As filed with the Securities and Exchange Commission on June 27,
2018
Registration No. 333-_______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
IMAGEWARE SYSTEMS, INC.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware
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33-0224167
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification Number)
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10815 Rancho Bernardo Road, Suite 310
San Diego, California 92127
(858) 673-8600
(Address, Including Zip Code, and Telephone Number, Including Area
Code, of Registrant’s Principal Executive
Offices)
S. James Miller, Jr.
President and Chief Executive Officer
ImageWare Systems, Inc.
10815 Rancho Bernardo Road, Suite 310
San Diego, California 92127
(858) 673-8600
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent for Service)
Copies to
Daniel W. Rumsey, Esq.
Jessica R. Sudweeks, Esq.
Disclosure Law Group, a Professional Corporation
600 West Broadway, Suite 700
San Diego, CA 92101
(619) 272-7050
Approximate date of
commencement of proposed sale to the public
: From time to time after this registration
statement becomes effective, as determined by market conditions and
other factors.
If
the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check
the following box. [ ]
If
any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [X]
If
this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. [ ]
If
this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same
offering. [ ]
If
this 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 Commission pursuant to Rule
462(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 the definitions of “large accelerated
filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):
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Large accelerated filer
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[ ]
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Accelerated
filer
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[X]
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Non-accelerated
filer
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[ ]
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Smaller reporting company
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[ ]
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Emerging
growth company
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[ ]
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The Registrant submits this Registration Statement pursuant to
General Instruction I.B.1 to Form S-3. As of May 31, 2018, the
aggregate market value of the Registrant’s outstanding common
stock held by non-affiliates was approximately $89.3 million based
on 58,364,201 shares of the Registrant’s outstanding
common stock held by non-affiliates as of such date at a price per
share of $1.53, the closing of the Registrant’s common stock
on May 31, 2018, as reported on the OTCQB Marketplace.
CALCULATION OF REGISTRATION FEE
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Title of each class of securities to
be registered
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Amount to be Registered
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Proposed
Maximum Offering Price Per Unit
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Proposed Maximum Aggregate
Offering
Price
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Amount of
Registration
Fee
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Common
Stock, par value $0.01 per share
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(1
)
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(2
)
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(2
)
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-
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Preferred
Stock, par value $0.01 per share
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(1
)
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(2
)
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(2
)
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-
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Warrants
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(1
)
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(2
)
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(2
)
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-
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Units
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(1
)
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(2
)
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(2
)
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-
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Total
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(1
)
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(2
)
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$
25,000,000
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$
3,112.50(3)
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(1)
There are being registered hereunder such
indeterminate number of shares of common stock and preferred stock,
and such indeterminate number of warrants and units as shall have
an aggregate offering price not to exceed $25,000,000. Any
securities registered hereunder may be sold separately or in
combination with other securities registered hereunder as units.
The securities registered herein also include such indeterminate
number of shares of common stock as may be issued upon exercise of
warrants or pursuant to anti-dilution provisions of any such
securities. In addition, pursuant to Rule 416 under the
Securities Act of 1933, as amended (the
“Securities
Act
”), the shares being
registered hereunder include such indeterminate number of shares of
common stock as may be issuable with respect to the shares being
registered hereunder as a result of stock splits, stock dividends
or similar transactions.
(2)
The proposed maximum aggregate offering price per share will be
determined from time to time by the Registrant in connection with
the issuance by the Registrant of the securities registered
hereunder and is not specified as to each class of
securities.
(3)
Calculated
pursuant to Rule 457(o) under the Securities Act.
The Registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically
states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the registration statement shall become effective on
such date as the Commission, acting pursuant to said section 8(a),
may determine.
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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 these securities
and it is not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
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PRELIMINARY
PROSPECTUS
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SUBJECT TO
COMPLETION
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DATED JUNE 27,
2018
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$
25,000,000
COMMON STOCK
PREFERRED STOCK
WARRANTS
UNITS
From time to time, we may offer and sell, in one or more offerings,
up to $25,000,000 of any combination of the securities described in
this prospectus. We may also offer securities as may be issuable
upon conversion, repurchase, exchange or exercise of any securities
registered hereunder, including any applicable anti-dilution
provisions.
We will provide the specific price and number of securities issued
in supplements to this prospectus. You should read this prospectus
and the accompanying prospectus supplement carefully before you
invest.
This prospectus provides a general description of the securities we
may offer from time to time. Each time we offer securities, we will
provide specific terms of the securities offered in a supplement to
this prospectus. We may also authorize one or more free writing
prospectuses to be provided to you in connection with an offering.
The prospectus supplement and any related free writing prospectus
may also add, update or change information contained in this
prospectus. You should carefully read this prospectus, the
applicable prospectus supplement and any related free writing
prospectus, as well as any documents incorporated by reference,
before you invest in any of the securities being
offered.
Our common stock is currently listed for quotation on the OTCQB
Marketplace under the symbol “IWSY.” The last reported
sales price of our common stock on June 27, 2018 was $1.28 per
share.
We may offer and sell our securities to or through one or more
agents, underwriters, dealers or other third parties, or directly
to one or more purchasers on a continuous or delayed basis. If
agents, underwriters or dealers are used to sell our securities, we
will name them and describe their compensation in a prospectus
supplement. The price to the public of our securities and the net
proceeds we expect to receive from the sale of such securities will
also be set forth in a prospectus supplement. For additional
information on the methods of sale, you should refer to the section
entitled “
Plan of
Distribution
” in this
prospectus.
Our business and investing in our
securities involves significant risks. You should review carefully
the risks and uncertainties referenced under the heading
“
Risk
Factors
” on page 5
of this prospectus, as well as those contained in
the applicable prospectus supplement and any related free writing
prospectus, and in the other documents that are incorporated by
reference into this prospectus or the applicable prospectus
supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is
[ ],
2018
IMAG
EWARE SYSTEMS, INC.
TAB
L
E OF CONTENTS
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ABOUT THIS P
R
OSPECTUS
This prospectus is part of a registration statement filed with the
Securities and Exchange Commission
(the “
SEC
”), using a “shelf” registration
process. Under this shelf registration process, we may sell
the securities described in this prospectus in one or more
offerings. This prospectus provides you with a general
description of the securities which may be offered. Each time
we offer securities for sale, we will provide a prospectus
supplement that contains information about the specific terms of
that offering. Any prospectus supplement may also add or update
information contained in this prospectus. You should read both
this prospectus and any prospectus supplement together with
additional information described below under
“
Where You Can Find More
Information
” and
“
Incorporation of Certain
Information by Reference
.”
