series of debt securities does not necessarily constitute an event of default for any other series of debt securities issued under the indenture. For each series of debt securities, any modifications to the above events of default will be described in the applicable prospectus supplement or term sheet for those debt securities.
The indenture provides that if an event of default occurs and is continuing with respect to any series of debt securities, either the trustee or the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series may declare the principal amount of all those debt securities (or, in the case of discount securities or indexed securities, that portion of the principal amount as may be specified in the terms of that series) to be due and payable immediately. If an event of default specified in the fourth bullet above occurs and is continuing, then the principal amount of all those debt securities (or, in the case of discount securities or indexed securities, that portion of the principal amount as may be specified in the terms of that series) will be due and payable immediately, without any declaration or other act on the part of the trustee or any holder. In certain cases, holders of a majority in principal amount of the outstanding debt securities of any series may, on behalf of holders of all those debt securities, rescind and annul a declaration of acceleration.
The indenture imposes limitations on suits brought by holders of debt securities against us. Except for actions to receive payment of principal, premium, if any, or interest, no holder of debt securities of any series may institute any action against us under the indenture unless:
| · | the holder has previously given to the trustee written notice of a default and continuance of such default; |
| · | the holders of at least 25% in principal amount of the outstanding debt securities of the affected series have requested that the trustee institute the action; |
| · | the requesting holders have offered the trustee indemnity for the reasonable costs, expenses and liabilities that may be incurred by bringing the action; |
| · | the trustee has not instituted the action within 60 days of the request and offer of indemnity; and |
| · | the trustee has not received inconsistent direction during such 60-day period by the holders of a majority in principal amount of the outstanding debt securities of the affected series. |
We will be required to file annually with the trustee a certificate, signed by one of our officers, stating whether or not the officer knows of any default by us in the performance, observance or fulfillment of any condition or covenant of the indenture.
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Discharge, Defeasance and Covenant Defeasance
We may discharge or decrease our obligations under the indenture as stated below.
We may discharge obligations to holders of any series of debt securities that have not already been delivered to the trustee for cancellation and that have either become due and payable or are by their terms to become due and payable, or are scheduled for redemption, within one year. We may effect a discharge by irrevocably depositing with the trustee cash or government obligations denominated in the currency of the debt securities, as trust funds, in an amount certified to be enough to pay when due, whether at maturity, upon redemption or otherwise, the principal of, and any premium and interest on, the debt securities and any mandatory sinking fund payments.
Unless otherwise provided in the applicable prospectus supplement or term sheet, we may also discharge any and all of our obligations to holders of any series of debt securities at any time, which we refer to as defeasance. We may also be released from the obligations imposed by certain covenants of any outstanding series of debt securities and provisions of the indenture, and we may omit to comply with those covenants without creating an event of default under the trust declaration, which we refer to as covenant defeasance. We may effect defeasance and covenant defeasance on the 91st day after the date of the deposit with the trustee described below only if, among other things:
| · | we irrevocably deposit with the trustee cash or government obligations denominated in the currency of the debt securities, as trust funds, in an amount certified to be enough to pay at maturity, or upon redemption, the principal (including any mandatory sinking fund payments) of, and any premium and interest on, all outstanding debt securities of the series; |
| · | no default under the indenture with respect to that series shall have occurred and be continuing on the date of such deposit or during the period ending on the 91st day after the date of deposit; and |
| · | we deliver to the trustee an opinion of counsel to the effect that the holders of the series of debt securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance or covenant defeasance and that defeasance or covenant defeasance will not otherwise alter the holders’ U.S. federal income tax treatment of principal, and any premium and interest payments on, the series of debt securities. |
In the case of a defeasance by us, the opinion we deliver must be based on a ruling of the Internal Revenue Service issued, or a change in U.S. federal income tax law occurring, after the date of the indenture, since such a result would not occur under the U.S. federal income tax laws in effect on that date.
Although we may discharge or decrease our obligations under the indenture as described in the three preceding paragraphs, we may not avoid, among other things, our duty to register the transfer or exchange of any series of debt securities, to replace any temporary, mutilated, destroyed, lost or stolen series of debt securities or to maintain an office or agency in respect of any series of debt securities.
