AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 17, 2003
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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VICOM, INCORPORATED
(Exact name of registration as specified in its charter)
MINNESOTA 4813 41-1255001
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
9449 SCIENCE CENTER DRIVE
NEW HOPE, MINNESOTA 55428
(763) 504-3000
(Address, including zip code, and telephone number,
including area code of registrant's principal executive offices)
JAMES L. MANDEL
CHIEF EXECUTIVE OFFICER
9449 SCIENCE CENTER DRIVE
NEW HOPE, MINNESOTA 55428
(763) 504-3000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:
STEVEN M. BELL, ESQ.
9449 SCIENCE CENTER DRIVE
NEW HOPE, MINNESOTA 55428
(763) 504-3051
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED
SALE TO PUBLIC: As soon as practicable after this
registration statement becomes effective.
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If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective date registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to Offering Price Aggregate Registration
Securities to be Registered Be Registered Per Unit (1) Offering Price (1) Fee
--------------------------- ------------- ------------ ------------------ -------------
Shares of Common Stock par value $0.01 per share 1,792,856 $1.80 $3,227,141 $851.97
Shares of Common Stock, par value $0.01 per
share, underlying Warrants 537,857 $1.80 $968,143 $255.59
------------------------------------------------- ---------------- ------------------------ ---------------------- -----------
Totals 2,330,713 $1.80 $4,195,284 $1,107.56
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(C) under the Securities Act of 1933. Based on the closing
price for the common stock on October 13, 2003 as reported on The Nasdaq
SmallCap Market.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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(Subject to Completion) THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL SECURITIES AND WE ARE NOT SOLICITING OFFERS
TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS Issued October 17, 2003
VICOM, INCORPORATED
2,330,713
Shares of Common Stock
This Prospectus relates to the sale of up to 2,330,713 shares of our
common stock by certain selling shareholders some of which shares have been
purchased and others that may be purchased upon the exercise of common stock
purchase warrants.
We will receive proceeds upon any exercise of the warrants. See "Use of
Proceeds" on page 7.
Our common stock is traded on The Nasdaq SmallCap Market under the
symbol "VICM." On October 13, 2003, the closing sales price of our common stock
as reported by The Nasdaq SmallCap Market was $1.80 per share.
The selling shareholders may offer the shares through public or private
transactions, at prevailing market prices or at privately negotiated prices. The
selling shareholders may make sales directly to purchasers or through agents,
dealers or underwriters.
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YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS
BEGINNING ON PAGE 2 OF THIS PROSPECTUS.
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The Securities and Exchange Commission and state securities regulators
have not approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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THE DATE OF THIS PROSPECTUS IS OCTOBER 17, 2003.
Table of Contents
I. Prospectus Summary
II. Our Company
III. Risk Factors
IV. Forward-Looking Statements
V. Going Concern
VI. Use of Proceeds
VII. Dividend Policy
VIII. Selling Shareholders
IX. Plan of Distribution
X. Legal Matters
XI. Experts
XII. Where You Can Find More Information
XIII. Incorporation of Certain Information by Reference
XIV. Information Concerning Forward-Looking Statements
XV. Information Not Required in Prospectus
PROSPECTUS SUMMARY
This summary highlights selected information and does not contain all
the information that is important to you. You should carefully read this
prospectus and the documents we have referred you to in "Where You Can Find More
Information" on page 8 for more information about Vicom and our financial
statements. In this prospectus, references to "Vicom," "we," "us" "our" and
"Company" refer to Vicom, Incorporated and its subsidiaries.
OUR COMPANY
Vicom, Incorporated (Vicom) is a Minnesota corporation formed in
September 1975. Vicom is the parent corporation of two wholly-owned
subsidiaries, Corporate Technologies, USA, Inc. (CTU), and MultiBand, Inc.
(MultiBand).
Vicom completed an initial public offering in June 1984. In November
1992, Vicom became a non-reporting company under the Securities Exchange Act of
1934. In July 2000, Vicom regained its reporting company status. In December,
2000, Vicom stock began trading on the NASDAQ stock exchange under the symbol
VICM.
Vicom's website is located at: www.vicominc.net.
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Vicom recently expanded its efforts to establish itself within the
rapidly evolving telecommunications and computer industries. Effective December
31, 1998, Vicom acquired the assets of the Midwest region of Enstar Networking
Corporation (ENC), a data cabling and networking company. In late 1999, in the
context of a forward triangular merger, Vicom, to expand its range of computer
products and related services, purchased the stock of Ekman, Inc. d/b/a
Corporate Technologies, and merged Ekman, Inc. into the newly formed surviving
corporation, Corporate Technologies, USA, Inc. (CTU). CTU provides voice, data
and video systems and services to business and government. MultiBand, Inc. was
incorporated in February 2000. MultiBand, Inc provides voice, data and video
services to multiple dwelling units (MDU's).