You should rely only on the information contained or incorporated
by reference in this prospectus, and in any prospectus
supplement. We have not authorized any other person to provide
you with different information. If anyone provides you with
different or inconsistent information, you should not rely on
it. We are not making offers to sell or solicitations to buy
the securities described in this prospectus in any jurisdiction in
which an offer or solicitation is not authorized, or in which the
person making that offer or solicitation is not qualified to do so
or to anyone to whom it is unlawful to make an offer or
solicitation. You should not assume that the information in
this prospectus or any prospectus supplement, as well as the
information we file or previously filed with the SEC that we
incorporate by reference in this prospectus or any prospectus
supplement, is accurate as of any date other than its respective
date. Our business, financial condition, results of operations
and prospects may have changed since those dates.
This prospectus contains summaries of certain provisions contained
in some of the documents described herein, but reference is made to
the actual documents for complete information. All of the summaries
are qualified in their entirety by the actual documents. Copies of
some of the documents referred to herein have been filed, will be
filed or will be incorporated by reference as exhibits to the
registration statement of which this prospectus is a part, and you
may obtain copies of those documents as described below under the
heading “
Where You Can Find More
Information.
”
BUSI
N
ESS
OVERVIEW
This summary highlights information
contained elsewhere in this prospectus. This summary does not
contain all the information you should consider before buying our
securities. You should read the following summary together with the
more detailed information appearing in this prospectus, including
the section titled “Risk Factors” on page
5
, before deciding whether to purchase shares of
our securities.
All brand names or trademarks appearing in this report are the
property of their respective holders. Unless the context requires
otherwise, references in this report to “ImageWare,”
“ImageWare Systems,” the “Company,”
“we,” “us,” and “our” refer to
ImageWare Systems, Inc., a Delaware corporation.
Overview
We develop mobile and cloud-based identity management solutions
providing biometric, secure credential and law enforcement
technologies. Our patented biometric product line includes our
flagship product, the IWS Biometric Engine®, a hardware and
algorithm independent multi-biometric engine that enables the
enrollment and management of unlimited population sizes. Our
identification products are used to manage and issue secure
credentials, including national IDs, passports, driver licenses and
access control credentials. Our digital booking products provide
law enforcement with integrated mug shots, fingerprint LiveScan and
investigative capabilities. We also provide comprehensive
authentication security software using biometrics to secure
physical and logical access to facilities or computer networks or
internet sites. We are headquartered in San Diego, California,
with offices in Portland, Oregon, Mexico, and Ottawa,
Ontario.
We are also a leading developer of mobile and cloud-based identity
management solutions providing patented biometric authentication
solutions for the enterprise. We deliver next-generation biometrics
as an interactive and scalable cloud-based solution. We bring
together cloud and mobile technology to offer multi-factor
authentication for smartphone users, for the enterprise, and across
industries. We have introduced a set of mobile and cloud solutions
to provide biometric user authentication, including the
GoVerifyID® mobile application and cloud-based SaaS solutions.
These solutions include GoMobile Interactive
(“
GMI
”), which provides patented, secure, dynamic
messaging. More recently we have introduced GoVerifyID®
Enterprise Suite, which provides turnkey integration with Microsoft
Windows, Microsoft Active Directory, and security products from CA,
HPE, IBM, and SAP. These solutions are marketed and sold to
businesses across many industries. For the healthcare industry, we
also developed and market a patented, FDA-Cleared,
biometrically-secured, enterprise-level platform for patient
engagement and medication adherence.
Historically, we have marketed our products to government entities
at the federal, state and local levels; however, the emergence of
cloud based computing, a mobile market that demands increased
security and interoperable systems, and the proven success of our
products in the government markets, has enabled us to enlarge our
target market focus to include the emerging consumer and
non-government enterprise marketplace.
Our biometric technology is a core software component of an
organization’s security infrastructure and includes a
multi-biometric identity management solution for enrolling,
managing, identifying and verifying the identities of people by the
physical characteristics of the human body. We develop, sell and
support various identity management capabilities within government
(federal, state and local), law enforcement, commercial
enterprises, and transportation and aviation markets for
identification and verification purposes. Our IWS Biometric Engine
is a patented biometric identity management software platform for
multi-biometric enrollment, management and authentication, managing
population databases of virtually unlimited sizes. It is hardware
agnostic and can utilize different types of biometric
algorithms. It allows different types of biometrics to be
operated at the same time on a seamlessly integrated
platform. It is also offered as a Software Development Kit
(“
SKD
”) based search engine, enabling developers
and system integrators to implement a biometric solution or
integrate biometric capabilities into existing applications without
having to derive biometric functionality from pre-existing
applications. The IWS Biometric Engine combined with our
secure credential platform, IWS EPI Builder, provides a
comprehensive, integrated biometric and secure credential solution
that can be leveraged for high-end applications such as passports,
driver licenses, national IDs, and other secure
documents.
Our law enforcement solutions enable agencies to quickly capture,
archive, search, retrieve, and share digital images, fingerprints
and other biometrics as well as criminal history records on a
stand-alone, networked, wireless or web-based platform. We develop,
sell and support a suite of modular software products used by law
enforcement and public safety agencies to create and manage
criminal history records and to investigate crime. Our IWS Law
Enforcement solution consists of five software modules: Capture and
Investigative modules, which provide a criminal booking system with
related databases as well as the ability to create and print mug
photo/SMT image lineups and electronic mug-books; a Facial
Recognition module, which uses biometric facial recognition to
identify suspects; a Web module, which provides access to centrally
stored records over the Internet in a connected or wireless
fashion; and a LiveScan module, which incorporates LiveScan
capabilities into IWS Law Enforcement providing integrated
fingerprint and palm print biometric management for civil and law
enforcement use. The IWS Biometric Engine is also available to
our law enforcement clients and allows them to capture and search
using other biometrics such as iris or DNA.
Our secure credential solutions empower customers to create secure
and smart digital identification documents with complete ID
systems. We develop, sell and support software and design systems
which utilize digital imaging and biometrics in the production of
photo identification cards, credentials and identification systems.
Our products in this market consist of IWS EPI Suite and IWS EPI
Builder. These products allow for production of digital
identification cards and related databases and records and can be
used by, among others, schools, airports, hospitals, corporations
or governments. We have added the ability to incorporate multiple
biometrics into the ID systems with the integration of IWS
Biometric Engine to our secure credential product
line.
Our GoVerifyID products support multi-modal biometric
authentication including, but not limited to, face, voice,
fingerprint, iris, palm, and more. All the biometrics can be
combined with or used as replacements for authentication and access
control tools, including tokens, digital certificates, passwords,
and PINS, to provide the ultimate level of assurance,
accountability, and ease of use for corporate networks, web
applications, mobile devices, and PC desktop environments.
GoVerifyID provides patented multi-modal biometric identity
authentication that can be used in place of passwords or as a
strong second factor authentication method. GoVerifyID is provided
as a cloud-based Software-as-a-Service (“
SaaS
”) solution; thereby, eliminating complex IT
deployment of biometric software and eliminating startup costs.