Modification of the Indenture
The indenture provides that we and the trustee may enter into supplemental indentures without the consent of the holders of debt securities to, among other things:
| · | evidence the assumption by a successor entity of our obligations; |
| · | add to our covenants for the benefit of the holders of debt securities, or to surrender any rights or power conferred upon us; |
| · | add any additional events of default; |
| · | cure any ambiguity or omission or correct any inconsistency or defect in the indenture; |
| · | add to, change or eliminate any of the provisions of the indenture in a manner that will become effective only when there is no outstanding debt security which is entitled to the benefit of the provision as to which the modification would apply; |
| · | add guarantees of or secure any debt securities; |
| · | establish the forms or terms of debt securities of any series; |
| · | evidence and provide for the acceptance of appointment by a successor trustee and add to or change any of the provisions of the indenture as is necessary for the administration of the trusts by more than one trustee; |
| · | add to or change any of the provisions of the indenture to the extent necessary to permit or facilitate the issuance of debt securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons; |
| · | provide for uncertificated debt securities in addition to or in place of all, or any series of, certificated debt securities; |
| · | change any place or places where (a) the principal of or premium, if any, or interest, if any, on all or any series of debt securities shall be payable, (b) all or any series of debt securities may be surrendered for registration or transfer, (c) all or any series of debt securities may be surrendered for exchange or conversion, and (d) notices and demands to or upon us in respect of all or any series of debt securities and the indenture may be served; |
| · | supplement any of the provisions of the indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of debt securities, provided that any such action shall not adversely affect the interests of the holders of debt securities of such series or any other series in any material respect; |
| · | conform the terms of any series of debt securities to the description thereof in the prospectus and prospectus supplement (or similar offering document) offering such series of debt securities; |
| · | modify, eliminate or add to the provisions of the indenture as shall be necessary to effect the qualification of the indenture under the Trust Indenture Act of 1939 or under any similar federal statute later enacted, and to add to the indenture such other provisions as may be expressly required by the Trust Indenture Act of 1939; or |
| · | make any other provisions with respect to matters or questions arising under the indenture as long as the new provisions do not adversely affect the interests of the holders of any outstanding debt securities of any series created prior to the modification in any material respect. |
The indenture also provides that we and the trustee may, with the consent of the holders of not less than a majority in aggregate principal amount of debt securities of each series of debt securities affected by such supplemental indenture then outstanding, add any provisions to, or change in any manner, eliminate or modify in any way the provisions of, the indenture or any supplemental indenture or modify in any manner the rights of the holders of the debt securities. We and the trustee may not, however, without the consent of the holder of each outstanding debt security affected thereby:
| · | change the final maturity of any debt security; |
| · | change or reduce the principal amount or premium, if any; |
| · | change or reduce the interest rate; |
| · | change the method of calculating the interest rate; |
| · | reduce the amount of the principal of any debt security issued with an original issue discount that is payable upon acceleration; |
| · | change the currency in which the principal, and any premium or interest, is payable; |
| · | impair the right to institute suit for the enforcement of any payment on any debt security when due; |
| · | if applicable, adversely affect the right of a holder to convert or exchange a debt security; or |
| · | reduce the percentage of holders of debt securities of any series whose consent is required for any modification of the indenture or for waivers of compliance with or defaults under the indenture with respect to debt securities of that series. |
The indenture provides that the holders of not less than a majority in aggregate principal amount of the then outstanding debt securities of any series, by notice to the relevant trustee, may on behalf of the holders of the debt securities of that series waive any default and its consequences under the indenture except:
| · | a default in the payment of, any premium and any interest on, or principal of, any such debt security held by a nonconsenting holder; or |
| · | a default in respect of a covenant or provision of the indenture that cannot be modified or amended without the consent of the holder of each outstanding debt security of each series affected. |
Registered Global Securities and Book Entry System
The debt securities of a series may be issued in whole or in part in book-entry form and will be represented by one or more fully registered global securities. We will deposit any registered global securities with a depositary or with a nominee for a depositary identified in the applicable prospectus supplement or term sheet and registered in the name of such depositary or nominee. In such case, we will issue one or more registered global securities denominated in an amount equal to the aggregate principal amount of all of the debt securities of the series to be issued and represented by such registered global security or securities. This means that we will not issue certificates to each holder, except in the limited circumstances described below.