As of September 30, 2003, CTU was providing telephone equipment and
service to approximately 800 customers, with approximately 10,000 telephones in
service. In addition, CTU provides computer products and services to
approximately 2,100 customers. Telecommunications systems distributed by CTU are
intended to provide users with flexible, cost-effective alternatives as compared
to systems available from major telephone companies, including those formerly
comprising the Bell System and from other interconnect telephone companies.
CTU provides a full range voice, data and video communications systems
and service, system integration, training and related communication sales and
support activities for commercial, professional and institutional customers,
most of which are located in Minnesota and North Dakota. CTU purchases products
and equipment from NEC America, Inc. (NEC), Cisco Systems, Inc. (Cisco), Nortel
Networks Corp. (Nortel), Tadiran Telecom, Inc. (Tadiran), and other
manufacturers of communications and electronic products and equipment. CTU uses
these products to design telecommunications systems to fit its customers'
specific needs and demands.
The products sold by CTU include Private Branch Exchange (PBX),
telephone systems, hubs and routers used as interconnection devices in computer
networks, personal computers, desktop video-conferencing units, and the wire and
cable products required to make all the other aforementioned products integrate
and operate as necessary. CTU has trained staff that install, maintain and
repair the products we sell. Repair of products is performed under either a time
and materials basis or an extended service contract basis, at the customer's
election, once the manufacturer's original warranty on a product has expired.
Extended service contracts offered by CTU generally range in length
from 12 to 36 months. The contracts provide for repair or replacement of all
broken or non-working materials and the labor necessary to make such repairs or
replacements, subject to exceptions for customer abuse or negligence and
problems due to fire, flood or other causes beyond CTU's control.
In February 2003, the Company formed a 50% owned subsidiary, Multiband
USA, Inc. This subsidiary will provide the digital satellite signal for private
cable operations to multiple dwelling units.
RISK FACTORS
Our operations and our securities are subject to a number of risks,
including but not limited to those described below. If any of the following
risks actually occur, the business, financial condition or operating results of
Vicom and the trading price or value of our common stock could be materially
adversely affected.
General
Vicom, since 1998, has taken several significant steps to reinvent and
reposition itself to take advantage of opportunities presented by a shifting
economy and industry environment.
Recognizing that voice, data and video technologies in the late
twentieth century were beginning to systematically integrate as industry
manufacturers were evolving technological standards from "closed" proprietary
networking architectures to a more "open" flexible and integrated approach,
Vicom, between 1998 and 2001, purchased three competitors which, in the
aggregrate, possessed expertise in data networking, voice and data cabling and
video distribution technologies.
In early 2000, Vicom created its Multiband subsidiary, employing the
aforementioned expertise, to provide communications and entertainment services
(local dial tone, long distance, high-speed internet and expanded satellite
television services) to residents in Multi-Dwelling-Unit properties (MDUs) on
one billing platform. Although Multiband related revenues (installations and
recurring subscriber fees) accounted for less than 10% of overall Vicom revenues
in 2002, Vicom expects Multiband related revenues to increase significantly in
2003 as a percentage of overall revenues. These revenues are expected to provide
higher gross margins than the company's more traditional sales to commercial
enterprises.
The specific risk factors, as detailed below, should be analyzed in the
context of the Company's anticipated Multiband related growth.
Net Losses
The Company had net losses of $4,438,059 for the fiscal year ended
December 31, 2002, $5,325,552 for the fiscal year ended December 31, 2001, and
$4,235,831 for the fiscal year ended December 31, 2000. Vicom may never be
profitable.
The prolonged effects of generating losses without additional funding
may restrict our ability to pursue our business strategy. Unless our business
plan is successful, an investment in our common stock may result in a complete
loss of an investor's capital.
If we cannot achieve profitability from operating activities, we may
not be able to meet:
o our capital expenditure objectives;
o our debt service obligations; or
o our working capital needs.
Dependence on Asset-Based Financing
Vicom currently depends on asset-based financing to purchase product,
and we cannot guarantee that such financing will be available in the future.
Furthermore, we need additional financing to support the anticipated growth of
our Multiband subsidiary. We cannot guarantee that we will be able to obtain
this additional financing.
However, the Company recently introduced a program where it can control
capital expenditures by contracting Multiband services and equipment through a
landlord or third party investor owned equipment program. This program both
significantly reduces any Company expenditures in a Multi-dwelling-unit
installation and permits the Company to record revenues from the third party
sale of said equipment.
Goodwill
In June 2001, the Financial Accounting Standards Board (FASB) adopted
Statement of Financial Accounting Standards (SFAS) 142, "Goodwill and Other
Intangible Assets" which changes the amortization rules on recorded goodwill
from a monthly amortization to a periodic "impairment" analysis for fiscal years
beginning after December 15, 2001. In 2002, the Company retained an independent
outside expert to evaluate the impact of this new Accounting standard and the
expert concluded there was no impairment to goodwill. However,
the Company could be subject to a determination that its goodwill is impaired in
the future. As of December 31, 2002, the Company had recorded goodwill of
approximately $2.7 million.