GoVerifyID works with existing mobile devices, eliminating the need
for specialized biometric scanning devices typically used with most
biometric solutions.
GoVerifyID was built to work seamlessly with our patented
technology portfolio, including GoMobile Interactive®, the
secure dynamic messaging system, and the ultra-scalable IWS
Biometric Engine that provides anonymous biometric matching and
storage. GoVerifyID is secure, simple to use, and designed to
provide instant identity authentication by engaging with the
biometric capture capabilities of each user’s mobile device.
GoVerifyID also provides a fully open SDK for organizations that
require the utmost in flexibility.
Our GoVerifyID Enterprise Suite for Windows easily and seamlessly
integrates with a user’s existing Microsoft
ecosystem/infrastructure to support the user’s extended
workforce. GoVerifyID Enterprise Suite secures corporate networks
from end-to-end – both applications and data – on
client, server, and cloud systems with flexible user login policies
to address varied trust requirements. Our GoVerifyID Enterprise
Suite works with the smart devices that the workforce already uses,
including iOS/Android smartphones and tablets.
Our GoVerifyID Enterprise Suite for Windows provides biometric
authentication for the Microsoft ecosystem that secures enterprise
security without compromising agility, productivity, or user
experience. Its comprehensive architecture offers biometric
authentication for the complete range of enterprise stakeholders,
delivering secure enterprise applications and workspaces to
internal employees, partners, suppliers and vendors, even
customers. Out-of-band authentication is provided via universally
available devices, such as smartphones and tablets. In-band
authentication can be enabled via fingerprint readers, iris
scanners, and any Windows Biometric Framework compatible device.
The server component provides easy centralized management of
biometric authentication policies for all users, using a standard
Snap-In to the Microsoft Management Console. It provides greater
user assurance and Single Sign-On (“
SSO
”) convenience for all corporate systems and
cloud applications. There is no compromise in agility or user
experience.
GoVerifyID Enterprise Suite also provides options for seamless
integration with leading Enterprise Identity and Access Management
(“
IAM
”) solutions including CA SSO, IBM Security
Access Manager (“
ISAM
”), SAP Cloud Platform, and HPE’s
Aruba ClearPass. These turnkey integrations provide multi-modal
biometric authentication to replace or augment passwords for use
with enterprise and consumer class systems.
Our pillphone® Platform:
●
Improves
medication adherence and manages chronic conditions by enriching
the relationship between the care team and the patient via its
enterprise level, mobile communication platform;
●
Digitally
connects healthcare providers with patients and provides support
when the patients are outside of the medical facility;
●
Streamlines
workflows and improves care team communication and collaboration
with the patient by offering personalized, two-way interactive,
secure messaging and real-time remote medication monitoring;
and
●
Enhances
the human connection of the care team that is essential for quality
patient-centered care.
Risk Factors
Our business is subject to substantial risk. Please carefully
consider the section titled “
Risk
Factors
” on page 5
of this prospectus for a discussion of
the factors you should carefully consider before deciding to
purchase securities that may be offered by this
prospectus.
Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our business
operations. You should be able to bear a complete loss of your
investment.
Corporate Information
We were incorporated in the state of Delaware in 2005, and
previously incorporated in California in 1987 as a California
corporation. Our principal place of business is located at 10815
Rancho Bernardo Road, Suite 310, San Diego, California 92127. Our
telephone number is (858) 673-8600. We maintain a corporate website
at
http://www.iwsinc.com
.
The
information contained on our website is not, and should not be
interpreted to be, a part of this prospectus.
RI
S
K FA
CTORS
Investing in our securities involves a high degree of risk. Before
deciding whether to purchase any of our securities, you should
carefully consider the risks and uncertainties described under
“
Risk
Factors
” in our Annual
Report on Form 10-K for the fiscal year ended
December 31, 2017, any subsequent Quarterly Report on
Form 10-Q and our other filings with the SEC, all of which are
incorporated by reference herein. If any of these risks actually
occur, our business, financial condition and results of operations
could be materially and adversely affected and we may not be able
to achieve our goals, the value of our securities could decline and
you could lose some or all of your investment. Additional risks not
presently known to us or that we currently deem immaterial may also
impair our business operations. If any of these risks occur, the
trading price of our securities could decline materially and you
could lose all or part of your investment
.
CAUTIONARY NOTES REGA
R
DING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve
substantial risks and uncertainties. All statements contained in
this prospectus other than statements of historical facts,
including statements regarding our strategy, future operations,
future financial position, future revenue, projected costs,
prospects, plans, objectives of management and expected market
growth, are forward-looking statements. 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, performance or
achievements expressed or implied by the forward-looking
statements.
The words “anticipate,” “believe,”
“estimate,” “expect,” “intend,”
“may,” “plan,” “predict,”
“project,” “target,”
“potential,” “will,” “would,”
“could,” “should,” “continue,”
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements include,
among other things, statements about:
●
the
availability of capital to satisfy our working capital
requirements;
●
the
accuracy of our estimates regarding expenses, future revenues and
capital requirements;
●
anticipated
trends and challenges in our business and the markets in which we
operate;
●
our
ability to anticipate market needs or develop new or enhanced
products to meet those needs;
●
our
expectations regarding market acceptance of our
products;
●
the
success of competing products by others that are or become
available in the market in which we sell our products;
●
our
ability to protect our confidential information and intellectual
property rights;
●
our
ability to manage expansion into international
markets;
●
our
ability to maintain or broaden our business relationships and
develop new relationships with strategic alliances, suppliers,
customers, distributors or otherwise;
●
developments
in the U.S. and foreign countries; and
●
other risks and uncertainties, including
those
described under Item
1A, “
Risk
Factors
,” in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2017,
which risk factors are incorporated herein by
reference
.
These forward-looking statements are only predictions and we may
not actually achieve the plans, intentions or expectations
disclosed in our forward-looking statements, so you should not
place undue reliance on our forward-looking statements. Actual
results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking
statements we make. We have based these forward-looking statements
largely on our current expectations and projections about future
events and trends that we believe may affect our business,
financial condition and operating results. We have included
important factors in the cautionary statements included in this
prospectus, as well as certain information incorporated by
reference into this prospectus, that could cause actual future
results or events to differ materially from the forward-looking
statements that we make. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers,
dispositions, joint ventures or investments we may
make.
You should read this prospectus with the understanding that our
actual future results may be materially different from what we
expect. We do not assume any obligation to update any
forward-looking statements whether as a result of new information,
future events or otherwise, except as required by applicable
law.