Unless and until it is exchanged in whole or in part for debt securities in definitive registered form, a registered global security may not be transferred except as a whole:
| · | by the depositary for the registered global security to its nominee; |
| · | by a nominee of the depositary to the depositary or another nominee of the depositary; or |
| · | by the depositary or its nominee to a successor of the depositary or a nominee of the successor. |
The prospectus supplement or term sheet relating to a series of debt securities will describe the specific terms of the depositary arrangement involving any portion of the series represented by a registered global security. We anticipate that the following provisions will apply to all depositary arrangements for debt securities:
| · | ownership of beneficial interests in a registered global security will be limited to persons that have accounts with the depositary for such registered global security, these persons being referred to as “participants,” or persons that may hold interests through participants; |
| · | upon the issuance of a registered global security, the depositary for the registered global security will credit, on its book-entry registration and transfer system, the participants’ accounts with the respective principal amounts of the debt securities represented by the registered global security beneficially owned by the participants; |
| · | any dealers, underwriters, or agents participating in the distribution of the debt securities will designate the accounts to be credited; and |
| · | ownership of beneficial interest in the registered global security will be shown on, and the transfer of the ownership interest will be effected only through, records maintained by the depositary for the registered global security for interests of participants, and on the records of participants for interests of persons holding through participants. |
The laws of some states may require that specified purchasers of securities take physical delivery of the securities in definitive form. These laws may limit the ability of those persons to own, transfer or pledge beneficial interests in registered global securities.
So long as the depositary for a registered global security, or its nominee, is the registered owner of the registered global security, the depositary or such nominee, as the case may be, will be considered the sole owner or holder of the debt securities represented by the registered global security for all purposes under the indenture. Except as stated below, owners of beneficial interests in a registered global security:
| · | will not be entitled to have the debt securities represented by a registered global security registered in their names; |
| · | will not receive or be entitled to receive physical delivery of the debt securities in the definitive form; and |
| · | will not be considered the owners or holders of the debt securities under the relevant indenture. |
Accordingly, each person owning a beneficial interest in a registered global security must rely on the procedures of the depositary for the registered global security and, if the person is not a participant, on the procedures of a participant through which the person owns its interest, to exercise any rights of a holder under the indenture.
We understand that under existing industry practices, if we request any action of holders or if an owner of a beneficial interest in a registered global security desires to give or take any action that a holder is entitled to give or take under the indenture, the depositary for the registered global security would authorize the participants holding the relevant beneficial interests to give or take the action, and the participants would authorize beneficial owners owning through the participants to give or take the action or would otherwise act upon the instructions of beneficial owners holding through them.
We will make payments of principal and premium, if any, and interest, if any, on debt securities represented by a registered global security registered in the name of a depositary or its nominee to the depositary or its nominee, as the case may be, as the registered owners of the registered global security. Neither we nor the trustee, or any other agent of ours or the trustee will be responsible or liable for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the registered global security or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests.
We expect that the depositary for any debt securities represented by a registered global security, upon receipt of any payments of principal and premium, if any, and interest, if any, in respect of the registered global security, will promptly credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the registered global security as shown on the records of the depositary. We also expect that standing customer instructions and customary practices will govern payments by participants to owners of beneficial interests in the registered global security held through the participants, as is the case with the securities held for the accounts of customers in bearer form or registered in “street name.” We also expect that any of these payments will be the responsibility of the participants.