Deregulation
Several regulatory and judicial proceedings have recently concluded,
are underway or may soon be commenced that address issues affecting operations
and those of our competitors, which may cause significant changes to our
industry. We cannot predict the outcome of these developments, nor can we assure
you that these changes will not have a material adverse effect on us.
Historically, we have been a reseller of products and services, not a
manufacturer or carrier requiring regulation of its activities. Pursuant to
Minnesota statutes, our Multiband activity is specifically exempt from the need
to tariff our services in multiple dwelling units (MDUs). However, the
Telecommunications Act of 1996 provides for significant deregulation of the
telecommunications industry, including the local telecommunications and
long-distance industries. This federal statute and the related regulations
remain subject to judicial review and additional rule-makings of the Federal
Communications Commission, making it difficult to predict what effect the
legislation will have on us, our operations, and our competitors.
Dependence on Strategic Alliances
Vicom has a distribution agreement with NEC, its main supplier of
telecommunication products, which expires June 30, 2004. An interruption or
substantial modification of Vicom's distribution relationship with NEC could
have a material adverse effect on Vicom's business, operating results and
financial condition.
In addition, several suppliers, or potential suppliers of Vicom, such
as McLeod, WorldCom, WS Net, XO Communications and others have filed for
bankruptcy in recent years. While the financial distress of its suppliers or
potential suppliers could have a material adverse effect on Vicom's business,
Vicom believes that enough alternate suppliers exist to allow the Company to
execute its business plans.
Changes in Technology
A portion of our projected future revenue is dependent on public
acceptance of broadband, and expanded satellite television services. Acceptance
of these services is partially dependent on the infrastructure of the internet
and satellite television which is beyond Vicom's control. In addition, newer
technologies, such as video-on-demand, are being developed which could have a
material adverse effect on the Company's competitiveness in the marketplace if
Vicom is unable to adopt or deploy such technologies.
Attraction and Retention of Employees
Vicom's success depends on the continued employment of certain key
personnel, including executive officers. If Vicom were unable to continue to
attract and retain a sufficient number of qualified key personnel, its business,
operating results and financial condition could be materially and adversely
affected. In addition, Vicom's success depends on its ability to attract,
develop, motivate and retain highly skilled and educated professionals with a
wide variety of management, marketing, selling and technical capabilities.
Competition for such personnel is intense and is expected to increase in the
future.
Business Growth and Scalability
Vicom's Multiband subsidiary, as of September 30, 2003, was providing
communications and entertainment services to fourteen MDUs located in Minnesota,
North Dakota and Missouri. Vicom needs to provide products and services to
additional MDUs if it is to become profitable. Vicom may need to go beyond its
current geographic territory to increase its MDU customers and attract
additional financing.
In expanding the provision of its services to MDUs in its current
territories and beyond, Vicom needs to successfully overcome a number of the
factors listed above such as attracting the capital to finance expanded
installations, obtaining additional technical staff for installation and support
in its present markets and beyond; and extending its key vendor relationships
into other markets.
Intellectual Property Rights
Vicom relies on a combination of trade secret, copyright, and trademark
laws, license agreements, and contractual arrangements with certain key
employees to protect its proprietary rights and the proprietary rights of third
parties from which Vicom licenses intellectual property. If it was determined
that Vicom infringed the intellectual property rights of others, it could be
required to pay substantial damages or stop selling products and services that
contain the infringing intellectual property, which could have a material
adverse effect on Vicom's business, financial condition and results of
operations. Also, there can be no
assurance that Vicom would be able to develop non-infringing technology or that
it could obtain a license on commercially reasonable terms, or at all. Vicom's
success depends in part on its ability to protect the proprietary and
confidential aspects of its technology and the products and services it sells.
There can be no assurance that the legal protections afforded to Vicom or the
steps taken by Vicom will be adequate to prevent misappropriation of Vicom's
intellectual property.
Variability of Quarterly Operating Results; Seasonality
Variations in Vicom's revenues and operating results occur from quarter
to quarter as a result of a number of factors, including customer engagements
commenced and completed during a quarter, the number of business days in a
quarter, employee hiring and utilization rates, the ability of customers to
terminate engagements without penalty, the size and scope of assignments and
general economic conditions. Because a significant portion of Vicom's expenses
are relatively fixed, a variation in the number of customer projects or the
timing of the initiation or completion of projects could cause significant
fluctuations in operating results from quarter to quarter. Further, Vicom has
historically experienced a seasonal fluctuation in its operating results, with a
larger proportion of its revenues and operating income occurring during the
third quarter of the fiscal year.
Certain Anti-Takeover Effects
Vicom is subject to Minnesota statutes regulating business combinations
and restricting voting rights of certain persons acquiring shares of Vicom.