USE
O
F
PROCEEDS
Unless we state otherwise in an accompanying prospectus supplement,
we intend to use the net proceeds from the sale of the securities
offered by us under this prospectus and any related prospectus
supplement for general corporate purposes including, but not
limited to, capital expenditures, repayment of indebtedness, and
additions to working capital. We cannot currently allocate
specific percentages of the net proceeds that we may use for the
purposes specified above. When a particular series of securities is
offered, the prospectus supplement relating to that series will set
forth our intended use for the net proceeds we receive from the
sale of those securities. Pending the application of the net
proceeds, we intend to invest the net proceeds in short- and
intermediate-term, interest-bearing obligations, investment-grade
instruments, certificates of deposit or direct or guaranteed
obligations of the U.S. government.
DESCRIPTION OF SECUR
I
TIES THAT MAY BE OFFERED
General
Our certificate of incorporation, as amended (our
“
Charter
”), authorizes the issuance of up to
175,000,000 shares of our common stock, $0.01 par value per share,
and 4,000,000 shares of preferred stock, $0.01 par value per
share.
As of June 27, 2018 we had
95,180,459
shares
of common stock issued and outstanding. Our authorized but unissued
shares of common stock are available for issuance without action by
our stockholders. All shares of common stock now outstanding are
fully paid and non-assessable. In addition, our Board of Directors
has designated two series of preferred stock, Series A Convertible
Preferred (“
Series A
Preferred
”) and Series B
Convertible Redeemable Stock (“
Series B
Preferred
”). As of June
27, 2018, there were 31,021 designated shares of Series A
Preferred, 30,571 of which are issued and outstanding, and 750,000
shares designated as Series B Preferred, of which 239,400 shares
are issued and outstanding.
We may elect or be required to amend our Charter to increase the
number of shares of common stock authorized for issuance prior to
completing sales of shares of our common stock, or securities
convertible and/or exchangeable into shares of our common stock
described in this prospectus.
Transfer Agent
The transfer agent and registrar for our common stock is
Computershare Trust Company, N.A. The transfer agent and
registrar’s address is 250 Royall Street, Canton,
Massachusetts 02021.
Common Stock
This section describes the general terms of our common stock that
we may offer from time to time. For more detailed information, a
holder of our common stock should refer to our Charter and our
bylaws, copies of which are filed with the SEC as exhibits to the
registration statement of which this prospectus is a
part.
Except as otherwise expressly provided in our Charter, or as
required by applicable law, all shares of our common stock have the
same rights and privileges and rank equally, share ratably and are
identical in all respects as to all matters, including, without
limitation, those described below. All outstanding shares of common
stock are fully paid and nonassessable.
The holders of our common stock have equal ratable rights to
dividends from funds legally available, when, as and if declared by
our Board of Directors. To date, we have not paid any
dividends on our common stock. Holders of common stock are also
entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation,
dissolution or winding up of the affairs. The holders of our common
stock have no preemptive or conversion rights or other subscription
rights. There are no redemption or sinking fund provisions
applicable to our common stock.
Each holder of common stock is entitled to one vote for each share
of common stock held on all matters submitted to a vote of the
stockholders, including the election of directors.
The holders of shares
of common stock do not have cumulative voting rights, which means
that the holders of more than 50% of such outstanding shares,
voting for the election of directors, can elect all of the
directors to be elected, if they so choose and in such event, the
holders of the remaining shares will not be able to elect any of
our directors. The holders of 50% percent of the outstanding
common stock constitute a quorum at any meeting of shareholders,
and the vote by the holders of a majority of the outstanding shares
are required to effect certain fundamental corporate changes, such
as liquidation, merger or amendment of our
Charter.
Preferred Stock
This section describes the general terms and provisions of our
outstanding shares of preferred stock, as well as preferred stock
that we may offer from time to time. The applicable prospectus
supplement will describe the specific terms of the shares of
preferred stock offered through that prospectus supplement, which
may differ from the terms we describe below. We will file a
copy of the certificate of designation that contains the terms of
each new series of preferred stock with the SEC each time we issue
a new series of preferred stock, and these certificates of
designation will be incorporated by reference into the registration
statement of which this prospectus is a part. Each certificate of
designation will establish the number of shares included in a
designated series and fix the designation, powers, privileges,
preferences and rights of the shares of each series as well as any
applicable qualifications, limitations or restrictions. A holder of
our preferred stock should refer to the applicable certificate of
designation, our Charter and the applicable prospectus supplement
(and any related free writing prospectus that we may authorize to
be provided to you) for more specific information.
Our Board of Directors has the authority, without action by our
stockholders to designate and issue preferred stock in one or more
series and to designate the rights, preferences and privileges of
each series, which may be greater than the rights of our common
stock. It is not possible to state the actual effect of the
issuance of any shares of our preferred stock upon the rights of
holders of our common stock until our Board of Directors determines
the specific rights of the holders of our preferred stock. However,
the effects might include, among other things:
●
restricting
dividends on our common stock;
●
diluting
the voting power of our common stock;
●
impairing
the liquidation rights of our common stock; or
●
delaying
or preventing a change in control of our Company without further
action by our stockholders.
Series A Preferred
On September 15, 2017, our Board designated 31,021 shares of our
authorized but unissued shares of preferred stock as Series A
Preferred.
S
hares
of Series A Preferred accrue dividends at a rate of 8% per annum if
paid in cash, and 10% per annum if paid by the issuance of shares
of our common stock. Each share of Series A Preferred has a
liquidation preference of $1,000 per share and is convertible, at
the option of the holder, into that number of shares of the
Company’s common stock equal to the Liquidation Preference,
divided by $1.15. Each holder of the Series A Preferred is entitled
to vote on all matters, together with the holders of our common
stock, on an as converted basis.
The holders of Series A Preferred may elect to convert shares of
Series A Preferred into shares of our common stock
(“
Conversion
Shares
”) at any time. In
the event the volume-weighted average price
(“
VWAP
”) of the our common stock is at least $2.15
per share for at least 20 consecutive trading days, we may elect to
convert one-half of the shares of Series A Preferred issued and
outstanding, on a pro-rata basis, into Conversion Shares, or, if
the VWAP of our Common Stock is at least $2.15 for 80 consecutive
trading days, we may convert all issued and outstanding shares of
Series A Preferred into Conversion Shares. In addition, in the
event of a Change of Control, we will have the option to redeem all
issued and outstanding shares of Series A Preferred for 115% of the
Liquidation Preference per share.
The Company had 30,571 shares of Series A Preferred outstanding as
of June 27, 2018 and cumulative undeclared dividends of
approximately $720,000.
Series B Preferred
In April 1995, our Charter was amended to designate 750,000
shares of Series B Preferred stock for issuance. Every 5.275
shares of Series B Preferred is convertible into one share of our
common stock.
The holders of Series B Preferred are entitled to cumulative
preferred dividends payable at the rate of $0.2125 per share, per
annum, subject to legally available funds. Shares of Series B
Preferred and accrued but unpaid dividends are convertible at the
option of the holder into shares of common stock at a conversion
price equal to the original Series B Preferred issue price, as
adjusted to prevent dilution.