If the depositary for any debt securities represented by a registered global security is at any time unwilling or unable to continue as depositary or stops being a clearing agency registered under the Exchange Act, we will appoint an eligible successor depositary. If we fail to appoint an eligible successor depositary within 90 days, we will issue the debt securities in definitive form in exchange for the registered global security. In addition, we may at any time and in our sole discretion decide not to have any of the debt securities of a series represented by one or more registered global securities. In that event, we will issue debt securities of the series in a definitive form in exchange for all of the registered global securities representing the debt securities. The trustee will register any debt securities issued in definitive form in exchange for a registered global security in the name or names as the depositary, based upon instructions from its participants, shall instruct the trustee.
We may also issue bearer debt securities of a series in the form of one or more global securities, referred to as “bearer global securities.” We will deposit these securities with a depositary identified in the prospectus supplement or term sheet relating to the series. The prospectus supplement or term sheet relating to a series of debt securities represented by a bearer global security will describe the applicable terms and procedures. These will include the specific terms of the depositary arrangement and any specific procedures for the issuance of debt securities in definitive form in exchange for a bearer global security, in proportion to the series represented by a bearer global security.
Concerning the Trustee
The indenture provides that there may be more than one trustee under the indenture, each for one or more series of debt securities. If there are different trustees for different series of debt securities, each trustee will be a trustee of a trust under the indenture separate and apart from the trust administered by any other trustee under that indenture. Except as otherwise indicated in this prospectus or any prospectus supplement or term sheet, any action permitted to be taken by a trustee may be taken by such trustee only on the one or more series of debt securities for which it is the trustee under the indenture. Any trustee under the indenture may resign or be removed from one or more series of debt securities. All payments of principal of, and any premium and interest on, and all registration, transfer, exchange, authentication and delivery of, the debt securities of a series will be effected by the trustee for that series at an office designated by the trustee in New York, New York.
The indenture provides that, except during the continuance of an event of default, the trustee will perform only such duties as are specifically set forth in the indenture. During the existence of an event of default, the trustee will exercise those rights and powers vested in it under the indenture and use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person’s own affairs.
If the trustee becomes a creditor of ours, the indenture places limitations on the right of the trustee to obtain payment of claims or to realize on property received in respect of any such claim as security or otherwise. The trustee may engage in other transactions. If it acquires any conflicting interest relating to any duties concerning the debt securities, however, it must eliminate the conflict or resign as trustee.
No Individual Liability of Incorporators, Stockholders, Officers or Directors
The indenture provides that no past, present or future incorporator, director, officer, stockholder or employee of ours, any of our affiliates, or any successor corporation, in their capacity as such, shall have any individual liability for any of our obligations, covenants or agreements under the debt securities or the indenture.
Governing Law
The indenture and the debt securities will be governed by, and construed in accordance with, the laws of the State of Delaware.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of common stock, preferred stock, debt securities, or any combination thereof. We may issue warrants independently or together with any other securities offered by any prospectus supplement and the warrants may be attached to or separate from the other offered securities. Each series of warrants will be issued under a separate warrant agreement to be entered into by us with a warrant agent, if any. The warrant agent, if any, will act solely as our agent in connection with the warrants and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. Further terms of the warrants and the applicable warrant agreements will be set forth in the applicable prospectus supplement.
The applicable prospectus supplement or term sheet relating to any particular issue of warrants will describe the terms of the warrants, including, as applicable, the following:
| · | the title of the warrants; |
| · | the aggregate number of the warrants; |
| · | the price or prices at which the warrants will be issued; |
| · | the designation, terms and number of shares of common stock, preferred stock or principal amount of debt securities purchasable upon exercise of the warrants; |
| · | the designation and terms of the offered securities, if any, with which the warrants are issued and the number of the warrants issued with each offered security; |
| · | the date, if any, on and after which the warrants and the related common stock or preferred stock or debt securities will be separately transferable; |
| · | the price at which each share of common stock, preferred stock or underlying debt securities purchasable upon exercise of the warrants may be purchased or the manner of determining such price; |
| · | the date on which the right to exercise the warrants shall commence and the date on which that right shall expire; |
| · | the minimum or maximum amount of the warrants which may be exercised at any one time; |
| · | information with respect to book- entry procedures, if any; |
| · | a discussion of certain federal income tax considerations; and |
| · | any other material terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants. |
We and the warrant agent may amend or supplement the warrant agreement for a series of warrants without the consent of the holders of the warrants issued thereunder to effect changes that are not inconsistent with the provisions of the warrants and that do not materially and adversely affect the interests of the holders of the warrants.