These anti-takeover statutes may render more difficult or tend to discourage a
merger, tender offer or proxy contest, the assumption of control by a holder of
a large block of Vicom's securities, or the removal of incumbent management.
Volatility of Vicom's Common Stock
The trading price of our common stock has been and is likely to be
volatile. The stock market has experienced extreme volatility, and this
volatility has often been unrelated to the operating performance of particular
companies. We cannot be sure that an active public market for our common stock
will continue after this offering. Investors may not be able to sell the common
stock at or above the price they paid for their common stock, or at all. Prices
for the common stock will be determined in the marketplace and may be influenced
by many factors, including variations in our financial results, changes in
earnings estimates by industry research analysts, investors' perceptions of us
and general economic, industry and market conditions.
Future Sales of Our Common Stock May Lower Our Stock Price
If our existing shareholders sell a large number of shares of our
common stock, the market price of the common stock could decline significantly.
The perception in the public market that our existing shareholders might sell
shares of common stock could depress our market price.
Forward-Looking Statements
This document contains forward-looking statements within the meaning of
federal securities law. Terminology such as "may," "will," "expect,"
"anticipate," "believe," "estimate," "continue," "predict," or other similar
words, identify forward-looking statements. These statements discuss future
expectations, contain projections of results of operations or of financial
condition or state other forward-looking information. Forward-looking statements
appear in a number of places in this prospectus and include statements regarding
our intent, belief or current expectation about, among other things, trends
affecting the industries in which we operate, as well as the industries we
service, and our business and growth strategies. Although we believe that the
expectations reflected in these forward-looking statements are based on
reasonable assumptions, forward-looking statements are not guarantees of future
performance and involve risks and uncertainties. Actual results may differ
materially from those predicted in the forward-looking statements as a result of
various factors, including those set forth in "Risk Factors."
GOING CONCERN
Should the Company not be able to satisfactorily receive many of the
items discussed previously under "Risk Factors", it may not be able to continue
as a going concern.
USE OF PROCEEDS
We will receive proceeds from any exercise of warrants sold under this
prospectus, those proceeds estimated to be $1,163,285, after payment of the
offering expenses and assuming the warrants are exercised. We have agreed to pay
all of the expenses related to this offering, estimated to be approximately
$20,000.
We expect to use the net proceeds from the exercise of the warrants
primarily for acquisitions, working capital and other general corporate
purposes, including expenditures for sales, marketing, fixed assets and
inventory. No specific amount has been allocated to any particular purpose.
Pending these uses, we intend to invest the net proceeds of this offering in
investment grade, interest-bearing securities.
DIVIDEND POLICY
We have never paid cash dividends on our common stock, nor do we have
plans to do so in the foreseeable future. The declaration and payment of any
cash dividends on our common stock in the future will be determined by our Board
of Directors, in its discretion, and will depend on a number of factors,
including our earnings, capital requirements and overall financial condition.
The holders of our Series A Cumulative Convertible Preferred Stock are
entitled to receive a cumulative dividend of 8% per year, payable quarterly, and
the holders of our Series B and Series C Cumulative Convertible Preferred Stock
are entitled to receive cumulative dividends of 10% per year, payable monthly.
The holders of our Series D Cumulative Convertible Preferred Stock are entitled
to receive a cumulative dividend of 14% per year, payable quarterly. The holders
of our Series E Cumulative Convertible Preferred Stock are entitled to receive a
cumulative dividend of 15% per year, payable quarterly in kind.
SELLING SHAREHOLDERS
This prospectus covers offers and sale of shares of our common stock by
the selling shareholders, which shares may be purchased upon exercise of
warrants.
The table below lists the selling shareholders, shows the shares of
common stock beneficially owned by each of the selling shareholders as of
September 30, 2003, and the shares offered for resale by each of the selling
shareholders. Beneficial ownership includes shares which the selling
shareholders can acquire upon exercise of the warrants (all of which are
currently exercisable) or of options exercisable currently or within 60 days
after September 30, 2003. Our registration of these shares does not necessarily
mean that any selling stockholder will sell all or any of their shares of common
stock. The "Shares Beneficially Owned After Offering" columns in the table
assume that all shares covered by this prospectus will be sold by the
shareholders and that no additional shares of common stock are bought or sold by
any selling shareholder. Except for the placement agent, or as noted in the
footnotes, no selling stockholder has had, within the past three years, any
position, office or other material relationships with us.
The information provided in the table is from the selling shareholders,
reports furnished to us under rules of the SEC, and our stock ownership records.