The holders of Series B Preferred, on an as-converted basis, have
the same voting rights per share as common stock;
provided,
however,
that the holders of
Series B Preferred have a special right to elect one director if
the Company defaults in the payment of any dividend to the holders
of Series B Preferred. The holders of Series B Preferred are
entitled to initial distributions of $2.50 per share of Series B
Preferred outstanding, upon liquidation and in preference to common
shares and any other series of preferred stock plus all
accrued but unpaid dividends.
The Company presently has the right to redeem all or some of the
outstanding shares of Series B Preferred at a price equal to the
original issue price, plus all accrued but unpaid
dividends.
The Company had 239,400 shares of Series B Preferred outstanding as
of June 27, 2018, and cumulative undeclared dividends of
approximately $8,000.
Warrants
The following description, together with the additional information
we include in any applicable prospectus supplements or free writing
prospectus, summarizes the material terms and provisions of the
warrants that we may offer under this prospectus. Warrants may be
offered independently or together with common stock or preferred
stock offered by any prospectus supplement or free writing
prospectus, and may be attached to or separate from those
securities. While the terms we have summarized below will generally
apply to any future warrants we may offer under this prospectus, we
will describe the particular terms of any warrants that we may
offer in more detail in the applicable prospectus supplement or
free writing prospectus. The terms of any warrants we offer under a
prospectus supplement or free writing prospectus may differ from
the terms we describe below.
In the event that we issue warrants, we will issue the warrants
under a warrant agreement, which we will enter into with a warrant
agent to be selected by us. Forms of these warrant agreements and
forms of the warrant certificates representing the warrants, and
the complete warrant agreements and forms of warrant certificates
containing the terms of the warrants being offered, will be filed
as exhibits to the registration statement of which this prospectus
is a part or will be incorporated by reference from reports that we
file with the SEC. We use the term “warrant agreement”
to refer to any of these warrant agreements. We use the term
“warrant agent” to refer to the warrant agent under any
of these warrant agreements. The warrant agent will act solely as
an agent of ours in connection with the warrants and will not act
as an agent for the holders or beneficial owners of the
warrants.
The following summaries of material provisions of the warrants and
the warrant agreements are subject to, and qualified in their
entirety by reference to, all the provisions of the warrant
agreement applicable to a particular series of warrants. We urge
you to read the applicable prospectus supplements or free writing
prospectus related to the warrants that we sell under this
prospectus, as well as the complete warrant agreements that contain
the terms of the warrants.
General
We will describe in the applicable prospectus supplement or free
writing prospectus the terms relating to a series of warrants. If
warrants for the purchase of common stock or preferred stock are
offered, the prospectus supplement or free writing prospectus will
describe the following terms, to the extent
applicable:
●
the
offering price and the aggregate number of warrants
offered;
●
the
total number of shares that can be purchased if a holder of the
warrants exercises them and, in the case of warrants for preferred
stock, the designation, total number and terms of the series of
preferred stock that can be purchased upon exercise;
●
the
designation and terms of any series of preferred stock with which
the warrants are being offered and the number of warrants being
offered with each share of common stock or preferred
stock;
●
the
date on and after which the holder of the warrants can transfer
them separately from the related common stock;
●
the
number of shares of common stock or preferred stock that can be
purchased if a holder exercises the warrant and the price at which
such common stock or preferred stock may be purchased upon
exercise, including, if applicable, any provisions for changes to
or adjustments in the exercise price and in the securities or other
property receivable upon exercise;
●
the
terms of any rights to redeem or call, or accelerate the expiration
of, the warrants;
●
the
date on which the right to exercise the warrants begins and the
date on which that right expires;
●
federal
income tax consequences of holding or exercising the warrants;
and
●
any
other specific terms, preferences, rights or limitations of, or
restrictions on, the warrants.
Exercise of Warrants
Each holder of a warrant is entitled to purchase the number of
shares of common stock or preferred stock, as the case may be, at
the exercise price described in the applicable prospectus
supplement or free writing prospectus. After the close of business
on the day when the right to exercise terminates (or a later date
if we extend the time for exercise), unexercised warrants will
become void.
A holder of warrants may exercise them by following the general
procedure outlined below:
●
delivering
to the warrant agent the payment required by the applicable
prospectus supplement or free writing prospectus to purchase the
underlying security;
●
properly
completing and signing the reverse side of the warrant certificate
representing the warrants; and
●
delivering
the warrant certificate representing the warrants to the warrant
agent within five business days of the warrant agent receiving
payment of the exercise price.
If you comply with the procedures described above, your warrants
will be considered to have been exercised when the warrant agent
receives payment of the exercise price, subject to the transfer
books for the securities issuable upon exercise of the warrant not
being closed on such date. After you have completed those
procedures and subject to the foregoing, we will, as soon as
practicable, issue and deliver to you the common stock or preferred
stock that you purchased upon exercise. If you exercise fewer than
all of the warrants represented by a warrant certificate, a new
warrant certificate will be issued to you for the unexercised
amount of warrants. Holders of warrants will be required to pay any
tax or governmental charge that may be imposed in connection with
transferring the underlying securities in connection with the
exercise of the warrants.
Amendments and Supplements to the Warrant Agreements
We may amend or supplement a warrant agreement without the consent
of the holders of the applicable warrants to cure ambiguities in
the warrant agreement, to cure or correct a defective provision in
the warrant agreement, or to provide for other matters under the
warrant agreement that we and the warrant agent deem necessary or
desirable, so long as, in each case, such amendments or supplements
do not materially adversely affect the interests of the holders of
the warrants.
Warrant Adjustments
Unless the applicable prospectus supplement or free writing
prospectus states otherwise, the exercise price of, and the number
of securities covered by, a common stock warrant or a preferred
stock warrant will be adjusted proportionately if we subdivide or
combine our common stock or preferred stock, as applicable. In
addition, unless the prospectus supplement or free writing
prospectus states otherwise, if we, without receiving
payment:
●
issue
capital stock or other securities convertible into or exchangeable
for common stock or preferred stock, or any rights to subscribe
for, purchase or otherwise acquire any of the foregoing, as a
dividend or distribution to holders of our common stock or
preferred stock;
●
pay
any cash to holders of our common stock or preferred stock other
than a cash dividend paid out of our current or retained earnings
or other than in accordance with the terms of the preferred
stock;
●
issue
any evidence of our indebtedness or rights to subscribe for or
purchase our indebtedness to holders of our common stock or
preferred stock; or
●
issue
common stock or preferred stock or additional stock or other
securities or property to holders of our common stock or preferred
stock by way of spinoff, split-up, reclassification, combination of
shares or similar corporate rearrangement,
then the holders of common stock warrants and preferred stock
warrants, as applicable, will be entitled to receive upon exercise
of the warrants, in addition to the securities otherwise receivable
upon exercise of the warrants and without paying any additional
consideration, the amount of stock and other securities and
property such holders would have been entitled to receive had they
held the common stock or preferred stock, as applicable, issuable
under the warrants on the dates on which holders of those
securities received or became entitled to receive such additional
stock and other securities and property.