DESCRIPTION OF UNITS
We may issue, in one or more series, units consisting of common stock, preferred stock, debt securities and warrants or any combination of such securities. While the terms we have summarized below will apply generally to any units that we may offer under this prospectus, we will describe the particular terms of any series of units in more detail in the applicable prospectus supplement. The terms of any units offered under a prospectus supplement may differ from the terms described below.
General
Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security.
We will describe in the applicable prospectus supplement the terms of the series of units being offered, including:
| · | the material terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately; |
| · | any material provisions relating to the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and |
| · | if appropriate, any special United States federal income tax considerations applicable to the units. |
PLAN OF DISTRIBUTION
We may sell the securities from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or a combination of these methods. We may sell the securities separately or together:
| · | through one or more underwriters or dealers; |
| · | through agents; |
| · | directly to one or more other purchasers; or |
| · | otherwise through a combination of any of the above methods of sale. |
We may distribute the securities from time to time in one or more transactions:
| · | at a fixed price or prices, which may be changed; |
| · | at market prices prevailing at the time of sale; |
| · | at prices related to such prevailing market prices; |
| · | at varying prices determined at the time of sale; or |
| · | at negotiated prices or in competitive bid transactions. |
The accompanying prospectus supplement will set forth the terms of the offering and the method of distribution and will identify any firms acting as underwriters, dealers or agents in connection with the offering, including:
| · | the name or names of any underwriters, dealers or agents; |
| · | the purchase price of the securities and the proceeds to us from the sale; |
| · | any over-allotment options under which underwriters may purchase additional securities from us; |
| · | any underwriting discounts and other items constituting compensation to underwriters, dealers or agents; |
| · | any other offering expenses; |
| · | any discounts or concessions allowed or re-allowed or paid to dealers; |
| · | any securities exchange or the market on which the securities offered in the prospectus may be listed; |
| · | the method of distribution of the securities; and |
| · | the terms of any agreement, arrangement or understanding entered into with the underwriters or dealers. |
If underwriters are used in the sale, they will acquire the securities for their own account and may resell the securities from time to time in one or more transactions at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the securities will be subject to the conditions set forth in the applicable underwriting agreement. We may offer the securities to the public through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. Subject to certain conditions, the underwriters will be obligated to purchase all of the securities offered by the prospectus supplement, other than securities covered by any over-allotment option. Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may change from time to time. We may use underwriters with whom we have a material relationship. We will describe the nature of any such relationship in the prospectus supplement and will name the underwriter.
We may sell securities directly or through agents we designate from time to time. We will name any agent involved in the offering and sale of securities and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement states otherwise, our agent will act on a best-efforts basis for the period of its appointment.
We may authorize agents or underwriters to solicit offers by certain types of institutional investors to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation of these contracts in the prospectus supplement.
We may provide agents and underwriters with indemnification against civil liabilities, including liabilities under the Securities Act, or contribution with respect to payments that the agents or underwriters may make with respect to these liabilities. Underwriters, dealers and agents may engage in transactions with us, or perform services for us, in the ordinary course of business.
All securities we may offer, other than common stock, will be new issues of securities with no established trading market. Any underwriters may make a market in these securities, but will not be obligated to do so and may discontinue any market making at any time without notice. We cannot guarantee the liquidity of the trading markets for any securities.
Any underwriter may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum price. Syndicate-covering or other short-covering transactions involve purchases of the securities, either through exercise of the over-allotment option or in the open market after the distribution is completed, to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a stabilizing or covering transaction to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time.
The anticipated date of delivery of the securities offered by this prospectus will be described in the applicable prospectus supplement relating to the offering.