------------------------------------- ------------------------------------------------------ -------------- ------------------------
Shares Beneficially Shares Beneficially
Owned Prior Owned After
To Offering /1/ Offering /1/
------------------------------------- ------------------------------------------------------ -------------- ------------------------
Shares Total
Underlying Number of Shares
Beneficial Owner Shares/2/ Warrants Shares Percent/3/ To Be Sold Number Percent
------------------------------------- ----------- ---------------- ------------- ----------- -------------- -------------- ---------
Palisades Master Fund, L.P. 714,285 214,286 928,571 4.8% 928,571 0 0
------------------------------------- ----------- ---------------- ------------- ----------- -------------- -------------- ---------
Ellis International, LTD. 71,429 21,429 92,858 * 92,858 0 0
------------------------------------- ----------- ---------------- ------------- ----------- -------------- -------------- ---------
Bristol Investment Fund, LTD. 214,286 64,286 278,572 1.4% 278,572 0 0
------------------------------------- ----------- ---------------- ------------- ----------- -------------- -------------- ---------
Alpha Capital, AG 178,571 53,571 232,142 1.2% 232,142 0 0
------------------------------------- ----------- ---------------- ------------- ----------- -------------- -------------- ---------
Crescent International, LTD. 178,571 53,571 232,142 1.2% 232,142 0 0
------------------------------------- ----------- ---------------- ------------- ----------- -------------- -------------- ---------
Polaris Partners, L.P. 150,000 45,000 195,000 1.0% 195,000 0 0
------------------------------------- ----------- ---------------- ------------- ----------- -------------- -------------- ---------
RHP Master Fund, LTD. 142,857 42,857 185,714 * 185,714 0 0
------------------------------------- ----------- ---------------- ------------- ----------- -------------- -------------- ---------
Equitec Group, LLC 142,857 42,857 185,714 * 185,714 0 0
------------------------------------- ----------- ---------------- ------------- ----------- -------------- -------------- ---------
TOTAL 1,792,856 537,857 2,330,713 11.3% 2,330,713 0 0
------------------------------------- ----------- ---------------- ------------- ----------- -------------- -------------- ---------
PLAN OF DISTRIBUTION
The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:
---------------
* Less than one percent
/1/ Each person has sole voting and sole dispositive power with respect to all
outstanding shares, except as noted.
/2/ Excludes shares underlying warrants.
/3/ Based on an average of 18,339,053 shares outstanding at September 30, 2003,
and 18,876,910 shares outstanding after the exercise of warrants. Each
figure showing the percentage of outstanding shares owned beneficially has
been calculated by treating as outstanding and owned the shares which could
be purchased by the indicated person within 60 days upon the exercise of
stock options and warrants (including the warrants).
o Ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o Block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o Purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o An exchange distribution in accordance with the rules of the
applicable exchange;
o Privately negotiated transactions;
o Settlement of short sales;
o Broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
o A combination of any such methods of sale; and
o Any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock from
time to time under this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933
amending the list of Selling Stockholders to include the pledgee, transferee or
other successors in interest as Selling Stockholders under this prospectus.
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The Selling Stockholders have
informed the Company that it does not have any agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock.
The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 302A.251 of the Minnesota statutes, a corporation shall,
unless prohibited or limited by its Articles of Incorporation or Bylaws,
indemnify its directors, officers, employees and agents against judgments,
penalties, fines, settlements and reasonable expenses, including attorneys' fees
and disbursements, incurred by such person who was, or is threatened to be, made
a party to a proceeding by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation if generally, with
respect to the acts or omissions of the person complained of in the proceeding,
the person (i) has not been indemnified by another organization with respect to
the same acts or omissions; (ii) acted in good faith; (iii) received no improper
personal benefit; (iv) in the case of a criminal proceeding, had no reasonable
cause to believe the conduct was unlawful; and (v) reasonably believed the
conduct was in the best interest of the corporation or, in certain
circumstances, reasonably believed that the conduct was not opposed to the best
interests of the corporation. Minnesota corporate law also provides that a
corporation may purchase and maintain insurance on behalf of any indemnified
party against any liability asserted against such person, whether or not the
corporation would have been required to indemnify the person against liability
under the provisions of Minnesota corporate law. Vicom's Articles of
Incorporation provide for indemnification pursuant to Minnesota statutes. We
also have directors' and officers' insurance in the amount of $1,000,000 per
occurrence.
LEGAL MATTERS
The validity of the shares of common stock being offered by this
prospectus will be passed upon for us by Steven M. Bell, Esq. of New Hope,
Minnesota.
EXPERTS
The consolidated financial statements and Schedule II of Vicom,
Incorporated and Subsidiaries incorporated by reference in this prospectus for
the years ended December 31, 2002 and December 31, 2001 have been audited by
Virchow, Krause & Company, LLP, and for the year ended December 31, 2000 has
been audited by Lurie Besikof Lapidus & Company, LLP independent certified
public accountants, as indicated in their reports with respect thereto, and are
included in this prospectus in reliance upon the authority of such firm as
experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We will be filing annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission
under File No. 0-13529. You may read and copy any document in our public files
at the SEC's offices at:
o Judiciary Plaza
450 Fifth Street, NW
Room 1024
Washington, D.C. 20549
o 500 West Madison Street
Suite 1400
Chicago, Illinois 60606
o 3475 Lenox, N.E.