Except as stated above or as otherwise set forth in the applicable
prospectus supplement or free writing prospectus, the exercise
price and number of securities covered by a common stock warrant
and preferred stock warrant, and the amounts of other securities or
property to be received, if any, upon exercise of such warrants,
will not be adjusted or provided for if we issue those securities
or any securities convertible into or exchangeable for those
securities, or securities carrying the right to purchase those
securities or securities convertible into or exchangeable for those
securities.
Holders of common stock warrants and preferred stock warrants may
have additional rights under the following
circumstances:
●
certain
reclassifications, capital reorganizations or changes of the common
stock or preferred stock, as applicable;
●
certain
share exchanges, mergers, or similar transactions involving us and
which result in changes of the common stock or preferred stock, as
applicable; or
●
certain
sales or dispositions to another entity of all or substantially all
of our property and assets.
If one of the above transactions occurs and holders of our common
stock or preferred stock are entitled to receive stock, securities
or other property with respect to or in exchange for their
securities, the holders of the common stock warrants and preferred
stock warrants then outstanding, as applicable, will be entitled to
receive upon exercise of their warrants the kind and amount of
shares of stock and other securities or property that they would
have received upon the applicable transaction if they had exercised
their warrants immediately before the transaction.
Units
This section outlines some of the provisions of the units and the
unit agreements. This information may not be complete in all
respects and is qualified entirely by reference to the unit
agreement with respect to the units of any particular series. The
specific terms of any series of units will be described in the
applicable prospectus supplement or free writing prospectus. If so
described in a particular prospectus supplement or free writing
prospectus, the specific terms of any series of units may differ
from the general description of terms presented below.
As specified in the applicable prospectus supplement, we may issue
units consisting of one or more shares of common stock, shares of
preferred stock, warrants or any combination of such
securities.
The applicable prospectus supplement will specify the following
terms of any units in respect of which this prospectus is being
delivered:
●
the
terms of the units and of any of the shares of common stock, shares
of preferred stock, or warrants comprising the units, including
whether and under what circumstances the securities comprising the
units may be traded separately;
●
a
description of the terms of any unit agreement governing the
units;
●
if
appropriate, a discussion of material U.S. federal income tax
considerations; and
●
a
description of the provisions for the payment, settlement, transfer
or exchange of the units.
DESCRIPTION OF CERT
AIN PROVISIONS OF DELAWARE LAW
AND
OUR CHARTER AND BYLAWS
Certain provisions of Delaware law, our Charter and bylaws
discussed below may have the effect of making more difficult or
discouraging a tender offer, proxy contest or other takeover
attempt. These provisions are expected to encourage persons seeking
to acquire control of our company to first negotiate with our Board
of Directors. We believe that the benefits of increasing our
ability to negotiate with the proponent of an unfriendly or
unsolicited proposal to acquire or restructure our company outweigh
the disadvantages of discouraging these proposals because
negotiation of these proposals could result in an improvement of
their terms.
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 of 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;
●
upon
consummation of the transaction that 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
specified shares; or
●
at or
subsequent to the date of the transaction, the business combination
is approved by the Board of Directors and authorized at an annual
or special meeting of stockholders, and not by written consent, by
the affirmative vote of at least 66 2/3% of the outstanding voting
stock which is not owned by the interested
stockholder.
Section 203 defines a “business combination” to
include:
●
any
merger or consolidation involving the corporation and the
interested stockholder;
●
any
sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 10% or more of the assets of the corporation to or
with the interested stockholder;
●
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;
●
subject
to exceptions, any transaction involving the corporation that has
the effect of increasing the proportionate share of the stock of
any class or series of the corporation beneficially owned by the
interested stockholder; or
●
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 person that is:
●
the
owner of 15% or more of the outstanding voting stock of the
corporation;
●
an
affiliate or associate of the corporation who was the owner of 15%
or more of the outstanding voting stock of the corporation at any
time within three years immediately prior to the relevant date;
or
●
the
affiliates and associates of the above.
Under specific circumstances, Section 203 makes it more
difficult for an “interested stockholder” to effect
various business combinations with a corporation for a three-year
period, although the stockholders may, by adopting an amendment to
the corporation’s certificate of incorporation or bylaws,
elect not to be governed by this section, effective 12 months after
adoption.
Our Charter and bylaws do not exclude us from the restrictions of
Section 203. We anticipate that the provisions of
Section 203 might encourage companies interested in acquiring
us to negotiate in advance with our Board of Directors since the
stockholder approval requirement would be avoided if a majority of
the directors then in office approve either the business
combination or the transaction that resulted in the stockholder
becoming an interested stockholder.
Charter and Bylaws.
Provisions of our Charter and bylaws may delay or discourage
transactions involving an actual or potential change of 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 stock. Among other things, our
Charter and bylaws:
●
permit
our Board of Directors to issue up to 4,000,000 shares of preferred
stock, with any rights, preferences and privileges as they may
designate (including the right to approve an acquisition or other
change of control);
●
provide
that the authorized number of directors may be changed only by the
vote of a majority of the Company’s shareholders at a
properly convened annual meeting, or by the written consent of a
majority of the Company’s shareholders, or by the Board of
Directors;
●
provide
that all vacancies, including newly created directorships, may,
except as otherwise required by law, be filled by the affirmative
vote of a majority of directors then in office, even if less than a
quorum;
●
provide
that stockholders seeking to present proposals before a meeting of
stockholders or to nominate candidates for election as directors at
a meeting of stockholders must provide advance notice in writing,
and also specify requirements as to the form and content of a
stockholder’s notice; and
●
do not
provide for cumulative voting rights (therefore allowing the
holders of a majority of the shares of common stock entitled to
vote in any election of directors to elect all of the directors
standing for election, if they should so choose).
PLAN
O
F
DISTRIBUTION
We may sell the securities described in this prospectus to or
through underwriters or dealers, through agents, or directly to one
or more purchasers. A prospectus supplement or supplements (and any
related free writing prospectus that we may authorize to be
provided to you) will describe the terms of the offering of the
securities, including, to the extent applicable:
●
the
name or names of any underwriters, dealers or agents, if
applicable;
●
the
purchase price of the securities and the proceeds we will receive
from the sale;
●
any
over-allotment options under which underwriters may purchase
additional securities from us;
●
any
agency fees or underwriting discounts and other items constituting
agents’ or underwriters’ compensation;
●
any
public offering price;
●
any
discounts or concessions allowed or re-allowed or paid to dealers;
and
●
any
securities exchange or market on which the securities offered in
the prospectus supplement may be listed.