In compliance with the guidelines of the Financial Industry Regulatory Authority (“FINRA”), the aggregate maximum discount, commission, agency fees or other items constituting underwriting compensation to be received by any FINRA member or independent broker-dealer will not exceed 8% of the offering proceeds from any offering pursuant to this prospectus and any applicable prospectus supplement.
No FINRA member may participate in any offering of securities made under this prospectus if such member has a conflict of interest under FINRA Rule 5121, including if 5% or more of the net proceeds, not including underwriting compensation, of any offering of securities made under this prospectus will be received by a FINRA member participating in the offering or affiliates or associated persons of such FINRA members, unless a qualified independent underwriter has participated in the offering or the offering otherwise complies with FINRA Rule 5121.
We may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement so indicates, in connection with any derivative transaction, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and, if not identified in this prospectus, will be identified in the applicable prospectus supplement or a post-effective amendment to the registration statement of which this prospectus is a part. In addition, we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
LEGAL MATTERS
The validity of the securities being offered by this prospectus will be passed upon by Folger & Folger, New York, New York.
EXPERTS
Our consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended December 31, 2011, and the effectiveness of our internal control over financial reporting as of December 31, 2011, have been audited by J.H. Cohn LLP, an independent registered public accounting firm, as set forth in their reports thereon and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
As required by the Securities Act, we filed a registration statement relating to the securities offered by this prospectus with the SEC. This prospectus is a part of that registration statement, which includes additional information.
We file annual, quarterly and current reports, proxy statements and other information with theSEC under the Exchange Act. These filings are available to the public on the SEC’s website atwww.sec.gov.
You may also read and copy any document we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. We maintain a website at www.innodata.com where our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports are available without charge, as soon as reasonably practicable after those reports are filed with or furnished to the SEC.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to “incorporate by reference” the information we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus. Information that we file later with the SEC will automatically update information in this prospectus. In all cases, you should rely on the later information over different information included in this prospectus or the prospectus supplement. We incorporate by reference the following documents which have been filed with the SEC:
| · | Our Annual Report on Form 10-K for the year ended December 31, 2011 filed on February 28, 2012; |
| · | Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 filed on May 4, 2012; |
| · | Our Current Reports on Form 8-K filed on February 8, 2012, March 14, 2012, April 26, 2012 and June 7, 2012; |
| · | The description of our Company’s common stock contained in the Post-Effective Amendment No. 1 to our Company’s Registration Statement on Form SB-2 (Registration Statement No. 33-62012) filed with the Securities and Exchange Commission and effective as of June 21, 1994. |
All documents and reports that we file with the SEC (other than any portion of such filings that are furnished under applicable SEC rules rather than filed) pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (a) after the date of the initial registration statement and prior to effectiveness of the registration statement and (b) after the date of this prospectus and before the later of (1) the completion of the offering of the securities described in this prospectus and (2) the date we stop offering securities pursuant to this prospectus, shall be incorporated by reference in this prospectus from the date of filing of such documents.
These documents may also be accessed on our website atwww.innodata.com. Except as otherwisespecifically incorporated by reference in this prospectus, information contained in, or accessible through, our website is not a part of this prospectus. You may request, and we will provide you with, a copy of these filings, at no cost, by calling us at (201) 371-8000 or by writing to us at the following address: Three University Plaza, Suite 506, Hackensack, New Jersey 07601.
You should not assume that the information in this prospectus, the prospectus supplement, any applicable pricing supplement or any documents incorporated by reference is accurate as of any date other than the date of the applicable document. Any statement contained in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or any other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provision, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
| 22 |
INNODATA INC.
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
PROSPECTUS
____________, 2012
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
| Item 14. | Other Expenses of Issuance and Distribution |
The following table sets forth the estimated costs and expenses, other than underwriting discounts and commissions payable by us in connection with the offering of the securities being registered. All the amounts shows are estimates, except for the SEC registration fee:
| SEC registration fee | $ | 8,022 | ||
| Legal fees and expenses | * | |||
| Accounting fees and expenses | * | |||
| Printing fees | * | |||
| Trustee fee and expenses | * | |||
| Miscellaneous | - | |||
| Total | $ | * |
* Fees payable will depend on the securities offered, the number of issuances and the nature of the offerings, and cannot be estimated at this time, and accordingly, will be supplied in a prospectus supplement.
| Item 15. | Indemnification of Directors and Officers |
The Company is a Delaware corporation. Section 145 of the Delaware General Corporation Law concerning indemnification
of officers, directors, employees and agents is set forth below.