Suite 1000
Atlanta, Georgia 30326
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public from
the SEC's website at http://www.sec.gov, through the SEC's electronic data
gathering analysis and retrieval system, EDGAR. Our common stock is traded on
the NASDAQ Smallcap Market under the symbol "VICM." Information about us is also
available from the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
This prospectus is part of a registration statement that we filed with
the SEC. You should rely only on the information provided in this prospectus or
any supplement. We have not authorized anyone else to provide you with different
information. You should not assume that the information in this prospectus or
any supplement is accurate as of any date other than the date on the front of
that document.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, which we have filed with the Commission, are
incorporated by reference in this Prospectus:
o our Annual Report on Form 10-K for the fiscal year ended
December 31, 2002;
o our proxy statement for the 2002 Annual Meeting of
Shareholders;
o our quarterly reports on Form 10-Q for the quarters ended June
30, 2003 and March 31, 2003;
o our Forms 8-K filed September 24, 2003, October 26, 2001 and
8-K/A filed November 5, 2001; and
o the description of our common stock contained in our
Registration Statement on Form 10.
All documents we file in the future pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering are also incorporated by reference and are an
important part of this Prospectus. Any statement contained in a document
incorporated by reference in this Prospectus shall be modified or superseded for
purposes of this Prospectus to the extent that a statement contained in this
Prospectus or in any other subsequently filed document which is incorporated by
reference modifies or supersedes such statement.
We will provide without charge to each person to whom this Prospectus
is delivered, upon request, a copy of any or all documents that have been or may
be incorporated by reference in the Prospectus (other than exhibits to such
documents which are not specifically incorporated by reference into such
documents). Your requests should be directed to our Chief Financial Officer at
our principal executive offices at:
9449 Science Center Drive
New Hope, Minnesota 55428
Telephone Number (763) 504-3000
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
All statements contained in this Prospectus and the documents we
incorporate be reference that are not statements of historical fact are
"forward-looking statements". Sometimes these statements contain words like
"believe", "belief", "plan", "anticipate", "expect", "estimate", "may", "will",
or similar terms. Forward-looking statements involve known or unknown
uncertainties and other factors that could cause actual results to be materially
different from historical results or from any future results expressed or
implied by the forward-looking statements. The "Risk Factors" section of this
Prospectus, beginning on page 2, summarizes certain of the material risks and
uncertainties that could cause our actual results, performance or achievements
to differ materially from what we have said in this Prospectus and the documents
we incorporate by reference. The Risk Factors apply to all of our
forward-looking statements. Given these uncertainties, you should not place
undue reliance on these forward-looking statements, which speak only as of the
date of this Prospectus. We will not revise these forward-looking statements to
reflect events or circumstances after the date of this Prospectus or to reflect
the occurrence of unanticipated events.
Vicom,
Incorporated
2,330,713 Shares of Common Stock
----------
PROSPECTUS
----------
October 17, 2003
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth expenses and costs payable by the
Registrant expected to be incurred in connection with the issuance and
distribution of the securities described in this registration statement. All
amounts are estimated except for the Securities and Exchange Commission's
registration fee.
Amount
------
Registration fee under Securities Act........................... $1,108.00
Selling Agent's commissions..................................... $0.00
Legal fees and expenses......................................... $12,216.00
Accounting fees and expenses.................................... $4,410.00
Printing expenses............................................... $2,000.00
Registrar and transfer agent fees............................... $0.00
Miscellaneous expenses.......................................... $266.00
Total........................................................ $20,000.00
Item 15. Indemnification of Directors and Officers
Section 302A.521 of the Minnesota Statutes empowers a Minnesota
corporation to indemnify its officers and directors and certain other persons to
the extent and under the circumstances set forth therein.
Article VII of the Registrant's Articles of Incorporation eliminates
the liability of directors of the Registrant to the Registrant or its
shareholders for monetary damages for breach of fiduciary duty except for any
breach of a director's duty of loyalty to the Registrant or its shareholders,
for acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, under Sections 302A.559 of the Minnesota Statutes
(relating to illegal distributions) or Section 80A.23 of the Minnesota Statutes
(relating to securities law violations), for any transaction from which the
director derived an improper personal benefit; or for any act or omission
occurring prior to May 22, 1987, which is the date that this provision in the
Registrant's Articles became effective.
The above discussion of Section 302A.521 and of the Registrant's
Articles of Incorporation is not intended to be exhaustive and is respectively
qualified in its entirety by such statute and the Articles of Incorporation. The
Registrant has insurance in the amount of $1,000,000 per occurrence insuring its
directors and officers and those of its subsidiaries against certain liabilities
they may incur in their capacity as directors and officers.
Item 16. Exhibits and Financial Statement Schedules.