Only those underwriters identified in such prospectus supplement
are deemed to be underwriters in connection with the securities
offered by the prospectus supplement.
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. Any public
offering price and any discounts or concessions allowed or
reallowed or paid to dealers may change from time to time. We may
use underwriters with whom we have a material relationship. We will
describe in the prospectus supplement that names the underwriter,
the nature of any such relationship.
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 related to this offering, including liabilities
under the Securities Act of 1933, as amended, or contribution with
respect to payments that the agents or underwriters may make with
respect to these liabilities. Agents and underwriters may engage in
transactions with, or perform services for, us in the ordinary
course of business.
Any underwriters or agents that are qualified market makers on the
OTCQB Marketplace may engage in passive market making transactions
in the securities on the OTCQB Marketplace in accordance with
Regulation M under the Exchange Act, during the business day prior
to the pricing of the offering, before the commencement of offers
or sales of the securities. Passive market makers must comply with
applicable volume and price limitations and must be identified as
passive market makers. In general, a passive market maker must
display its bid at a price not in excess of the highest independent
bid for such security; if all independent bids are lowered below
the passive market maker’s bid, however, the passive market
maker’s bid must then be lowered when certain purchase limits
are exceeded. Passive market making may stabilize the market price
of the securities at a level above that which might otherwise
prevail in the open market and, if commenced, may be discontinued
at any time.
In compliance with guidelines of the Financial Industry Regulatory
Authority, Inc. (“
FINRA
”), the maximum consideration or discount to
be received by any FINRA member or independent broker dealer may
not exceed 8% of the aggregate amount of the securities offered
pursuant to this prospectus and any applicable prospectus
supplement.
LEG
A
L MATTERS
Certain legal matters in connection with this offering will be
passed upon for us by Disclosure Law Group, a Professional
Corporation, of San Diego, California.
EX
P
ERTS
Our consolidated financial statements appearing in our Annual
Report on Form 10-K for the year ended December 31, 2017, and
the effectiveness of our internal control over financial reporting
as of December 31, 2017, have been audited by Mayer Hoffman
McCann P.C.
of San Diego,
California
, an independent
registered public accounting firm, as set forth in their reports
thereon. 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 FI
N
D MORE
INFORMATION
We are a public company and file annual, quarterly and special
reports, proxy statements and other information with the
SEC
. You may read and copy any
document we file at the SEC’s public reference room at 100 F
Street, NE, Washington, D.C. 20549. You can request copies of these
documents by writing to the SEC and paying a fee for the copying
cost. Please call the SEC at 1-800-SEC-0330 for more information
about the operation of the public reference room. Our SEC filings
are also available, at no charge, to the public at the SEC’s
web site at
http://www.sec.gov
.
INCORPORATION
OF
CERT
A
IN INFORMATION BY
REFERENCE
The following documents filed by us with the SEC are incorporated
by reference in this prospectus:
|
●
|
Annual
Report on Form 10-K for the fiscal year ended December 31, 2017,
filed on March 19, 2018;
|
|
●
|
Quarterly
Report on Form 10-Q for the quarter ended March 31, 2018 filed on
May 10, 2018;
|
|
●
|
Current
Report on Form 8-K, filed February 13, 2018; and
|
|
●
|
The
description of our common stock contained in the Registration
Statement on Form 8-A filed pursuant to Section 12(b) of the
Exchange Act on March 21, 2000, including any amendment or report
filed with the SEC for the purpose of updating this
description.
|
We also incorporate by reference all documents we file pursuant to
Section 13(a), 13(c), 14 or 15 of the Exchange Act (other than any
portions of filings that are furnished rather than filed pursuant
to Items 2.02 and 7.01 of a Current Report on Form 8-K) after the
date of the initial registration statement of which this prospectus
is a part and prior to effectiveness of such registration
statement. 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 or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this registration statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is or deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this registration statement.
We will provide to each person, including any beneficial owner, to
whom a prospectus is delivered, a copy of any or all of the
information that has been incorporated by reference in the
prospectus but not delivered with the prospectus. You may request a
copy of these filings, excluding the exhibits to such filings which
we have not specifically incorporated by reference in such filings,
at no cost, by writing to or calling us at:
ImageWare Systems, Inc.
Attn: Corporate Secretary
10815 Rancho Bernardo Road, Suite 310
San Diego, California 92127
(858) 673-8600
This prospectus is part of a registration statement we filed with
the SEC. You should only rely on the information or representations
contained in this prospectus and any accompanying prospectus
supplement. We have not authorized anyone to provide information
other than that provided in this prospectus and any accompanying
prospectus supplement. We are not making an offer of the securities
in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any accompanying
prospectus supplement is accurate as of any date other than the
date on the front of the document.
PROSPECTUS
$
25,000,000
COMMON STOCK
PREFERRED STOCK
WARRANTS
UNITS
[_____________], 2018
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND
DISTRIBUTION
The following table sets forth an estimate of the fees and
expenses, other than the underwriting discounts and commissions,
payable by us in connection with the issuance and distribution of
the securities being registered. All the amounts shown are
estimates, except for the SEC registration fees.
|
|
Amount
|
|
SEC
registration fee
|
$
*
|
|
FINRA
filing fee (if applicable)
|
*
|
|
Legal
fees and expenses
|
*
|
|
Accounting
fees and expenses
|
*
|
|
Printing
and miscellaneous fees and expenses
|
*
|
|
Total
|
$
*
|
* To be included by amendment
ITEM 15. INDEMNIFICATION OF OFFICERS AND
DIRECTORS
Our Charter and bylaws contain provisions relating to the
limitation of liability and indemnification of directors and
officers. Our Charter provides that a director will not be
personally liable to us or our stockholders for monetary damages
for breach of fiduciary duty as a director, except for
liability:
●
for any
breach of the director’s duty of loyalty to us or our
stockholders;
●
for
acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
●
under
Section 174 of the Delaware General Corporation Law (the
“
DGCL
”);
or
●
for any
transaction from which the director derived any improper personal
benefit.
Our Charter also provides that if the DGCL is amended to authorize
corporate action further eliminating or limiting the personal
liability of directors, then the liability of our directors will be
eliminated or limited to the fullest extent permitted by the
DGCL.
Our bylaws provide that we will indemnify our directors and
officers to the fullest extent not prohibited by the
DGCL;
provided,
however,
that we may limit
the extent of such indemnification by individual contracts with our
directors and executive officers; and provided, further, that we
are not required to indemnify any director or executive officer in
connection with any proceeding (or part thereof) initiated by such
person or any proceeding by such person against us or our
directors, officers, employees or other agents
unless:
●
such
indemnification is expressly required to be made by
law;
●
the
proceeding was authorized by the Board of Directors;
or
●
such
indemnification is provided by us, in our sole discretion, pursuant
to the powers vested in us under the DGCL.