Section 145. Indemnificationthe State of officers, directors, employees and agents;
insurance.
(a) ADelaware (the “DGCL”) provides that a Delaware corporation may indemnify any personpersons who wasare, or is a party or isare threatened to be made, a partyparties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, (otherother than an action by or in the right of the corporation)such corporation, by reason of the fact that hesuch person is or was aan officer, director, officer, employee or agent of thesuch corporation, or is or was serving at the request of thesuch corporation as a director, officer, employee or agent of another corporation partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection withif such action, suit or proceeding if heperson acted in good faith and in a manner hethe person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe histhe person’s conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interestsSection 145 of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or isDGCL further authorizes a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such persons shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer, to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance on behalf of any indemnified person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any suchindemnified capacity, or arising out of his or her status as such, regardless of whether or not the corporation would otherwise have the power to indemnify him against
such liabilityor her under this section.
(h) For purposesthe DGCL.
Our Certificate of this section, references to "the corporation" shall
include, in additionIncorporation provides that we will indemnify our directors and officers, and the directors and officers of our subsidiaries, to the resulting corporation, any constituent corporation
(including any constituentmaximum extent permitted by law. Our Certificate of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, soIncorporation also provides that
any person who is or was a director, officer, employee or agentformer director, shall not be liable to us or to any of such
constituent corporation, or is or was serving at the requestour stockholders for monetary damages for breach of such constituent
corporationfiduciary duty as a director, officer, employeeit being provided that such indemnity provision does not eliminate or agentlimit the liability of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.a director: (i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall includefor any excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the requestbreach of the corporation" shall include any
service as a director, officer, employeedirector's duty of loyalty to us or agent of the corporation which
imposes duties on,to our stockholders; (ii) for acts or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who actedomissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 174 of the General Corporation Law of the State of Delaware, pertaining to the liability of directors for unlawful payment of dividends or unlawful stock purchase or redemption; or (iv) for any transaction from which the director derived an improper personal benefit. Our Bylaws provide that we shall indemnify our directors and officers to the fullest extent permitted by law, or as otherwise set forth in a manner he
reasonably believedan indemnification agreement entered into between us and an officer or director. Furthermore, we have entered into agreements with our directors in which we agreed to beindemnify the director to the maximum extent permitted by law. We also maintain directors’ and officers’ liability insurance.
| II-1 |
| Item 16. | Exhibits |
A list of exhibits filed with this registration statement is contained in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, (the "Securities Act") may be permitted to directors,
officers, and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnificationexhibits index, which 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 paymentincorporated by the Company of expenses incurred or paid by a director, officer
or controlling person of the Company 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 Company will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to the 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.
ITEM 16. Exhibits.
(23) (a) Consent of Oscar D. Folger (includes opinion required by
Exhibit 5)
(23) (b) Consent of Grant Thornton LLP
ITEM 17. UNDERTAKINGS
1. reference.
| Item 17. | Undertakings |
The undersigned registrant hereby undertakes:
(a)
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by sectionSection 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change to suchin the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation“Calculation of Registration Fee"Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change in theto such information set forth in the registration statement;
Provided,
Provided, however, that paragraphs (1)(a)(i), (ii) and (1)(a)(ii)(iii) above do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to sectionSection 13 or sectionSection 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(b)
(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.
(c)
(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.
2.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
| II-2 |
(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, in a primary offering of securities of the registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the registrant or used or referred to by the registrant;
(iii) The undersignedportion of any other free writing prospectus relating to the offering containing material information about the registrant hereby undertakesor its securities provided by or on behalf of the registrant; and
(iv) Any other communication that is an offer in the offering made by the registrant to the purchaser.