The following documents are filed as exhibits to this registration
statement:
Exhibit
No. Description
--- -----------
2.1 Asset Purchase Agreement and related documents with Enstar Networking
Corporation dated December 31, 1998(1)
2.2 Agreement and Plan of Merger with Ekman, Inc. dated December 29,
1999(1)
3.1 Amended and Restated Articles of Incorporation of Vicom, Inc.(1)
3.2 Restated Bylaws of Vicom, Incorporated(1)
3.3 Articles of Incorporation of Corporate Technologies, USA, Inc.(1)
3.4 Bylaws of Corporate Technologies, USA, Inc.(1)
4.1 Certificate of Designation of the Relative Rights, Restrictions and
Preferences of 8% Class A Cumulative Convertible Preferred Stock and
10% Class B Cumulative Convertible Preferred Stock dated December 9,
1998(1)
4.2 Form of Warrant Agreement(1)
4.3 Warrant Agreement with James Mandel dated December 29, 1999(1)
4.4 Warrant Agreement with Marvin Frieman dated December 29, 1999(1)
4.5 Warrant Agreement with Pierce McNally dated December 29, 1999(1)
4.6 Warrant Agreement with Enstar, Inc. dated December 29, 1999(1)
4.7 Warrant Agreement with David Ekman dated December 29, 1999(1)
4.8 Certificate of Designation of the Relative Rights, Restrictions and
Preferences of 10% Class C Cumulative Convertible Stock(6)
4.9 Certificate of Designation of the Relative Rights, Restrictions and
Preferences of 14% Class D Cumulative Convertible Stock(2)
4.10 Certificate of Designation of the Relative Rights, Restrictions and
Preferences of 15% Class E Cumulative Convertible Stock(2)
4.11 Securities Purchase Agreement Dated September 18, 2003(6)
5.1 Opinion of Steven M. Bell, Esq.(6)
10.1 Vicom Lease with Marbell Realty dated June 20, 1996(1)
10.2 Employment Agreement with Marvin Frieman dated October 1, 1996(1)
10.3 Employment Agreement with Steven Bell dated October 1, 1996(1)
10.4 Employment Agreement with James Mandel dated August 14, 1998(1)
10.5 Vicom Associate Agreement with NEC America, Inc. dated June 1999(1)
10.6 Loan Agreement with Wells Fargo dated June 17, 1999(1)
10.7 Employment Agreement with David Ekman dated December 29, 1999(1)
10.8 Debenture Loan Agreement with Convergent Capital dated March 9, 2000(1)
10.9 Corporate Technologies, USA, Inc. lease with David Ekman dated January
19, 2000(1)
10.10 Amendment dated July 11, 2000 to debenture loan agreement with
Convergent Capital dated March 9, 2000.(2)
10.11 Corporate Technologies agreement with Siemens dated December 14,
2001(4)
10.12 Note with Pyramid Trading, L.P. (4)
10.14 Employment Agreement of Steven M. Bell dated January, 1, 2002(5)
10.15 Employment Agreement of James Mandel dated January 1, 2002(5)
19.1 2000 Non-Employee Director Stock Compensation Plan(3)
19.2 2000 Employee Stock Purchase Plan(3)
21.1 List of subsidiaries of the registrant(1)
23.1 Consent of Virchow, Krause & Company, LLP(7)
23.2 Consent of Lurie Besikof Lapidus & Company, LLP(7)
24.1 Power of Attorney (included on signature page of original registration
statement)
99.1 Section 906 of Sarbanes-Oxley Act of 2002 - James Mandel
99.2 Section 906 of Sarbanes-Oxley Act of 2002 - Steven Bell
(1) Previously filed as the same exhibit to the Registrant's Registration
Statement on Form 10, as amended.
(2) Previously filed as the same exhibit to the original Registration
Statement on Form S-1 filed on August 11, 2000 and declared effective
on August 18, 2000.
(3) Previously filed as the same exhibit to Registrant's Proxy Statement on
Form 14A, filed on July 31, 2000.
(4) Previously filed as the same exhibit to the original Registration
Statement on Form S-1 filed on August 15, 2001 and declared effective
on August 20, 2001.
(5) Previously filed as the same exhibit to Registrant's Form 10-Q, filed
May 15, 2002
(6) Previously filed as the same exhibit to registrant's Form 8-K filed
September 24, 2003.
(7) Filed herewith.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(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 section
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 in 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 Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
(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.
(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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual reports 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'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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, 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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1993, 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 shall be deemed to be part of
this registration statement as of the time it was declared
effective.
(2) For purposes of determining any liability under the Securities
Act of 1993, 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this registration statement on Form S-3 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
Hope, State of Minnesota, on October 17, 2003.
VICOM, INCORPORATED
By:
-----------------------------
Steven M. Bell
President and Chief Financial Officer
Pursuant to the requirements of the Securities Act, this registration
statement on Form S-3 has been signed by the following persons in their
capacities indicated as of October 17, 2003.