Our bylaws provide that we shall advance, prior to the final
disposition of any proceeding, promptly following request therefor,
all expenses by any director or executive officer in connection
with any such proceeding upon receipt of any undertaking by or on
behalf of such person to repay said amounts if it should be
determined ultimately that such person is not entitled to be
indemnified under Article XIII of our bylaws or otherwise.
Notwithstanding the foregoing, unless otherwise determined, no
advance shall be made by us if a determination is reasonably and
promptly made by the Board of Directors by a majority vote of a
quorum of directors who were not parties to the proceeding, or 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, that the facts known to the decision-making
party at the time such determination is made demonstrate clearly
and convincingly that such person acted in bad faith or in a manner
that such person did not believe to be in or not opposed to our
best interests.
Our bylaws also authorize us to purchase insurance on behalf of any
person required or permitted to be indemnified pursuant to Article
XIII of our bylaws.
Section 145(a) of the DGCL authorizes a corporation to indemnify
any person who was or is a party, or is threatened to be made a
party, to a threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation), by reason of the fact that the person 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), judgments, fines and amounts
paid in settlement actually and reasonably incurred by the person
in connection with such action, suit or proceeding, if the 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 respect to any criminal action or proceeding, had no
reasonable cause to believe the person’s conduct was
unlawful.
Section 145(b) of the DGCL provides in relevant part that a
corporation may indemnify any person who was or is 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 the
person 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 the person in connection with the defense or settlement
of such action or suit if the 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 except that no
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable 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.
The DGCL also provides that indemnification under Section 145(d)
can only be made upon a determination that indemnification of the
present or former director, officer or employee or agent is proper
in the circumstances because such person has met the applicable
standard of conduct set forth in Section 145(a) and
(b).
Section 145(g) of the DGCL also empowers a corporation to purchase
and maintain insurance on behalf of any 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 such person and incurred by such person in any
such capacity, or arising out of such person’s status as
such, whether or not the corporation would have the power to
indemnify such person against such liability under Section 145 of
the DGCL.
Section 102(b)(7) of the DGCL permits a corporation to provide for
eliminating or limiting the personal liability of one of its
directors for any monetary damages related to a breach of fiduciary
duty as a director, as long as the corporation does not eliminate
or limit the liability of a director for acts or omissions which
(1) which breached the director’s duty of loyalty to the
corporation or its stockholders, (2) which were not in good faith
or which involve intentional misconduct or knowing violation of
law, (3) under Section 174 of the DGCL; or (4) from which the
director derived an improper personal benefit.
We have obtained directors’ and officers’ insurance to
cover our directors and officers for certain
liabilities.
ITEM 16. EXHIBITS
|
*
|
To be filed, if necessary, by a report filed under the Securities
Exchange Act of 1934, as amended, and incorporated or deemed to be
incorporated by reference to this registration
statement.
|
ITEM 17. UNDERTAKINGS
(a) 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, as amended;
(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 SEC 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;
provided,
however
, that paragraphs
(a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or
furnished to the SEC by the registrant pursuant to Section 13
or Section 15(d) of the Exchange Act 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.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, as amended, 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.
(4) That,
for the purpose of determining liability under the Securities Act
of 1933, as amended, to any purchaser:
(i)
If the Registrant is relying on Rule 430B:
(A) 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
(B) 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, as amended, 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;
or
(ii) If
the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying
on Rule 430B or other than prospectuses filed in reliance on Rule
430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after
effectiveness. 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 first use,
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 date of
first use.
(5) That,
for the purpose of determining liability of the registrant under
the Securities Act of 1933, as amended, to any purchaser in the
initial distribution of the securities: The undersigned registrant
undertakes that in a primary offering of securities of the
undersigned 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
undersigned 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 undersigned 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 undersigned registrant or used or referred to by the
undersigned registrant;
(iii) The
portion of any other free-writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
(6) The undersigned registrant hereby
undertakes that, for purposes of determining any liability under
the Securities Act of 1933, as amended, each filing of the
registrant’s annual report pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended, (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, as amended) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, 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
of 1933, as amended, 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 SEC 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 the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of San Diego, California on
June 27
, 2018.
|
|
IMAGEWARE SYSTEMS, INC.
|
|
|
|
|
|
|
|
By:
|
/s/
S. James Miller, Jr.
|
|
|
|
S.
James Miller, Jr.
|
|
|
|
Chief
Executive Officer, President
(Principal
Executive Officer)
|
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints S. James Miller,
Jr. as his or her true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his
or her name, place, and stead, in any and all capacities, to
(i) act on, sign and file with the Securities and Exchange
Commission any and all amendments (including post-effective
amendments) to this registration statement together with all
schedules and exhibits thereto and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended, together with all schedules and exhibits thereto,
(ii) act on, sign and file such certificates, instruments,
agreements and other documents as may be necessary or appropriate
in connection therewith, (iii) act on and file any supplement
to any prospectus included in this registration statement or any
such amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, as
amended, and (iv) take any and all actions which may be
necessary or appropriate to be done, as fully for all intents and
purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, or his or
her substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in
the capacities and on the dates indicated.
|
Signature
|
|
Title(s)
|
|
Date
|
|
|
|
|
||
|
/s/
S. James Miller, Jr.
S.
James Miller, Jr.
|
|
President,
Chief Executive Officer and Chairman
|
|
June
27, 2018
|
|
|
|
|
||
|
/s/
Wayne Wetherell
Wayne
Wetherell
|
|
Chief
Financial Officer
|
|
June
27, 2018
|
|
|
|
|
||
|
/s/
David Loesch
David
Loesch
|
|
Director
|
|
June
27, 2018
|
|
|
|
|
||
|
/s/
Steve Hamm
Steve
Hamm
|
|
Director
|
|
June
27, 2018
|
|
|
|
|
||
|
/s/
David Carey
David
Carey
|
|
Director
|
|
June
27, 2018
|
|
|
|
|
|
|
|
/s/
John Cronin
John
Cronin
|
|
Director
|
|
June
27, 2018
|
|
/s/
Neal Goldman
Neal
Goldman
|
|
Director
|
|
June
27, 2018
|
|
|
|
|
||
|
/s/
Charles Crocker
Charles
Crocker
|
|
Director
|
|
June
27, 2018
|
|
|
|
|
||
|
/s/
Dana Kammersgard
Dana
Kammersgard
|
|
Director
|
|
June
27, 2018
|
|
|
|
|
||
|
/s/
Robert T. Clutterbuck
Robert
T. Clutterbuck
|
|
Director
|
|
June
27, 2018
|
|
|
|
|
|
|
|
/s/
Charles Frischer
Charles
Frischer
|
|
Director
|
|
June
27, 2018
|
II-5