(6) 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 Section 15(d) of the Securities Exchange Act of 1934 (and where applicable, each filing of an employee benefit plan'splan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
3.
(7) The undersigned registrant hereby undertakes that for purposes of determining any liability under the Securities Act of1933, as amended, (i) the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act of 1933, as amended, shall be deemed to be part of this registration statement as of the time it was declared effective, and (ii) each post-effective amendment that contains a form of prospectus 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.
(8) The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of section 310 of the Trust Indenture Act (“Act”) in accordance with the rules and regulations prescribed by the Commission under section 305 (b) (2) of that Act.
(9) The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.
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Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions described in Item 15 or otherwise, the registrant 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 of 1933 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 Track
Data Corporationthe 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, Track Data Corporationthe 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 of 1933 and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the Citycity of New York,Hackensack, State of New YorkJersey, on June 14, 2012.
| INNODATA INC. | ||
| By | /s/ Jack S. Abuhoff | |
| Jack Abuhoff | ||
| Chairman of the Board, | ||
| Chief Executive Officer and President | ||
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Jack Abuhoff and Amy R. Agress and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution and re-substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to sign any registration statement for the 4th daysame offering covered by this registration statement that is to be effective on filing pursuant to Rule 462(b) promulgated under the Securities Act of December, 2000.
INNODATA CORPORATION
By /s/
--------------------------
Barry Hertz
Chairman1933, as amended, and all post-effective amendments thereto, and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the Board
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 attorneys-in-fact and agents or any of them, or his or her or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statementpre-effective amendment to the Registration Statement has been signed below by the following personsperson in the capacities and on the date stated.
dates indicated.
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| Signature | Title | Date | ||
| /s/ Jack S. Abuhoff | Chairman of the Board, | June 14, 2012 | ||
| Jack S. Abuhoff | Chief Executive Officer and President | |||
| /s/ O’Neil Nalavadi | Senior Vice President, | June 14, 2012 | ||
| O’Neil Nalavadi | Chief Financial Officer and Principal Accounting Officer | |||
| /s/ Todd H. Solomon | Director | June 14, 2012 | ||
| Todd H. Solomon | ||||
| /s/ Louise C. Forlenza | Director | June 14, 2012 | ||
| Louise C. Forlenza | ||||
| /s/ Haig S. Bagerdjian | Director | June 14, 2012 | ||
| Haig S. Bagerdjian | ||||
| /s/ Stewart R. Massey | Director | June 14, 2012 | ||
| Stewart R. Massey | ||||
| /s/ Anthea C. Stratigos | Director | June 14, 2012 | ||
| Anthea C. Stratigos | ||||
| /s/ Andargachew S. Zelleke | Director | June 14, 2012 | ||
| Andargachew S. Zelleke |
| II-6 |
EXHIBIT INDEX
| Exhibit Number | Description of Document | |
| 1.1* | Form of Underwriting Agreement | |
| 3.1 | Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(a) to our Form 10-K for the fiscal year ended December | |
| 3.2 | Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated December | |
| 3.3** | Certificate of Amendment of Certificate of Incorporation | |
| 4.1 | Specimen Stock Certificate (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form SB-2 filed on August 2, 1993 (No. 33-62012) | |
| 4.2 | Form of Rights Agreement, by and | |
| 4.3* | Form of Preferred Stock Certificate | |
| 4.4** | Form of Indenture | |
| 4.5* | Form of Warrant Agreement | |
| 4.6* | Form of Unit Agreement | |
| 5.1** | Opinion of Folger & Folger | |
| 10.1 | Form of Indemnification Agreement between us and our directors and one of our officers (filed as Exhibit 10.3 to our Form 10-K for the fiscal year ended December | |
| 23.1** | Consent of J.H. Cohn LLP | |
| 23.2** | Consent of Folger & Folger (contained in Exhibit 5.1) | |
| 24.1 | Power of Attorney (included in the signature page hereto) |
| * | To be filed, if necessary, by a post-effective amendment to the registration statement or as an exhibit to a document incorporated by reference herein. |
| ** | Filed herewith. |