Signature Title
--------- -----
/s/ Steven M. Bell President, Chief Financial Officer and Director
------------------------------ (Principal Financial and Accounting Officer)
Steven. M. Bell
/s/ James L. Mandel Chief Executive Officer and Director (Principal Executive Officer)
------------------------------
James L. Mandel
Jonathan Dodge
/s/ Jonathan Dodge Director
------------------------------
/s/ David Ekman Director
------------------------------
David Ekman
/s/ Donald Miller Director and Chairman
------------------------------
Donald Miller
/s/ David Weiss Director
------------------------------
David Weiss
/s/ Frank Bennett Director
------------------------------
Frank Bennett
*By:
Steven M. Bell
Attorney-in-Fact
INDEX TO EXHIBITS
Exhibit
No. Description
--- -----------
2.1 Asset Purchase Agreement and related documents with Enstar Networking
Corporation dated December 31, 1998(1)
2.2 Agreement and Plan of Merger with Ekman, Inc. dated December 29,
1999(1)
3.1 Amended and Restated Articles of Incorporation of Vicom, Inc.(1)
3.2 Restated Bylaws of Vicom, Incorporated(1)
3.3 Articles of Incorporation of Corporate Technologies, USA, Inc.(1)
3.4 Bylaws of Corporate Technologies, USA, Inc.(1)
4.1 Certificate of Designation of the Relative Rights, Restrictions and
Preferences of 8% Class A Cumulative Convertible Preferred Stock and
10% Class B Cumulative Convertible Preferred Stock dated December 9,
1998(1)
4.2 Form of Warrant Agreement(1)
4.3 Warrant Agreement with James Mandel dated December 29, 1999(1)
4.4 Warrant Agreement with Marvin Frieman dated December 29, 1999(1)
4.5 Warrant Agreement with Pierce McNally dated December 29, 1999(1)
4.6 Warrant Agreement with Enstar, Inc. dated December 29, 1999(1)
4.7 Warrant Agreement with David Ekman dated December 29, 1999(1)
4.8 Certificate of Designation of the Relative Rights, Restrictions and
Preferences of 10% Class C Cumulative Convertible Stock(6)
4.9 Certificate of Designation of the Relative Rights, Restrictions and
Preferences of 14% Class D Cumulative Convertible Stock(2)
4.10 Certificate of Designation of the Relative Rights, Restrictions and
Preferences of 15% Class E Cumulative Convertible Stock(2)
4.11 Securities Purchase Agreement Dated September 18, 2003(6)
5.1 Opinion of Steven M. Bell, Esq.(6)
10.1 Vicom Lease with Marbell Realty dated June 20, 1996(1)
10.2 Employment Agreement with Marvin Frieman dated October 1, 1996(1)
10.3 Employment Agreement with Steven Bell dated October 1, 1996(1)
10.4 Employment Agreement with James Mandel dated August 14, 1998(1)
10.5 Vicom Associate Agreement with NEC America, Inc. dated June 1999(1)
10.6 Loan Agreement with Wells Fargo dated June 17, 1999(1)
10.7 Employment Agreement with David Ekman dated December 29, 1999(1)
10.8 Debenture Loan Agreement with Convergent Capital dated March 9, 2000(1)
10.9 Corporate Technologies, USA, Inc. lease with David Ekman dated January
19, 2000(1)
10.10 Amendment dated July 11, 2000 to debenture loan agreement with
Convergent Capital dated March 9, 2000.(2)
10.11 Corporate Technologies agreement with Siemens dated December 14,
2001(4)
10.12 Note with Pyramid Trading, L.P. (4)
10.14 Employment Agreement of Steven M. Bell dated January, 1, 2002(5)
10.15 Employment Agreement of James Mandel dated January 1, 2002(5)
19.1 2000 Non-Employee Director Stock Compensation Plan(3)
19.2 2000 Employee Stock Purchase Plan(3)
21.1 List of subsidiaries of the registrant(1)
23.1 Consent of Virchow, Krause & Company, LLP(7)
23.2 Consent of Lurie Besikof Lapidus & Company, LLP(7)
24.1 Power of Attorney (included on signature page of original registration
statement)
99.1 Section 906 of Sarbanes-Oxley Act of 2002 - James Mandel
99.2 Section 906 of Sarbanes-Oxley Act of 2002 - Steven Bell
(1) Previously filed as the same exhibit to the Registrant's Registration
Statement on Form 10, as amended.
(2) Previously filed as the same exhibit to the original Registration
Statement on Form S-1 filed on August 11, 2000 and declared effective
on August 18, 2000.
(3) Previously filed as the same exhibit to Registrant's Proxy Statement on
Form 14A, filed on July 31, 2000.
(4) Previously filed as the same exhibit to the original Registration
Statement on Form S-1 filed on August 15, 2001 and declared effective
on August 20, 2001.
(5) Previously filed as the same exhibit to Registrant's Form 10-Q, filed
May 15, 2002
(6) Previously filed as the same exhibit to registrant's Form 8-K filed
September 24, 2003.
(7) Filed herewith.